UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - - - - - --- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- - - - - - --- EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-14349
COMMERCIAL DEVELOPMENT FUND 85
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(Exact name of registrant as specified in its charter)
Connecticut 06-1141277
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
3 World Financial Center, 29th Floor, New York, NY 10285
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(Address of principal executive offices) (Zip code)
(212) 526-3237
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Balance Sheets
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March 31, December 31,
Assets 1995 1994
- - - - - - --------------- ---------- ----------
Land $ 639,650 $ 639,650
Buildings and personal property 8,041,795 8,038,682
Tenant improvements 1,011,023 1,003,171
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9,692,468 9,681,503
Less-accumulated depreciation (2,873,968) (2,770,841)
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6,818,500 6,910,662
Cash and cash equivalents 1,100,938 1,048,774
Accounts receivables 20,128 29,749
Prepaid expenses, net of accumulated
amortization of $126,228 in 1995 and
$114,635 in 1994 182,789 197,788
Deferred rent receivable 283,445 298,572
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Total Assets $ 8,405,800 $ 8,485,545
========== ==========
Liabilities and Partners' Capital
- - - - - - ---------------------------------
Liabilities:
Accounts payable and accrued expenses $ 46,208 $ 76,354
Other payables 12,227 12,227
Due to affiliates 9,000 27,127
Tenant improvements payable 91,798 91,798
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Total Liabilities 159,233 207,506
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Partners' Capital:
General Partner 65,162 61,579
Limited Partners 8,181,405 8,216,460
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Total Partners' Capital 8,246,567 8,278,039
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Total Liabilities and Partners' Capital $ 8,405,800 $ 8,485,545
========== ==========
See accompanying notes to the financial statements.
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Statement of Partners' Capital
For the three months ended March 31, 1995
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General Limited
Partner Partners Total
------- --------- ---------
Balance at December 31, 1994 $61,579 $8,216,460 $8,278,039
Net income 8,162 51,945 60,107
Cash distributions (4,579) (87,000) (91,579)
------- --------- ---------
Balance at March 31, 1995 $65,162 $8,181,405 $8,246,567
======= ========= =========
See accompanying notes to the financial statements.
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Statements of Operations
For the three months ended March 31, 1995 and 1994
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Income 1995 1994
- - - - - - --------------- --------- ---------
Rental $ 311,840 $ 526,474
Tenant expense reimbursements 41,019 30,884
Interest and other 15,200 6,704
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Total Income 368,059 564,062
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Expenses
- - - - - - ---------------
Property operating 165,365 328,894
Depreciation and amortization 114,720 188,229
General and administrative 20,044 16,499
Professional fees 7,823 9,447
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Total Expenses 307,952 543,069
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Net Income $ 60,107 $ 20,993
========= =========
Net Income Allocated:
To the General Partner $ 8,162 $ 10,071
To the Limited Partners 51,945 10,922
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$ 60,107 $ 20,993
========= =========
Per limited partnership unit
(29,000 outstanding) $1.79 $.38
========= =========
See accompanying notes to the financial statements.
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Statements of Cash Flows
For the three months ended March 31, 1995 and 1994
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Cash Flows from Operating Activities: 1995 1994
--------- ---------
Net income $ 60,107 $ 20,993
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 114,720 188,229
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Accounts receivables 9,621 89,775
Deferred rent receivable 15,127 71,492
Prepaid expenses 3,406 2,433
Accounts payable and accrued expenses (30,146) (9,418)
Due to affiliates (18,127) (2,850)
Other payables -- 2,092
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Net cash provided by operating activities 154,708 362,746
Cash Flows from Investing Activities:
Additions to real estate assets (10,965) (71,739)
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Net cash used for investing activities (10,965) (71,739)
Cash Flows from Financing Activities:
Cash distributions (91,579) (305,263)
--------- ---------
Net cash used for financing activities (91,579) (305,263)
Net increase (decrease) in cash and cash equivalents 52,164 (14,256)
Cash and cash equivalents at beginning of period 1,048,774 1,062,569
--------- ---------
Cash and cash equivalents at end of period $1,100,938 $1,048,313
========= =========
See accompanying notes to the financial statements.
---------------------------------
Notes to the Financial Statements
---------------------------------
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of March 31, 1995 and the results of operations and cash flows for
the three months ended March 31, 1995 and 1994 and the statement of changes in
partners' capital for the three months ended March 31, 1995. Results of
operations for the period are not necessarily indicative of the results to be
expected for the full year.
