FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from.........to.........
Commission file number 0-14530
DAVIDSON INCOME REAL ESTATE, L.P.
(Exact name of small business issuer as specified in its charter)
Delaware 62-1242144
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
Issuer's telephone number
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the 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 .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
DAVIDSON INCOME REAL ESTATE, L.P.
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 1998
Assets
Cash and cash equivalents $ 858
Receivables and deposits 524
Restricted escrows 294
Other assets 284
Investment properties:
Land $ 4,120
Buildings and related personal property 20,492
24,612
Less accumulated depreciation (10,815) 13,797
Investment in Joint Venture 171
$ 15,928
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 118
Tenant security deposit liabilities 83
Accrued property taxes 337
Other liabilities 125
Mortgage notes payable 11,929
Partners' Capital (Deficit)
General partners' $ (671)
Limited partners' (26,776 units
issued and outstanding) 4,007 3,336
$ 15,928
See Accompanying Notes to Consolidated Financial Statements
b)
DAVIDSON INCOME REAL ESTATE, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenues:
Rental income $ 1,113 $ 1,116 $ 3,304 $ 3,310
Other income 62 29 162 167
Total revenues 1,175 1,145 3,466 3,477
Expenses:
Operating 583 643 1,597 1,665
General and administrative 56 43 172 124
Depreciation 222 225 666 664
Interest 250 253 752 765
Property taxes 114 96 338 334
Total expenses 1,225 1,260 3,525 3,552
Equity in income
of joint venture 11 13 38 41
Net loss $ (39) $ (102) $ (21) $ (34)
Net loss allocated
to general partners (3%) $ (1) $ (3) $ (1) $ (1)
Net loss allocated
to limited partners (97%) (38) (99) (20) (33)
$ (39) $ (102) $ (21) $ (34)
Net loss per limited
partnership unit $ (1.41) $ (3.70) $ (.76) $ (1.24)
Distributions per limited
partnership unit $ 3.63 $ 3.58 $ 10.87 $ 9.93
See Accompanying Notes to Consolidated Financial Statements
c)
DAVIDSON INCOME REAL ESTATE, L.P.
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 26,776 $ 1 $ 26,776 $ 26,777
Partners' capital (deficit)
at December 31, 1997 26,776 $ (661) $ 4,318 $ 3,657
Distributions paid to partners -- (9) (291) (300)
Net loss for the nine months
ended September 30, 1998 -- (1) (20) (21)
Partners' capital (deficit)
at September 30, 1998 26,776 $ (671) $ 4,007 $ 3,336
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
d)
DAVIDSON INCOME REAL ESTATE, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1998 1997
Cash flows from operating activities:
Net loss $ (21) $ (34)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 666 664
Amortization of discounts and loan costs 59 64
Equity in income of joint venture (38) (41)
Change in accounts:
Receivables and deposits (81) (11)
Other assets 8 (48)
Accounts payable (3) 5
Tenant security deposit liabilities (10) (6)
Accrued property taxes 65 --
Other liabilities 10 8
Net cash provided by operating activities 655 601
Cash flows from investing activities:
Property improvements and replacements (325) (250)
Net withdrawals from restricted escrows 21 52
Distributions from joint venture 131 71
Net cash used in investing activities (173) (127)
Cash flows from financing activities:
Payments on mortgage notes payable (100) (92)
Distributions to partners (300) (276)
Loan costs -- (2)
Net cash used in financing activities (400) (370)
Net increase in cash and cash equivalents 82 104
Cash and cash equivalents at beginning of period 776 655
Cash and cash equivalents at end of period $ 858 $ 759
Supplemental disclosure of cash flow information:
Cash paid for interest $ 694 $ 701
See Accompanying Notes to Consolidated Financial Statements
e)
DAVIDSON INCOME REAL ESTATE, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Davidson Income Real Estate,
L.P. (the "Partnership") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of Davidson Diversified Properties, Inc. (the "Managing General
Partner"), a wholly-owned subsidiary of Insignia Properties Trust ("IPT") (see
Note D), all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and nine month periods ended September 30, 1998, are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 1998. For further information, refer to the financial statements
and footnotes thereto included in the Partnership's annual report on Form 10-KSB
for the year ended December 31, 1997.
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following amounts were paid to the
Managing General Partner and its affiliates during the nine month periods ended
September 30, 1998 and 1997:
1998 1997
(in thousands)
Property management fees (included in operating expenses) $176 $173
Reimbursement for services of affiliates (included in
general and administrative and operating expenses) (1) 101 83
(1) Included in "Reimbursements for services of affiliates" for 1998 and 1997,
are approximately $7,600 and $15,500, respectively, of construction
oversight cost reimbursements.
