United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10 - K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended September 30, 1996
Commission File Number 0-15256
Gran-Mark Income Properties Limited Partnership
(Exact Name of Registrant)
A Maryland Limited Partnership 52-1425166
(State of Organization) I.R.S. Employer ID
c/o Amherst Properties, Inc.; 7900 Sudley Road, Suite 900,
Manassas, Virginia 22110
Registrant's Telephone Number, including Area Code (703) 368-2415
Securities Registered Pursuant to Section 12(b) of the Act;
None
Securities Registered Pursuant to Section 12(g) of the Act;
Limited Partnership Interest (Filed on December 17, 1986)
(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 such shorter period that the
registrant was required to files such reports), and (2) has been subject to
such filing requirements for the past 90 days.
X Yes No
At September 30, 1996, the registrant had outstanding 6,505 units of
limited partnership interest. The units are not readily marketable and have a
stated value of $1,000 per unit.
Amherst Group Management, Inc.("AGM"), an affiliate of Amherst
Properties, has signed a contract for management of the office building and
shopping center with management fees currently based on 6% of gross revenues,
starting October 1, 1990. Amherst Properties, Inc. has subcontracted with
Center Association, Inc., an unrelated entity, to provide certain management
services for the shopping center. In accordance with the Partnership
Agreement, AGM is responsible for all third party management expenses.
The Partnership's properties compete with other similar type properties
in their respective geographic markets.
ITEM 2 - Properties
OFFICE BUILDING
The Partnership owns a nine-story, air-conditioned, multi-tenant office
building with three self-service elevators located in Manassas, Virginia, on
Sudley Road (State Route 234), a six lane median highway, just south of I-66,
which provides direct access to Washington, D.C., and points in Northern
Virginia. Completed in 1974, the office building has a gross area of
approximately 95,000 square feet of which approximately 90,933 square feet are
rentable. The office building is located on approximately 4.9 acres and has
on-site parking for 337 cars, which exceeds the applicable zoning
requirements.
As of September 30, 1996, the office building was approximately 96%
leased with two tenants leasing in excess of 10% which together lease
approximately 26.7% of the office building.
Because of the loan restructuring with Old Stone Bank in 1992, the debt
service requirements have been reduced. This reduction is now reflected in
the rental structure which has been lowered to be more competitive in the
marketplace. The completed renovation of the lobby gives the building a more
inviting look for the nineties.
The office building has been known as the First Virginia Building until
First Virginia Bank terminated its lease in November 1990. The building name
has been changed to The Sudley Tower.
SHOPPING CENTER
Sherdian Hills Plaza, a one-story shopping center completed in 1980, has
approximately 117,000 square feet of rental space, 652 parking spaces, and is
located on approximately 15 acres in Amherst, New York (a suburb of Buffalo,
New York). As of September 30, 1995, 95% of the shopping center was leased
with the primary tenants being Hills Department Store and Fay's Drug Company,
Inc. (Fay's Drug Stores), which together lease nearly 86% of the shopping
center. On September 12, 1996, the shopping center was sold for $3,625,000.
The outstanding principal balance on the mortgage of $2,962,361 was paid from
the gross proceeds, as well as $295,791 in selling expenses and other related
disbursements. The proceeds to the Partnership were $366,888, less additional
legal fees of $16,000, resulting in net proceeds of $350,888.
The managing general partner believes that the property is adequately
covered by insurance.
Item 3 - Legal Proceedings
Chapter 11 Filing - See Note 3 to Financial Statements at Item 8.
Law Suit Filing - See Note 10 to Financial Statements at Item 8.
Item 4 - Submission of Matters to a vote of Security Holders
On August 2, 1990, Amherst Properties, Inc. sent voting materials to
limited partners of Gran-Mark Income Properties Limited Partnership and by
August 24, 1990, had received written consents from a 60% majority of the
units in favor of the removal of the former general partners and the
substitution of Amherst Properties, Inc. as the new general partner.
PART II
Item 5 - Market for Registrant's Common Equity and related Stockholders
Matters
There is no established public trading market for the class of limited
Partnership units. The most recent price that the current general partner is
aware of is $100 per $1,000 unit paid in early 1991 paid by an officer of the
current general partner of the units owned by a third party.
Item 6 - Selected Financial Data
For the Year ended September 30, 1996 1995 1994 1993
Total Revenue $ 2,002,248 1,870,121 1,735,895 1,605,755
Net Loss $ (46,830) (217,247) (270,949) (389,950)
Net Loss per weighted
average limited
partnerhsip unit $ (7.13) (33.06) (41.24) (98.59)
Total assets $ 6,447,761 9,646,798 9,930,069 10,311,631
Mortgages payable $ 4,634,915 7,673,367 7,744,189 7,790,440
Item 7 - Management's discussion and Analysis of financial condition and
results of operation
General
During the fiscal year ending September 30, 1996, the Partnership's cash
position changed from $542,360 to $963,019.
The occupancy of the Manassas office building was approximately 96% on
September 30, 1996.
Partners' equity totaled $1,499,119 as of September 30, 1996, a
decrease of $46,830 from the prior year.
The partnership's net loss for the fiscal year ending September 30,
1996, was $46,830; a decrease of $170,417 from a loss of $217,247 for the
fiscal year ending September 30, 1995.
Results of Operations
The shopping center's occupancy rate was approximately 96% on September
12, 1996, about the same as for the year ended September 30, 1995, and a
decrease from 100% for the year ended September 30, 1994. The shopping center
generated a positive cash flow.
The office building's occupancy rate was approximately 96% on September 30,
1996. The office building was approximately 96% and 88% leased for the years
ended September 30, 1995 and 1994, respectively. It is anticipated that
most of the current tenants will remain at least through 1997. The office
building generates a positive cash flow.
During fiscal year ending September 30, 1996, revenues have increased
with a commensurate increase in management fees based on a percentage.
Interest expenses were affected by the scheduled rate increase and an increase
in interest rates for U.S. Treasury Bills on the office building mortgage and
the sale of the New York property. Expenses for depreciation and
amortization have slightly decreased. The expense for utilities decreased
due to the installation of energy efficient light fixtures. Real estate taxes
have increased due to an increase in assessed values and the imposition of a
tax by Prince William County for storm water management. Expenses for
property maintenance and repairs have increased due to completion of several
maintenance and replacement projects. Preventive maintenance programs
continue to protect and improve the buildings and grounds. General and
Administration Expenses have decreased due to the sale of the New York
Shopping Center. See Notes to Financial Statement - Note 10: Management
Plans.
Trends & prospective information
See Item 6 - Selective Financial Data
Sale of the shopping center is a material event which results in the
historical operations and financial condition not being indicative of future
operations or financial condition.
