SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
For the fiscal year
ended December 31, 1997 Commission File Number 0-14547
JMB/MANHATTAN ASSOCIATES, LTD.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3339372
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- -------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(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 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 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 ]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Not applicable.
Documents incorporated by reference: None
<PAGE>
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . 3
Item 3. Legal Proceedings. . . . . . . . . . . . . . 5
Item 4. Submission of Matters to a
Vote of Security Holders . . . . . . . . . . 5
PART II
Item 5. Market for the Partnership's
Limited Partnership Interests and
Related Security Holder Matters. . . . . . . 5
Item 6. Selected Financial Data. . . . . . . . . . . 6
Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . 8
Item 7A. Quantitative and Qualitative
Disclosures About Market Risk. . . . . . . . 9
Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . 10
Item 9. Changes in and Disagreements
with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . 34
PART III
Item 10. Directors and Executive Officers
of the Partnership . . . . . . . . . . . . . 34
Item 11. Executive Compensation . . . . . . . . . . . 37
Item 12. Security Ownership of Certain
Beneficial Owners and Management . . . . . . 38
Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . 39
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . 39
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 43
i
<PAGE>
PART I
ITEM 1. BUSINESS
Unless otherwise indicated, all references to "Notes" are to Notes to
Financial Statements of JMB/Manhattan Associates, Ltd. contained in this
report. Capitalized items used herein, but not defined, have the same
meanings as used in the Notes.
The registrant, JMB/Manhattan Associates, Ltd. (the "Partnership"), is
a limited partnership formed during 1984 and currently governed by the
Revised Uniform Limited Partnership Act of the State of Illinois for the
purpose of acquiring and owning an approximate 25% interest in JMB/NYC
Office Building Associates, L.P. ("JMB/NYC"), an Illinois limited
partnership consisting indirectly of the Partnership and two partnerships
sponsored by an affiliate of the General Partners of the Partnership,
Carlyle Real Estate Limited Partnership - XIII ("Carlyle-XIII"), an
Illinois limited partnership, and Carlyle Real Estate Limited Partnership -
XIV ("Carlyle-XIV"), an Illinois limited partnership. JMB/NYC acquired
interests in three office buildings and the underlying land (the
"Buildings"), through various other joint ventures (each a "Joint Venture"
and collectively, the "Three Joint Ventures"), in New York, New York. On
April 30, 1985, the Partnership commenced a private offering of $62,700,000
of Limited Partnership Interests (the "Interests") pursuant to a Private
Placement Memorandum (the "Private Placement Memorandum") in accordance
with Rules 501-503 and 506 of Regulation D of the Securities Act of 1933.
A total of 1,000 Interests were sold at $62,700 per Interest of which
$14,053 per Interest was due upon admission, with the remaining purchase
price paid in annual installments from 1986 through 1988, except for 41.5
Interests paid for entirely upon subscription. The offering closed on
October 31, 1985. The holders of Interests (herein after "Holders" or
Holders of Interests") in the Partnership share in their portion of the
benefits of ownership of the Partnership's real property investments
according to the number of Interests held. The Partnership has been
engaged, indirectly through other entities, in owning and leasing the
buildings located in New York, New York. Approximately $43,000,000 of the
net proceeds of the private offering was contributed to JMB/NYC related to
the acquisition of the interests in the Buildings and for working capital
requirements.
In October 1994, the Partnership and its affiliated partners (together
with the Partnership, the "Affiliated Partners"), through JMB/NYC, entered
into an agreement (the "Agreement") with the affiliates (the "Olympia &
York affiliates") of Olympia & York Developments, Ltd. ("O&Y") who were the
venture partners in the Joint Ventures which owned 237 Park Avenue, 1290
Avenue of the Americas and 2 Broadway Buildings, to resolve certain
disputes among the Affiliated Partners and the Olympia & York affiliates.
In general, the parties agreed to: (i) restructure the first mortgage
loan; (ii) sell the 2 Broadway Building; (iii) reduce or eliminate approval
rights of JMB/NYC with respect to virtually all property management,
leasing, sale or refinancing; (iv) amend the Joint Ventures' agreements to
eliminate any funding obligations by JMB/NYC and (v) establish a new
preferential cash distribution level for the Olympia & York affiliates. In
accordance with the Agreement and in anticipation of the sale of the 2
Broadway Building, the unpaid first mortgage indebtedness previously
allocated to 2 Broadway was allocated in 1994 to 237 Park Avenue and 1290
Avenue of the Americas Buildings.
As part of the Agreement, JMB/NYC and the Olympia & York affiliates
agreed to file a pre-arranged bankruptcy plan for reorganization under
Chapter 11 of the Bankruptcy Code in order to facilitate the restructuring
of the Joint Ventures between JMB/NYC and the Olympia & York affiliates and
the debt encumbering the two properties remaining after the sale of 2
Broadway. In June 1995, the 2 Broadway Joint Ventures filed their pre-
arranged bankruptcy plans for reorganization, and in August 1995, the
bankruptcy court entered an order confirming their plans of reorganization.