For the period of January 1, 1997 to August 31, 1997, the Partnership insured
its properties under a master policy through an agency affiliated with the
Managing General Partner with an insurer unaffiliated with the Managing General
Partner. An affiliate of the Managing General Partner acquired, in the
acquisition of a business, certain financial obligations from an insurance
agency which was later acquired by the agent who placed the master policy. The
agent assumed the financial obligations to the affiliate of the Managing General
Partner, which received payment on these obligations from the agent. The amount
of the Partnership's insurance premiums accruing to the benefit of the affiliate
of the Managing General Partner by virtue of the agent's obligations was not
significant.
On September 26, 1997, an affiliate of the Managing General Partner purchased
Lehman Brothers' "Class D" subordinated bonds of SASCO, 1992-M1. These bonds
are secured by 55 multi-family apartment mortgage loan pairs held in Trust,
including Bexley House Apartments owned by the Partnership.
On August 27, 1998, an affiliate of the Managing General Partner (the
"Purchaser") commenced a tender offer for limited partnership interests in the
Partnership. The Purchaser offered to purchase up to 9,000 of the outstanding
units of limited partnership interest in the Partnership at $375 per Unit, net
to the seller in cash. The expiration date for the tender offer was extended to
November 16, 1998.
NOTE C - DISTRIBUTIONS
The Partnership distributed cash from operations of approximately $291,000 and
$9,000 to the limited partners and general partners, respectively, during the
nine months ended September 30, 1998. During the nine months ended September
30, 1997, the Partnership distributed cash from operations of approximately
$266,000 and $10,000 to the limited partners and general partners, respectively.
NOTE D - TRANSFER OF CONTROL - SUBSEQUENT EVENT
On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and
into Apartment Investment and Management Company ("AIMCO"), a publicly traded
real estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control
of the Managing General Partner. In addition, AIMCO also acquired approximately
51% of the outstanding common shares of beneficial interest of IPT. Also,
effective October 1, 1998, IPT and AIMCO entered into an Agreement and plan of
Merger pursuant to which IPT is to be merged with and into AIMCO or a subsidiary
of AIMCO (the "IPT Merger"). The IPT Merger requires the approval of the holders
of a majority of the outstanding IPT Shares. AIMCO has agreed to vote all of the
IPT Shares owned by it in favor of the IPT Merger and has granted an irrevocable
limited proxy to unaffiliated representatives of IPT to vote the IPT Shares
acquired by AIMCO and its subsidiaries in favor of the IPT Merger. As a result
of AIMCO's ownership and its agreement, the vote of no other holder of IPT is
required to approve the merger. The Managing General Partner does not believe
that this transaction will have a material effect on the affairs and operations
of the Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of four apartment complexes.
The following table sets forth the average occupancy of the properties for the
nine months ended September 30, 1998 and 1997:
Average
Occupancy
Property 1998 1997
Northsprings Apartments (1)
Atlanta, Georgia 96% 91%
Lakeside Apartments
Charlotte, North Carolina 93% 93%
Bexley House Apartments
Columbus, Ohio 92% 94%
Covington Pointe Apartments (2)
Dallas, Texas 81% 93%
(1)The increase in occupancy at Northsprings Apartments is attributed to a
stronger rental market in the Atlanta area. Improvements were also made
recently to enhance the appearance of the property and a "One Month Free"
special promotion was provided at the property.
(2)Occupancy decreased at Covington Pointe Apartments as a result of direct
competition of newer complexes in the Dallas area.
Results of Operations
The Partnership realized a net loss for the three and nine month periods ended
September 30, 1998 of approximately $39,000 and $21,000, respectively. During
the three and nine month periods ended September 30, 1997, the Partnership
realized a net loss of approximately $102,000 and $34,000, respectively. The
decrease in net loss for the nine month period ended September 30, 1998 is
primarily attributable to a decrease in operating expense partially offset by an
increase in general and administrative expense. The decrease in operating
expense is attributable to a decrease in maintenance expense for the nine months
ended September 30, 1998 due to parking lot and building repair projects at a
number of the Partnership's investment properties in 1997. General and
administrative expense increased due to an increase in general partner
reimbursements and other administrative costs. The decrease in net loss for the
three months ended September 30, 1998 as compared to the same period in 1997 is
primarily attributable to a decrease in operating expense, as discussed above,
combined with an increase in other income. The increase in other income is
primarily due to increases in interest income and various rental related fees
during the three month period ended September 30, 1998. Rental income for both
the three and nine month comparable periods remained relatively constant as
increases in rental rates offset the overall decrease in occupancy at the
Partnership's investment properties.
The Partnership owns a 17.5% interest in Sterling Crest Joint Venture. Equity in
the income of the joint venture decreased slightly for the three month period
ended September 30, 1998 as a result of a decrease in the income of the Joint
Venture's investment property, Brighton Crest. The decrease in net income at
Brighton Crest for the three month period ended September 30, 1998 is primarily
attributable to a decrease in rental income attributable to concessions offered
to maintain occupancy offset by a decrease in property expense at the property.