No significant events have occurred subsequent to fiscal year 1994, and no
material contingencies exist which require disclosure in this interim report
per Regulation S-X, Rule 10-01, Paragraph (a)(5).
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Part I, Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
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Liquidity and Capital Resources
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On October 24, 1994, the Partnership sold North Pointe for a gross sales price
of $4,900,000 to the property's major tenant. The Partnership received
proceeds from the sale in the amount of $4,684,491 net of selling costs. The
Partnership recognized a gain on sale of $216,998.
As of March 31, 1995, the Partnership had cash and cash equivalents totalling
$1,100,938, compared with $1,048,774 at December 31, 1994. The $52,164
increase is attributable to net cash flow from operations being in excess of
the payment of cash distributions and tenant and building improvements. The
cash and cash equivalents balance includes a working capital reserve to cover
anticipated costs associated with the lease-up of vacant space at Atrium I.
At Atrium I, two leases totalling 11,184 square feet or approximately 11% of
the property's leasable area, are scheduled to expire during the third quarter
of 1995. The General Partner has been in contact with these tenants regarding
a lease renewal, however, there can be no assurance that a renewal will be
executed.
Accounts receivable decreased $9,621 to $20,128 at March 31, 1995 from $29,749
at December 31, 1994. The decrease is primarily due to the receipt of base
rent at Atrium I that was previously outstanding. Deferred rent receivable
totalled $283,445 at March 31, 1995 compared with $298,572 at December 31,
1994. The decrease is primarily attributable to the amortization of rental
concessions and step rents included in certain leases at Atrium I.
Accrued expenses decreased to $46,208 at March 31, 1995 from $76,354 at
December 31, 1994. The decrease is primarily attributable to the payment of
Partnership and property invoices which were outstanding at year end 1994.
After reviewing the Partnership's operations for the 1995 first quarter, the
General Partner has determined that an adequate cash reserve exists to fund
anticipated tenant improvements and leasing commission costs associated with
leasing efforts at Atrium, and a cash distribution to the Limited Partners.
Accordingly, a cash distribution in the amount of $3 per Unit will be paid to
Limited Partners in the 1995 second quarter. The timing and amount of future
distributions, if any, will be reviewed quarterly by the General Partner.
Future cash distributions may be reduced or suspended in anticipation of
significant lease expirations in 1995 at Atrium. In addition, distributions
may become more volatile since the Partnership has only one property.
Results of Operations
- - - - - - ---------------------
Operations resulted in net income of $60,107 for the quarter ended March 31,
1995, compared with $20,993 for the quarter ended March 31, 1994. The increase
is primarily attributable to a reduction in property operating expenses due to
the sale of North Pointe.
Rental income at Atrium I totalled $311,840 for the quarter ended March 31,
1995, compared with $311,675 for the quarter ended March 31, 1994. Tenant
expense reimbursements at Atrium I totalled $41,019 for the quarter ended March
31, 1995, compared with $16,072 for the quarter ended March 31, 1994. The
increase primarily reflects higher utility usage by several tenants at Atrium
I.
Property operating expenses consist primarily of on-site personnel expenses,
utility costs, repair and maintenance costs, property management fees,
insurance and real estate taxes. Property operating expenses at Atrium I
totalled $165,365 for the quarter ended March 31, 1995, compared to $224,071
for the quarter ended March 31, 1994. Atrium I experienced a decrease in
cleaning, management fees and utility expenses largely due to space reductions
by certain tenants during 1994. Depreciation and amortization expenses at
Atrium I totalled $114,720 for the quarter ended March 31, 1995, compared to
$104,931 for the quarter ended March 31, 1994. The increase results from a
higher depreciable asset base at Atrium I due to tenant and building
improvements completed in 1994.
The occupancy levels at Atrium I as of March 31, 1995 and March 31, 1994 were
84% and 86%, respectively.
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PART II OTHER INFORMATION
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Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended March 31, 1995.
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SIGNATURES
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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.
COMMERCIAL DEVELOPMENT FUND 85
A REAL ESTATE LIMITED PARTNERSHIP
BY: CDF85 REAL ESTATE SERVICES INC.
General Partner
Date: May 15, 1995
BY: /s/Kenneth L. Zakin
Name: Kenneth L. Zakin
Title: Director and President
Date: May 15, 1995
BY: /s/William Caulfield
Name: William Caulfield
Title: Vice President and
Chief Financial Officer
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
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