In September 1995, the sale of the 2 Broadway Building was completed. Such
sale did not result in any distributable proceeds to JMB/NYC or the Olympia
& York affiliates.
<PAGE>
Bankruptcy filings for the Joint Ventures owning the 237 Park Avenue
and 1290 Avenue of the Americas properties were made in April 1996, and in
August 1996, an Amended Plan of Reorganization and Disclosure Statement
(the "Plan") was filed with the Bankruptcy Court for these Joint Ventures.
The Plan was accepted by the various classes of debt and equity holders and
confirmed by the Court on September 20, 1996 and became effective
October 10, 1996 ("Effective Date"). The Plan provides that JMB/NYC has an
indirect limited partnership interest which, before taking into account
significant preferences to other partners, equals approximately 4.9% of the
reorganized and restructured ventures owning 237 Park and 1290 Avenue of
the Americas (the "Properties"). Neither O&Y nor any of its affiliates has
any direct or indirect continuing interest in the Properties. The new
ownership structure gives control of the Properties to an unaffiliated real
estate investment trust ("REIT") which is owned primarily by holders of the
first mortgage debt which encumbered the Properties prior to the
bankruptcy. JMB/NYC has, under certain limited circumstances, through
January 1, 2001 rights of consent regarding sale of the Properties or the
consummation of certain other transactions that significantly reduce
indebtedness of the Properties. In general, at any time on or after
January 2, 2001, an affiliate of the REIT has the right to purchase
JMB/NYC's interest in the Properties for certain amounts relating to the
operations of the Properties. There can be no assurance that such REIT
affiliate will not exercise such right on or after January 2, 2001. If
such REIT affiliate exercises such right to purchase, due to the level of
indebtedness remaining on the Properties, the original purchase money notes
payable by JMB/NYC, the significant preference levels within the
reorganized structure and liabilities of the Partnership, it is unlikely
that such purchase would result in any significant distributions to the
partners of the Partnership. Additionally, at any time, JMB/NYC has the
right to require such REIT affiliate to purchase the interest of JMB/NYC in
the Properties for the same price at which such REIT affiliate can require
JMB/NYC to sell such interest as described above.
The restructuring and reorganization discussed above eliminates any
potential additional obligation of the Partnership in the future to provide
additional funds under its previous joint venture agreements(other than
that related to a certain indemnification agreement provided in connection
with the restructuring). In 1995, the Partnership distributed to its
partners virtually all of its working capital funds leaving as the
Partnership's only asset its receivable from JMB Realty Corporation
("JMB"), an affiliate of the Corporate General Partner. This receivable
had been the Partnership's sole source of capital to fund continuing
operations of the Partnership. During 1996, such receivable was collected
and the proceeds thereof have been used by the Partnership toward funding
its portion of the collateral required pursuant to the $25 million
indemnification provided by the Affiliated Partners to the REIT as of the
Effective Date. The balance of the Partnership's share of the collateral
was advanced by JMB in order for the Partnership to satisfy its full
portion as discussed below. The Partnership's sole source of capital to
fund continuing operations are advances from JMB.
The Affiliated Partners entered into a joint and several obligation to
indemnify, through a date no later than January 2, 2001, the REIT to the
extent of $25 million to ensure their compliance with the terms and
conditions relating to JMB/NYC's indirect limited partnership interest in
the restructured and reorganized joint ventures that own the Properties.
The Affiliated Partners contributed approximately $7.8 million (of which
the Partnership's share was approximately $1.9 million) to JMB/NYC which
was deposited into an escrow account as collateral for such
indemnification. These funds have been invested in stripped U.S.
Government obligations with a maturity date of February 15, 2001. The
Partnership's share of the reduction of the maximum unfunded obligation
under the indemnification agreement recognized as income is a result of
interest earned on amounts contributed by the Partnership and held in
escrow by JMB/NYC. Such income earned reduces the Partnership's share of
the maximum unfunded obligation under the indemnification agreement, which
is reflected as a liability in the accompanying financial statements.
<PAGE>
The provisions of the indemnification agreement generally prohibit the
Affiliated Partners from taking actions that could have an adverse effect
on the operations of the REIT. Compliance, therefore, is within the
control of the Affiliated Partners and non-compliance with such provisions
by either the Partnership or the other Affiliated Partners is highly
unlikely. Therefore, it is highly likely that the Partnership's share of
the collateral will be returned (including interest earned) at the
termination of the indemnification agreement. Upon return of such funds,
advances made by JMB (including accrued and deferred interest) will be
repaid. After establishing an appropriate working capital reserve, the
remainder, if any, would be available for distribution to the partners.
