UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) of THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-15550
AMERICAN STORAGE PROPERTIES, L.P.
(formerly Hutton/GSH American Storage Properties, L.P.)
Exact name of registrant as specified in its charter
Virginia 11-2741889
State or other jurisdiction of incorporation I.R.S. Employer
Identification No.
ATTN: Andre Anderson
3 World Financial Center, 29th Floor, New York, New York
Address of principal executive offices 10285
zip code
Registrant's telephone number, including area code: (212) 526-3237
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
Title of Class
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. (x)
Documents Incorporated by Reference:
The Prospectus of the Registrant dated September 9, 1985, as supplemented
by the Prospectus Supplement dated May 16, 1986, filed pursuant to Rules
424(b) and 424(c), respectively, is incorporated by reference in Part III
of this Annual Report on Form 10-K.
Portions of Parts I, II, III and IV are incorporated by reference to the
Partnership's Annual Report to Unitholders for the year ended
November 30, 1996, filed as an exhibit under Item 14.
PART I
Item 1. Business
(a) General
American Storage Properties, L.P. (the "Registrant" or "Partnership"),
formerly Hutton/GSH American Storage Properties, L.P. (see Item 10.
"Certain Matters Involving Affiliates"), is a Virginia limited partnership
organized pursuant to a Certificate and Agreement of Limited Partnership
dated May 15, 1985 (the "Partnership Agreement"), of which Storage
Services, Inc. ("Storage Services"), formerly Hutton Storage Services,
Inc. (see Item 10. "Certain Matters Involving Affiliates"), and Goodman Segar
Hogan/American Storage Properties Associates, a California Limited Partnership
("ASP Associates") are the general partners (together, the "General Partners").
The Registrant was engaged in the business of acquiring, operating and holding
for investment self-service storage facilities (the "Properties"),including
all necessary or appropriate ancillary or appurtenant properties and
facilities, and any and all other activities related, necessary, appropriate
or incidental thereto. As of November 30, 1996, all nine of the Registrant's
Properties were sold, and consequently, the Registrant is expected to dissolve
during 1997. For further information concerning the sale of the Properties,
please refer to Item 7."Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained herein, and to Note 5
"Self-service Storage Facilities" of the Notes to the Consolidated Financial
Statements contained in the Partnership's Annual Report to Unitholders for
the year ended November 30, 1996, filed as an exhibit under Item 14.
A description of the Properties is incorporated by reference to Note 5
"Self-service Storage Facilities" of the Notes to the Consolidated Financial
Statements contained in the Partnership's Annual Report to Unitholders for the
year ended November 30, 1996, filed as an exhibit under Item 14.
Commencing September 9, 1985, the Registrant began the offering of Partnership
units (the "Units") with two separate closings occurring on May 6, 1986 and
July 22, 1986. Upon termination of the offering, the Registrant had accepted
subscriptions for 50,132 Units for aggregate gross proceeds of $25,066,000.
After deducting organization and offering expenses and initial working capital
reserves, approximately $21,450,000 was available for investment in self-
service storage facilities. $19,500,000 of such proceeds was invested in
seven self-service storage facilities and in two limited partnerships, each
of which owned a self-service storage facility. The Registrant's commitments
for the purchase of the Properties were fully funded by November 30, 1986.
Funds held as a working capital reserve were invested in bank certificates of
deposit, money market funds or other similar highly liquid, short-term
investments where there was appropriate safety of principal, in accordance
with the Registrant's investment objectives and policies.
The Registrant's principal investment objectives with respect to the Properties
(in no particular order of priority) have been:
(1) Distributions of Net Cash From Operations
derived from rental income;
(2) Capital appreciation; and
(3) Preservation and protection of capital.
Distribution of Net Cash From Operations was the Registrant's objective during
its operational phase, while preservation and appreciation of capital were
the Registrant's long-term objectives. The attainment of the Registrant's
investment objectives was dependent on many factors, including the successful
management of the operations of its Properties and economic conditions in the
United States and in the localities in which the Registrant's Properties were
located.
Users of self-storage facilities are primarily individuals, large and small
businesses and professional offices. Spaces are usually rented on a
month-to-month basis, although business tenants often have longer-term leases.
The typical occupancy period for a tenant is less than one year. Rental
periods tend to be longer in successful facilities that have been in operation
for a number of years than in newer facilities.
(b) Employees
The Registrant's business is managed by the General Partners and the
Registrant has no employees.
Item 2. Properties
A description of the Properties formerly owned by the Registrant is
incorporated by reference to Note 5 "Self-Service Storage Facilities" of the
Notes to the Consolidated Financial Statements contained in the Partnership's
Annual Report to Unitholders for the year ended November 30, 1996, filed as
an exhibit under Item 14.
Item 3. Legal Proceedings
Neither the Registrant nor any of the Properties is subject to any material
pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
To obtain approval for the sale of the Partnership's nine storage properties
(the "Sale"), a proxy solicitation describing the terms of the Sale was
mailed to Limited Partners on September 10, 1996. Limited Partners were
required to submit executed ballots ("Ballots") by October 10, 1996.
As of the date of the proxy solicitation, the purchaser, Public Storage, Inc.,
a California corporation ("Public Storage"), owned approximately 29.1% of the
outstanding Units. Pursuant to a letter agreement with the Partnership dated
February 9, 1997, Public Storage agreed that prior to August 9, 1997, it
would vote all its Units on all issues in the same manner as by the majority
of all other Unitholders who voted on any such proposal.
On October 10, 1996 the Partnership announced the approval by Limited Partners
holding a majority of the outstanding Units. As of that date, Ballots
representing 36,448 Units or 72.704% of the outstanding Units, were received.
Of this amount, Ballots representing 35,616.905 Units or 71.046% of outstanding
Units, approved the Sale, Ballots representing 669.215 Units or 1.335% of the
outstanding Units, withheld consent, and holders of 161.880 Units, or 0.323%
of the outstanding Units, abstained.
PART II
Item 5. Market for Registrant's Limited Partnership Units and Related
Stockholder Matters
(a) Market Information - No public trading market developed for the Units.
The transfer of Units is subject to significant restrictions. Given the
impending liquidation of the Partnership, all discretionary trading has
been suspended by the General Partner.
(b) Number of Unitholders - As of November 30, 1996, the number of holders of
Units was 2,284.
(c) Dividends - Distributions of Net Cash From Operations have been made
quarterly, from rentalincome with respect to the Registrant's investment
in the Properties, as well as from interest on short-term investments.
Information regarding quarterly cash distributions and distributions from
Property sales is incorporated by reference to the section entitled
Message to Investors of the Partnership's Annual Report to Unitholders
for the year ended November 30, 1996, filed as an exhibit under Item 14.
Item 6. Selected Financial Data
Selected Partnership financial data for the years ended November 30, 1996,
1995, 1994, 1993 and 1992 are shown below. This data should be read in
conjunction with the Partnership's financial statements included in the
Partnership's Annual Report to Unitholders for the year ended November 30,
1996, filed as an exhibit under Item 14.