Net income for the nine month period ended September 30, 1998 remained
consistent with that of the same period in 1997.
Included in operating expense for the nine month period ended September 30, 1998
are approximately $46,000 of major repairs and maintenance comprised primarily
of landscaping costs, parking lot and pool repairs, and construction oversight
reimbursements. For the nine months ended September 30, 1997 approximately
$217,000 of major repairs and maintenance, mainly comprised of parking lot,
gutter, pool, tennis court and exterior building repairs, and balcony
restoration at Lakeside Apartments, were included in operating expense.
Liquidity and Capital Resources
At September 30, 1998, the Partnership held cash and cash equivalents of
approximately $858,000 compared to approximately $759,000 at September 30, 1997.
The net increase in cash and cash equivalents was approximately $82,000 and
$104,000 for the nine month periods ended September 30, 1998 and 1997,
respectively. Net cash provided by operating activities increased primarily due
to decreases in other assets and an increase in accrued property taxes partially
offset by an increase in receivables and deposits. These fluctuations in other
operating accounts are due to the timing of collections and payments. Net cash
used in investing activities increased due to an increase in property
improvements and replacements in 1998 combined with a decrease in withdrawals
from restricted escrows. Partially offsetting these increases was an increase in
cash distributions received from the joint venture. Net cash used in financing
activities increased primarily as a result of increased distributions paid to
partners during the nine months ended September 30, 1998 compared to the
corresponding period in 1997.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership and to comply with federal,
state and local legal and regulatory requirements. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
Managing General Partner is currently assessing the need for capital
improvements at each of the Partnership's properties. To the extent that
additional capital improvements are required, the Partnership's distributable
cash flow, if any, may be adversely affected at least in the short term. The
mortgage indebtedness of approximately $11,929,000, net of discount, is
amortized over varying periods with required balloon payments ranging from
November 2002 to November 2003. The Managing General Partner will attempt to
refinance such indebtedness or sell the properties prior to such maturity dates.
If the properties cannot be refinanced or sold for a sufficient amount, the
Partnership will risk losing such properties through foreclosure.
Distributions paid to the partners during the nine months ended September 30,
1998 and 1997 were approximately $300,000 ($10.87 per unit of limited
partnership interest) and $276,000 ($9.93 per unit of limited partnership
interest), respectively. Future cash distributions will depend on the levels of
net cash generated from operations, refinancings, property sales, and the
availability of cash reserves. The Partnership's distribution policy will be
reviewed on a quarterly basis. There can be no assurance, however, that the
Partnership will generate sufficient funds from operations to permit further
distributions to its partners in 1998 or subsequent periods.
Transfer of Control - Subsequent Event
On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and
into Apartment Investment and Management Company ("AIMCO"), a publicly traded
real estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result of the Insignia Merger, AIMCO acquired control
of the Managing General Partner. In addition, AIMCO also acquired approximately
51% of the outstanding common shares of beneficial interest of Insignia
Properties Trust ("IPT"), the entity which controls the Managing General
Partner. Also, effective October 1, 1998, IPT and AIMCO entered into an
Agreement and plan of Merger pursuant to which IPT is to be merged with and into
AIMCO or a subsidiary of AIMCO (the "IPT Merger"). The IPT Merger requires the
approval of the holders of a majority of the outstanding IPT Shares. AIMCO has
agreed to vote all of the IPT Shares owned by it in favor of the IPT Merger and
has granted an irrevocable limited proxy to unaffiliated representatives of IPT
to vote the IPT Shares acquired by AIMCO and its subsidiaries in favor of the
IPT Merger. As a result of AIMCO's ownership and its agreement, the vote of no
other holder of IPT is required to approve the merger. The Managing General
Partner does not believe that this transaction will have a material effect on
the affairs and operations of the Partnership.
Year 2000
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. The Partnership is
dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
The Managing Agent has determined that it will be required to modify or replace
significant portions of its software and certain hardware so that those systems
will properly utilize dates beyond December 31, 1999. The Managing Agent
presently believes that with modifications or replacements of existing software
and certain hardware, the Year 2000 Issue can be mitigated. However, if such
modifications and replacements are not made, or are not completed timely, the
Year 2000 Issue could have a material impact on the operations of the Managing
Agent and the Partnership.
Status of Progress in Becoming Year 2000 Compliant
The Managing Agent's plan to resolve the Year 2000 Issue involves the following
four phases: assessment, remediation, testing and implementation. To date, the
Managing Agent has fully completed its assessment of all information systems
that could be significantly affected by the Year 2000, and has begun the
remediation, testing and implementation phase on both hardware and software
systems. Assessments are continuing in regards to embedded systems in operating
equipment. The Managing Agent anticipates having all phases complete by June 1,
1999.