The level of any future distributable cash is dependent upon the
amount of advances made by JMB, which must be repaid before any
distributions are made. The Partnership's sole source of capital to pay
for continuing operations is advances from JMB. Advances made by JMB are
evidenced by a promissory note with a maximum principal sum of $2 million
and are due June 30, 1999. The note bears interest at the applicable
Federal rate which ranged between 5.55% and 6.14% per annum in 1997.
While the Partnership is not expected to terminate in the near term,
it currently appears unlikely that any significant distributions will be
made by the Partnership at any time due to the level of indebtedness
remaining on the Properties, the original purchase money notes payable by
JMB/NYC, the significant preference levels within the reorganized structure
of the joint ventures owning the Properties and the liabilities of the
Partnership.
The Partnership has no employees.
The terms of transactions between the Partnership, the General
Partners and their affiliates are set forth in Item 11 below and in the
Notes to which reference is hereby made for a description of such terms and
transactions.
ITEM 2. PROPERTIES
The Partnership had owned, indirectly through JMB/NYC and the Joint
Ventures, an interest in the properties referred to in Item 1 above. Upon
the Effective Date of the Plan, JMB/NYC's ownership interests in the
remaining properties were converted to limited partnership interests.
The following is a listing of principal businesses or occupations
carried on in and approximate occupancy levels by quarter during fiscal
1996:
<PAGE>
<TABLE>
<CAPTION>
1996 1997
------------------------- -------------------------
Principal At At At At At At At At
Business 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
-------------- ---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. 237 Park Avenue
Building
New York,
New York. . . . . . . Advertising 98% 98% 98% * * * * *
Insurance
Paper
Real Estate
2. 1290 Avenue of
the Americas
Building
New York,
New York. . . . . . . Men's Clothing 78% 71% 81% * * * * *
Financial
Services
<FN>
- --------------------
Reference is made to Item 7 for further information regarding property occupancy, competitive conditions and
tenant leases at the Partnership's investment properties.
An "*" indicates that the joint venture which owns the property was restructured. Reference is made to the
Notes for further information regarding the reorganized and restructured ventures.
</TABLE>
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material pending legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
fiscal years 1996 and 1997.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1997, there were 861 record holders of the 999
outstanding Interests of the Partnership. There is no public market for
Interests and it is not anticipated that a public market for Interests will
develop. The Interests have not been registered under the Securities Act
of 1933, as amended, or (with certain exceptions) under State securities
laws and are subject to the consent of the Corporate General Partner, which
may be granted or withheld in its sole discretion. Transfers of the
Interests must be made in compliance with applicable Federal and State
securities laws and are subject to the consent of the Corporate General
Partner, which may be granted or withheld in its sole discretion. There
are certain conditions and restrictions on the transfer of Interests,
including, among other things, the requirement that the substitution of a
transferee of Interests as a Limited Partner of the Partnership be subject
to the written consent of the Corporate General Partner which may be
granted or withheld in its sole discretion. The rights of a transferee of
Interests who does not become a substituted Limited Partner will be limited
to the rights to receive his share of profits or losses and cash
distributions from the Partnership, and such transferee will not be
entitled to vote such Interests or have other rights of a Limited Partner.
No transfer will be effective until the first day of the next succeeding
calendar quarter after the requisite transfer form satisfactory to the
Corporate General Partner has been received by the Corporate General
Partner. The transferee consequently will not be entitled to receive any
cash distributions or any allocable share of profits or losses for tax
purposes until such next succeeding calendar quarter. Profits or losses
from operations of the Partnership for a calendar year in which a transfer
occurs will be allocated between the transferor and the transferee based
upon the number of quarterly periods in which each was recognized as the
Holder of the Interests, without regard to the results of the Partnership's
operations during particular quarterly periods and without regard to
whether cash distributions were made to the transferor or transferee.
Profits or losses arising from the sale or other disposition of Partnership
properties will be allocated to the recognized Holder of the Interests as
of the last day of the quarter in which the Partnership recognized such
profits or losses. Cash distributions to a Holder of Interests arising
from the sale or other disposition of Partnership properties will be
distributed to the recognized Holder of the Interests as of the last day of
the quarterly period with respect to which such distribution is made.
Reference is made to Item 6 below for a discussion of cash
distributions made to Holders of Interests. Reference is made to the Notes
for a discussion of the provisions of the Partnership Agreement relating to
cash distributions. Future cash distributions by the Partnership are
dependent upon the amount of advances made by JMB, which must be repaid
before any distributions are made. It currently appears unlikely that any
significant distributions will be made by the Partnership at any time due
to the level of indebtedness remaining on the Properties, the original
purchase money notes payable by JMB/NYC, the significant preference levels
within the reorganized structure of the joint ventures owning the
Properties and the liabilities of the Partnership.
<PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
YEARS ENDED DECEMBER 31, 1997, 1996, 1995, 1994 AND 1993
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1997 1996 1995 1994 1993
------------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Total income. . . . . . . $ -- 120,331 405,719 1,649,889 1,500,142
============ ========== ========== ========== ===========
Earnings (loss) before
sale of investment
property or forgiveness
of indebtedness
(including income from
restructuring of
$72,073,760 in 1996). . $ (206,892) 71,692,012 (7,801,149) (4,883,847) (20,909,957)
Partnership's share
of loss on sale
of investment
property by uncon-
solidated venture . . . -- -- (14,789,529) -- --
Partnership's share of
extraordinary gain on
forgiveness of
indebtedness
of unconsolidated
venture . . . . . . . . -- -- 15,632,407 -- --
------------ ---------- ---------- ---------- -----------
Net earnings (loss) . . . $ (206,892) 71,692,012 (6,958,271) (4,883,847) (20,909,957)
============ ========== ========== ========== ===========
Net earnings (loss)
per Interest:
Earnings (loss) before
sale of investment
property or forgive-
ness of indebtedness . $ (199) 68,824 (7,489) (4,688) (20,494)
Share of loss on sale
of investment
property by uncon-
solidated venture. . . -- -- (14,642) -- --
Share of extraordinary
gain on forgiveness
of indebtedness
of unconsolidated
venture . . . . . . . . -- -- 15,476 -- --
------------ ---------- ---------- ---------- -----------
<PAGE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
YEARS ENDED DECEMBER 31, 1997, 1996, 1995, 1994 AND 1993 - CONTINUED
1997 1996 1995 1994 1993
------------- ---------- --------- ---------- -----------
Net earnings (loss)
per Interest (b). . . . $ (199) 68,824 (6,655) (4,688) (20,494)
============ ========== ========== ========== ===========
Total assets. . . . . . . $ 971 1,679 1,688,536 18,043,225 16,555,044
Cash distributions per
Interest (b)(c) . . . . $ -- -- 15,000 -- --
============ ========== ========== ========== ===========
<FN>
- ----------
(a) The above selected financial data should be read in conjunction with the financial statements of the
Partnership and the related notes appearing elsewhere in this annual report.
(b) The net earnings (loss) and cash distributions per Interest are based upon the number of Interests
outstanding at the end of each period (1,000).
(c) Cash distributions from the Partnership are generally not equal to Partnership income (loss) for
financial reporting or Federal income tax purposes. Each Partner's taxable income (or loss) from the Partnership
in each year is equal to his allocable share of the taxable income (loss) of the Partnership, without regard to
the cash generated or distributed by the Partnership. Accordingly, cash distributions to the Holders of Interests
since the inception of the Partnership have represented a return of capital for financial reporting purposes.
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On April 30, 1985, the Partnership commenced a private offering of
$62,700,000 in Limited Partnership Interests pursuant to a Private
Placement Memorandum as described in Item 1. The net offering proceeds
were utilized primarily for the payment of the Partnership's bank
borrowings and related interest, contributions to JMB/NYC and working
capital requirements.
In February 1995, the Partnership distributed $15,000,000 to the
Holders of Interests ($15,000 per Interest) and $625,000 to the General
Partners and made a related payment of management fees to the General
Partners of $1,041,667. Such amounts were made out of excess working
capital reserves plus $2,850,000 received from JMB Realty Corporation
("JMB") (an affiliate of the Corporate General Partner) under its working
capital minimum guarantee. The Partnership believed that the working
capital reserves were in excess of the amount necessary for the future
operations of the Partnership as a result of the agreement entered into
with the Olympia & York affiliates that resolved certain disputes between
the Affiliated Partners and the Olympia & York affiliates. Subsequent to
the $2,850,000 funding made in March 1995, JMB funded an additional $65,000
in December 1995 to pay for 1995 operating costs. During 1996, JMB funded
its remaining obligation under the working capital minimum guarantee of
approximately $1,800,000 and advanced the Partnership an additional
$530,000 pursuant to the terms of a promissory note. Such amounts were
used to fund 1996 operating costs and the Partnership's approximate $1.9
million share of the collateral required pursuant to the terms of the
restructuring and reorganizing of the Partnership's indirect ownership
interest in the Properties as described more fully in the Notes which
descriptions are hereby incorporated herein by reference.
Advances made by JMB are evidenced by a promissory note with a maximum
principal sum of $2 million and are due June 30, 1999. The note bears
interest at the applicable Federal rate, which ranged between 5.55% and
6.14% per annum in 1997. During 1997, JMB advanced the Partnership
$200,000 to fund operating costs incurred during the year. The balance of
the note, including accrued interest as of December 31, 1997, is $775,499.
The Partnership's sole source of capital to fund continuing operations is
advances from JMB.