For the periods ended November 30, 1996 1995 1994 1993 1992
(dollars in thousands,
except per Unit data)
Total income $ 3,367(1) $ 3,620 $ 3,420 $ 3,147 $ 2,952
Net income 14,808(2) 1,638 1,553 1,399 1,129
Total assets at period-end 2,882 16,625 16,556 16,629 16,875
Net income per Limited
Partnership Unit 287.40 32.81 31.11 28.04 22.65
Cash distributions per
Limited Partnership Unit(3) 567.90(4) 33.75 32.60 32.60 32.60
(1) Total income for the 1996 period includes property operations through
October 11, 1996, the date the properties were sold.
(2) Net income for the 1996 period includes a gain on the sale of the
properties in the amount of $13,606,741.
(3) As approved for payment during the 12 months ended November 30.
(4) Includes special distribution of $540 per Unit representing the majority
of the proceeds from the Sale and fourth quarter 1996 net cash from
operations.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
At November 30, 1996, the Partnership had cash and cash equivalents of
$2,770,939 which were invested in money market accounts. The increase of
$103,587 from November 30, 1995 is attributable to net cash provided by
operating activities and net proceeds from the sale of the Partnership's nine
self-storage facilities exceeding amounts used to fund cash distributions to
the Limited Partners.
The Partnership acquired an interest in the Fern Park property and the Oak
Ridge property through two Limited Partnerships with affiliates of the seller
of the facilities (the "Limited Partner"). The Limited Partnership agreements
provide that net cash from operations of these two properties be distributed
each quarter 100% to the Partnership until the Partnership has received an
amount equal to a cumulative annual 12% return ("Preferred Return") on its
capital contribution, as adjusted. The balance of any net cash from operations
was to be distributed 85% to the Partnership and 15% to the Limited Partner.
The Preferred Return for Fern Park was satisfied during the third quarter of
fiscal 1996 and the balance of net cash from operations was distributed
according to the guidelines stated above. The minority share is recorded as
minority interest in the Partnership's financial statements. Minority interest
payable increased to $382,816 at November 30, 1996 from $13,985 at November 30,
1995. The 1996 balance primarily consists of accruals estimating the Limited
Partners'share of the liquidating distribution. The 1995 balance primarily
consists of the minority share of 1995 operations, which was paid to the
Limited Partner during the first half of 1996.
In response to a request from an unaffiliated third party, Public Storage, Inc.,
a California corporation ("Public Storage"), to receive a list of the
Partnership's Unitholders, the Partnership entered into a letter agreement,
dated February 9, 1996, pursuant to which the Partnership furnished the list
and such third party agreed not to purchase more than 5% of the outstanding
Units on the open market or more than 25% of the outstanding Units pursuant to
a tender offer filed with the Securities and Exchange Commission. On March 1,
1996, Public Storage commenced a tender offer to purchase up to 12,533
outstanding Units at a net cash price of $419 per Unit. On April 2, 1996, the
tender offer expired with Public Storage accepting for purchase 13,516 Units,
or approximately 26.97% of the outstanding Units.
Given the improvement of the self-storage industry in recent years, combined
with the strong performance of the Partnership's nine storage facilities, the
General Partners began marketing the facilities for sale during the first
quarter of 1996. The objective was to maximize the selling price of the
properties and distribute the net sales proceeds to Limited Partners. The
General Partners engaged in discussions with several potential buyers who
expressed an interest in acquiring one or more of the Partnership's properties.
On May 17, 1996 the Partnership entered into three substantially identical
Contracts of Sale (together, the "Contracts of Sale") with Public Storage,
one for the Virginia properties and two as general partner of the Florida
limited partnerships, pursuant to which the Partnership agreed to sell
substantially all its assets to Public Storage for an aggregate price of
$27,500,000, subject to adjustment, in cash (the "Sale"). The Sale price was
the highest offer received by the Partnership.
The Sale was conditioned upon, among other things, the simultaneous closing of
all three Contracts of Sale, except under certain circumstances, and the
approval of the Sale by holders of a majority of the outstanding Units of
limited partnership interests of the Partnership. To obtain such approval, a
proxy solicitation describing the terms of the Sale was mailed to Limited
Partners on September 10, 1996. Limited Partners were required to submit
executed ballots ("Ballots") by October 10, 1996.
On October 10, 1996 the Partnership announced the approval by Limited Partners
holding a majority of the outstanding Units. In accordance with Sections
16.a.(iii) and (iv) of the Amended and Restated Certificate and Agreement of
Limited Partnership of the Partnership (the "Partnership Agreement,
as Amended"), approval of the Sale will result in the dissolution of
the Partnership.
The Sale was consummated on October 11, 1996. The Properties were sold for
$27,500,000 and the transaction resulted in a gain on sale of $13,606,741.
A special cash distribution of $540 per Unit, representing the majority of the
net proceeds from the Sale and fourth quarter cash from operations, was
distributed to the Limited Partners on November 25, 1996. On January 2, 1997,
$270,642 was distributed to the General Partners representing their portion of
the net proceeds from the Sale. As of November 30, 1996, this amount was
reflected as "Distribution Payable" on the Partnership's consolidated balance
sheet. The remaining proceeds from the Sale and cash reserves will be first
used to pay the Partnership's remaining obligations and costs of liquidation.
Any remaining balance will be distributed to the Partners in accordance with
the Partnership Agreement, as Amended. The General Partners intend to wind
up the affairs of the Partnership and subsequently liquidate the Partnership
in accordance with the terms of the Partnership Agreement in 1997. The
Partnership currently expects that such subsequent distribution will
approximate a minimum of $25 per Unit.
Net cash from operations was distributed to the Limited Partners on a
quarterly basis in proportion to the number of units held by each Limited
Partner. In view of the sale of the Partnership's assets and impending
liquidation of the Partnership, there will be no more regular quarterly
distributions to Limited Partners.
Rent receivable decreased from $108,596 at November 30, 1995 to $77,344 at
November 30, 1996, primarily due to the collection in early 1996 of a
portion of outstanding rents. Accounts payable and accrued expenses increased
from $120,589 at November 30, 1995 to $269,458 at November 30, 1996.
The increase is primarily attributable to the timing of payments for legal
fees and administrative fees and for the accrual of costs associated with the
proxy solicitation.
Results of Operations
1996 versus 1995
Partnership operations resulted in operating income of $1,201,028 for the year
ended November 30, 1996, compared with $1,638,214 for the year ended November
30, 1995. The decrease is primarily due to a decrease in rental income as a
result of the Sale, and an increase in general and administrative expenses.
The higher net income of $14,807,769 in 1996 is primarily attributable to the
gain on the Sale of $13,606,741.
Rental income totaled $3,066,939 for the year ended November 30, 1996, compared
to $3,494,224 for the year ended November 30, 1995. The decrease in rental
income is due to the Sale on October 11, 1996, when operations ceased. Interest
income totaled $299,858 for the year ended November 30, 1996, compared to
$126,270 for the year ended November 30, 1995. The increase is primarily due
to interest earned on the Sale proceeds prior to the distribution to Limited
Partners in November 1996.
Property operating expenses totaled $1,136,797 for the year ended November 30,
1996, compared with $1,153,216 for the year ended November 30, 1995. The
decrease is primarily due to the Sale in the fourth quarter of 1996.
General and administrative expenses totaled $317,077 for the year ended
November 30, 1996 compared with $155,796 for the year ended November 30, 1995.
The increase is primarily due to an increase in legal, audit, printing and
postage and other professional fees due to the costs incurred in connection
with the Sale and preparation of solicitation materials. The increase is also
due in part to higher salary reimbursements in 1996. These increases were
partially offset by a decrease in appraisal fees.