In addition to the areas the Partnership is relying on the Managing Agent to
verify compliance with, the Partnership has certain operating equipment,
primarily at the property sites, which needed to be evaluated for Year 2000
compliance. The focus of the Managing General Partner was to the security
systems, elevators, heating-ventilation-air-conditioning systems, telephone
systems and switches, and sprinkler systems. The Managing General Partner is
currently engaged in the identification of all non-compliant operational
systems, and is in the process of estimating the costs associated with any
potential modifications or replacements needed to such systems in order for them
to be Year 2000 compliant. It is not expected that such costs would have a
material adverse affect upon the operations of the Partnership.
Risk Associated with the Year 2000
The Managing General Partner believes that the Managing Agent has an effective
program in place to resolve the Year 2000 issue in a timely manner and has
appropriate contingency plans in place for critical applications that could
affect the Partnership's operations. To date, the Managing General Partner is
not aware of any external agent with a Year 2000 issue that would materially
impact the Partnership's results of operations, liquidity or capital resources.
However, the Managing General Partner has no means of ensuring that external
agents will be Year 2000 compliant. The Managing General Partner does not
believe that the inability of external agents to complete their Year 2000
resolution process in a timely manner will have a material impact on the
financial position or results of operations of the Partnership. However, the
effect of non-compliance by external agents is not readily determinable.
Other
Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements speak only as of the date
of this quarterly report. The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled ROSALIE NUANCES, ET AL. V. INSIGNIA
FINANCIAL GROUP, INC., ET AL, in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Corporate General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at the time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates as well as a recently
announced agreement between Insignia and Apartment Investment and Management
Company. The complaint seeks monetary damages and equitable relief, including
judicial dissolution of the Partnership. On June 25, 1998, the Managing General
Partner filed a motion seeking dismissal of the action. In lieu of responding to
the motion, plaintiffs have recently filed an amended complaint. The Managing
General Partner has filed demurrers to the amended complaint which are scheduled
to be heard on January 8, 1999. The Managing General believes the action to be
without merit, and intends to vigorously defend it.
On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint in the Superior Court of the State of
California, County of Los Angeles. The action, entitled EVEREST PROPERTIES LLC
V. INSIGNIA FINANCIAL GROUP, INC., involves 44 real estate limited partnerships
(including the Partnership) in which the plaintiffs allegedly own interests and
which Insignia Affiliates allegedly manage or control (the "Subject
Partnerships"). The complaint names as defendants Insignia, several Insignia
Affiliates alleged to be managing partners of the Subject Partnerships, the
Partnership and the Managing General Partner. Plaintiffs allege that they have
requested from, but have been denied by each of the Subject Partnerships, lists
of their respective limited partners for the purpose of making tender offers to
purchase up to 4.9% of the limited partner units of each of the Subject
Partnerships. The complaint also alleges that certain of the defendants made
tender offers to purchase limited partner units in many of the Subject
Partnerships, with the alleged result that plaintiffs have been deprived of the
benefits they would have realized from ownership of the additional units. The
plaintiffs assert eleven causes of action, including breach of contract, unfair
business practices, and violations of the partnership statutes of the states in
which the Subject Partnerships are organized. Plaintiffs seek compensatory,
punitive and treble damages. The Managing General Partner filed an answer to
the complaint on September 15, 1998. The Managing General Partner believes the
claims to be without merit and intends to defend the action vigorously.
The Managing General Partner is unaware of any other pending or outstanding
litigation that is not of a routine nature. The Managing General Partner
believes that all such other matters will be resolved without a material adverse
effect upon the Partnership's financial condition, results of operations, or
liquidity.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DAVIDSON INCOME REAL ESTATE, L.P.
By: DAVIDSON DIVERSIFIED PROPERTIES, INC.,
as Managing General Partner
By: /s/Patrick Foye
Patrick Foye
Executive Vice President
By: /s/Timothy R. Garrick
Timothy R. Garrick
Vice President - Accounting
(Duly Authorized Officer)
Date: November 13, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Davidson Income Real Estate, L.P. 1998 Third Quarter 10-QSB and is
qualified in its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000768598
<NAME> DAVIDSON INCOME REAL ESTATE, L.P.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 858
<SECURITIES> 0
<RECEIVABLES> 524
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 24,612
<DEPRECIATION> 10,815
<TOTAL-ASSETS> 15,928
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 11,929
0
0
<COMMON> 0
<OTHER-SE> 3,336
<TOTAL-LIABILITY-AND-EQUITY> 15,928
<SALES> 0
<TOTAL-REVENUES> 3,466
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,525
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 752
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21)
<EPS-PRIMARY> (.76)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