Based upon the restructured joint ventures and the liabilities of the
Partnership, it is unlikely that the Partnership will be able to make any
significant additional distributions to the Holders of Interests. It
should be noted, however, that in the future, the Holders of Interest will
be allocated substantial net gain for Federal income tax purposes even
though the Partnership would not be able to make any significant additional
amounts of distributions. Such gain may be offset by suspended losses from
prior years (if any) that have been allocated to the Holders of Interests.
The Affiliated Partners entered into a joint and several
indemnification obligation to insure their compliance with certain terms
and conditions relating to the restructuring, as more fully described in
the Notes.
RESULTS OF OPERATIONS
The results of operations for the years ended December 31, 1996 and
1995 are primarily attributable to the operations of the real property
investments owned by the Partnership through JMB/NYC and restructuring of
the Joint Ventures as described in the Notes.
<PAGE>
The increase in amounts due to affiliates and notes payable to an
affiliate - long-term as of December 31, 1997 compared to December 31, 1996
is primarily due to additional loans aggregating $200,000 pursuant to the
promissory note payable to JMB and interest expense accrued in excess of
amounts paid, pursuant to terms of the respective notes payable to
affiliates.
The Partnership's share of the maximum unfunded obligation under the
indemnification agreement at December 31, 1997 was $4,131,383. During
1996, the Partnership contributed $1,950,802 to JMB/NYC which, along with
additional contributions of $5,852,406 from the other Affiliated Partners
of JMB/NYC, is held in escrow pursuant to the terms of the indemnification
agreement. These funds have been invested by JMB/NYC in stripped U.S.
Government obligations with a maturity date of February 15, 2001. The
Partnership's share of the reduction of the maximum unfunded obligation
under the indemnification agreement recognized as income during 1997 of
$134,252 is a result of interest earned on amounts contributed by the
Partnership and held in escrow by JMB/NYC. Such income earned reduces the
Partnership's proportionate share of the maximum unfunded obligation under
the indemnification agreement.
The decrease in interest income for the year ended December 31, 1997
compared to the year ended December 31, 1996 is due to JMB funding the
remaining obligations under its working capital minimum guarantee of
approximately $1,800,000 during 1996. Such amounts along with additional
advances of approximately $530,000 pursuant to the terms of a promissory
note with JMB, were used by the Partnership to fund Partnership operating
costs and the Partnership's share of the collateral required pursuant to
the terms of the indemnification agreement as part of the restructuring and
reorganizing of the Partnership's indirect ownership interests in the
Properties.
The decrease in interest income and management fees paid to general
partners for the year ended December 31, 1996 as compared to the year ended
December 31, 1995 is primarily due to the Partnership's distribution to
partners of $15,625,000 and the related payment of management fees to the
General Partners of $1,041,667 in February 1995.
The decrease in the Partnership's share of income from unconsolidated
venture for the year ended December 31, 1997 compared to income from
unconsolidated venture of $71,825,434, and the recognition of income from
unconsolidated venture for the year ended December 31, 1996 compared to a
loss of $6,794,224 for the year ended December 31, 1995 is primarily the
result of the restructuring of JMB/NYC's interests in the joint ventures
owning the Properties during 1996. Pursuant to the terms of the Plan,
JMB/NYC converted its general partnership interest in the joint ventures
which owned the Properties to a limited partnership interest and
accordingly no longer has a commitment to provide financial support to the
joint ventures owning the Properties. As a result, during 1996, the
Partnership recognized income from restructuring of $72,073,760 from the
reversal of those previously recognized losses that it is no longer
obligated to fund (net of capital contributions). The Partnership's share
of income from operations of unconsolidated venture during 1996 is
partially offset by loss from operations prior to such reorganization of
$248,326. As of the Effective Date, the Partnership has discontinued the
application of the equity method of accounting for its indirect interests
in the Properties and additional losses from the investment in
unconsolidated venture will not be recognized.
The Partnership's share of loss on sale of investment property by
unconsolidated venture and the Partnership's share of gain from the
extinguishment of indebtedness of unconsolidated venture for the year ended
December 31, 1995 is due to the sale of the 2 Broadway Building and the
related share of the gain on the extinguishment of indebtedness.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1997 and 1996
Statements of Operations, years ended December 31,
1997, 1996 and 1995
Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 1997, 1996 and 1995
Statements of Cash Flows, years ended December 31,
1997, 1996 and 1995
Notes to Financial Statements
SCHEDULES NOT FILED:
All schedules have been omitted as the required information is
inapplicable or the information is presented in the financial statements or
related notes.
