UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to .
Commission File Number : 0-14857
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Virginia 04-2866287
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
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 .
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
September 30, 1995 and March 31, 1995
(Unaudited)
(In Thousands)
ASSETS
September 30 March 31
Operating investment properties:
Land $ 3,962 $ 3,962
Buildings and improvements 27,115 25,769
31,077 29,731
Less accumulated depreciation (8,676) (8,222)
22,401 21,509
Investments in unconsolidated joint
ventures, at equity 24,405 25,036
Cash and cash equivalents 4,856 6,460
Escrowed cash 111 -
Prepaid expenses 303 12
Accounts receivable, net 252 77
Accounts receivable - affiliates 227 215
Deferred rent receivable - 29
Deferred expenses, net 219 234
$ 52,774 $ 53,572
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $ 537 $ 285
Bonds payable 1,621 1,648
Notes payable 9,841 9,900
Minority interest in net assets of
consolidated joint venture 187 187
Total partners' capital 40,588 41,552
$ 52,774 $ 53,572
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
For the six months ended September 30, 1995 and 1994
(In Thousands)
(Unaudited)
General Limited
Partners Partners
Balance at March 31, 1994 $(804) $52,611
Net loss (11) (1,080)
BALANCE AT SEPTEMBER 30, 1994 $(815) $51,531
Balance at March 31, 1995 $(912) $42,464
Net loss (5) (454)
Cash distributions (5) (500)
BALANCE AT SEPTEMBER 30, 1995 $(922) $41,510
See accompanying notes.
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended September 30, 1995 and 1994
(In Thousands, except per Unit data)
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
1995 1994 1995 1994
REVENUES:
Rental income and expense
reimbursements $ 566 $ 441 $ 1,010 $ 895
Interest and other income 69 75 154 147
635 516 1,164 1,042
EXPENSES:
Property operating expenses 306 318 577 606
Depreciation and amortization 258 263 508 516
Interest expense 267 258 527 507
General and administrative 151 151 277 271
Bad debt expense - 2 27 3
982 992 1,916 1,903
Operating loss (347) (476) (752) (861)
Investment income:
Interest income on notes
receivable
from unconsolidated
ventures 200 200 400 400
Partnership's share of
unconsolidated
ventures' income (losses) 2 (462) (107) (630)
NET LOSS $ (145) $ (738) $ (459) $ (1,091)
Net loss per Limited
Partnership Unit $(0.07) $(0.38) $ (0.23) $(0.54)
Cash distributions per Limited
Partnership Unit $ 0.12 $ - $ 0.25 $ -
The above net loss and cash distributions per Limited Partnership Unit are based
upon the 2,000,000 Limited Partnership Units outstanding during each period.
See accompanying notes.
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended September 30, 1995 and 1994
Increase (Decrease) in Cash and Cash Equivalents
(In Thousands)
(Unaudited)
1995 1994
Cash flows from operating activities:
Net loss $ (459) $(1,091)
Adjustments to reconcile net loss to
net cash provided by (used for)
operating activities:
Partnership's share of unconsolidated
ventures' losses 107 630
Depreciation and amortization 508 516
Amortization of deferred financing costs 10 8
Interest expense on zero coupon loans - 230
Changes in assets and liabilities:
Escrowed cash (111) (36)
Prepaid expenses (291) (26)
Accounts receivable (175) (76)
Accounts receivable - affiliates (12) 152
Deferred rent receivable 29 46
Deferred expenses (49) -
Other assets - (7)
Accounts payable and accrued expenses 252 263
Accrued interest payable - 49
Total adjustments 268 1,749
Net cash provided by (used for)
operating activities (191) 658
Cash flows from investing activities:
Distributions from unconsolidated joint
ventures 729 4,878
Additions to operating investment properties (1,346) (256)
Additional investments in unconsolidated
joint ventures (205) (4,852)
Net cash used for investing
activities (822) (230)
Cash flows from financing activities:
Repayment of principal and deferred
interest on long-term debt (86) (4,042)
Issuance of note payable - 3,480
Payment of deferred financing costs - (126)
Distributions to partners (505) -
Net cash used for financing
activities (591) (688)
Net decrease in cash and cash equivalents (1,604) (260)
Cash and cash equivalents, beginning of period 6,460 6,263
Cash and cash equivalents, end of period $ 4,856 $ 6,003
Cash paid during the period for interest $ 517 $ 2,337
See accompanying notes.
