FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
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, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT of 1934
For the transition period.........to.........
Commission file number 0-14470
INVESTORS FIRST-STAGED EQUITY L.P.
(Exact name of small business issuer as specified in its charter)
Delaware 36-3310965
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
8700 West Bryn Mawr
Chicago, Illinois 60631
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (312) 399-8700
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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) INVESTORS FIRST-STAGED EQUITY L.P.
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1995
<S> <C> <C>
Assets
Cash:
Unrestricted $ 2,511,993
Restricted-tenant security deposits 323,456
Accounts receivable, net of allowance
for doubtful accounts of $130,310 184,653
Note receivable 179,345
Escrows for taxes and insurance 378,699
Restricted escrows 412,887
Other assets 266,781
Investment properties:
Land $ 9,810,454
Buildings and related improvements 45,499,255
55,309,709
Less accumulated depreciation (23,596,770) 31,712,939
$ 35,970,753
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 93,192
Accrued interest 1,868,484
Tenant security deposits 400,652
Property taxes 109,115
Other liabilities 595,203
Advances from affiliates of General
Partner 2,199,844
Mortgage notes payable, including
$22,405,214 in default 49,848,311
Partners' Deficit
General partner $ (405,750)
Limited partners (16,267 units
issued and outstanding) (18,738,298) (19,144,048)
$ 35,970,753
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
b) INVESTORS FIRST-STAGED EQUITY L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental income $1,828,977 $1,927,364 $ 5,540,364 $ 5,802,069
Other income 68,957 92,721 250,495 200,943
Total revenues 1,897,934 2,020,085 5,790,859 6,003,012
Expenses:
Operating 400,960 432,090 1,159,754 1,372,231
General and administrative 85,274 61,186 263,921 319,060
Property management fees 113,056 111,428 346,462 311,476
Maintenance 225,098 179,099 587,246 840,070
Depreciation 505,388 496,503 1,510,408 1,627,004
Amortization 20,496 26,228 63,259 65,159
Interest 1,043,098 953,585 3,125,180 4,072,160
Property taxes 109,232 118,064 313,474 372,867
Tenant reimbursements (67,366) (107,019) (108,560) (136,042)
Provision to reduce investment
in properties to fair value -- -- -- 1,448,062
Total expenses 2,435,236 2,271,164 7,261,144 10,292,047
Loss on disposal of property -- -- (77,941) --
Loss before extraordinary item (537,302) (251,079) (1,548,226) (4,289,035)
Extraordinary item-gain on
extinguishment of debt -- -- -- 6,439,639
Net (loss) income $ (537,302) $ (251,079) $(1,548,226) $ 2,150,604
Net (loss) income allocated to
general partners $ (5,373) $ (2,511) $ (15,482) $ 105,222
Net (loss) income allocated to
limited partners (531,929) (248,568) (1,532,744) 2,045,382
$ (537,302) $ (251,079) $(1,548,226) $ 2,150,604
Net (loss) income per limited
partnership unit:
Net loss before extraordinary
item $ (32.70) $ (15.28) $ (94.22) $ (261.03)
Extraordinary item - gain on
extinguishment of debt -- -- -- 386.77
Net (loss) income per limited
partnership unit $ (32.70) $ (15.28) $ (94.22) $ 125.74
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
c) INVESTORS FIRST-STAGED EQUITY L.P.