1995 versus 1994
Partnership operations resulted in net income of $1,638,214 for the year ended
November 30, 1995, compared with $1,553,098 for the year ended November 30,
1994. The higher net income in 1995 was primarily attributable to an increase
in rental and interest income partially offset by higher property operating
expenses.
Rental income totaled $3,494,224 for the year ended November 30, 1995, compared
to $3,363,560 for the year ended November 30, 1994. The increase in rental
income can be attributed in part to increased rental rates at several of the
Partnership's properties, particularly the Mechanicsville and Midlothian
facilities, as well as higher occupancy levels at certain properties,
particularly Hampton, Mechanicsville and Widgeon. Interest income totaled
$126,270 for the year ended November 30, 1995, compared to $56,620 for the year
ended November 30, 1994. The increase was primarily due to higher interest
rates earned in 1995 as well as higher cash balances maintained by the
Partnership in 1995 compared to 1994.
Property operating expenses totaled $1,153,216 for the year ended November 30,
1995, compared with $1,066,654 for the year ended November 30, 1994. The
increase was primarily due to higher costs for routine repairs and maintenance,
and higher payroll costs incurred at the Virginia properties. In addition, the
Partnership recognized higher real estate tax expense in 1995.
General and administrative expenses totaled $155,796 for the year ended
November 30, 1995, largely unchanged from $149,076 for the year ended November
30, 1994.
Average Occupancy Average Rental Rate
1996(1) 1995 1994 1996(1) 1995 1994
Chesapeake _ 88% 94% $ _ $5.76 $5.28
Fern Park _ 86 90 _ 7.39 7.32
Hampton _ 93 89 _ 7.19 6.65
Norfolk (Widgeon) _ 97 95 _ 6.62 6.07
Oak Ridge _ 91 90 _ 6.28 6.03
Richmond
(Mechanicsville) _ 95 91 _ 7.65 6.43
Richmond (Midlothian) _ 78 78 _ 6.45 4.94
Roanoke _ 93 94 _ 6.47 5.72
Virginia Beach
(Arrowhead) _ 95 97 _ 6.61 6.84
Weighted Average _ 91% 90% $ _ $6.71 $6.16
(1) As of November 30, 1996, all nine of the Partnership's Properties were
sold.
Occupancy rates have been determined by dividing actual rental income received
by scheduled rental income (assuming full occupancy at full scheduled rates)
for the indicated calendar period. Average effective annual rent per square
foot for the facilities is determined by dividing actual rental income received
by net rentable area (in square feet).
Item 8. Financial Statements and Supplementary Data
Incorporated by reference to the Partnership's Annual Report to Unitholders for
the year ended November 30, 1996, filed as an exhibit under Item 14.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Storage Services Inc. Storage Services Inc. ("Storage Services"), formerly
Hutton Storage Services, Inc., is a Delaware corporation formed on April 29,
1985. The names of and the positions held by the directors and executive
officers of Storage Services are set forth below. There are no family
relationships between any officers and directors listed below.
Certain officers and directors of Storage Services are now serving (or in the
past have served) as officers or directors of entities which act as general
partners of a number of real estate limited partnerships which have sought
protection under the provisions of the Federal Bankruptcy Code. The
partnerships which have filed bankruptcy petitions own real estate which has
been adversely affected by the economic conditions in the markets in which that
real estate is located and, consequently, the partnerships sought the
protection of the bankruptcy laws to protect the partnerships' assets from
losses through foreclosure.
Name Office
Paul L. Abbott Director, President,
Chief Executive Officer and
Chief Financial Officer
James L. Greig Vice President
Robert J. Hellman Vice President
Paul L. Abbott, 51, is a Managing Director of Lehman Brothers. Mr. Abbott
joined Lehman Brothers in August 1988, and is responsible for investment
management of residential, commercial and retail real estate. Prior to joining
Lehman Brothers, Mr. Abbott was a real estate consultant and a senior officer
of a privately held company specializing in the syndication of private real
estate limited partnerships. From 1974 through 1983, Mr. Abbott was an officer
of two life insurance companies and a director of an insurance agency
subsidiary. Mr. Abbott received his formal education in the undergraduate and
graduate schools of Washington University in St. Louis.
James L. Greig, 48, Vice President, joined Lehman Brothers in 1987, and is
engaged in asset management for commercial and residential real estate. From
1984 to 1987, Mr. Greig was a Regional Vice President of the asset management
arm of Integrated Resources, Inc. From 1980 to 1984, he was a Vice President of
Landauer Associates, Inc., real estate consultants, where he managed the real
property investments of overseas and domestic pension funds and was involved in
various assignments for major mortgage lenders. He was employed in the real
estate and mortgage loan area of New York Life Insurance Company from 1978 to
1980, and with Helmsley-Spear, Inc. from 1973 to 1978. Mr. Greig received a
B.A. degree from Syracuse University, and an M.A. from New York University. He
holds a Certified Property Manager (CPM) designation from the Institute of Real
Estate Management.
Robert J. Hellman, 42, is a Senior Vice President of Lehman Brothers and is
responsible for investment management of retail, commercial and residential
real estate. Since joining Lehman Brothers in 1983, Mr. Hellman has been
involved in a wide range of activities involving real estate and direct
investments including origination of new investment products, restructurings,
asset management and the sale of commercial, retail and residential properties.
Prior to joining Lehman Brothers, Mr. Hellman worked in strategic planning for
Mobil Oil Corporation and was an associate with an international consulting
firm. Mr. Hellman received a bachelor's degree from Cornell University, a
master's degree from Columbia University, and a law degree from Fordham
University.
ASP Associates
ASP Associates is a California limited partnership formed on May 14, 1985, the
sole general partner of which is American Storage Properties, Inc. ("ASP,
Inc."), a wholly-owned subsidiary of Goodman Segar Hogan, Inc. ("GSH"). The
names of and the positions held by the directors and executive officers of ASP,
Inc. are as set forth below.
Name Office
Robert M. Stanton Chairman of the Board
Mark P. Mikuta President
Julie R. Adie Vice President and Secretary
Robert M. Stanton, 58, is the retired Chairman and Chief Executive Officer of
GSH, a diversified commercial real estate company headquartered in Norfolk,
Virginia. Mr. Stanton joined GSH in 1966 and retired from the company in 1993.
He is currently President of Stanton Partners, Inc., a real estate investment
and advisory firm. Mr. Stanton serves as a Trustee of the Urban Land Institute
(ULI) and is a past Trusted and State Director of the International Council of
Shopping Centers (ICSC). He was chairman of the 1981 edition of The Dollars
and Cents of Shopping Centers, published by ULI. Mr. Stanton co-authored The
Valuation of Shopping Centers, published by the American Institute of Real
Estate Appraisers. Currently, he serves on the advisory board of Norfolk
Southern Corporation and is Chairman of the Greater Norfolk Corporation. He
holds the Certified Property Manager (CPM) designation conferred by the
Institute of Real Estate Management. Mr. Stanton also serves as Chairman of
American Storage Properties, L.P. A graduate of Old Dominion University with a
B.A. Degree in Banking and Finance, he has served as Rector of the Board of
Visitors.