1. General
The accompanying financial statements, footnotes and discussion should be
read in conjunction with the financial statements and footnotes in the
Partnership's Annual Report for the year ended March 31, 1995.
In the opinion of management, the accompanying financial statements,
which have not been audited, reflect all adjustments necessary to present
fairly the results for the interim period. All of the accounting
adjustments reflected in the accompanying interim financial statements are
of a normal recurring nature.
2. Investments in Unconsolidated Joint Venture Partnerships
As of September 30, 1995 and 1994, the Partnership had investments in
five unconsolidated joint venture partnerships which own operating
properties as more fully described in the Partnership's Annual Report. The
unconsolidated joint ventures are accounted for by using the equity method
because the Partnership does not have a voting control interest in the
ventures. Under the equity method, the assets, liabilities, revenues and
expenses of the unconsolidated joint ventures do not appear in the
Partnership's financial statements. Instead, the investments are carried at
cost adjusted for the Partnership's share of each venture's earnings, losses
and distributions. The Partnership reports its share of unconsolidated
joint venture earnings or losses three months in arrears.
Summarized operations of the unconsolidated joint ventures, for the
periods indicated, are as follows:
CONDENSED COMBINED SUMMARY OF OPERATIONS
For the three and six months ended June 30, 1995 and 1994
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Revenues:
Rental revenues and
expense recoveries $ 2,643 $ 2,526 $ 5,354 $ 5,120
Interest and other income 71 44 95 71
2,714 2,570 5,449 5,191
Expenses:
Property operating expenses 897 911 1,804 1,717
Real estate taxes 601 676 1,259 1,385
Mortgage interest expense 213 445 436 671
Interest expense payable
to partner 200 200 400 400
Depreciation and
amortization 800 750 1,574 1,504
2,711 2,982 5,473 5,677
Net income (loss) $ 3 $ (412) $ (24) $ (486)
Net income (loss):
Partnership's share of
combined income (loss) $ 13 $ (440) $ (84) $ (587)
Co-venturers' share of
combined incomes (loss) (10) 28 60 101
$ 3 $ (412) $ (24) $ (486)
RECONCILIATION OF PARTNERSHIP'S SHARE OF OPERATIONS
For the three and six months ended June 30, 1995 and 1994
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Partnership's share of combined
income (loss), as shown above $ 13 $ (440) $ (84) $ (587)
Amortization of excess basis (11) (22) (23) (43)
Partnership's share of
unconsolidated
ventures' income (losses) $ 2 $ (462) $ (107) $ (630)
3.Operating Investment Properties
At September 30, 1995 and March 31, 1995, the Partnership's balance sheet
includes two operating investment properties: the wholly-owned Crystal Tree
Commerce Center and the Sunol Center Office Buildings, owned by Sunol Center
Associates, a majority-owned and controlled joint venture. The Crystal Tree
Commerce Center consists of three one-story retail plazas containing an
aggregate of 74,923 square feet of leasable space and one four-story office
building containing 40,115 square feet of leasable space, located in North
Palm Beach, Florida. The Sunol Center Office Buildings comprise 116,680
square feet of leasable space, located in Pleasanton, California. The
Partnership reports the operations of Sunol Center Associates on a three-
month lag.
The following is a combined summary of property operating expenses for the
Crystal Tree Commerce Center and the Sunol Center Office Buildings as
reported in the Partnership's consolidated statements of operations for the
three and six months ended September 30, 1995 and 1994 (in thousands):
Three Months Ended Six Months Ended
September 30, September 30,
1995 1994 1995 1994
Real estate taxes $ 27 $ 68 $ 59 $ 136
Repairs and maintenance 100 93 157 151
Utilities 43 36 79 70
Management fees 22 23 45 45
Administrative and other 114 98 237 204
$ 306 $ 318 $ 577 $ 606
4.Related Party Transactions
Accounts receivable - affiliates at both September 30, 1995 and March 31,
1995 includes $100,000 due from one joint venture for interest earned on a
permanent loan and $112,000 and $100,000, respectively, of investor servicing
fees due from three of the joint ventures for reimbursement of certain
expenses incurred in reporting Partnership operations to the Limited Partners
of the Partnership. Accounts receivable - affiliates at both September 30,
1995 and March 31, 1995 also includes $15,000 of expenses paid by the
Partnership on behalf of the joint ventures and other affiliates.