Current management expects that the capital improvements will continue
to improve the appearance of the Manassas property, that the building will
continue to successfully compete with existing office buildings and shopping
centers, and will maintain a high rate of occupancy. Since November 1993 the
Office Building is nearing 100% occupancy.
For further information see Notes to Financial Statement - Note 10:
Management Plans.
Liquidity
At the present time current rental income covers the expenses on the
property.
Monthly partnership incoming cash flow has increased and monthly
partnership outgoing cash flow has been reduced since the new managing general
partner has taken control of the properties in October 1990.
During fiscal year ending September 30, 1996, $336,399 of cash was
generated from operations. This reflects a decrease in cash flow from
operations of $28,564 over the previous fiscal year due primarily to the
increase in tenant rents receivable and the receipt of a full year's rent from
a Sudley Tower tenant for this fiscal year but received in the prior year.
The managing general partner deferred payment of most of its management
fees since October 1990 to allow the partnership to continue to improve its
financial position. The cash flow during the current year was sufficient to
pay the current year's fees plus $21,294 of prior years' fees.
Funds were also used to acquire additional office equipment of $18,676
and make building improvements of $158,014. The building improvements
included $150,215 for energy efficient light fixtures.
Capital Resources
Current management estimates the current market value to be more than
$6,000,000. An improvement in the commercial rental real estate market and an
increase in the occupancy of the Manassas office building would have a major
effect on the market values of the properties.
The Partnership received cash from the sale of the New York shopping center.
The mortgage payable on the Manassas property, which is due April 30, 1997,
is anticipated to be refinanced.
Item 8 - Financial Statements and Supplementary Data
Independent Auditor's Report.........................7
Balance Sheets.......................................8-9
Statements of Income.................................10
Statements of Changes in Partners' Equity............11
Statements of Cash Flow..............................12-13
Notes to Financial Statements........................14-29
Accompanying schedules are omitted since they are included in the Notes.
Jennifer A. Jones, CPA, Ltd.
10615 Judicial Drive, Suite 701
Fairfax, VA 22030
703-352-1587
November 19, 1996
Independent Auditors Report
To the Partners of Gran-Mark Income
Properties Limited Partnership
7200 Sudley Road, Suite 900
Manassas, VA 22070
I have audited the accompanying balance sheets of Gran-Mark Income
Properties Limited Partnership as of September 30, 1996 and 1995, and the
related statements of income, changes in partners equity, and cash flows for
the years ending September 30, 1996, 1995 and 1994. These financial
statements are the responsibility of the Partnerships management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. These standards require that I 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.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Gran-Mark Income
Properties Limited Partnership as of September 30, 1996 and 1995, and the
results of its operations and its cash flows for the years ending September
30, 1996, 1995 and 1994, in conformity with general accepted accounting
principles.
Jennifer A. Jones, CPA, Ltd.
<TABLE>
Gran-Mark Income Properties Limited Partnership
Balance Sheets
September 30, 1996 and 1995
ASSETS
9/30/96 9/30/95
<S> <C> <C>
CURRENT ASSETS
Cash $ 963,019 $ 542,360
Tenant Rents Receivable 133,343 30,124
Prepaid Expenses and Other 30,202 47,210
Mortgage Escrow Accounts 30,816 27,831
Total Current Assets 1,157,380 647,525
FIXED ASSETS:
Land 418,598 1,114,193
Buildings 6,594,998 10,547,032
Building Improvements 654,858 611,992
Vehicle and Office Equipment 41,064 38,053
Total 7,709,518 12,311,270
Less: Accumulated Depreciation 2,462,063 3,365,558
Total Book Value of Fixed Assets 5,247,455 8,945,712
OTHER ASSETS:
Deferred Costs net of accumulated
amortization of $199,315 and
$255,187 as of June 30, 1996,
and September 30, 1995, respective 42,926 53,561
Total Other Assets 42,926 53,561
Total Assets $ 6,447,761 $ 9,646,798
<F/N>
See Notes to the Financial Statements
</TABLE>
<TABLE>
Gran-Mark Income Properties Limited Partnership
Balance Sheets
September 30, 1996 and 1995
LIABILITIES AND PARTNERS' EQUITY
9/30/96 9/30/95
<S> <C> <C>
CURRENT LIABILITIES:
Accounts Payable $ 55,344 $ 86,927
Accrued Inter 46,478 55,516
Accrued Expenses 83,199 59,964
Unearned Rental Income 8,554 65,417
Current Portion of Note Payable 0 1,197
Current Portion of Mortgages Payable 4,634,915 77,782
Total Current Liabilities 4,828,490 346,803
LONG-TERM LIABILITIES:
Tenant Security Deposits Payable 44,746 57,085
Management Fees Payable to Amherst
Properties, Inc. 75,406 101,376
Mortgage Payable - Office Building 0 4,635,333
Mortgage Payable - Shopping Center 0 2,960,252
Total Long-Term Liabilities 120,152 7,754,046
Total Liabilities 4,948,642 8,100,849
CONTINGENCIES AND COMMITMENTS (Notes 3 through 10)
9/30/96 9/30/95
PARTNERS' EQUITY:
General Partner $ (20,315) $ (19,847)
Limited Partners (12,000 units
authorized; 6,505 issued and
outstanding) 1,519,434 1,565,796
Total Partners' Equity 1,499,119 1,545,949
Total Liabilities and
Partners' Equity $ 6,447,761 $ 9,646,798
<F/N>
See Notes to the Financial Statements.
</TABLE>
<TABLE>
Gran-Mark Income Properties Limited Partnership
Statements of Income
For Fiscal Years Ending September 30, 1996, 1995 and 1994
9/30/96 9/30/95 9/30/94
<S> <C> <C> <C>
REVENUE:
Rental $ 1,686,507 $ 1,613,965 $ 1,483,926
Tenant Reimbursements 355,729 234,822 241,403
Interest 10,017 10,050 8,535
Other 26,410 11,284 2,031
Loss on Sale of Asset (76,415) 0 0
Total Revenue 2,002,248 1,870,121 1,735,895
EXPENSES:
Interest 634,377 684,743 653,561
Depreciation & Amortization 432,665 442,982 446,725
Utilities 198,603 219,100 206,717
Real Estate Taxes & Licenses 234,218 230,229 232,290
Property Maintenance & Repairs 235,148 195,531 210,205
Management Fees 115,093 114,231 103,580
General & Administrative Expenses 198,974 200,552 153,766
Total Expenses 2,049,078 2,087,368 2,006,844
Net Loss $ (46,830) $ (217,247) $ (270,949)
Allocation of Net Loss:
General Partner $ 468 $ 2,172 $ 2,709
Limited Partners 46,362 215,075 268,240
Net Loss per weighted
average Limited Partnership
unit (6,505 units) $ 7.13 $ 33.06 $ 41.24
<F/N>
See Notes to the Financial Statements.
