<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
--------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
Commission File Number 0-13500
-------
1626 New York Associates Limited Partnership
(Exact name of Registrant as specified in its charter)
Massachusetts 04-2808184
- --------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
- --------------------------------------- ------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
--------------
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
----- -----
1 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 1997
PART 1 - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
March 31, December 31,
1997 1996
-------- --------
<S> <C> <C>
ASSETS
Real estate:
Land $ 24,440 $ 24,440
Buildings and improvements, net of accumulated
depreciation of $133,198 and $130,617 as of
March 31, 1997 and December 31, 1996, respectively 110,851 110,878
-------- --------
135,291 135,318
Other Assets:
Cash and cash equivalents 373 125
Restricted cash 9,818 8,935
Accounts receivable, net of reserves of $748
as of March 31, 1997 and December 31, 1996 970 751
Prepaid expenses and other assets 5,265 5,267
Deferred rent receivable 8,366 8,424
Deferred costs, net of accumulated amortization of
$22,299 and $21,786 as of March 31, 1997
and December 31, 1996, respectively 4,415 4,827
-------- --------
Total Assets $164,498 $163,647
======== ========
</TABLE>
See notes to consolidated financial statements.
2 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 1997
<TABLE>
<CAPTION>
Consolidated Balance Sheets (Unaudited)
(In Thousands, Except Unit Data)
(Continued)
LIABILITIES AND PARTNERS' DEFICIT
March 31, December 31,
1997 1996
--------- ---------
<S> <C> <C>
Liabilities:
Mortgage notes payable to affiliates $ 204,702 $ 205,171
Other mortgage notes payable 19,142 19,171
Notes payable and accrued interest
to general partners and affiliates 16,214 13,695
Accounts payable, accrued expenses, security
deposits and other liabilities 9,548 8,826
Accrued interest on mortgage notes to affiliates 41,733 38,108
Accrued interest on other mortgage notes 960 960
Deferred purchase price obligation 1,498 1,498
--------- ---------
Total Liabilities 293,797 287,429
--------- ---------
Commitments and Contingencies
Partners' Deficit:
Limited Partners Deficit - Units of Investor
Limited Partnership Interest
$250,000 stated value per unit; authorized, issued
and outstanding -1,340 as of March 31, 1997 and
December 31, 1996, respectively (134,435) (129,148)
Less: investor notes (68) (68)
--------- ---------
(134,503) (129,216)
General Partners Equity 5,204 5,434
--------- ---------
Total Partners' Deficit (129,299) (123,782)
--------- ---------
Total Liabilities and Partners' Deficit $ 164,498 $ 163,647
========= =========
</TABLE>
See notes to consolidated financial statements.
3 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 1997
<TABLE>
<CAPTION>
Consolidated Statements of Operations (Unaudited)
(In Thousands, Except Unit Data)
For the Three Months Ended
March 31, March 31,
1997 1996
------------- -------------
<S> <C> <C>
Revenues:
Rental and escalation income $ 9,827 $ 11,822
Interest and other income 365 142
------------- -------------
Total revenues 10,192 11,964
------------- -------------
Expenses:
Interest on obligations to affiliates 6,356 2,306
Interest 408 3,015
Depreciation and amortization 3,305 3,609
Real estate and other taxes 2,346 2,430
Utilities 1,085 1,109
Cleaning and security 1,034 951
Asset and property management fees 135 344
Repairs and maintenance 280 265
Payroll 310 488
General and administrative 296 270
Professional fees 154 80
------------- -------------
Total expenses 15,709 14,867
------------- -------------
Loss before extraordinary gain (5,517) (2,903)
Extraordinary gain on transfer of 227 East 45th Street -- 13,688
------------- -------------
Net (loss) income $ (5,517) $ 10,785
============= =============
Net (loss) income allocated to general partners $ (230) $ 912
============= =============
Net loss before extraordinary item allocated to
investor limited partners $ (5,287) $ (2,865)
============= =============
Extraordinary gain allocated to investor limited partners -- 12,738
------------- -------------
Net (loss) income allocated to investor limited partners $ (5,287) $ 9,873
============= =============
Net loss per unit of investor limited partnership
interest before extraordinary gain $ (3,945.52) $ (2,138.06)
Extraordinary gain per unit of investor limited
partnership interest -- 9,505.97
------------- -------------
Net (loss) income per unit of investor limited
partnership interest $ (3,945.52) $ 7,367.91
============= =============
</TABLE>
See notes to consolidated financial statements.