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Partners' deficit at
December 31, 1994 16,267 $(390,268) $(17,205,554) $(17,595,822)
Net loss for the nine months
ended September 30, 1995 -- (15,482) (1,532,744) (1,548,226)
Partners' deficit at
September 30, 1995 16,267 $(405,750) $(18,738,298) $(19,144,048)
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
d) INVESTORS FIRST-STAGED EQUITY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $(1,548,226) $ 2,150,604
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Negative amortization on mortgage loans payable -- 841,454
Depreciation 1,510,408 1,627,004
Amortization of loan costs and leasing commissions 85,935 90,955
Loss on disposal of property 77,941 --
Provision to reduce investment in properties to
fair value -- 1,448,062
Extraordinary gain on extinguishment of debt -- (6,439,639)
Change in accounts:
Restricted cash (115,524) 55,006
Accounts receivable (62,914) (240,902)
Notes receivable 15,543 12,536
Escrows for taxes and insurance (108,710) (231,168)
Other assets (28,698) (133,204)
Accounts payable 22,175 96,262
Accrued interest 1,030,386 968,515
Tenant security deposit liabilities (27,020) 56,683
Property taxes 109,115 117,914
Other liabilities 146,525 92,080
Net cash provided by operating activities 1,106,936 512,162
Cash flows from investing activities:
Property improvements and replacements (315,448) (411,050)
Receipts from restricted escrows 70,641 --
Deposits to restricted escrows (37,814) (52,063)
Net cash used in investing activities (282,621) (463,113)
Cash flows from financing activities:
Payments on mortgage notes payable (211,023) (210,519)
Cash released to lender for foreclosed property -- (26,210)
Net cash used in financing activities (211,023) (236,729)
Net increase (decrease) in cash 613,292 (187,680)
Cash at beginning of period 1,898,701 1,823,469
Cash at end of period $ 2,511,993 $ 1,635,789
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,024,299 $ 2,092,814
</TABLE>
[FN]
See Accompanying Notes to Consolidated Financial Statements
INVESTORS FIRST-STAGED EQUITY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY
Foreclosure
In May of 1994, the Partnership lost East Bluff, an apartment building in
Pinnie, California, through foreclosure to the Federal Deposit Insurance
Corporation (FDIC), the holder of the second mortgage (See Note E of the Notes
to Consolidated Financial Statements). In connection with this transaction,
cash of $26,210 was relinquished to the lender and certain other accounts were
adjusted by the following non-cash amounts noted:
Relinquishment of cash $ (26,210)
Accounts receivable (71,608)
Escrow deposits for taxes and insurance (503,151)
Escrow deposits for restricted escrows (143,651)
Other assets (3,638)
Apartment properties (8,408,719)
Accumulated depreciation 3,779,891
Accounts payable and other liabilities 52,534
Accrued interest 1,612,676
Tenant security deposits 46,174
Mortgage payable 8,657,279
Aggregate gain on transaction (6,439,639)
Write-down of apartment property 1,448,062
e) INVESTORS FIRST-STAGED EQUITY L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements 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 the General Partner, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine month period
ended September 30, 1995, are not necessarily indicative of the results that may
be expected for the fiscal year ending December 31, 1995. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-KSB for the
fiscal year ended December 31, 1994.
Certain reclassifications have been made to the 1994 information to conform
to the 1995 presentation.
Note B - Going Concern
The consolidated financial statements have been prepared assuming that the
Partnership will continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
the uncertainties described below, however, such uncertainties raise substantial
doubt about the Partnership's ability to continue as a going concern.
The Partnership's properties have, in the aggregate, experienced operating
deficits after debt service payments. As a means of funding the Partnership's
deficits, the Partnership had drawn upon working capital reserves which were
exhausted as of December 31, 1989, and had taken cash advances from affiliates
of the General Partner. The General Partner and affiliates are not obligated to
and do not intend to further fund any such cash flow deficits. In addition,
since December 31, 1989, the Partnership has deferred repayment of these
advances and other accrued expenses with the consent of the General Partner and
its affiliates. Such accrued expenses are semi-annually converted to
interest-bearing advances. During 1994, the General Partner and its affiliates
assigned a portion of the advances to an affiliate of Insignia Financial Group,
Inc.("Insignia"). The willingness of the General Partner and its affiliates to
continue to defer repayment of these amounts could adversely affect the
Partnership's financial condition. In the short term it is likely that the
Partnership will suffer additional liquidity problems until cash flow
difficulties are resolved. The General Partner is evaluating its options for
the Partnership should the Partnership continue to suffer substantial losses
from operations and cash deficiencies.
Note B - Going Concern - continued
In addition, the General Partner and its affiliates have incurred serious
financial difficulties that may affect the ability of the General Partner to
function in that capacity. The administration and management of the Partnership
is dependent on the General Partner and its affiliates. Pursuant to an
agreement dated July 14, 1994, a transaction is pending in which the current
General Partner would be replaced by MAERIL, Inc., an affiliate of Insignia.