Mark P. Mikuta, 43, is Senior Vice President of Goodman Segar Hogan, Inc. and
is Vice President and Controller of Dominion Capital, Inc., a wholly-owned
subsidiary of Dominion Resources. Mr. Mikuta joined Dominion Resources in
1987. Prior to joining Dominion Resources, he was an internal auditor with
Virginia Commonwealth University in Richmond, Virginia from 1980 - 1987 and an
accountant with Coopers & Lybrand from 1977 - 1980. Mr. Mikuta earned a
bachelor of science degree in accounting from the University of Richmond in
1977. He is a Certified Public Accountant (CPA) and Certified Financial
Planner (CFP) in the state of Virginia and a member of the American Institute
of Certified Public Accountants.
Julie R. Adie, 42, is a Vice President of Goodman Segar Hogan, Inc. and Senior
Vice President of Goodman Segar Hogan Hoffler, L.P. ("GSHH"). She is
responsible for investment management of a commercial real estate portfolio for
the company's Asset Management Division. Prior to GSHH, Ms. Adie was an asset
manager with Aetna Real Estate Investors from 1986 to 1988. Ms. Adie practiced
as an attorney from 1978 through 1984 and is currently a member of the Virginia
Bar Association. She holds a B.A. Degree from Duke University, a Juris Doctor
from University of Virginia and an M.B.A. from Dartmouth College.
Certain Matters Involving Affiliates
On July 31, 1993, Shearson Lehman Brothers Inc. ("Shearson") sold certain of
its domestic retail brokerage and asset management businesses to Smith Barney,
Harris Upham & Co. Incorporated ("Smith Barney"). Subsequent to this sale,
Shearson changed its name to Lehman Brothers Inc. ("Lehman"). The transaction
did not affect the ownership of the Partnership or the Partnership's General
Partners. However, the assets acquired by Smith Barney included the name
"Hutton." Consequently, effective August 3, 1995, the name of the Partnership
was changed to American Storage Properties, L.P. to delete any reference to
"Hutton." Additionally, effective July 31, 1993, the Hutton Storage Services,
Inc. general partner changed its name to Storage Services Inc. to delete any
reference to "Hutton."
On August 1, 1993, Goodman Segar Hogan, Incorporated ("GSH") transferred all of
its leasing, management and sales operations to Goodman Segar Hogan Hoffler,
L.P., a Virginia limited partnership ("GSHH"). On that date, the leasing,
management and sales operations of a portfolio of properties owned by the
principals of Armada/Hoffler were also obtained by GSHH. The general partner
of GSHH is Goodman Segar Hogan Hoffler, Inc., a Virginia corporation ("GSHH
Inc."), which has a one percent interest in GSHH. The stockholders of GSHH
Inc. are GSH with a sixty-two percent stock interest and H.K. Associates, L.P.,
an affiliate of Armada/Hoffler ("HK"), with a thirty-eight percent stock
interest. The remaining ninety-nine percentage interests in GSHH are limited
partnership interests owned fifty percent by GSH and forty-nine percent by HK.
The transaction did not affect the ownership of the ASP, Inc. general partner.
Item 11. Executive Compensation
Neither of the General Partners of the Registrant nor any of the directors and
officers of the General Partners or their affiliates received any compensation
from the Registrant during 1996. See Item 13 below with respect to a
description of certain costs of the General Partners and their affiliates
reimbursed by the Registrant.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Beneficial owners of 5% or more of Registrant's Securities
Amount and
Nature of
Beneficial Percent
Title of Class Beneficial Owner Ownership of Class
Limited Partnership Public Storage, Inc. 14,608 Units 29.13%
Interest, $500 701 Western Ave (owned beneficially
per Interest Glendale, CA 91202 and of record)
(b) Neither of the General Partners of the Registrant nor any of the
directors and officers of their Affiliates owns any Units.
Item 13. Certain Relationships and Related Transactions
The General Partners and their Affiliates have received substantial fees and
compensation for managing the Properties pursuant to the Partnership Agreement.
Such fees and compensation were not determined in arm's-length negotiations.
For a description of all the types of compensation, fees, or other
distributions that may or will be paid by the Registrant or others to the
General Partners or their Affiliates in connection with the operations of the
Registrant, reference is made to the material contained on pages 13 through 17
of the Prospectus, under the section captioned "Compensation and Fees", and
pages 77 through 79 of the Prospectus under the section captioned "Offering and
Sale of the Units" which sections are incorporated herein by reference thereto.
Storage Services and ASP Associates did not receive any cash distributions from
Net Cash From Operations during fiscal year 1996 in accordance with the terms
of the Partnership Agreement. On January 2, 1997, $270,642 was distributed to
the General Partners representing a portion of their net proceeds from the
Sale. As of November 30, 1996, this amount was reflected as "Distribution
Payable" on the Partnership's consolidated balance sheet. The remaining
proceeds from the Sale and cash reserves will be first used to pay the
Partnership's remaining obligations and costs of liquidation. Any remaining
balance will be distributed to the Partners in accordance with the Partnership
Agreement. Please refer to Note 3 "Partnership Agreement" of the Notes to the
Consolidated Financial Statements contained in the Partnership's Annual Report
to Unitholders for the year ended November 30, 1996, filed as an exhibit under
Item 14.
Pursuant to Section 12(g) of Registrant's Certificate and Agreement of Limited
Partnership, the General Partners may be reimbursed by the Registrant for
certain of their costs as described on page A-19 of the Prospectus, which
description is incorporated herein by reference thereto. First Data Investor
Services Group (formerly The Shareholder Services Group) provides partnership
accounting and investor relations services for the Partnership. Prior to May
1993, these services were provided by a former subsidiary of Lehman. Pursuant
to such provision, during the year ended November 30, 1996, the General
Partners and their affiliates were entitled to receive reimbursements
aggregating $122,825. As of November 30, 1996, $72,628 of this amount had been
paid to the General Partners with the remaining $50,197 still to be paid.
Please refer to Note 4 "Transactions with Related Parties" of the Notes to the
Consolidated Financial Statements contained in the Partnership's Annual Report
to Unitholders for the year ended November 30, 1996, filed as an exhibit under
Item 14.
PART IV
Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K
(a)(1) Financial Statements: Page
Independent Auditors' Report
Report of Arthur Andersen LLP. (1)
Consolidated Balance Sheets - At November 30,
1996 and 1995 (1)
Consolidated Statements of Income - For the
years ended November 30, 1996, 1995 and 1994 (1)
Consolidated Statements of Partners' Capital
(Deficit) - For the years ended November 30, 1996,
1995 and 1994 (1)
Consolidated Statements of Cash Flows - For the
years ended November 30, 1996, 1995 and 1994 (1)
Notes to the Consolidated Financial Statements (1)
(1)Incorporated by reference to the Partnership's Annual Report to Unitholders
for the year ended November 30, 1996, which is filed as an exhibit under
Item 14.
(a) (2) Financial Statement Schedules:
Schedule III - Real Estate and Accumulated Depreciation
and Independent Auditors' Report thereon F-1 - F-3
No other schedules are presented because the information is not
applicable or is included in the financial statements or notes thereto.