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
INDEX
Independent Auditors' Report
Balance Sheets, December 31, 1997 and 1996
Statements of Operations, years ended December 31, 1997 and 1996
Statements of Partners' Capital Accounts (Deficits), years ended
December 31, 1997 and 1996
Statements of Cash Flows, years ended December 31, 1997 and 1996
Notes to Financial Statements
SCHEDULES NOT FILED:
All schedules have been omitted as the required information is
inapplicable or the information is presented in the financial statements or
related notes.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
JMB/Manhattan Associates, Ltd.:
We have audited the financial statements of JMB/Manhattan Associates,
Ltd., a limited partnership (the Partnership), as listed in the
accompanying index. These financial statements are the responsibility of
the General Partners of the Partnership. 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 the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of JMB/Manhattan
Associates, Ltd. as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the years in the three-year
period ended December 31, 1997, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that
the Partnership will continue as a going concern. As discussed in the
notes to the financial statements, the Partnership has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern. The
General Partners' plans in regard to these matters are also described in
the notes to the financial statements. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 25, 1998
<PAGE>
<TABLE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
ASSETS
------
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Current assets:
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 971 1,679
------------ -----------
$ 971 1,679
============ ===========
<PAGE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1997 1996
------------ -----------
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,360 1,274
Amounts due to affiliates . . . . . . . . . . . . . . . . . . . . . 1,303,866 1,205,330
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . . . 1,308,226 1,206,604
Note payable to an affiliate - long-term. . . . . . . . . . . . . . 775,499 536,685
Partnership's share of the maximum unfunded obligation
under the indemnification agreement . . . . . . . . . . . . . . . . 4,131,383 4,265,635
------------ -----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . 6,215,108 6,008,924
Commitments and contingencies
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . 1,500 1,500
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . (1,385,413) (1,377,137)
Cumulative cash distributions . . . . . . . . . . . . . . . . . (737,500) (737,500)
------------ -----------
(2,121,413) (2,113,137)
------------ -----------
Limited partners (1,000 Interests):
Capital contributions, net of offering costs. . . . . . . . . . 57,042,489 57,042,489
Cumulative net losses . . . . . . . . . . . . . . . . . . . . . (43,135,213) (42,936,597)
Cumulative cash distributions . . . . . . . . . . . . . . . . . (18,000,000) (18,000,000)
------------ -----------
(4,092,724) (3,894,108)
------------ -----------
Total partners' capital accounts (deficits) . . . . . . . . (6,214,137) (6,007,245)
------------ -----------
$ 971 1,679
============ ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Interest. . . . . . . . . . . . . . . . . . . . . $ -- 120,331 405,719
------------ ------------ ------------
Expenses:
Interest. . . . . . . . . . . . . . . . . . . . . 132,965 123,461 131,272
Professional services . . . . . . . . . . . . . . 126,139 86,822 185,439
Management fees paid to general partners. . . . . -- -- 1,041,667
General and administrative. . . . . . . . . . . . 82,040 77,033 54,266
------------ ------------ ------------
341,144 287,316 1,412,644
------------ ------------ ------------
(341,144) (166,985) (1,006,925)
Partnership's share of the reduction of
the maximum unfunded obligation under the
indemnification agreement . . . . . . . . . . . . 134,252 33,563 --
Partnership's share of income (loss)
from unconsolidated venture (including
income from restructuring of $72,073,760
in 1996). . . . . . . . . . . . . . . . . . . . . -- 71,825,434 (6,794,224)
------------ ------------ ------------
Earnings (loss) before sale of
investment property and extra-
ordinary item . . . . . . . . . . . . . . . (206,892) 71,692,012 (7,801,149)
Partnership's share of earnings (loss)
on sale of investment property by
unconsolidated venture. . . . . . . . . . . . . . -- -- (14,789,529)
------------ ------------ ------------
Earnings (loss) before extraordinary item . . (206,892) 71,692,012 (22,590,678)
Extraordinary item:
Partnership's share of gain on
forgiveness of indebtedness of
unconsolidated venture. . . . . . . . . . . . . -- -- 15,632,407
------------ ------------ ------------
Net earnings (loss) . . . . . . . . . . . . . $ (206,892) 71,692,012 (6,958,271)
============ ============ ============
<PAGE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS - CONTINUED
1997 1996 1995
------------ ------------ ------------
Net earnings (loss) per limited
partnership interest:
Earnings (loss) before sale of
investment property and extra-
ordinary item . . . . . . . . . . . . . . $ (199) 68,824 (7,489)
Partnership's share of earnings
(loss) on sale of investment
property by unconsolidated
venture . . . . . . . . . . . . . . . . . -- -- (14,642)
Partnership's share of gain on