The substitution of MAERIL, Inc. as the General Partner is expected, but there
is no assurance that the transaction will be consummated. The pending
replacement of the General Partner will not necessarily have a positive impact
on the financial condition of the Partnership.
Due to cash flow deficiencies at Rivercrest Village Apartments, East Bluff
Apartments and Richardson Highlands Apartments, the Partnership stopped making
the required monthly payments on the second mortgage loans for these properties
in October 1990, November 1990, and September 1991, respectively. East Bluff
Apartments was foreclosed upon by the Federal Deposit Insurance Corporation
("FDIC") on May 23, 1994. The Registrant negotiated with the subordinate debt
holder for Rivercrest Village and Richardson Highlands and finalized a debt
restructure on June 22, 1994. The Partnership is in default of certain
provisions of these restructured subordinate loans due to the failure to make
the required debt service payments of surplus cash amounts as provided by The
Department of Housing and Urban Development (HUD) Regulatory Agreement. Due to
the default, management could be forced to relinquish the related properties to
the debt holder in satisfaction of the obligations.
A tenant representing approximately 40% of leasable square feet at Serramonte
Plaza has made an offer to purchase the building which it sublets. While the
contract is being negotiated and a sale is expected to take place in the fourth
quarter; there is no assurance the transaction will be consummated.
The Partnership, VMS Realty Management, Inc. and HUD are engaged in
discussions covering the appropriateness of certain Richardson Highlands and
Rivercrest Village disbursements totalling approximately $2,168,000 and
$1,608,000, respectively, made during the years 1987 through 1991. The parties
are attempting to resolve this issue, but the ultimate outcome cannot presently
be determined. The General Partner is vigorously defending its past actions and
does not believe the eventual outcome of these discussions will have a material
adverse effect on the operations of the Partnership. Given the General
Partner's beliefs and the uncertainty regarding the eventual resolution of the
amounts in question, the responsible parties and their ability to make repayment
if deemed necessary, no adjustment has been made to the Partnership's
consolidated financial statements concerning this matter.
Note B - Going Concern - continued
The consolidated financial statements do not include any adjustments relating
to the recoverability of the recorded asset accounts or the amount of
liabilities that might be necessary should the Partnership be unable to continue
as a going concern.
Note C - Legal Proceedings
Certain affiliates of the General Partner and certain officers and directors
of such affiliates are parties to certain pending legal proceedings. The
adverse outcome of any one or more legal proceedings against an affiliate of the
General Partner which provides financial support or services to the Partnership
could have a materially adverse effect on the present and future operations of
the Partnership. However, the inclusion of this discussion is not intended as a
representation by the Partnership that any particular proceeding is material.
The ultimate outcome of the litigation cannot be presently determined.
Accordingly, no provision for any liability that may result has been made in the
consolidated financial statements.
Note D - Transactions with Affiliates and Related Parties
The Partnership has no employees and is dependent on the General Partner or
its affiliates for the management and administration of all partnership
activities. The General Partner or its affiliates may be reimbursed for direct
expenses relating to the Partnership's administration and other costs charged on
behalf of the Partnership.
In late 1993, a letter of intent was signed between Insignia and VMSRIL
contemplating a substitution of the General Partner. Pursuant to an agreement
dated July 14, 1994, a transaction is pending in which the current General
Partner would be replaced by MAERIL, Inc., an affiliate of Insignia. The
substitution of MAERIL, Inc. as the General Partner is expected, but there is no
assurance that the transaction will be consummated.
The Partnership has engaged affiliates of Insignia to provide day-to-day
management of the Partnership's properties under an agreement which provides for
fees equal to 5% of revenues on each property. An affiliate of Insignia also has
provided partnership administration and management services for the Partnership
since March 1, 1994. Accrued reimbursements for direct expenses relating to
these services total approximately $416,317 September 30, 1995. Of this amount,
$181,341 and $154,380 relate to the nine months ended September 30, 1995, and
1994, respectively. For the period from January through July 14, 1994, Insignia
assigned a portion of its fees to an affiliate of the current General Partner.