(a) (3) Exhibit Index
3.1 Form of Amended and Restated Certificate and Agreement of
Limited Partnership (incorporated by reference to Exhibit 3.2 to the
Registrant's Registration Statement on Form S-11, File No. 2-98071)
3.2 First Amendment to Amended and Restated Certificate and Agreement of
Limited Partnership (incorporated by reference to Exhibit 3.3 to
Post-Effective Amendment No. 2 to Registrant's Registration Statement
on Form S-11, File No. 2-98071)
3.3 Second Amendment to Amended and Restated Certificate and Agreement of
Limited Partnership (incorporated by reference to Exhibit 3.4 to
Post-Effective Amendment No. 2 to Registrant's Registration Statement
on Form S-11, File No. 2-98071)
10.1 Form of Management Agreement to be entered into between the Registrant
and any Affiliate providing certain services to the Registrant
(incorporated by reference to Exhibit 10.4 to the Registrant's
Registration Statement on Form S-11, File No. 2-98071)
10.2 Contract of Sale (Virginia) dated May 17, 1996 between American
Storage Properties, L.P. and Public Storage, Inc. (Incorporated by
reference from Exhibit 10.1 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended August 31, 1996).
10.3 Contract of Sale (Fern Park) dated May 17, 1996 between Hutton/GSH
American Storage Properties, L.P. (Fern Park) and Public Storage, Inc.
(Incorporated by reference from Exhibit 10.2 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended August 31, 1996).
10.4 Contract of Sale (Oak Ridge) dated May 17, 1996 between Hutton/GSH
American Storage Properties, L.P. (Oak Ridge) and Public Storage, Inc.
(Incorporated by reference from Exhibit 10.3 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended August 31, 1996).
13.1 Annual Report to Unitholders for the year ended November 30, 1996
27.1 Financial Data Schedule
99.1 Portions of the prospectus of the Registrant dated September 9, 1985,
as supplemented by the Prospectus Supplement dated May 16, 1986, files
pursuant to Rules 424(b) and 424(c), respectively
(b) Reports on Form 8-K filed in the fourth quarter of fiscal 1996:
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN STORAGE PROPERTIES, L.P.
BY: Goodman Segar Hogan/American Storage Properties
Associates, a California Limited Partnership
General Partner
BY: American Storage Properties, Inc.
General Partner
Date: February 28, 1997 BY: s/Robert M. Stanton/
Name: Robert M. Stanton
Title: Chairman of the Board
BY: Storage Services, Inc.
General Partner
BY: s/Paul L. Abbott/
Name: Paul L. Abbott
Title: Director, President, Chief Executive
Officer and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
STORAGE SERVICES, INC.
A General Partner
Date: February 28, 1997 BY: s/Paul L. Abbott/
Name: Paul L. Abbott
Title: Director, President, Chief Executive
Officer and Chief Financial Officer
Date: February 28, 1997 BY: s/James L. Greig/
Name: James L. Greig
Title: Vice President
Date: February 28, 1997
BY: s/Robert J. Hellman/
Name: Robert J. Hellman
Title: Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GOODMAN SEGAR HOGAN/AMERICAN STORAGE
PROPERTIES ASSOCIATES
A California Limited Partnership
A General Partner
BY: American Storage Properties, Inc.
General Partner
Date: February 28, 1997
BY: s/Robert M. Stanton/
Name: Robert M. Stanton
Title: Chairman of the Board
Date: February 28, 1997 BY: s/Mark P. Mikuta/
Name: Mark P. Mikuta
Title: President
Date: February 28, 1997 BY: s/Julie R. Adie/
Name: Julie R. Adie
Title: Vice President and Secretary
EXHIBIT 13.1
AMERICAN STORAGE PROPERTIES, L.P.
1996 ANNUAL REPORT TO UNITHOLDERS
Message to Investors
Presented for your review is the 1996 Annual Report for American Storage
Properties, L.P. (the "Partnership"). Included in this report is an update on
the liquidation of the Partnership and timing of the final cash distribution to
Limited Partners. Also included are the Partnership's audited financial
statements for the year ended December 31, 1996.
Overview
As you are aware, on October 11, 1996 the Partnership completed the sale of its
nine self-storage facilities to Public Storage, Inc. for $27,500,000 in cash
(the "Sale"). The majority of the proceeds from the Sale were distributed to
Limited Partners during the fourth quarter of 1996, and the remaining proceeds
were set aside to provide for, along with the Partnership's cash reserves, all
liabilities and other obligations of the Partnership through liquidation. The
General Partners intend to utilize any cash after payment of these items to
make a final liquidating distribution to the Limited Partners. We currently
expect this distribution will approximate a minimum of $25 per Unit. As a
result of the Sale, the Partnership is expected to be dissolved during the
second quarter of 1997.
Cash Distributions
The Partnership paid total cash distributions of $567.90 per $465 Unit for the
year ended November 30, 1996, including a special distribution in the amount of
$540 per Unit paid to Limited Partners on November 25, 1996, representing the
majority of the net proceeds from the Sale and fourth quarter cash from
operations. Since inception, the Partnership has paid cumulative cash
distributions totaling $935.12 and $926.75 per original $500 Unit for first and
second close investors, respectively. These amounts include return of capital
payments totaling $575 per Unit. In view of the Sale of the Partnership's
assets, there will be no additional quarterly distributions to Limited
Partners.
Quarterly Cash Distributions Per Limited Partnership Unit
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
1995 $ 8.15 $ 8.15 $ 8.15 $ 9.30 $ 33.75
1996 $ 9.30 $ 9.30 $ 9.30 $ 540.00* $ 567.90
* Special distribution representing majority of the net
proceeds from the Sale of the Partnership's assets and
fourth quarter cash from operations.
Summary
We are pleased to have successfully completed the Sale of the Partnership's
assets. As a result of the Sale, the Partnership is expected to be dissolved
during the second quarter of 1997, at which time a final liquidating
distribution will be made to Limited Partners. In the interim, any questions
regarding the Partnership should be directed to your Financial Consultant or
First Data Investor Services Group. All requests for a change of address
should be submitted in writing to the Partnership's transfer agent, Service
Data Corporation, 2424 South 130th Circle, Omaha, NE 68144-2596. Both First
Data Investor Services Group and Service Data Corporation can be reached at
(800) 223-3464.
Very truly yours,
s/Paul L. Abbott/ s/Robert M. Stanton/
Paul L. Abbott Robert M. Stanton
President Chairman
Storage Services Inc. American Storage Properties, Inc.