</TABLE>
<TABLE>
Gran-Mark Income Properties Limited Partnership
Statements of Changes in Partners' Equity
For the Years Ending September 30, 1996, 1995 and 1994
General Limited
Partner Partners Total
<S> <C> <C> <C>
Balance, September 30, 1993 $ (14,966) $ 2,049,111 $ 2,034,145
Net Loss Fiscal Year Ending 1994 (2,709) (268,240) (270,949)
Balance, September 30, 1994 $ (17,675) $ 1,780,871 $ 1,763,196
Net Loss Fiscal Year Ending 1995 (2,172) (215,075) (217,247)
Balance, September 30, 1995 $ (19,847) $ 1,565,796 $ 1,545,949
Net Loss Fiscal Year Ending 1996 (468) (46,362) (46,830)
Balance, September 30, 1996 $ (20,315) $ 1,519,434 $ 1,499,119
<F/N>
See Notes to the Financial Statements
</TABLE>
<TABLE>
Gran-Mark Income Properties Limited Partnership
Statements of Cash Flow
For the Fiscal Years Ending
Ending September 30, 1996, 1995 and 1994
9/30/96 9/30/95 9/30/94
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income or Loss from
Statement of Income $ (46,830) $ (217,247) $ (270,949)
Adjustments to reconcile net loss
to cash provided by (used in)
operating activities:
Depreciation & Amortization 432,665 442,982 446,725
Loss on Vehicle 2,871 0 0
Loss on Sale of Assets 76,415 0 0
Operating Expenses not paid by cash,
Withheld from Asset sale proceeds 73,032 0 0
(Increase) Decrease in:
Tenant Rents Receivable (103,219) (7,746) (4,085)
Prepaid Expenses and Other 17,008 (4,863) (3,459)
Mortgage Escrow Accounts (2,985) 132,044 11,724
Increase (Decrease) in:
Accounts Payable (31,583) (7,900) (159,923)
Accrued Interest (9,038) (556) 64
Accrued Expenses 23,235 (4,846) 29,829
Unearned Rental Income (56,863) 52,791 (4,536)
Tenant Security Deposits
Payable (12,339) 10,268 4,320
Management Fees Payable to
Amherst Properties, Inc. (25,970) (29,964) 13,984
Total Adjustments 383,229 582,210 334,643
Net Cash Provided by Operating
Activities 336,399 364,963 63,694
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sale of Assets 350,888 0 0
Additions to Vehicle & Office
Equipment (18,676) (8,222) (761)
Additions to Building Improvements (158,014) (18,404) (115,643)
Additions to Deferred Costs (12,650) (15,433) (3,515)
Maturity of Certificate of Deposit 0 0 50,000
Decrease in Reserve Funds and
Escrow Accounts in connection
with Chapter 11 proceedings 0 0 205,693
Net Cash Provided by (Used in)
Investing Activities 161,548 (42,059) 135,774
<F/N>
See Notes to the Financial Statements.
</TABLE>
<TABLE>
Gran-Mark Income Properties Limited Partnership
Statements of Cash Flows
For the Fiscal Years Ending
Ending September 30, 1996, 1995 and 1994
9/30/96 9/30/95 9/30/94
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Notes $ (1,197) $ (4,787) $ (4,787)
Repayment of Secured Claims (76,091) (70,822) (46,251)
Incentive to Lessee 0 (16,687) (23,392)
Net Cash Used in Financing
Activities (77,288) (92,296) (74,430)
Net Change in Cash $ 420,659 $ 230,608 $ 125,038
CASH AT BEGINNING OF YEAR 542,360 311,752 186,714
CASH AT END OF YEAR $ 963,019 $ 542,360 $ 311,752
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for
Interest $ 650,168 $ 685,299 $ 653,497
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
On September 12, 1996, the New York shopping center was sold.
Gross Sales Price $ 3,625,000
Items paid from sales proceeds
Selling Expenses (222,719)
Secured Claim (2,962,361)
Operating expenses (73,032)
Legal Fees (16,000)
Net proceeds from Sale $ 350,888
On December 31, 1995, the vehicle was traded in. Both the old and new
vehicle are in Amherst Properties, Inc.'s name. The new vehicle is not
recorded on the Partnership's books.
Fully depreciated building improvements totaling $2,897 were disposed of
during the year ending September 30, 1995.
<F/N>
See Notes to the Financial Statements.
</TABLE>
GRAN-MARK INCOME PROPERTIES LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
Note 1: NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES:
Nature of Business
The Partnership owns and operates an office building in Manassas,
Virginia, and owned and operated a shopping center in Amherst, NY,
which contains approximately 95,000 and 117,000 square feet, respectively.
Significant Accounting Policies
The following accounting policies conform to generally accepted
accounting principles and have been consistently applied in the
preparation of the financial statements. Certain prior year
amounts and disclosures have been reclassified to conform with
the current year's presentation. These reclassifications have no
effect on the net losses as previously reported.
Revenue Recognition
Rental income is reported as earned over the lives of the related
leases. Tenant reimbursements are accrued based on annual or
quarterly expenses and included pro-rata payments under certain
leases for increases in property taxes, insurance, depreciation
and direct operating expenses. Such amounts are calculated
annually on a calendar year basis or quarterly with pro-rata
portions based upon square footage leased during the year.
Rental Property and Depreciation
Buildings are stated at cost and depreciated over their estimated
thirty-year useful lives. Leasehold improvements, also stated at
cost, are depreciated over the lesser of the length of the
related leases or the estimated useful lives. The improvements
generally have a useful life from one to fifteen years.
Depreciation is computed on the straight-line method for financial
reporting purposes and for income tax purposes depreciation is
computed on both accelerated and straight-line methods.
Improvements and major renovations are capitalized, while
expenditures for maintenance, repairs and minor renovations are
expensed when the cost in incurred.
Deferred costs and amortization
Financing costs are amortized over the terms of the related loans
using the straight-line method.
Leasing costs are amortized over the terms of the lease using the
straight-line method.
Cash Equivalents
For balance sheet and cash flow purposes, the Partnership
considers all cash accounts, which are not subject to withdrawal
restrictions or penalties, and all highly liquid financial
instruments purchased with a maturity of three months or less to
be cash equivalents. There are no cash equivalents as of
September 30, 1996.