Included in general and administrative expenses for the six months ended
September 30, 1995 and 1994 is $104,000 and $101,000, respectively,
representing reimbursements to an affiliate of the Managing General Partner
for providing certain financial, accounting and investor communication
services to the Partnership.
Also included in general and administrative expenses for both of the six-
month periods ended September 30, 1995 and 1994 is $11,000, representing fees
earned by Mitchell Hutchins Institutional Investors, Inc. for managing the
Partnership's cash assets.
5. Notes Payable
Notes payable at September 30, 1995 and March 31, 1995 consist of the
following (in thousands):
September 30 March 31
9.125% nonrecourse loan payable to an
insurance company, which is secured by the
625 North Michigan Avenue operating
investment property. Monthly payments
including interest of $55 are due
beginning July 1, 1994 through maturity on
May 31, 1999. The terms of the note were
modified effective May 31, 1994 (see
discussion below). $ 6,400 $ 6,437
8.39% nonrecourse note payable to an
insurance company, which is secured by the
Crystal Tree Commerce Center operating
investment property. Monthly payments
including interest of $28 are due
beginning November 15, 1994 through
maturity on September 19, 2001 (see
discussion below). 3,441 3,463
$ 9,841 $ 9,900
On April 29, 1988, the Partnership borrowed $4,000,000 in the form of a
zero coupon loan secured by the 625 North Michigan operating property which
bore interest at an annual effective compounded rate of 9.8% and had a
scheduled maturity date in May of 1995. During the quarter ended June 30,
1994, an agreement was reached with the lender of the zero coupon loan on a
proposal to refinance the loan. The terms of the agreement called for the
Partnership to make a principal pay down of $541,000. The maturity date of
the loan, which now requires principal and interest payments on a monthly
basis as set forth above, was extended to May 31, 1999. The terms of the
loan agreement also required the establishment of an escrow account for real
estate taxes, as well as a capital improvement escrow which is to be funded
with monthly deposits from the Partnership aggregating approximately $700,000
through the scheduled maturity date. Formal closing of the modification and
extension agreement occurred on May 31, 1994.
In addition, during 1986 and 1987 the Partnership received the proceeds
from three additional nonrecourse zero coupon loans in the initial amounts of
$3 million, $4.5 million and approximately $1.9 million, which were secured
by the Warner/Red Hill Business Center, the Monterra Apartments and the
Chandler's Reach Apartments, respectively. Legal liability for the repayment
of the two loans secured by the Warner/Red Hill and Monterra properties
rested with the related joint ventures and, accordingly, these amounts were
recorded on the books of the joint ventures. Interest expense on the
Warner/Red Hill and Monterra loans accrued at 9.36%, compounded annually, and
was due at maturity in August of 1993 and September of 1994, respectively, at
which time total principal and interest payments aggregating $5,763,000 and
$8,645,000, respectively, became due and payable. The nonrecourse zero
coupon loan secured by the Chandler's Reach Apartments, which bore interest
at 10.5%, compounded annually, matured on August 1, 1994 with an outstanding
balance of $3,462,000.
During the quarter ended December 31, 1993, the Partnership negotiated and
signed a letter of intent to modify and extend the maturity of the Warner/Red
Hill zero coupon loan with the existing lender. The terms of the extension
and modification agreement, which was finalized in August 1994, provide for a
10-year extension of the note effective as of the original maturity date of
August 15, 1993. During the term of the agreement, the loan will bear
interest at 2.875% per annum and monthly principal and interest payments of
$24,000 will be required. In addition, the lender required a participation
in the proceeds of a future sale or debt refinancing in order to enter into
this agreement. Accordingly, upon the sale or refinancing of the property,
the lender will receive 40% of the residual value of the property, as
defined, after the payment of the outstanding balance of the loan payable.
The principal balance of the Warner/Red Hill loan as of June 30, 1995 was
$5,545,000.
During September 1994, the Partnership obtained three new nonrecourse,
current-pay mortgage loans and used the proceeds to pay off the zero coupon
loans secured by the Monterra and Chandler's Reach apartment properties.