General Partner of Goodman Segar Hogan/
American Storage Properties Associates
February 28, 1997
Consolidated Balance Sheets At November 30, At November 30,
1996 1995
Assets
Self-service storage facilities, at cost:
Land $ _ $ 3,756,319
Buildings and improvements _ 16,061,509
19,817,828
Less accumulated depreciation _ (6,010,342)
_ 13,807,486
Cash and cash equivalents 2,770,939 2,667,352
Rent receivable 77,344 108,596
Other assets 34,187 41,327
Total Assets $ 2,882,470 $16,624,761
Liabilities and Partners' Capital (Deficit)
Liabilities:
Accounts payable and accrued expenses $ 269,458 $ 120,589
Due to affiliates 50,197 53,522
Security deposits _ 13,050
Advance rent _ 115,194
Distribution payable 270,642 466,228
Minority interest payable 382,816 13,985
Total Liabilities 973,113 782,568
Partners' Capital (Deficit):
General Partners 3,188 (125,793)
Limited Partners 1,906,169 15,967,986
Total Partners' Capital 1,909,357 15,842,193
Total Liabilities and Partners' Capital $ 2,882,470 $16,624,761
Consolidated Statement of Partners' Capital (Deficit)
For the years ended November 30, 1996, 1995 and 1994
General Limited
Partners Partners Total
Balance at November 30, 1993 $(112,707) $16,089,847 $15,977,140
Net Income (Loss) (6,514) 1,559,612 1,553,098
Cash distributions - (1,634,304) (1,634,304)
Balance at November 30, 1994 $(119,221) $16,015,155 $15,895,934
Net Income (Loss) (6,572) 1,644,786 1,638,214
Cash distributions - (1,691,955) (1,691,955)
Balance at November 30, 1995 $(125,793) $15,967,986 $15,842,193
Net Income 399,623 14,408,146 14,807,769
Cash distributions (270,642) (28,469,963) (28,740,605)
Balance at November 30, 1996 $ 3,188 $ 1,906,169 $ 1,909,357
Consolidated Statements of Operations
For the years ended November 30, 1996 1995 1994
Income
Rental $ 3,066,939 $ 3,494,224 $ 3,363,560
Interest 299,858 126,270 56,620
Total Income 3,366,797 3,620,494 3,420,180
Expenses
Property operating 1,136,797 1,153,216 1,066,654
Depreciation 329,079 657,210 651,352
General and administrative 317,077 155,796 149,076
Total Expenses 1,782,953 1,966,222 1,867,082
Income before minority interest 1,583,844 1,654,272 1,553,098
Minority interest (382,816) (16,058) -
Income from operations 1,201,028 1,638,214 1,553,098
Gain on sale of properties 13,606,741 - -
Net Income $14,807,769 $1,638,214 $ 1,553,098
Net Income (Loss) Allocated:
To the General Partners $ 399,623 $ (6,572) $ (6,514)
To the Limited Partners 14,408,146 1,644,786 1,559,612
$14,807,769 $1,638,214 $ 1,553,098
Per limited partnership unit
(50,132 outstanding) $287.40 $ 32.81 $ 31.11
Consolidated Statements of Cash Flows
For the years ended November 30, 1996 1995 1994
Cash Flows From Operating Activities:
Net Income $14,807,769 $1,638,214 $1,553,098
Adjustments to reconcile net income to net cash
provided by operating activities:
Minority interest 382,816 16,058 -
Depreciation 329,079 657,210 651,352
Gain on sale of properties (13,606,741) - -
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Rent receivable 31,252 549 (23,607)
Other assets 7,140 (4,239) (18,160)
Accounts payable and accrued expenses 148,869 34,104 296
Due to affiliates (3,325) 18,365 16,603
Security deposits (13,050) (2,754) (5,149)
Advance rent (115,194) 670 (3,252)
Net cash provided by operating activities 1,968,615 2,358,177 2,171,181
Cash Flows From Investing Activities:
Net proceeds from sale of properties 27,085,148 - -
Additions to real estate - (55,984) (97,794)
Net cash provided by (used for)
investing activities 27,085,148 (55,984) (97,794)
Cash Flows From Financing Activities:
Distributions paid - Minority interest (13,985) (2,073) -
Distributions paid - Limited Partners (28,936,191) (1,634,303) (1,634,304)
Net cash used for financing activities (28,950,176) (1,636,376) (1,634,304)
Net increase in cash and cash equivalents 103,587 665,817 439,083
Cash and cash equivalents, beginning of year 2,667,352 2,001,535 1,562,452
Cash and cash equivalents, end of year $2,770,939 $2,667,352 $2,001,535
Notes to the Consolidated Financial Statements
November 30, 1996, 1995 and 1994
1. Organization
American Storage Properties, L.P. (the "Partnership") was organized as a
Limited Partnership under the laws of the Commonwealth of Virginia pursuant to
a Certificate and Agreement of Limited Partnership dated and filed May 15, 1985
(the "Partnership Agreement"). The Partnership was formed for the purpose of
acquiring and operating self-service storage facilities. The General Partners
of the Partnership are Storage Services Inc., an affiliate of Lehman Brothers
(see below), and Goodman Segar Hogan/American Storage Properties, a California
Limited Partnership ("ASP Associates"), an affiliate of Goodman Segar Hogan
Hoffler, L.P. (see below).
On July 31, 1993, Shearson Lehman Brothers Inc. ("Shearson") sold certain of
its domestic retail brokerage and asset management businesses to Smith Barney,
Harris Upham & Co. Incorporated ("Smith Barney"). Subsequent to the sale,
Shearson changed its name to Lehman Brothers Inc. ("Lehman Brothers"). The
transaction did not affect the ownership of the General Partner. However, the
assets acquired by Smith Barney included the name "Hutton." Consequently,
effective August 3, 1995, the name of the Partnership was changed to American
Storage Properties, L.P. to delete any reference to "Hutton." Additionally,
effective July 31, 1993, the Hutton Storage Services, Inc. general partner
changed its name to Storage Services Inc. to delete any references to "Hutton".
On August 1, 1993, Goodman Segar Hogan Incorporated ("GSH") transferred all of
its leasing, management and sales operations to Goodman Segar Hogan Hoffler,
L.P., a Virginia limited partnership ("GSHH"). On that date, the leasing,
management and sales operations of a portfolio of properties owned by the
principals of Armada/Hoffler were also obtained by GSHH. The General Partner
of GSHH is Goodman Segar Hogan Hoffler, Inc., a Virginia corporation ("GSHH
Inc."), which has a one percent interest in GSHH. The stockholders of GSHH
Inc. are GSH with a 62% stock interest and H.K. Associates, L.P., an affiliate
of Armada/Hoffler ("HK"), with a 38% stock interest. The remaining 99%
interests in GSHH are limited partnership interests owned 50% by GSH and 49% by
HK. The transaction did not affect the ownership of the General Partner.
On March 1, 1996, Public Storage, Inc., a California corporation ("Public
Storage") commenced a tender offer to purchase up to 12,533 outstanding Units
at a net cash price of $419 per unit. On April 2, 1996, the tender offer
expired with Public Storage accepting for purchase 13,516 Units, or
approximately 26.97% of the outstanding Units.
On October 11, 1996, the Partnership sold its nine properties. It is
anticipated that the Partnership will liquidate and settle its remaining assets
and liabilities and consequently dissolve in 1997.
2. Significant Accounting Policies
Basis of Presentation The accompanying consolidated financial statements
include the accounts of the Partnership and its ventures, American Storage
Properties, (Fern Park) L.P. ("Fern Park") and American Storage Properties (Oak
Ridge) L.P. ("Oak Ridge"). Intercompany accounts and transactions between the
Partnership and the ventures have been eliminated in consolidation.
As discussed in Notes 1 and 5, it is anticipated that the Partnership will
liquidate in 1997. Accordingly, the carrying values of the remaining assets at
November 30, 1996, are presented at estimated realizable values and all
liabilities are presented at estimated settlement amounts. Additionally, the
statements of operations and cash flows represent the operations of the
Partnership for the year ended November 30, 1996, including the operations of
the nine properties through October 10, 1996. Operating activities of the
Partnership subsequent to the sale of the properties on October 11, 1996, were
limited.
Self-Service Storage Facilities Self-service storage facilities were recorded
at cost less accumulated depreciation, which included the initial purchase
price of the property plus closing costs, acquisition and legal fees and other
miscellaneous acquisition costs.