4 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 1997
<TABLE>
<CAPTION>
Consolidated Statement of Partners' Deficit (Unaudited)
(In Thousands, Except Unit Data)
Units of
Investor Investor
Limited Limited General Total
Partnership Partners' Partners' Partners'
Interest (Deficit) Equity Deficit
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance - December 31, 1996 1,340 $(129,216) $ 5,434 $(123,782)
Net Loss -- (5,287) (230) (5,517)
--------- --------- --------- ---------
Balance - March 31, 1997 1,340 $(134,503) $ 5,204 $(129,299)
========= ========= ========= =========
</TABLE>
See notes to consolidated financial statements.
5 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 1997
<TABLE>
<CAPTION>
Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended
(In Thousands) March 31, March 31,
1997 1996
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net (loss) income $ (5,517) $ 10,785
Adjustments to reconcile net (loss) income to net cash
used in operating activities:
Depreciation 2,581 2,725
Amortization 724 884
Change in deferred rent receivable (153) (181)
Gain on transfer of 227 East 45th Street -- (13,688)
Changes in operating assets and liabilities:
Decrease in accounts receivable, prepaid
expenses and other assets (217) 348
Decrease in accounts payable, accrued expenses,
security deposits and other liabilities 722 (1,095)
------------- -------------
Net cash used in operating activities (1,860) (222)
------------- -------------
Cash Flows from Investing Activities:
Additions to buildings and improvements (2,554) (1,733)
Increase in deferred costs (101) (81)
------------- -------------
Cash used in investing activities (2,655) (1,814)
------------- -------------
Cash Flows from Financing Activities:
Increase in accrued mortgage interest 3,625 1,406
Principal payments on mortgage notes to affiliates (469) --
Increase in notes payable and accrued interest to
general partners and affiliates 2,519 968
Principal payments on other mortgage notes (29) (18)
Increase in restricted cash (883) (315)
------------- -------------
Net cash provided by financing activities 4,763 2,041
------------- -------------
Net increase in cash and cash equivalents 248 5
Cash and cash equivalents, beginning of year 125 267
------------- -------------
Cash and cash equivalents, end of year $ 373 $ 272
============= =============
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest Cash paid for interest $ 2,780 $ 3,099
============= =============
Supplemental Disclosure of Non-Cash Investing
and Financing Activities:
Deed in lieu of foreclosure - See Note 4
Related party debt forgiveness and modification - See Note 2
</TABLE>
See notes to consolidated financial statements.
6 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The accompanying consolidated financial statements, footnotes and
discussions should be read in conjunction with the consolidated financial
statements, related footnotes and discussions contained in the
Partnership's annual report for the year ended December 31, 1996.
The financial information contained herein is unaudited. In the opinion
of management, all adjustments necessary for a fair presentation of such
financial information have been included. All adjustments are of a normal
recurring nature except as discussed in Notes 2, 3 and 4. Certain amounts
have been reclassified to conform to the March 31, 1997 presentation. The
balance sheet at December 31, 1996 was derived from audited financial
statements at such date.
The results of operations for the three months ended March 31, 1997 and
1996 are not necessarily indicative of the results to be expected for the
full year.
2. Related Parties
The Partnership incurred approximately $329,000 of property and asset
management fees and approximately $135,000 of leasing and construction
fees through February 28, 1996, payable to an affiliate of the general
partner. As part of the sale of the Fuji Loan, (described in Note 3), the
Partnership agreed to retain new, unaffiliated management and leasing
agents for all of its properties.
In connection with the sale of the Fuji Loan, Winthrop Financial
Associates ("WFA") and certain of its affiliates entered into an
agreement with the Investor Partnership, the Operating Partnership and an
affiliate of Zeus Property LLC ("Zeus") with regard to amounts owed to
WFA and its affiliates by the Investor Partnership and the Operating
Partnership (the "Winthrop Debt Agreement"). Prior to this agreement,
Winthrop and its affiliates were owed, in the aggregate, $47,162,000 by
the Investor Partnership and the Operating Partnership. This amount was
comprised of cash advances made by Winthrop to the Operating Partnership,
as well as unpaid deferred fees related to the on-site management of the
properties, asset management and syndication. This amount also included
accrued interest on these outstanding balances.