forgiveness of indebtedness
of unconsolidated venture . . . . . . . . -- -- 15,476
------------ ------------ ------------
Net earnings (loss) . . . . . . . . . . $ (199) 68,824 (6,655)
============ ============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (1,000 INTERESTS)
--------------------------------------------- -------------------------------------------------
CONTRI-
BUTIONS
NET CASH NET OF NET
CONTRI- EARNINGS DISTRI- OFFERING EARNINGS CASH
BUTIONS (LOSS) BUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficits)
December 31,
1994 . . . . $1,500 (3,941,200) (112,500) (4,052,200) 57,042,489 (105,106,275) (3,000,000)(51,063,786)
Cash distri-
butions
($15,000 per
limited
partnership
interest). . -- -- (625,000) (625,000) -- -- (15,000,000)(15,000,000)
Net earnings
(loss) . . . -- (303,617) -- (303,617) -- (6,654,654) -- (6,654,654)
------ ---------- --------- ----------- ----------- ----------- ----------- -----------
Balance
(deficits)
December 31,
1995 . . . . 1,500 (4,244,817) (737,500) (4,980,817) 57,042,489 (111,760,929) (18,000,000)(72,718,440)
Net earnings
(loss) . . . -- 2,867,680 -- 2,867,680 -- 68,824,332 -- 68,824,332
------ ---------- --------- ----------- ----------- ----------- ----------- -----------
<PAGE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED
GENERAL PARTNERS LIMITED PARTNERS (1,000 INTERESTS)
--------------------------------------------- -------------------------------------------------
CONTRI-
BUTIONS
NET CASH NET OF NET
CONTRI- EARNINGS DISTRI- OFFERING EARNINGS CASH
BUTIONS (LOSS) BUTIONS TOTAL COSTS (LOSS) DISTRIBUTIONS TOTAL
------- ---------- ----------- ----------- ----------- ---------- ------------- -----------
Balance
(deficits)
December 31,
1996 . . . . 1,500 (1,377,137) (737,500) (2,113,137) 57,042,489 (42,936,597) (18,000,000) (3,894,108)
Net earnings
(loss) . . . -- (8,276) -- (8,276) -- (198,616) -- (198,616)
------ ---------- --------- ----------- ----------- ----------- ----------- -----------
Balance
(deficits)
December 31,
1997 . . . . $1,500 (1,385,413) (737,500) (2,121,413) 57,042,489 (43,135,213) (18,000,000) (4,092,724)
====== ========== ========= =========== =========== =========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . $ (206,892) 71,692,012 (6,958,271)
Items not requiring (providing) cash or
cash equivalents:
Partnership's share of the reduction of
the maximum unfunded obligation under
the indemnification agreement . . . . . . . . (134,252) (33,563) --
Partnership's share of (income) loss from
unconsolidated venture (including
income from restructuring
of $72,073,760 in 1996) . . . . . . . . . . . -- (71,825,434) 6,794,224
Partnership's share of loss on sale
of investment property by
unconsolidated venture. . . . . . . . . . . . -- -- 14,789,529
Partnership's share of gain from
forgiveness of indebtedness of
unconsolidated venture. . . . . . . . . . . . -- -- (15,632,407)
Changes in:
Interest and other receivables. . . . . . . . . -- -- 20,397
Accounts payable . . . . . . . . . . . . . . . 3,086 (8,648) (9,359)
Amounts due to affiliates . . . . . . . . . . . 137,350 123,461 131,273
----------- ----------- -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . (200,708) (52,172) (864,614)
----------- ----------- -----------
Cash flows from investing activities:
Net sales and maturities of
short-term investments. . . . . . . . . . . . . -- -- 9,912,520
Partnership's contributions to
unconsolidated venture. . . . . . . . . . . . . -- (2,009,199) --
----------- ----------- -----------
Net cash provided by (used in)
investing activities. . . . . . . . . . -- (2,009,199) 9,912,520
----------- ----------- -----------
<PAGE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996 1995
----------- ----------- -----------
Cash flows from financing activities:
Bank overdraft. . . . . . . . . . . . . . . . . -- (155,322) 155,322
Distributions to limited partners . . . . . . . -- -- (15,000,000)
Distributions to general partners . . . . . . . -- -- (625,000)
Amounts received from affiliates. . . . . . . . 200,000 2,218,372 2,637,697
----------- ----------- -----------
Net cash provided by (used in)
financing activities. . . . . . . . . . 200,000 2,063,050 (12,831,981)
----------- ----------- -----------
Net increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . (708) 1,679 (3,784,075)
Cash, beginning of year . . . . . . . . . 1,679 -- 3,784,075
----------- ----------- -----------
Cash, end of year . . . . . . . . . . . . $ 971 1,679 --
=========== =========== ===========
Supplemental disclosure of
cash flow information:
Cash paid for mortgage and
other interest. . . . . . . . . . . . . . . . . $ 1,600 -- --
=========== =========== ===========
Non-cash investing and financing activities:
Reduction in investment in unconsolidated
venture . . . . . . . . . . . . . . . . . . . $ -- 800,000 --
=========== =========== ===========
Reduction in amounts due to affiliates. . . . . $ -- (800,000) --
=========== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
JMB/MANHATTAN ASSOCIATES, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
OPERATIONS AND BASIS OF ACCOUNTING
GENERAL
The Partnership holds an approximate indirect 25% interest in JMB/NYC
Office Building Associates, L.P. ("JMB/NYC") which in turn owns an indirect
approximate 4.9% interest in commercial real estate in the City of New
York, New York consisting of the 237 Park Avenue and 1290 Avenue of the
Americas properties (the "Properties").