Net Loss Per Weighted Average Limited Partnership Unit
The computation of net income (loss) per weighted average limited
partnership units is based on the weighted average number of units
outstanding during the year. The weighted average number of units
for each period is 6,505.
Income Taxes
Partnerships are not subject to income taxes. The partners are
required to report their respective shares of partnership income
or loss on their individual income tax returns.
Concentration of Credit Risk
Financial instruments that potentially subject the Partnership to
credit risk include cash on deposit with financial institutions
amounting to $458,973 and $961,771 at September 30, 1995 and 1996,
respectively, which was insured up to $100,000 and $200,000,
respectively, by the Federal Deposit Insurance Corporation.
Allowance for Doubtful Accounts
The Partnership considers accounts receivable to be fully
collectible; accordingly, no allowance for doubtful accounts is
required.
NOTE 2: RENTAL PROPERTY:
Land, buildings, improvements, and other capital expenditures, and
their related accumulated depreciation accounts are summarized as
follows:
Office Vehicle
Building and
Manassas, Office
Virginia Equipment Total
Date of Construction 1974
Date Acquired Aug. 1986 Various
Land $ 418,598 $ 0 $ 418,598
Buildings 6,594,998 0 6,594,998
Other 0 41,064 41,064
Total initial cost to partnership 7,013,596 41,064 7,054,660
Improvements capitalized
subsequent to acquisition 654,858 0 654,858
Total accumulated cost 7,668,454 $ 41,064 $ 7,709,518
Accumulated depreciation 2,446,793 15,270 2,462,063
Net book Value $ 5,221,661 $ 25,794 $ 5,247,455
The following is a summary of activity for the land, buildings and
improvements, for the years ended September 30, 1994, 1995, and
1996:
Rental Accumulated
Property Depreciation
Balance September 30, 1993 $12,374,579 $(2,838,491)
10/01/93 - 9/30/94
Additions during the period:
Improvements capitalized 203,343
Depreciation expense (410,490)
Deletions during the period: (320,212) 320,212
Balance September 30, 1994 $12,257,710 $(2,928,769)
10/01/94 - 9/30/95
Additions during the period:
Improvements capitalized 18,404
Depreciation expense (417,460)
Deletions during the period: (2,897) 2,897
Balance September 30, 1995 $12,273,217 $(3,343,332)
10/01/95 - 9/30/96
Additions during the period:
Improvements capitalized 158,014
Depreciation expense (405,850)
Deletions during the period (4,762,777) 1,302,389
Balance September 30, 1996 $ 7,668,454 $ 2,446,793
One of the primary tenants at the Shopping Center in Amherst, New
York, was Hills Department Store ("Hills"). Hills, on February 5,
1991 filed a petition for Chapter 11 Reorganization, but continued
to occupy its space and to pay rent post-petition on a current
basis. On September 10, 1993, Debtor's First Amended Consolidated
Plan of Reorganization was confirmed by the Court.
Hills completely renovated the interior of the store in the
shopping center. The creditors of Hills consented to the
renovation expense of approximately $525,000. The Partnership
agreed to contribute an additional $125,000 for such renovation
and repairs with the condition that the Lease Agreement be
affirmed prior to any payments made by the Partnership. Assistant
Corporate Counsel of Hills Department Stores confirmed in November
1993 that the Lease for the store in the shopping center had been
assumed and had not been rejected nor was it the subject of a
pending motion to reject.
The $125,000 offered by the Partnership was derived from the
following sources:
Pre-petition rent of $7,622 was forgiven; $25,000 was paid
out of the cash call fund in December 1993; 12,300 was paid
August, 1993; $40,000 was paid on July 28, 1994; and
commencing March 1994 twelve consecutive monthly
installments of $3,341 were paid.
The tenant was paid $16,687 and $23,392 during the fiscal years
ending September 30, 1994 and 1995, respectively, as partial
payments of the rent offset identified as Incentive to Lessee.
NOTE 3: PLAN OF REORGANIZATION UNDER CHAPTER 11:
By August 24, 1990, limited partners owning more than 60% of the
Partnership's units voted to remove Gran-Mark Properties, Inc. and
Fourth Coast Properties Ltd. as the general partners and replace
the former general partners with Amherst Properties, Inc., the
current general partner. The effective date of removal in
accordance with the Partnership Agreement was September 30, 1990.
On September 28, 1990, two days prior to the effective date of
removal, the former managing general partner filed a petition for
relief under Chapter 11 of the federal bankruptcy laws on behalf
of Gran-Mark Income Properties Limited Partnership (the "Debtor")
in the United States Bankruptcy Court for Eastern District of
Virginia - Alexandria Division.
A Plan of Reorganization dated March 27, 1992, a First Amended
Plan of Reorganization dated April 13, 1992, and a Second Amended
Plan of Reorganization dated June 2, 1992 were filed with the
Court for approval.
On June 24, 1992, the U.S. Bankruptcy Court for the Eastern
District of Virginia, Alexandria Division, approved a Disclosure
Statement in connection with the Plan of Reorganization and the
Plan was confirmed. The Effective Date of the Plan was August 28,
1992. Under the Plan, five classes of creditors were established:
The Class One Creditor group consisted of FDIC/Seaman's Bank for
Savings, FSB, whose secured claim was not impaired under the Plan.
The Plan required that as of the Effective Date of the Plan, all
monthly payments under the FDIC/Seaman's Bank for Savings, FSB
Note and Mortgage were to be paid in full, and to the extent that
the escrow account maintained for the purpose of paying real
estate taxes and insurance was insufficient was to be paid into
the escrow account. In accordance with a Court Order dated
January 25, 1993 the partnership made on September 21, 1993 a
payment in the amount of $46,173 to increase the escrow account
balance held by FDIC. The Class One Creditor was also allowed a
secured claim for its attorney's fees, costs and expenses incurred
and paid in the amount of $20,000. Of this claim, $10,000 was
paid by the Effective Date of the Plan, and $10,000 was added to
the principal balance of the loan and will be paid, without
interest, on the maturity of the Note and Mortgage.