Under the Winthrop Debt Agreement, Winthrop and its affiliates
contributed approximately $37,162,000 of the $47,162,000 to the Operating
Partnership. The remaining $10,000,000 receivable has been evidenced by a
promissory note issued by the Operating Partnership (the "Receivables
Note") and is payable from the excess cash flow, as defined, from 509
Fifth Avenue and 300 Park Avenue South. WFA then sold the Receivables
Note to an affiliate of Zeus for a payment of $6 million in cash. The
Receivables Note has an annual base interest rate of 6% and an additional
annual contingent interest rate of 9%. Interest is payable only from
available cash flow after payment of debt service on the Dime loans.
Interest, to the extent that it cannot be paid currently, accrues until
the maturity of this Note on July 31, 1997. However, the holder of the
Receivables Note previously entered into a forbearance agreement which
prohibits it from exercising its remedies if the Receivables Note is not
satisfied at maturity.
7 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Related Parties (Continued)
As of March 31, 1997, the outstanding balance against the Unsecured Note,
as defined below, was $5,187,000, and is included in notes payable and
accrued interest to general partners and affiliates.
3. Debt Modification
On February 28, 1996, Zeus purchased the existing debt held by The Fuji
Bank, Ltd. for $115 million. The Operating Partnership obtained a
reduction in the current interest required to be paid under the modified
loan which, based on current projections, will greatly reduce the
likelihood of monetary default under the loan prior to February 28, 1998,
the new maturity date for a portion of the loan. As part of the
restructuring of the Fuji loan, each of the Operating Partnership's 535
and 545 Fifth Avenue, 1372 Broadway and 757 Third Avenue properties (the
"Fuji Properties") were conveyed by the Operating Partnership to
newly-created limited liability companies which are wholly-owned,
indirectly, by the Operating Partnership and its partners.
The modified Fuji loan (the "Modified Loan") is comprised of several
component non-recourse loans, all held by Zeus and its affiliates. The
most senior loan component consists of a series of secured notes in the
aggregate principal amount of $102,252,000 at March 31, 1997. These notes
have an annual interest rate of 295 basis points over 30-day LIBOR (8.37%
at March 31, 1997), maturing on February 28, 1998 unless extended at
Zeus' option (the "Secured A Notes").
A junior component consists of secured notes in the aggregate principal
amount of $102,450,000, each having a fixed annual interest rate of 14%
for the next three years and then 16.75% thereafter, maturing on February
28, 2016 (the "Secured B Notes"). The Secured A Notes and Secured B Notes
are collectively secured by first mortgages on the Fuji Properties. A
third component is the unsecured $19,550,000 note (the "Unsecured Note")
representing the additional financing expected to be drawn upon by the
Operating Partnership to fund capital improvements and tenant lease-up
costs with respect to the Fuji Properties. The Unsecured Note bears
interest at a fixed annual rate of 14% for the next three years and then
16.75% thereafter and matures on February 28, 1998, unless extended at
Zeus' option.
The Partnership has maturing mortgage debt, totaling approximately
$29,000,000, plus accrued interest, due between July 31, 1997 and
December 31, 1997, approximately $102,000,000 due February 28, 1998 and a
$25,000,000 mandatory principal payment due March 15, 1998. The
Partnership is attempting to refinance or restructure the 1997
liabilities. However, based on the current value of the Properties it is
highly unlikely the Partnership will be able to meet its 1998
obligations. Accordingly, it appears there is a substantial likelihood
that some or all of the Properties will be lost through foreclosure in
1998. This raises substantial doubt about the Partnerships' ability to
continue as a going concern.
8 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q MARCH 31, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Deed in Lieu of Foreclosure
In early January 1996, a deed in lieu of foreclosure agreement was
reached between the Operating Partnership and Sanwa Business Credit
Corporation ("Sanwa"). Pursuant to the deed in lieu of foreclosure
agreement, the Operating Partnership transferred title to the property
located at 227 East 45th St. to Sanwa on January 24, 1996. In exchange,
Sanwa released, as of the closing date, the Operating Partnership from
all claims, demands, liabilities, obligations, actions and causes of any
kind with regard to Sanwa.
As of December 31, 1995, the related indebtedness to Sanwa was
approximately $24,409,000. As a result of the above described
transactions, the Operating Partnership has recognized an extraordinary
gain of approximately $13,688,000. The property was stated at its fair
value as of December 31, 1995 as a result of a recorded write-down.