Payments to this affiliate under this assignment were approximately $18,000 in
1994.
Note E - Foreclosure of East Bluff
Mortgage notes and accrued interest payable of East Bluff consisted of a
first mortgage in the principal amount of $1,762,402, with an interest rate of
7%, maturing on August 1, 2014; a second mortgage in the principal amount of
$6,894,877, with an interest rate of 13.84% which matured in December 1994; and
accrued mortgage interest of $1,612,674.
As a result of the cash flow deficits experienced by East Bluff Apartments
and the Partnership's inability to fund these deficits, as of November 25, 1990,
the Partnership stopped making the monthly debt service payments required under
the terms of the second mortgage loan collateralized by East Bluff Apartments.
The failure to make the required monthly debt service payments was an event of
default pursuant to the terms of the mortgage loan agreements which provide,
among other things, for the acceleration of maturity of the mortgage note and
the consequential possibility of foreclosure. In December 1990, the FDIC, the
second mortgage holder, sent the Partnership a Notice of Default. The
Partnership entered into discussions with the second mortgage holder in an
attempt to restructure the terms of the loan. However, negotiations were not
successful and a final judgement of foreclosure was issued in May 1994 at which
time the FDIC took ownership of the East Bluff property.
Note F - Debt Restructure
The Partnership and the FDIC finalized an agreement on June 22, 1994,
retroactive to July 1, 1993, to restructure the debt held on Richardson
Highlands and Rivercrest Village. The junior lien mortgages held by the FDIC
were restructured to mature on January 15, 2000, and provide for a 10% interest
rate (with a 7% pay rate), based on the "Agreed Valuation Amount", as defined in
the restructure agreement. Interest payments are payable from surplus cash as
provided by the HUD Regulatory Agreement. The Agreed Valuation Amounts for
Richardson Highlands and Rivercrest Village are $7,267,886 and $7,109,714,
respectively. No gain on the debt restructure was recognized since the debt
and accrued interest recorded by the Partnership at the time of restructure is
less than the Partnership's payments over the remaining term of the notes.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of two apartment complexes
and one commercial property. The following table sets forth the average
occupancy for these properties for the nine months ended September 30, 1995 and
1994:
Average
Occupancy
1995 1994
Rivercrest Village Apartments
Sacramento, California 94% 92%
Richardson Highlands Apartments
Marin City, California 95% 95%
Serramonte Plaza
Daly City, California 93% 93%
The Partnership incurred a net loss of $1,548,226 for the nine months ended
September 30, 1995, as compared to net income of $2,150,604 for the nine months
ended September 30, 1994. The net income at September 30, 1994, is a result of
an extraordinary gain on extinguishment of debt due to the foreclosure of East
Bluff Apartments in May 1994. (See discussion in Note E of the Notes to
Consolidated Financial Statements). The Partnership incurred a net loss of
$537,302 for the three months ended September 30, 1995, as compared to a net
loss of $251,079 for the three months ended September 30, 1994.
Rental income decreased for the nine months ended September 30, 1995,
compared to the nine months ended September 30, 1994, due to the 1994 results
including rental income of approximately $400,000 related to East Bluff
Apartments. The decrease was offset slightly by increases in rental rates at
Rivercrest Village Apartments and Richardson Highlands Apartments during the
quarter ended September 30, 1995. Other income increased for the nine months
ended September 30, 1995, due to increases in application fees, lease
cancellation fees and cleaning and damages fees at Rivercrest Village and
Richardson Highlands. Other income decreased for the three months ended
September 30, 1995, due to decreased deposit forfeitures and miscellaneous
income at Serramonte Plaza coupled with decreased laundry income at Rivercrest
and Richardson Apartments.