The Class Two Creditor group consisted of Old Stone Bank whose
secured claim shall be paid in accordance with the provisions of
the Plan and of the Modification Agreement and Allonge-Promissory
Note dated June 30, 1992. The allowed amount was determined to be
the loan balance as of March 1, 1992, of $4,291,717.51 plus
Accrued Interest at 9% per annum for the period of June 1, 1991
through May 31, 1992 in the amount of $372,761.19, plus other fees
recoverable by the Bank, referred to as the Deferred Balance, not
to exceed $55,000. The Accrued Interest and Deferred Balance were
added to the principal balance of the loan and will be paid
without interest on the maturity date. The maturity date of the
loan was extended to April 30, 1997. During the period from July
1, 1992 through April 30, 1994, interest only shall be paid on the
principal sum of $4,291,717.51 based upon a rate calculated by
adding 2.25% to the two year Treasury Note rate (computed on the
average rate of the last five business days in the month of May
1992). This interest rate is 7.53%, resulting in a monthly
interest payment of $26,930.53. During the period from May 1,
1994 through April 30, 1996, interest shall be paid on the
principal sum of $4,291,717.51 based upon a rate calculated by
adding 2,75% to the two year Treasury Note rate (computed on the
average rate of the last five business days in the month of April
1994) and an additional monthly payment of principal shall be made
based upon a thirty year amortization schedule. During the period
from May 1, 1996 through April 30, 1997, interest shall be paid on
the principal sum of $4,291,717.51 based upon a rate calculated by
adding 3.00% to the two year Treasury Note rate (computed on the
average rate of the last five business days in the month of April
1996) and an additional monthly payment of principal shall be made
based upon a twenty eight year amortization schedule. On April
30, 1997, all principal, unpaid interest, and the Deferred Balance
shall be due and payable.
Under the Plan, Old Stone Bank agreed to make available to the
Partnership the balance in the cash reserve fund, approximately
$162,800, together with $125,000 contributed by the Partnership,
for capital improvements, renovations, and repairs specified in
the Plan. These funds held in the Capital Improvement Reserve
Fund are subject to signatures of a representative of Old Stone
Bank and the Partnership.
As required by the Plan, the Partnership established a second
escrow account at Old Stone Bank as a Note Payment Reserve in the
amount of $40,000. This account shall only be used when the
available monthly cash flow from the Manassas Property is less
than the monthly debt service. On the first anniversary date of
the Effective Date, an amount will be deposited by the Partnership
to replenish the account. On the second anniversary of the
Effective Date, the account balance will be returned to the
Partnership.
The Class Three Creditor group consisted of Amherst Properties,
Inc. The Plan requires that on the Effective Date, a promissory
in the principal amount of $50,000 payable at the rate of $20,000
per year with interest of 6% per annum until paid shall be given
by the Partnership to Amherst Properties, Inc. At the option of
the Class Three Creditor, the note or any part of the note may be
converted to partnership interests at a conversion price of $100
per partnership unit. On August 1, 1993, Amherst Properties, Inc.
exercised such option and the partnership issued 500 units as
payment against the $50,000 principal due. The remainder of the
Class Three Creditor claim is subordinated to the claims of Class
Two and Class Four Creditors and are to be paid from future cash
flow only after the payments required under the Plan have been
made to all other Classes of Creditors.
The Class Four Creditor group consisted of all unsecured creditors
who are to be paid 50% of their claims upon the Effective Date of
the Plan with the remainder being paid on the anniversary date on
the confirmation.
The Class Five Creditors group consisted of all Equity Security
Holders. At its option, each holder of a Class Five Equity
Interest was entitled to retain its equity Security in the
Partnership by making a capital contribution in an amount equal to
a total of eight percent (8%) of the original capital investment.
To the extent a Class Five Equity Security Holder failed to make
a capital contribution, then that respective Holder's interest in
the Partnership was deemed null and void. The original investment
made to the Partnership equaled $6,005,000, and the new capital
raised under the Plan was $480,400.
The capital contribution was payable in two installments, the
first installment was due within 25 days of the approval of the
Disclosure Statement (June 24, 1992) in the amount of five percent
(5%) of the original investment, and the remainder of three
percent (3%) was due on the first anniversary of the confirmation
of the plan. Any partner failing to make the five percent (5%)
contribution was deemed to be a declining partner. A second
opportunity gave contributing partners the right to contribute for
additional partnership shares determined by the increased
percentage changed resulting from non contributing partners and
the right to request additional interests. If a contributing
partner made the initial five percent capital contribution but
failed to make the additional three percent (3%) capital
contribution, other contributing partners who have made both cash
contributions were given the option to make the declining three
percent (3%) capital contribution and receive the pro-rata
interest in the Partnership represented by that capital
contribution. The declining subscribing partner who made the five
percent (5%) capital contribution, retained the interest
represented by the five percent (5%) contribution. Only two
opportunities were offered. Partnership shares dated August 28,
1992 were issued for the first installment contribution.
Partnership shares dated August 1, 1993, were issued for the
second installment contribution.
Under the Plan, the Amended Partnership Agreement was further
modified to provide for future cash calls as deemed appropriate by
the General Partner. Such cash calls shall not cause a forfeiture
of Partnership interest for any Equity Security Holder who has
made the subscriptions required by the Plan, however, any future
cash call may result in a dilution in Partnership Interest.
When an entity emerges from a Chapter 11 reorganization, it must
determine if the reorganization value of its assets before the
date of confirmation is less than the total of all post-petition
liabilities and allowed claims, and if the holders of existing
voting shares immediately before confirmation receive less than
fifty percent (50%) of the voting shares of the emerging entity.
If these conditions exist, then the entity adopts fresh-start
reporting which adjusts the historical amounts of individual
assets and liabilities, reports forgiveness of debt, and creates a
new reporting entity.
These conditions did not exist and the partnership did not adopt
fresh-start reporting.
NOTE 4: CAPITAL CONTRIBUTIONS
Under the provisions of the Plan of Reorganization, the general
partner notified all limited partners of their right to make a
capital contribution and the consequences of any failure to make
the required capital contribution. The new capital raised under
the Plan was $480,400: $300,250 from the 5% contribution due July
19, 1992, (25 days after the date of approval of the Disclosure
Statement by the Bankruptcy Court) and $180,150 from the 3%
contribution due July 28, 1993 (the first anniversary of the date
of confirmation of the Plan of Reorganization).
The partnership received $480,400 related to the cash call and the
partnership issued 6,005 units.
Under the Plan of Reorganization, the general partner, Amherst
Properties, Inc. had the right to convert its approved claim of
$50,000 represented by a Note dated August 28, 1992, into a
partnership interest in the reorganized partnership at the
conversion price of $100.00 per partnership unit. On August 1,
1993, Amherst Properties, Inc. exercised that right and 500 units
were issued.
As of September 30, 1996, a total of 6,505 units had been issued.