5. Subsequent Event
In April 1997, the Partnership contracted to sell its 1372 Broadway
property to an unaffiliated third party for $52,000,000. If the sale is
consummated, all of the proceeds from such sale will be required to be
used to partially satisfy the Modified Loan. For financial statement
purposes, the Partnership will recognize a substantial gain on the sale.
9 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-MARCH 31, 1997
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Item should be read in conjunction with the Consolidated
Financial Statements and other items contained elsewhere in this
Report.
Liquidity and Capital Resources
The Registrant serves as the general partner of Nineteen New York
Properties Limited Partnership (the "Operating Partnership"). All of
the Operating Partnership's six remaining properties (the
"Properties") are office buildings located in New York City. The
Registrant's sole source of revenue is from distributions from the
Operating Partnership and interest income on cash reserves. The
Registrant is responsible for its operating expenses. The Operating
Partnership receives rental revenue from tenants and is responsible
for operating expenses, administrative expenses, capital
improvements and debt service payments.
The Registrant and the Operating Partnership had $373,000 of cash
and cash equivalents and $9,818,000 of restricted cash at March 31,
1997, as compared to $125,000 and $8,935,000 respectively, at
December 31, 1996. Restricted cash includes amounts held in mortgage
collateral accounts, restricted operating accounts, and tenant
security and utility deposits accounts. The $248,000 increase in
cash and cash equivalents at March 31, 1997, as compared to December
31, 1996, was due to $4,763,000 of cash provided by financing
activities, which was substantially offset by $2,655,000 of cash
used in investing activities and $1,860,000 of cash used in
operating activities. Cash used in investing activities consisted
primarily of $2,554,000 of improvements to real estate, the majority
of which were building improvements. Cash provided by financing
activities consisted of the accrual of $3,625,000 of interest on
mortgage notes payable, $2,295,000 in borrowings against the
unsecured line of credit, and $200,000 of accrued and unpaid
interest on the Receivables Note. In addition, Registrant used
$469,000 of cash provided by financing activities for principal
payments on mortgage notes to affiliates. All other increases
(decreases) in certain assets and liabilities are the result of the
timing of receipt and payment of various activities.
The Operating Partnership's only other source of liquidity is a
$19,550,000 unsecured credit line provided by Zeus Property LLC
("Zeus"). This credit line can be used by the Operating Partnership
to fund capital improvements and tenant lease-up costs at the Fuji
Properties. However, any borrowings under this credit line are
subject to Zeus' discretion. Accordingly, it is possible that the
Operating Partnership may not be able to borrow against this credit
line each time it deems it necessary. As of March 31, 1997, the
outstanding borrowings against the unsecured credit line were
$5,187,000.
The Registrant has maturing mortgage debt, totaling approximately
$29,000,000, plus accrued interest, due between July 31, 1997 and
December 31, 1997, approximately $102,000,000 due February 28, 1998
and a $25,000,000 mandatory principal payment due March 15, 1998.
The Registrant is attempting to refinance or restructure the 1997
liabilities. However, based on the current value of the Properties
it is highly unlikely the Registrant will be able to meet its 1998
obligations. Accordingly, it appears there is a substantial
likelihood that some or all of the Properties will be lost through
foreclosure in 1998. This raises substantial doubt about the
Partnerships' ability to continue as a going concern.
10 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-MARCH 31, 1997
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Liquidity and Capital Resources (Continued)
In May 1997, the Registrant entered into an agreement to sell its
1372 Broadway property for $52,000,000. If the sale is consummated,
all of the proceeds from such sale will be required to be used to
partially satisfy the Modified Loan. The sale, which is subject to
the purchaser's due diligence review and other customary conditions,
is expected to close in the first quarter of 1998.
It appears that the Registrant's original objective of capital
appreciation will not be achieved and it is anticipated that the
Registrant's partners will not receive any future distributions.
Accordingly, the Registrant's partners will not receive a return of
their original investment.
There have been, and it is possible there may be other Federal,
state and local legislation and regulations enacted relating to the
protection of the environment and individual rights (such as the
American with Disabilities Act). The Registrant is unable to predict
the extent, if any, to which such new legislation or regulation
might occur and the degree to which such existing or new legislation
or regulations might adversely affect the Registrant's liquidity and
capital resources.