Depreciation Depreciation was computed using the straight-line method over the
estimated useful lives of 20 to 25 years for Buildings and Improvements and
five years for Furniture and Fixtures. Depreciation expense for 1996 was only
recorded through May 1996, which is when the Partnership entered into three
contracts of sale, pursuant to which the Partnership agreed to sell its nine
properties (see Note 5). Included in the cost basis of Buildings and
Improvements at November 30, 1995 was $156,995 of Furniture and Fixtures.
Leases Leases were generally on a month-to-month basis and were accounted for
as operating leases.
Cash and Cash Equivalents Cash and cash equivalents consist of short-term,
highly liquid investments that have original maturities of three months or
less. The carrying amount approximates fair value because of the short
maturity of these investments.
Income Taxes No provision for income taxes has been made in the financial
statements since such taxes are the responsibility of the individual partners
rather than that of the Partnership.
Use of Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Reclassifications Certain prior year amounts have been reclassified in order
to conform to the current year's presentation.
3. Partnership Agreement
The Partnership Agreement provides that the net cash from operations, as
defined, for each fiscal year will be distributed on a quarterly basis, first
to the Limited Partners until each Limited Partner has received an 8% annual
cumulative return based on contributed capital. The net cash from operations
will then be distributed to the General Partners until the General Partners
have received an amount equal to 4% of the net cash from operations distributed
to all partners. The balance of net cash from operations will then be
distributed 96% to the Limited Partners and 4% to the General Partners. As the
8% cumulative return has not been satisfied as of November 30, 1996,
substantially all of the income of the Partnership has been allocated to the
Limited Partners.
Net proceeds from sales or refinancings will generally be distributed 99% to
the Limited Partners and 1% to the General Partners until each Limited Partner
has received an amount equal to his adjusted capital investment, as defined,
and an 11% cumulative annual return thereon. The balance of the net proceeds
will then be distributed 85% to the Limited Partners and 15% to the General
Partners.
Income before depreciation and amortization for any fiscal year will be
allocated in substantially the same manner as net cash from operations. Losses
and depreciation and amortization for any fiscal year will be allocated 99% to
the Limited Partners and 1% to the General Partners.
4. Transactions with Related Parties
The following is a summary of the amounts paid or accrued to the General
Partners and their affiliates during the years ended November 30, 1996, 1995
and 1994:
Unpaid at
November 30, Earned
----------- --------------------------------
1996 1996 1995 1994
Reimbursement of:
Out-of-pocket expenses $ - $ 5,383 $ 3,088 $ 5,420
Administrative salaries
and expenses 50,197 117,442 75,627 57,572
Total $50,197 $122,825 $78,715 $62,992
The above amounts have been paid and/or accrued to the General
Partners and affiliates as follows:
Unpaid at
November 30, Earned
----------- ------------------------------
1996 1996 1995 1994
Storage Services, Inc. and affiliates $35,210 $ 74,763 $45,914 $29,292
ASP Associates and affiliates 14,987 48,062 32,801 33,700
Total $50,197 $122,825 $78,715 $62,992
5. Self-service Storage Facilities
The self-service storage facilities consisted of nine properties
acquired either directly or, in two cases, through investments in
other limited partnerships. On October 11, 1996, the Partnership
sold all nine self-service storage facilities. A description of
each property is as follows:
Number of
Date of Number of Rentable Rentable Purchase
Property Location Purchase Buildings Sq. Ft. Spaces Price
- ----------------- ----------- --------- ------ ------ ----------
880 Widgeon Road May 6, 1986 11 70,430 518 $2,465,000
Norfolk, VA
5728 Southern Blvd. May 6, 1986 5 25,749 228 $ 800,000
Virginia Beach, VA
1205 W. Pembroke Ave. May 6, 1986 7 59,680 657 $2,640,000
Hampton, VA
1430 S. Military Hwy. May 6, 1986 5 75,015 439 $2,200,000
Chesapeake, VA
1717 Bloom Lane May 6, 1986 6 61,603 604 $2,250,000
Richmond, VA
8226 South Hwy 17-92 Dec. 9, 1986 8 69,280 761 $2,129,829
Fern Park, FL
235 East Oak Ridge Rd. Dec. 9, 1986 5 56,410 589 $1,658,250
Orlando, FL
5440 Midlothian Trnpk. Dec. 29, 1986 10 65,600 651 $1,843,150
Richmond, VA
2918 Peter's Creek Rd. Dec. 29, 1986 5 56,524 449 $2,000,000
Roanoke, VA
Sale of Properties On May 17, 1996, the Partnership, entered into three
Contracts of Sale (together, the "Contracts of Sale") dated as of May 17, 1996,
one for the Virginia properties and two as general partner of Fern Park and Oak
Ridge, with Public Storage, pursuant to which the Partnership agreed to sell
substantially all its assets to Public Storage for an aggregate price of
$27,500,000, subject to adjustment, in cash (the "Sale").
The Sale was conditioned upon, among other things, the simultaneous closing of
all three Contracts of Sale, except under certain circumstances, and the
approval of the Sale by holders of a majority of the outstanding units of
limited partnership interests of the Partnership.
To obtain approval for the Sale, a proxy solicitation describing the terms of
the Sale was mailed to Limited Partners on September 10, 1996. Limited
Partners were required to submit executed ballots by October 10, 1996. On
October 10, 1996, the Partnership announced the approval by Limited Partners
holding a majority of the outstanding Units. In accordance with Sections
16.a.(iii) and (iv) of the Partnership Agreement, approval of the Sale will
result in the dissolution of the Partnership.
The Sale of the Partnership's nine properties (the "Properties") was
consummated on October 11, 1996. The Properties were sold for $27,500,000. The
Partnership received net sales proceeds of $27,085,148 and the transaction
resulted in a gain on sale of $13,606,741.
A special cash distribution of $27,071,280, or $540 per Unit, representing the
majority of the net proceeds from the Sale and fourth quarter net cash from
operations, was distributed to the Limited Partners on November 25, 1996. On
January 2, 1997, $270,642 was distributed to the General Partners representing
their portion of the net proceeds from the Sale. As of November 30, 1996, this
amount was reflected as "Distribution Payable" on the Partnership's
consolidated balance sheet. The remaining proceeds from the Sale and cash
reserves will be first used to pay the Partnership's remaining obligations and
costs of liquidation. Any remaining balance will be distributed to the
Partners in accordance with the Partnership Agreement. The General Partners
intend to wind up the affairs of the Partnership and subsequently liquidate the
Partnership in accordance with the terms of the Partnership Agreement in 1997.
Investment in Limited Partnership On December 9, 1986, the Partnership
executed a purchase agreement to acquire an interest in two self-service
storage facilities located in Fern Park, Florida, and Orlando, Florida, through
two Limited Partnerships, Fern Park and Oak Ridge, with affiliates of the
seller of the facilities. The two facilities were acquired for initial
purchase prices of $2,026,750 and $1,658,250, respectively, and future
additional contingent amounts of up to $173,250 and $141,750, respectively,
based upon the achievement of certain cash flow levels. These amounts were
placed in an escrow account. In 1988, upon the expiration of the contingency
period, the cash flow level required for a partial payment was achieved by the
Fern Park property, and as a result, $103,079 was released as an addition to
the original purchase price of the property. The remaining amounts of $70,171
and $141,750 for Fern Park and Oak Ridge, respectively, were returned to the
Partnership. The initial purchase price of each property was disbursed by the
Partnership to the respective Limited Partnerships as a capital contribution.