NOTE 5: SECURED CLAIMS:
Secured claims as of September 30, 1995 and September 30, 1996,
which are collateralized by liens on the Partnership's rental
property, including their related leases, accounts receivable, and
vehicle, are summarized below:
Lender Property Sept 30, 1995 Sept 30, 1996
Old Stone Bank, FSB The Sudley Tower
Now, Regency Savings (Office Bldg)
Bank Manassas, VA $ 4,672,365 $ 4,634,915
Seamen's Bank for Sheridan Hills
Savings, FSB Plaza
Now, Regency Savings (Shopping Ctr)
Bank Amherst, NY 3,001,002 0
First Virginia Bank Vehicle 1,197 0
Totals $ 7,674,564 $ 4,634,915
Scheduled maturities of secured claims at September 30, 1996, are
as follows:
FYE 1997 $4,634,915
FYE 1998 and after 0
Total $4,634,915
Old Stone Bank, FSB/Regency Savings Bank:
On June 30, 1992, Gran-Mark Income Properties Limited Partnership
and Old Stone Bank entered into a Modification Agreement and
Allonge Promissory Note to modify the promissory note dated May
29, 1987. The modification extends the maturity date to April 30,
1997. For the period from July 1, 1992 through April 30, 1994,
monthly payments of interest only at the rate of 7.53% (2,25%
added to the average two year U.S. Treasury Bill Rate for the last
five business days of May, 1992, and calculated upon the principal
outstanding), in the amount of $26,930.53 were due. For the
period from May 1, 1994 through April 30, 1996, monthly payments
of principal and interest are calculated based on an interest rate
calculated by adding 2.75% to the average two year U.S. Treasury
Bill Rate for the last five business days of April, 1994, and
calculated upon the principal outstanding, plus a thirty year
amortization of the principal balance of $4,291,717.51. For the
period from May 1, 1996 through April 30, 1997, monthly payments
of principal and interest will be calculated based on an interest
rate calculated by adding 3.0% to the average two year U.S.
Treasury Bill Rate for the last five business days of April, 1996,
and calculated upon the principal outstanding, plus a twenty eight
year amortization of the principal balance. On April 30, 1997,
all principal and accrued, unpaid interest is due plus a Deferred
Balance of interest (totaling $374,761.19) and unpaid fees in the
amount not to exceed $55,000. Interest charged to operations
during the years ending September 30, 1996, 1995, and 1994, was
$352,456, 359,156, and $338,996, respectively.
Seamen's Bank for Savings/Regency Savings Bank:
The mortgage bears interest at the rate of 10.31%; 2.5% over the
Federal Home Loan Bank Board Five Year Advance Rate. The loan was
to mature in January, 1997, at which time a balloon payment of
approximately $2,944,200 was due. Fixed monthly payments of
$27,708 through January 1992 were based upon a thirty year
amortization period. Commencing in February 1992, constant
monthly payments in the amount of $28,936 are based on a twenty-
five year amortization period.
The mortgage was only to be prepaid in the fifth, ninth or tenth
years subject to a penalty of 1% in years five and ten and 2% in
year nine, or if greater (in years nine and ten, only) 1% plus the
prepayment fee then charged by the Federal Home Loan Bank Board.
Interest Charged to operations during the years ending September
30, 1996, 1995 and 1994, was $289,619, $310,142, and $313,761;
respectively.
This mortgage was paid in full September 1996 upon the sale of
the New York shopping center. Payment was made from the gross
proceeds.
First Virginia Bank
On November 21, 1991, the Partnership acquired a 1991 Chevrolet
truck. The acquisition was financed solely with a loan in the
amount of $15,665, for which the vehicle is collateral. The loan
required forty eight (48) constant monthly payments of $398.95,
which commenced on January 5, 1992. The interest charged to
operations ending September 30, 1996, 1995, and 1994, was $23,
$378, and $804, respectively. Both the truck and the loan were in
Amherst Properties, Inc's name, but the truck was paid for solely
by the Partnership.
UNSECURED CLAIMS:
Unsecured claims (accounts payable) as of September 30, 1996, are
summarized below:
Manassas Office Building
Utilities $ 15,861
Repairs & Maintenance 1,219
Rent Overpayment 325
Office 497
Legal 382
Legal Fees to a Related Party 20,988
Building Improvements 6,910
Office Equipment 4,047
Construction Management to a Related Party 5,115
Total $ 55,344
NOTE 6: RELATED PARTY TRANSACTIONS:
Management Agreements
The Partnership maintains a management agreement with Amherst
Properties, Inc. (the current general partner) for each of the two
properties. The agreement provided for a monthly payment of
management fees in the amount of six percent (6%) of gross rents
collected and reimbursement of out-of-pocket expenses incurred in
connection with each property. Amherst Properties, Inc. has
subcontracted the day to day management and leasing responsibility
for the Amherst shopping center to a non-affiliate, Center
Associates, Realty Corp., for $1,000.00 per month. In accordance
with the partnership and management agreements, Amherst
Properties, Inc. is responsible for all third party management
expenses.
On September 24, 1994, Amherst Properties, Inc. executed an
agreement with Center Associates Realty Corp. to extend the
management contract for the Amherst Shopping Center. Under this
agreement the expiration date was extended to September 30, 1996.
All other terms and conditions remain the same.
On September 30, 1992, the partnership executed and Amendment to
Management agreement with Amherst Properties, Inc. for each of the
two management agreements, extending the expiration date of each
agreement to September 30, 1996. All other terms and conditions
remain the same.
Accordingly, aggregate management fees charged to operations for
the years ended September 30, 1996, 1995, and 1994, are as
follows:
1996 1995 1994
Amherst Properties, Inc. $ 115,089 $ 114,231 $ 103,580
Total $ 115,089 $ 114,231 $ 103,580
As of September 30, 1996, $30,586 of these fees remain payable to
Amherst Properties, Inc.
Reimbursement of Partnership Operating Expenses
The Partnership agreement provides for reimbursing the general
partner and its affiliates for costs of providing administrative
services to the partnership. Such reimbursements charged by and
paid to the current general partner for operations are none for
fiscal year ending September 30, 1994. Reimbursements charged by
and included in the Accounts Payable as of September 30, 1995,
were $27,985 and noted as related party items. Reimbursements of
$58,958 were charged by the general partner, $5,410 was paid
during the current fiscal year, and $53,548 are included an
Accrued Expenses as of September 30, 1996.
During the period of October 1990 through December 1990, the
general partner paid $79,994 in various costs for the Partnership.
During prior periods, $20,174 of these costs have been reimbursed
to the general partner, and during the current period an
additional $15,000 was reimbursed, leaving a balance of
unreimbursed costs of $44,820 as of September 30, 1996. These
unreimbursed costs are included in Management Fees Payable to
Amherst Properties, Inc. The Partnership has agreed to pay
interest at the rate of 12% on these unreimbursed costs from
December 31, 1990, until paid. Interest accrued for prior periods
is $42,875, less payments of interest made during the prior fiscal
year of $15,068 and $15,704 during the current period. A prior
adjustment has been made to reflect the accrual of the additional
interest due of $24,807 due to September 30, 1995. Interest
charged to operations during the current fiscal year is $5,556.