Real Estate Market
The income and expenses of operating the Properties owned by the
Operating Partnership are subject to factor's outside its control,
such as the over-supply of similar properties, increases in
unemployment, population shifts, or changes in patterns or needs of
users. Expenses, such as local real estate taxes and miscellaneous
expenses, are subject to change and cannot always be reflected in
rental rate increases due to market conditions. In addition, there
are risks inherent in owning and operating office buildings because
such properties are labor intensive and are susceptible to the
impact of economic and other conditions outside the control of the
Registrant.
11 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-MARCH 31, 1997
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Results of Operations
Three Months ended March 31, 1997 vs. March 31, 1996
The Partnership generated a net loss of approximately $5.5 million
for the three months ended March 31, 1997, as compared to a net loss
before extraordinary gain of approximately $2.9 million for the
three months ended March 31, 1996. The increase in net loss before
the extraordinary gain was due to a decrease in revenues and an
increase in expenses.
Base rent and rent escalations (collectively "rental and escalation
income") decreased to approximately $10 million for the three months
ended March 31, 1997 as compared to approximately $12 million for
the three months ended March 31, 1996. Rental and escalation income
declined due to a decrease in rental revenues at 757 Third Avenue,
535 Fifth Avenue and 300 Park Avenue South for the three months
ended March 31, 1997, as compared to 1996. These decreases were
partially offset by an increase in rental and escalation income at
1372 Broadway of approximately $400,000. The lower rental revenues
were primarily the result of lower effective rental rates, decreased
occupancy and an increase in rental concessions. Rental and
escalation income at the other properties remained relatively
constant.
Expenses increased by $842,000 for the three months ended March 31,
1997, as compared to 1996. The increases in overall interest expense
of $1,443,000, general and administrative expenses of $26,000 and
professional fees of $74,000, were partially offset by decreases in
overall operating expenses (i.e., real estate and other taxes,
payroll, utilities, repairs and maintenance, and cleaning and
security) of $188,000, asset and property management fees of
$209,000, depreciation and amortization expense of approximately
$304,000.
Interest expense increased due to the Modified Loan incurring
interest at an overall higher interest rate than on the prior loan.
Asset and property management fees declined due to the elimination
of the asset management fee payable to a related party and the new
management agreement (which changed the previous fee of 2.5% of cash
receipts to a fixed fee). Depreciation and amortization expenses
declined due to fixed assets and intangible assets becoming fully
amortized during 1996, which was only slightly offset by the current
years fixed asset additions.
As of March 31, 1997 and 1996, the current portfolio's occupancy was
79% and 90%, respectively. During the first three months of 1997,
the Operating Partnership signed new, renewal, extension, and
expansion leases totaling 59,610 square feet at rental terms
comparable to buildings of similar quality in the market.
12 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-MARCH 31, 1997
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit
to this report.
b) Reports on Form 8K:
No report on Form 8-K was filed during the period.
13 of 14
<PAGE>
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-MARCH 31, 1997
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
BY: TWO WINTHROP PROPERTIES, INC.
MANAGING GENERAL PARTNER
BY: /s/ Michael L. Ashner
------------------------------
Michael L. Ashner
Chief Executive Officer
BY: /s/ Edward V. Williams
------------------------------
Edward V. Williams
Chief Financial Officer
DATED: May 15, 1997
14 of 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from 1626 New
York Associates Limited Partnership and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 10,191,000 <F1>
<SECURITIES> 0
<RECEIVABLES> 1,718,000
<ALLOWANCES> (748,000)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 268,489,000
<DEPRECIATION> (133,198,000)
<TOTAL-ASSETS> 164,498,000
<CURRENT-LIABILITIES> 0
<BONDS> 282,751,000 <F2>
0
<COMMON> 0
0
<OTHER-SE> (129,299,000)
<TOTAL-LIABILITY-AND-EQUITY> 164,498,000
<SALES> 0
<TOTAL-REVENUES> 9,827,000
<CGS> 0
<TOTAL-COSTS> 8,649,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,764,000
<INCOME-PRETAX> (5,517,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,517,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,517,000)
<EPS-PRIMARY> (3,945.52)
<EPS-DILUTED> (3,945.52)
<FN>
<F1> Cash includes $9,818,000 of restricted cash.
<F2> Includes accrued interest of $43,720,000.
</FN>
</TABLE>