The Limited Partnership agreements substantially provide that:
i. Net cash from operations will be distributed each
quarter 100% to the Partnership until the Partnership has
received an amount equal to a cumulative annual 12% return
("Preferred Return") on its capital contribution, as
adjusted. The balance of any net cash from operations will
be distributed 85% to the Partnership and 15% to the Limited
Partner. The Preferred Return for Fern Park was satisfied
during 1996 and 1995. The balance of net cash from
operations was distributed according to the guidelines stated
above. The minority share of $10,744 and $16,058 is recorded
within minority interest expense for the years ended November
30, 1996 and 1995, respectively in the financial statements.
As of November 30, 1996 and 1995, $10,744 and $13,985 of the
minority share of net cash from operations were payable to
the Limited Partner respectively. As the Preferred Return
for Oak Ridge has not been satisfied as of November 30, 1996
and 1995, substantially all of the income of the Limited
Partnership has been allocated to the Partnership.
ii. Cash proceeds from interim capital transactions will be
distributed 100% to the Partnership until the Partnership has
received any shortfalls in its preferred return as well as
125% of its aggregate cash investment. The remaining cash
will be distributed 85% to the Partnership and 15% to the
Limited Partner.
iii. Cash proceeds from a terminating capital transaction
will be distributed to the Partners, pro-rata in accordance
with each Partner's capital account balance, to the extent
thereof, after allocation of gain from sale in connection
with such terminating capital transaction. Any remaining
proceeds will be distributed 85% to the Partnership and 15%
to the Limited Partners. As of November 30, 1996, $208,214
and $163,858 for Fern Park and Oak Ridge, respectively were
payable to the Limited Partner in connection with the
terminating capital transaction.
iv. Taxable income will be allocated in substantially the
same manner as net cash from operations. Tax losses will
generally be allocated 85% to the Partnership and 15% to the
Limited Partner.
6. Reconciliation of Net Income to Taxable Income
For the year ended November 30, 1996, taxable income exceeded net income
reported in the consolidated financial statements by $313,836. For the years
ending November 30, 1995 and 1994, net income reported in the consolidated
financial statements exceeded taxable income by $54,705 and $43,260
respectively. As of November 30, 1996, the tax basis of total assets and
liabilities is $11,910,410 and $7,364,636, respectively. These differences are
a result of differences between the tax basis and financial statement reporting
requirements. Different methods of depreciating real estate are used for tax
purposes as compared to those used for financial statement purposes.
Report of Independent Public Accountants
To the Partners of
American Storage Properties, L.P.:
We have audited the accompanying consolidated balance sheets of American
Storage Properties, L.P. (a Virginia limited partnership), and consolidated
ventures, as of November 30, 1996 and 1995, and the related consolidated
statements of operations, partners' capital and cash flows for each of the
three years in the period ended November 30, 1996. These financial
statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
As described in Note 5 to the financial statements, the Partnership
sold all of its properties on October 11, 1996. The Partnership anticipates
settling and liquidating its remaining assets and liabilities and
consequently will dissolve the Partnership in 1997. The balance sheet
presented herein represents the general partners' estimated net realizable
value of all assets and liabilities as of November 30, 1996 and the
statements of operations and cash flows represent the operations of the
Partnership for the year ended November 30, 1996, including the
operations of the properties through October 11, 1996.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of American
Storage Properties, L.P. and consolidated ventures as of November 30, 1996
and 1995, and the results of their operations and their cash flows for each
of the three years in the period ended November 30, 1996, in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 8, 1997
AMERICAN STORAGE PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation
November 30, 1996
Cost Capitalized
Subsequent
Initial Cost to
Partnership To Acquisition
Land,
Buildings and Buildings and
Description Encumbrances Land Improvements Improvements
Self service storage
facilities:
Virginia Beach $ - $ 151,165 $ 722,441 $ 125,706
Hampton - 306,343 2,553,577 36,738
Chesapeake - 327,656 2,076,833 82,779
Richmond - Bloom Ln. - 340,017 2,113,107 12,211
Norfolk - 302,270 2,371,404 74,584
Richmond - Midlothian - 553,763 1,453,322 68,779
Roanoke - 640,485 1,481,025 2,179
- 2,621,699 12,771,709 402,976
Consolidated Ventures:
Oak Ridge - 488,836 1,269,919 14,593
Fern Park - 645,784 1,499,232 103,079
$ - $3,756,319 $15,540,860 $ 520,648
F-1
AMERICAN STORAGE PROPERTIES, L.P.
Schedule III - Real Estate and Accumulated Depreciation
(continued)
November 30, 1996
Gross Amount at Which Carried at Close of Period
Land,
Buildings and Accumulated
Description Improvements Disposals Total Depreciation
Self service storage
facilities:
Virginia Beach $ 999,312 $ (999,312) - -
Hampton 2,896,658 (2,896,658) - -
Chesapeake 2,487,268 (2,487,268) - -
Richmond - Bloom Ln. 2,465,335 (2,465,335) - -
Norfolk 2,748,258 (2,748,258) - -
Richmond - Midlothian 2,075,864 (2,075,864) - -
Roanoke 2,123,690 (2,123,690) - -
15,796,385 (15,796,385) - -
Consolidated Ventures:
Oak Ridge 1,773,348 (1,773,348) - -
Fern Park 2,248,095 (2,248,095) - -
$ 19,817,828 $ (19,817,828) - -
A reconciliation of the carrying amount of real estate and accumulated
depreciation for the years ended November 30, 1996, 1995 and 1994:
Real Estate investments:
1996 1995 1994
Beginning of year $ 19,817,828 $ 19,761,844 $ 19,664,050
Additions - 55,984 97,794
Disposals (19,817,828) - -
End of year $ - $ 19,817,828 $ 19,761,844
Accumulated Depreciation:
Beginning of year $ 6,010,342 $ 5,353,132 $ 4,701,780
Depreciation expense 329,079 657,210 651,352
Disposals (6,339,421) - -
End of year $ - $ 6,010,342 $ 5,353,132
F-2
Report of Independent Public Accountants On Schedule
To Consolidated Financial Statements
To the Partners of
American Storage Properties, L.P.:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements included in American Storage Properties,
L.P.'s annual report to unitholders, incorporated by reference in this Form
10-K, and have issued our report theron dated January 8, 1997. Our audit was
made for the purpose of forming an opinion on those consolidated financial
statements taken as a whole. Schedule III is the responsibility of the
Partnership's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states, in all material respects, the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 8, 1997
F-3
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> NOV-30-1996
<CASH> 2,770,939
<SECURITIES> 000
<RECEIVABLES> 77,344
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 2,882,470
<CURRENT-LIABILITIES> 973,113
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 1,909,357
<TOTAL-LIABILITY-AND-EQUITY> 2,882,470
<SALES> 3,066,939
<TOTAL-REVENUES> 3,366,797
<CGS> 000
<TOTAL-COSTS> 1,136,797
<OTHER-EXPENSES> 646,156
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 14,807,769
<INCOME-TAX> 000
<INCOME-CONTINUING> 14,807,769
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 14,807,769
<EPS-PRIMARY> 287.40
<EPS-DILUTED> 287.40
</TABLE>