Certain administrative expenses, such as telephone charges, and
operating expenses incurred on the Partnership's behalf by Amherst
Properties, Inc. are billed to Amherst Properties, Inc. but are
paid directly by the Partnership.
During the current fiscal year, the Partnership paid $10,004 for
the down payment, monthly loan payments, and other expenses
related to a vehicle owned by Amherst Properties, Inc. Both the
vehicle and loan are in Amherst Properties, Inc.'s name. These
payments are included in the interest paid to Amherst Properties,
Inc.
Promissory Note
As provided for in the approved Plan of Reorganization, the Class
Three Creditor, Amherst Properties, Inc. was given a note of
$20,000 per year with interest of 6% per annum until paid. At the
option of Amherst Properties, Inc., the note or any part of the
note was converted to a Partnership interest in the reorganized
Partnership at a conversion price of $100.00 per Partnership unit.
This option was exercised. The remainder of the Class Three
Creditor's Claim was subordinated to the claims to the Class Two
and Class Four Creditors and will be paid from future cash flow
after the payments required under the Plan have been made.
NOTE 7: OPERATING LEASES
Minimum future rentals to be received under noncancellable
operating leases from tenants of both properties in effect at
September 30, 1996, are as follows:
Year ending September 30, Amount
1997 $ 822,012
1998 553,272
1999 381,219
2000 196,781
Subsequent to 1999 136,814
Total minimum future rentals $ 2,090,098
General leasing arrangements include a remaining fixed rental term
with annual increases, pro rata share of increases in property
expenses, and various renewal options.
NOTE 8: INCOME TAXES
A basic requirement of federal tax law requires that a
partnership's general partners assume unlimited liability.
Requirements, among others, in determining whether a limited
partnership will be recognized as a partnership or if it will be
recognized as a corporation are as follows:
A. Limited partners may not own directly or indirectly more
than 20 percent of the corporation or its affiliates.
B. The net worth of the corporation must at all times be a
minimum of 10 percent of total partnership contribution.
Affiliates of one of the Partnership's limited partners own a two-
thirds interest in Amherst Properties, Inc. and Amherst
Properties' net worth is less than the guidelines suggest.
Accordingly, the possibility exists that the Partnership could be
classified as an association and be subject to corporate tax laws,
which could result in the disallowance of previous deductions
taken by limited partners on their individual returns.
As previously noted in Securities and Exchange Commission filings,
the previous managing general partner has not met the net worth
requirements since 1987.
The Tax Reform Act of 1986 required the Partnership to change its
reporting period for income tax purposes to a calendar year. The
change became effective for the three month period ending December
31, 1988.
NOTE 9: PARTNERSHIP ALLOCATIONS:
Partnership income and net cash from operations are allocated 99%
to the limited partners and 1% to the general partner until the
limited partners have received their cumulative 7% priority
return. After this return has been achieved, the general partner
will then be allocated its annual incentive management fee so that
total distribution will aggregate 10% to the general partner and
90% to the limited partners in accordance with the Partnership
Agreement. The general partner will then receive its deferred
incentive management fee, if any, and any remaining income. Net
cash from operations in allocated 90% to the limited partners and
10% to the general partner. Losses are allocated 99% to the
limited partners and 1% to the general partner.
NOTE 10: MANAGEMENT PLANS:
At the time the new general partner, Amherst Properties, Inc.,
commenced managing the properties, there existed no operating
funds and a negative cash-flow. Significant legal bills and real
estate commissions were payable, numerous maintenance and heating
and air-conditioning problems at the office building existed, as
well as a serious default of the required loan payments to Old
Stone Bank.
Amherst Properties, Inc. had deferred collection of most
management fees accrued for the period from October 1990 to
September 1993 and advanced funds, to pay operating expenses,
legal fees and real estate commissions.
At the present time current rental income covers the operating
expenditures.
The success for the Manassas office building is dependent upon
three major factors:
1. The ability to successfully compete with existing office
buildings in Prince William County.
2. The ability to attract new tenants from adjacent counties.
3. Achieving and maintaining a high rate of occupancy.
Over the past year the managing general partner has continued to
improve the situation with regard to these factors. The managing
general partner has modernized the office building and replaced
light fixtures with more energy efficient fixtures to
successfully compete with existing buildings. The office building
has a competitive advantage because of easy access to and from
major highways, efficient heating and air-conditioning, an
effective security system and high rise view of surrounding scenic
areas.
Management's efforts over the past several years brought to
fruition an office building which is more than 95% leased and
occupied. The management team overcame the loss of major tenants
leasing more than 20,000 square feet. Management sought and
obtained a signed lease with a major real estate broker and
several mortgage companies.
Present plans are to continue to develop a self sufficient
financial center for loans, banking, mortgage, home real estate
sales, with necessary support services. These tenants which have
stood the test of time not only survived the crunch of the early
1990s but have expanded and became more profitable.
Management is generating a capacity for the roof top to
accommodate 50 antennae. A rail system has been built to anchor
the antennae and electronics will continue to be managed by RAM.
The number of licensed antennae users has increased to 21.
More repairs, maintenance, and upgrading are needed at the office
building to continue to attract and retain tenants. They are as
follows:
1. Power clean the exterior facade of the building.
2. Renovate bathrooms.
3. Renovate the hallways of the upper floors, carpeting,
wallpaper, ceiling, and lighting.
4. Caulking the windows and window frame.
5. Landscaping the building site front and rear.
6. Installation of energy efficient lighting and motors
which power the heating and hot water system.
The work for upgrading the building and performing needed repairs
and maintenance began with the new management and continues.
In April and May 1993, the Partnership entered into contracts
totaling $131,750 for renovations of the lobby and for
modifications to the first and fifth floor bathrooms to comply
with the Americans Disabilities Act requirements. Construction
began in May 1993 and was completed in September 1993. The
partnership contracted for renovation and modifications to the
bathrooms of the fifth (5th) floor to comply with the American
Disability Act requirements. Construction was completed in March
1994. The cost was $32,207. Payments for these renovations were
made from the Capital Improvement Reserve Fund.
As of March 1994, other completed improvements include walk-off
mats in the lobby, a glass enclosed entrance way, an additional
lobby directory, automatic door openers at the front and rear
entrances, resurfacing of the entire parking lot, and replacement
of 105 fifteen foot heating tubes in the boiler.
A new roof was installed and the sidewalk was resurfaced at the
entranceway in the front of the building. The building facade was
power washed at the front entrance. The parking lot has been
resurfaced.