The decrease in total expenses for the nine months ended September 30, 1995,
was due mainly to the decreases in operating, general and administrative,
maintenance, interest and property tax expenses. Operating expense decreased
primarily due to a $78,000 decrease in concessions and office supplies at
Serramonte Plaza and a $40,000 decrease in security services and other
administrative costs at Rivercrest Village. In addition, Richardson Highlands
had an $18,000 decrease in employee apartment unit expense as a result of
employees moving to less expensive apartments. General and administrative
expenses decreased for the nine months ended September 30, 1995, due to
decreased legal fees resulting from litigation to collect certain Serramonte
Plaza tenant receivables as well as decreased training and travel costs
resulting from the installation of new computer systems at all of the properties
in the fourth quarter of 1994. The decrease in maintenance expense for the nine
months ended September 30, 1995, was due to decreases in exterior painting,
roof, swimming pool and parking area repairs of approximately $150,000 which
related to East Bluff prior to the foreclosure in 1994. Also, maintenance
expense decreased as a result of decreases of approximately $100,000 in
landscaping projects, swimming pool repairs, and cleaning contracts at
Rivercrest Village that occurred in 1994. The decrease in interest expense for
the nine months ended September 30, 1995, was attributable to the troubled debt
restructuring of Rivercrest Village and Richardson Highlands which reduced the
stated interest rate on the properties' debt from 13.84% to 10% (See discussion
in Note F of the Notes to Consolidated Financial Statements). Property tax
expense decreased for the nine months ended September 30, 1995, due to a
property reassessment at Rivercrest Village.
Total expenses increased for the three months ended September 30, 1995, as
compared to the three months ended September 30, 1994, due to increases in
general and administrative, maintenance and interest expense. The increase in
general and administrative expense for the three months ended September 30,
1995, was due to increases in appraisal fees, off-site records storage costs,
and other miscellaneous administrative costs. Maintenance expense increased for
the three months ended September 30, 1995, due to increases in contract cleaning
and landscape contracts at Serramonte Plaza and Richardson Highlands, increases
in interior building improvements at Richardson Highlands for mini blinds and
countertop replacements and interior painting at Rivercrest Village. Tenant
reimbursements decreased for the three and nine months ended September 30, 1995,
due to tenant reimbursement billing adjustments for common area expenses at
Serramonte Plaza. Property management fees increased for the three and nine
months ended September 30, 1995, as a result of a 1% increase in property
management fees due to new management agreements entered into by the
Partnership. The loss on disposal of property during the nine months ending
September 30, 1995, related to roof replacements at Richardson Highlands.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
Liquidity
The consolidated financial statements have been prepared assuming that the
Partnership will continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
the uncertainties described below, however, such uncertainties raise substantial
doubt about the Partnership's ability to continue as a going concern.
The Partnership's properties have, in the aggregate, experienced operating
deficits after debt service payments. As a means of funding the Partnership's
deficits, the Partnership had drawn upon working capital reserves which were
exhausted as of December 31, 1989, and had taken cash advances from affiliates
of the General Partner. The General Partner and affiliates are not obligated to
and do not intend to fund any further such cash flow deficits. In addition,
since December 31, 1989, the Partnership has deferred repayment of these
advances and other accrued expenses with the consent of the General Partner and
its affiliates. Such accrued expenses are periodically converted to
interest-bearing advances. During 1994, the General Partner and its affiliates
assigned a portion of the advances to an affiliate of Insignia Financial Group,
Inc. ("Insignia"). The willingness of the General Partner and its affiliates to
continue to defer repayment of these amounts could further impact the
Partnership's ability to continue as a going concern. In the short term it is
likely that the Partnership will suffer additional liquidity problems until cash
flow difficulties are resolved. The General Partner is evaluating its options
for the Partnership should the Partnership continue to suffer substantial losses
from operations and cash deficiencies.
Due to cash flow deficiencies at Rivercrest Village Apartments, East Bluff
Apartments and Richardson Highlands Apartments, the Partnership stopped making
the required monthly payments on the second mortgage loans for these properties
in October 1990, November 1990, and September 1991, respectively. East Bluff
Apartments was foreclosed upon by the Federal Deposit Insurance Corporation
("FDIC") on May 23, 1994. The Registrant negotiated with the subordinate debt
holder for Rivercrest Village and Richardson Highlands and finalized a debt
restructure on June 22, 1994. The Partnership is in default of certain
provisions of these restructured subordinate loans (as described in Note B of
the Consolidated Financial Statements). Due to the default, Management could be
forced to relinquish the related properties to the debt holder in satisfaction
of the obligations.