These three new loans were in the initial principal amounts of $4,920,000
secured by the Monterra Apartments, $3,600,000 secured by the Chandler's
Reach Apartments, and $3,480,000 secured by the Crystal Tree Commerce Center.
The legal liability for the loans secured by the Monterra Apartments and
Chandler's Reach Apartments rests with the related joint ventures and,
accordingly, these amounts are recorded on the books of the joint ventures.
As of June 30, 1995, the principal balances of the Monterra and Chandler's
Reach loans were $4,881,000 and $3,571,000, respectively. The Partnership
has indemnified the Monterra and Chandler's Reach joint ventures, along with
the related co-venture partners, against all liabilities, claims and expenses
associated with these borrowings. The three new nonrecourse loans have terms
of seven years and mature in September of 2001. The Chandler's Reach loan
bears interest at a rate of 8.33% and requires monthly principal and interest
payments of $29,000. The Monterra loan bears interest at a rate of 8.45% and
requires monthly principal and interest payments of $40,000. The Crystal
Tree loan bears interest at a rate of 8.39% and requires monthly principal
and interest payments of $28,000.
6. Bonds Payable
Bonds payable consist of the Sunol Center joint venture's share of
liabilities for bonds issued by the City of Pleasanton, California for public
improvements that benefit the Sunol Center operating investment property.
Bond assessments are levied on a semi-annual basis as interest and principal
become due on the bonds. The bonds for which the operating investment
property is subject to assessment bear interest at rates ranging from 5% to
7.87%, with an average rate of 7.2%. Principal and interest are payable in
semi-annual installments. In the event the operating investment property is
sold, Sunol Center Associates will no longer be liable for the bond
assessments.
7. Contingencies
The Partnership is involved in certain legal actions. The Managing General
Partner believes these actions will be resolved without material adverse
effect on the Partnership's financial statements, taken as a whole.
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As discussed in the Annual Report, subsequent to the completion of the last
of the debt refinancing transactions during fiscal 1995, management performed an
analysis of its cash flows and liquidity needs for the purpose of determining
the timing and amount of the reinstatement of quarterly distributions to the
partners. Based on such analysis, quarterly distributions were reinstated with
the payment made on May 15, 1995 for the quarter ended March 31, 1995 at the
rate of 1% per annum on original invested capital. Management had suspended the
Partnership's regular quarterly distributions in order to accumulate the funds
necessary to complete the refinancings of the zero coupon loans secured by the
Warner/Red Hill, Monterra, Chandler's Reach and 625 North Michigan properties.
Management believes that it is prudent to distribute cash flow conservatively at
the present time due to the capital needs associated with the Partnership's
commercial office/R&D buildings and retail property. Capital improvements are
planned at 625 North Michigan over the next two years, including the completion
of facade repairs, common area enhancements, elevator control system upgrading
and a possible lobby area retail space expansion and renovation. Significant
leasing costs have been and will continue to be incurred at Sunol Center and
major leasing costs could be incurred at the Crystal Tree Commerce Center in
the near term.
Occupancy at Sunol Center increased to 90% at September 30,1995 from 32% at
March 31, 1995 as a result of two significant lease signings. A tenant that
signed a 7-year lease on 39,085 square feet took occupancy during the first
quarter, and a tenant which has committed to lease at least 48,000 square feet
took occupancy of 28,000 square feet of such space during the second quarter.
The remaining 20,000 square feet of this tenant's lease space is currently
occupied by another tenant which will be vacating the property on January 1,
1996. During the first six months of fiscal 1996, the Partnership funded
$2,180,000 to Sunol Center primarily to pay for tenant improvements and leasing
commissions in connection with the new leases. With the new leasing activity,
no further operating deficits are expected at Sunol Center over the next
several years. At Crystal Tree, occupancy declined from 98% to 87% during the
quarter ended September 30, 1995 due to the expiration of several leases.
Subsequently, the leasing agent has secured new leases which will bring
occupancy back up to 93%, but which will require an initial investment in
tenant improvement costs. Market conditions in the south Florida area remain
very competitive and continued tenant turnover is likely in the near term.
Despite the leasing gains achieved at most of the Partnership's office/R&D
properties in fiscal 1995, there continues to be an oversupply of available
space in most markets due to the trend toward corporate downsizing and
restructurings which has occurred in the wake of the last national recession.