For tenant retention and attracting new tenants, various tenant
incentives are offered according to the needs of each existing and
prospective tenant. These include special buildouts, facilities,
wiring for special equipment, plumbing for kitchens, assistance in
moving, providing furniture and furnishings when available, as
well as targeting a rental program to meet the business needs of
the tenant. These costs are reflected in Building Improvements.
Management is continuing to provide conscientious maintenance
which includes caulking windows, clean and polish marble in lobby
area and power wash the entire exterior of the building.
The property in New York is a shopping center with an occupancy of
95%. This shopping center was built in 1980 and needed to be
revitalized with the renovation of its exterior facing,
landscaping, resurfacing the parking lot and renovation of the
interior stores. It was sold in September 1996 after a long and
arduous process which took longer than two years to complete.
Management was faced with a loan on the shopping center which was
about to mature on January 1, 1997. The major tenant (Hills Department
Store) occupied about 80% of the center. Hills had emerged in
1993 from a chapter 11 reorganization in the bankruptcy court and
initially showed promise but the recent entry of Wal-Mart and
Target in the Buffalo/Niagara Falls area caused Hills to suffer a
decline in sales and it posted losses for the last twelve months.
Accordingly, its stock, listed on the N.Y.S.E. had a sharp
decline. Because of the financial weakness of this major tenant
it was extremely difficult, if at all possible, to refinance the
loan at competitive rates. Potential purchasers likewise were not
interested in the property because of the difficulty of obtaining
financing among other things.
Management feels that the partnership was fortunate in selling the
shopping center to a local developer who owns contiguous properties
and a number of other shopping centers in the Niagara Falls-Buffalo
area. The shopping center has virtually no frontage and very poor
visibility from the street. The center is also in need of a costly
face lift. The sale was only possible because the purchaser felt it
complemented his existing contiguous holdings without which he
would have no interest. He also had the financial strength to
purchase the mortgage note with funds from his corporate holdings
and thereby avoid refinancing. Management felt that under the circumstances
the sale was the proper and prudent thing to do and consider, the
Partnership fortunate to consummate same.
Supplementary data has been omitted in as much as it is either
inapplicable, immaterial, or it is presented in the financial statements or
notes thereto.
Item 9 - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
In October 1991, Jennifer A. Jones, CPA, Ltd. was appointed as new
certified public accountant for the partnership, replacing Charles M. Terry &
Company. Charles M. Terry & Company had replaced Charles H. Schnepfe,
Certified Public Accountant in 1990. Charles H. Schnepfe had replaced
Roberts, Halt, and Company in 1989, and Roberts, Halts, and Company had
replaced Price Waterhouse in 1988.
Part III
Item 10 - Directors and Executive Officers of the Registrant
The partnership has no directors or officers under the Partnership
Agreement and the General Partner is solely responsible for the operation of
the Partnership and its properties. The Limited Partners have no right to
participate in the control of the Partnership. The current General Partner is
Amherst Properties, Inc., located at 7900 Sudley Road, Suite 900, Manassas,
Virginia 22110 ([703] 368-2415).
For information concerning the former general partners, see previous SEC
filings.
Louis J. Marin, age 61, is the President of Amherst Properties, Inc. He
received his B.B.A. in Business from City College, New York (1957), his MBA
from Cornell University (1959) and his law degree from George Washington
University (1964). He worked in the regulatory field for the Securities &
Exchange Commission and the Office of the Comptroller of the Currency for 6
years. For the last 26 years he has worked as a lawyer specializing in real
estate. During this time he has been a developer, investor, and manager of
real estate.
Dr. Lionel Felsen, age 60, is the Executive Vice President of Amherst
Properties, Inc. He did his undergraduate at Brooklyn College and graduate
work at Georgetown University Medical and Dental School, D.D.S. (1964). He
has managed a professional office since 1964. He has been an active investor
in commercial and residential real estate for 26 years and is the major
investor in Sher-Man Real Estate Partnership.
ITEM 11 - Executive Compensation
The Partnership has no directors or officers. The Partnership will pay
the costs incurred by the General Partners or their affiliates in performing
administrative services necessary to the prudent operation of the Partnership;
provided, however, that the amounts charged to the Partnership for services
performed shall not exceed the lessor of (a) the actual cost of the services,
or (b) 90% of the competitive price which would be charged by non-affiliated
persons rendering services in the same or a comparable geographic location.
Costs of the services as used herein means the pro rata cost of personnel
including an allocation of overhead directly attributable to such services.
See Note 6 of the Notes to Financial Statements (Item 8) for Management fees
and other payments to the Managing General Partner and its affiliates.
Item 12 - Security Ownership of Certain Beneficial Owners and Management
As of September 30, 1996, Lou Marin, President of Amherst Properties,
Inc., was a beneficial owner of 629.7438 units or 9.58% of the Partnership;
Lionel Felsen, Executive Vice-President of Amherst Properties, Inc., was a
beneficial owner of 1116.5596 units or 16.99% of the Partnership and Amherst
Properties, Inc. was a beneficial owner of 500 units or 7.61% of the
Partnership, in addition to its general partnership interest. To the
knowledge of the Partnerships management there are no other beneficial owners
of more than 5% of the Partnership.
Item 13 - Certain Relationships and Related Transactions
See Note 7 of the Notes to Financial Statements at Item 8.
PART IV
(A) (1) Financial Statements - See Item 8
(B) Reports on Form 8-K: None
(C) Exhibits: None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by undersigned, thereunto duly authorized.
(Registrant) Gran-Mark Income Properties Limited Partnership
By: Amherst Properties, Inc.
General Partner
By: __________________________________ _______________
Louis J. Marin Date
President
__________________________________ _______________
Lionel Felsen Date
Vice-President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the
registrant and it the capacities and on the dated indicated.
Gran-Mark Income Properties Limited Partnership
By: Amherst Properties, Inc.
General Partner
By: __________________________________ _______________
Louis J. Marin Date
President
__________________________________ _______________
Lionel Felsen Date
Vice-President
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<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 963,019
<SECURITIES> 0
<RECEIVABLES> 133,343
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,157,380
<PP&E> 7,709,518
<DEPRECIATION> 2,462,063
<TOTAL-ASSETS> 6,447,761
<CURRENT-LIABILITIES> 4,828,490
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0
0
<COMMON> 0
<OTHER-SE> 1,499,119
<TOTAL-LIABILITY-AND-EQUITY> 6,447,761
<SALES> 1,686,507
<TOTAL-REVENUES> 2,002,248
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,049,078
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (46,830)
<INCOME-TAX> 0
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,830)
<EPS-PRIMARY> (7.13)
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