A tenant representing approximately 40% of leasable square feet at Serramonte
Plaza has made an offer to purchase the building which it sublets. While the
contract is being negotiated and a sale is expected to take place in the fourth
quarter; there is no assurance the transaction will be consummated.
The Partnership, VMS Realty Management, Inc. and The Department of Housing
and Urban Development (HUD) are engaged in discussions covering the
appropriateness of certain Richardson Highlands and Rivercrest Village
disbursements totalling approximately $2,168,000 and $1,608,000, respectively,
made during the years 1987 through 1991. The parties are attempting to resolve
this issue, but the ultimate outcome cannot presently be determined. The
General Partner is vigorously defending its past actions and does not believe
the eventual outcome of these discussions will have a material adverse effect on
the operations of the Partnership. Given the General Partner's beliefs and the
uncertainty regarding the eventual resolution of the amounts in question, the
responsible parties and their ability to make repayment if deemed necessary, no
adjustment has been made to the Partnership's financial statements concerning
this matter.
Other than routine tenant matters, there are no pending legal proceedings
against the Partnership. However, as disclosed in the prior reports on Form 10-
Q or Form 10-K ("Prior Public Filings"), certain officers and directors of the
General Partner and certain other affiliates of the Partnership are parties to
certain pending legal proceedings. The adverse outcome of such legal
proceedings disclosed in Prior Public Filings could have a significant adverse
effect on the present and future operations of the Partnership.
The Partnership had unrestricted cash of $2,511,993 at September 30, 1995, as
compared to unrestricted cash of $1,635,789 at September 30, 1994. Net cash
provided by operating activities increased primarily due to reduced operating
costs. Net cash used in investing activities decreased due to net reductions in
restricted escrows and reduced property improvements and replacements.
Recent Developments - VMS Realty Partners and Affiliates
There have been no material developments or changes from Recent Developments
- - - VMS Realty Partners and Affiliates disclosed in Part I, Item 2 of the
Partnership's report on Form 10-QSB for the quarter ended June 30, 1995.
ITEM 1. LEGAL PROCEEDINGS
There have been no new material developments or changes from Part II, Item 1 of
the Partnership's report on the Form 10-QSB for the quarter ended June 30, 1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Partnership did not submit any matter to a vote of its holders of Limited
Partnership Interests during the nine months ended September 30, 1995.
PART II - OTHER INFORMATION
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, 1995.
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.
INVESTORS FIRST-STAGED EQUITY L.P.
(Registrant)
By: VMS Realty Investment II,
General Partner
By: JAS Realty Corporation
Date: November 3, 1995 By: /s/ Joel A. Stone
Joel A. Stone
President
Date: November 3, 1995 By: /s/ Thomas A. Gatti
Thomas A. Gatti, Senior Vice-President
and Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Investors
First-Staged Equity L.P. 1995 Third Quarter 10-QSB and is qualified in its
entirety by reference to such 10-QSB.
</LEGEND>
<CIK> 0000768834
<NAME> INVESTORS FIRST-STAGED EQUITY L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,511,993
<SECURITIES> 0
<RECEIVABLES> 84,653
<ALLOWANCES> 130,310
<INVENTORY> 0
<CURRENT-ASSETS> 4,089,062
<PP&E> 55,309,709
<DEPRECIATION> (23,596,770)
<TOTAL-ASSETS> 35,970,753
<CURRENT-LIABILITIES> 1,534,504
<BONDS> 52,048,155
<COMMON> 0
0
0
<OTHER-SE> (19,144,048)
<TOTAL-LIABILITY-AND-EQUITY> 35,970,753
<SALES> 0
<TOTAL-REVENUES> 5,970,859
<CGS> 0
<TOTAL-COSTS> 7,261,144
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,125,180
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,548,226)
<EPS-PRIMARY> (94.22)
<EPS-DILUTED> 0
</TABLE>