The competitive conditions faced by the Partnership's Warner/Red Hill and 1881
Worcester Road investments are especially severe at the present time.
Management's most recent evaluation of the Partnership's investment properties,
performed during the first quarter of fiscal 1996, indicated that conditions in
the markets for suburban office/R&D space in the Orange County and Boston areas,
where these properties are located, continue to be adversely affected by
corporate restructurings, cutbacks in government defense spending and the
reduced rate of growth in the high technology industries. In management's
opinion, the recovery of these market areas appears to be lagging behind
recoveries of similar market segments in other areas of the country. While
occupancy at 1881 Worcester Road had increased to 100% as of September 30, 1995,
a lease with the property's largest tenant is due to expire in July 1996.
Subsequent to the end of the current quarter, this tenant, which currently
occupies 49% of the building's net leasable area, informed management that it
intends to consolidate its area lease obligations at another location and will
not renew its lease at 1881 Worcester Road. The three remaining leases at 1881
Worcester Road are due to expire in calendar 1998. Once the aforementioned
tenant vacates the property in calendar 1996, management plans to make certain
capital improvements aimed at making the 1881 Worcester Road property more
appealing to traditional office space users. Management believes that these
improvements could allow for increased rental rates and a potentially quicker
lease up of vacant space. The total costs of completing the improvements are
expected to be less than $200,000. At Warner/Red Hill, in addition to a decline
in occupancy experienced during fiscal 1995, one of the property's major
tenants that occupies approximately 25% of the property's net rentable area
has been experiencing cash flow problems and has retained a commercial
leasing agent to market a portion of its space for sublease. Unless its
operations improve in the near-term, this tenant is unlikely to renew its
lease which is scheduled to expire in July 1998. Furthermore, to the extent
that its operating results deteriorate further, and if the tenant is unable
to sublease the space, the Partnership may be unable to collect future rent
owed under the lease obligation.
In light of the circumstances facing the 1881 Worcester Road and Warner/Red
Hill properties and given the improving conditions in other market sectors which
may provide the Partnership with opportunities to sell its other remaining
investment properties over next 5 to 7 years, management reviewed the carrying
values of its 1881 Worcester Road and Warner/Red Hill investments for potential
impairment as of March 31, 1995. In conjunction with such review, the
Partnership elected early application of Statement of Financial Accounting
Standards No. 121, `Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of''(SFAS 121). In accordance with SFAS 121,
an impairment loss with respect to an operating investment property is
recognized when the sum of the expected future net cash flows (undiscounted and
without interest charges) is less than the carrying amount of the asset. An
impairment loss is measured as the amount by which the carrying amount of the
asset exceeds its fair value, where fair value is defined as the amount at which
the asset could be bought or sold in a current transaction between willing
parties, that is other than a forced or liquidation sale. The effect of such
application was the recognition of impairment losses on the operating
investment properties owned by Warner/Red Hill Associates and Framingham 1881 -
Associates which were recorded as of March 31, 1995. Both impairment losses
resulted because, in management's judgment, the physical attributes of these
properties and their locations relative to their competition, combined with the
lack of near-term prospects for future improvement in market conditions in the
local markets in which the properties are located, were not expected to enable
the ventures to recover the carrying values of the assets within the practicable
remaining holding period. Warner/Red Hill Associates recognized an impairment
loss in fiscal 1995 of $6,784,000 to write down the operating investment
property to its estimated fair value of $3,600,000. Framingham 1881 -
Associates also recognized an impairment loss in fiscal 1995 of $2,983,000 to
write down the operating investment property to its estimated fair value of
$2,200,000. Fair value was estimated using independent appraisals of the
operating properties. Such appraisals make use of a combination of certain
generally accepted valuation techniques, including direct capitalization,
discounted cash flows and comparable sales analysis.
At September 30, 1995, the Partnership and its consolidated joint venture
had available cash and cash equivalents of $4,856,000. These funds, along with
the future cash flow distributions from the operating properties, will be
utilized for the working capital requirements of the Partnership, monthly debt
service payments, and for the funding of capital enhancements and potential
leasing costs for the operating investment properties and for distributions to
the partners. The source of future liquidity and distributions to the partners
is expected to be from the sales of the operating investment properties.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1995
The Partnership's net loss decreased by $593,000 for the three months ended
September 30, 1995 when compared to the same period in the prior year. This
decrease is primarily due to a favorable change in the Partnership's share of
unconsolidated ventures' income (losses). The Partnership reported income from
the operations of its unconsolidated ventures of $2,000 for the current period
as compared to losses of $462,000 for the same period in the prior year. The
primary reasons for this favorable change are decreases in the net losses at
both the Monterra Apartments and Warner/Red Hill joint ventures. The net loss
of the Monterra joint venture decreased mainly as a result of a significant
decrease in interest expense. Interest expense decreased due to the refinancing
of the zero coupon bond secured by Monterra in September 1994. The refinancing
transaction changed Monterra's debt from a compounding zero coupon loan with a
balance of $8,645,000, bearing interest at 9.36%, at the time of the refinancing
to a current pay mortgage loan with an outstanding balance of $4,896,000,
bearing interest at 8.45%, at the end of the current quarter. The net loss at
the Warner/Red Hill joint venture decreased mainly due to a significant decrease
in depreciation expense. Depreciation expense decreased due to the write down
of the operating investment property to its estimated fair value at the end of
fiscal 1995 in accordance with SFAS 121, as discussed further above. As a
result of the write-down, the remaining depreciable basis of the operating
investment property was significantly lower than in the prior fiscal year. In
addition, the Partnership's operating loss for the second quarter of fiscal 1996
decreased by $129,000 primarily as a result of an increase in rental income of
$125,000. Rental income increased as a result of the significant increase in
occupancy at the consolidated Sunol Center property, as discussed further above.
Six Months Ended September 30, 1995
The Partnership's net loss decreased by $632,000 for the six months ended
September 30, 1995 when compared to the same period in the prior year, primarily
due to a decrease in the Partnership's share of unconsolidated ventures' losses
of $523,000. The Partnership's share of unconsolidated ventures' losses
decreased mainly as a result of decreases in the net losses at the Monterra
Apartments and Warner/Red Hill joint ventures. The net loss of the Monterra
joint venture decreased primarily as a result of a significant decrease in
interest expense. Interest expense decreased due to the refinancing of the zero
coupon bond secured by Monterra in September 1994, as discussed further above.
The net loss at the Warner/Red Hill joint venture decreased mainly due to a
significant decrease in depreciation expense. Depreciation expense decreased
due to the write down of the operating investment property to its estimated fair
value at the end of fiscal 1995 in accordance with SFAS 121, as discussed
further above. In addition to the decline in the Partnership's share of
unconsolidated ventures' losses, the Partnership's operating loss for the six
months ended September 30, 1995 decreased by $109,000 primarily as a result of
an increase in rental income of $115,000. Rental income increased as a result
of the significant increase in occupancy at the consolidated Sunol Center
property, as discussed further above.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
As discussed in the Partnership's annual report on Form 10-K for the year
ended March 31, 1995, in November 1994, a series of purported class actions (the
"New York Limited Partnership Actions") were filed in the United States District
Court for the Southern District of New York concerning PaineWebber
Incorporated's sale and sponsorship of various limited partnership investments,
including those offered by the Partnership. On May 30, 1995, the court
certified class action treatment of the claims asserted in the litigation.
Refer to the description of the claims in the prior quarterly report for further
information. The General Partners continue to believe that the action will be
resolved without material adverse effect on the Partnership's financial
statements, taken as a whole.
Item 2. through 5. NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: NONE
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed by the registrant during the quarter
for which this report is filed.
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PAINEWEBBER EQUITY PARTNERS ONE
LIMITED PARTNERSHIP
By: First Equity Partners, Inc.
Managing General Partner
By: /S/ Walter V. Arnold
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Dated: November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Partnership's interim financial statements for the six months ended September
30, 1995 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 4,856
<SECURITIES> 0
<RECEIVABLES> 481
<ALLOWANCES> (2)
<INVENTORY> 0
<CURRENT-ASSETS> 5,749
<PP&E> 55,482
<DEPRECIATION> (8,676)
<TOTAL-ASSETS> 52,774
<CURRENT-LIABILITIES> 537
<BONDS> 11,462
<COMMON> 0
0
0
<OTHER-SE> 40,588
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</TABLE>