The equity method of accounting has been applied in the accompanying
financial statements with respect to the Partnership's indirect 25%
interest in JMB/NYC through Property Partners, L.P.through the confirmation
and acceptance of the Amended Plan of Reorganization and Disclosure
Statement on October 10, 1996 ("Effective Date"). Accordingly, the
financial statements do not include the accounts of JMB/NYC. The share of
income from unconsolidated venture in the accompanying Partnership
financial statements includes the Partnership's proportionate share of the
operations of the Properties through the Effective Date, as well as income
from restructuring, consisting primarily of the reversal of previously
recognized losses and adjustments necessary to record the restructuring.
During 1996, the Partnership reversed those previously recognized losses
resulting from its interest in JMB/NYC that it is no longer obligated to
fund due to the conversion of JMB/NYC's general partnership interest in the
joint ventures which owned the Properties to a limited partnership interest
and the terms of the restructuring. The Partnership has no future funding
obligations (other than that related to a certain indemnification agreement
provided in connection with the restructuring) and has no influence or
control over the day-to-day affairs of the joint ventures which own the
Properties subsequent to the Effective Date. Accordingly, the Partnership
has discontinued the application of the equity method of accounting for the
indirect interests in the Properties and additional losses from the
investment in unconsolidated venture will not be recognized. Should the
unconsolidated venture subsequently report income, the Partnership will
resume applying the equity method on its share of such income only after
such income exceeds net losses not previously recognized.
The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records
after making appropriate adjustments to present the Partnership's accounts
in accordance with generally accepted accounting principles ("GAAP"). Such
GAAP and consolidation adjustments are not recorded on the records of the
Partnership. The net effect of these items for the years ended December 31,
1997 and 1996 is summarized as follows:
<PAGE>
<TABLE>
<CAPTION>
1997 1996
------------------------------- ------------------------------
TAX BASIS TAX BASIS
GAAP BASIS (UNAUDITED) GAAP BASIS (UNAUDITED)
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets. . . . . . . . . . . . $ 971 8,731,735 1,679 9,164,644
Partners' capital accounts
(deficits):
General partners. . . . . . . . . (2,121,413) (21,398,004) (2,113,137) (21,452,634)
Limited partners. . . . . . . . . (4,092,724) (69,992,740) (3,894,108) (71,303,843)
Net income (loss):
General partners. . . . . . . . . (8,276) 54,629 2,867,680 1,352,470
Limited partners. . . . . . . . . (198,616) 1,311,103 68,824,332 3,991,652
Net income (loss) per
limited partnership
interest. . . . . . . . . . . . . (199) 1,311 68,824 3,992
============ ============ ============ ============
</TABLE>
<PAGE>
The net earnings (loss) per limited partnership interest is based upon
the number of limited partnership interests (the "Interests") outstanding
at the end of each period (1,000). Deficit capital accounts will result,
through the duration of the Partnership, in the recognition of net gain for
financial reporting and Federal income tax purposes to the Limited
Partners.
During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. These standards became
effective for reporting periods after December 15, 1997. As the
Partnership's capital structure only has general and limited partnership
interests, the Partnership will not experience any significant impact on
its consolidated financial statements.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount 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.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. SFAS 121 requires that the Partnership record an
impairment loss on its properties to be held for investment whenever their
carrying value cannot be fully recovered through estimated undiscounted
future cash flows from their operations and sale. The amount of the
impairment loss to be recognized would be the difference between the
property's carrying value and the property's estimated fair value. The
Partnership's policy is to consider a property to be held for sale or
disposition when the Partnership has committed to sell (or dispose) of such
property and active marketing activity has commenced or is expected to
commence in the near term (or the Partnership has concluded that it may
dispose of the property by no longer funding operating deficits or debt
service requirements of the property thus allowing the lender to realize
upon its security). In accordance with SFAS 121, any properties identified
as "held for sale or disposition" are no longer depreciated. Adjustments
for impairment loss for such properties (subsequent to the date of adoption
of SFAS 121) are made in each period as necessary to report these
properties at the lower of carrying value or fair value less costs to sell.
The adoption of SFAS 121 did not have any effect on the Partnership's
financial position, results of operations or liquidity.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the partners rather than the
Partnership.
JMB/NYC
JMB/NYC is a limited partnership among Property Partners, L.P.,
Carlyle-XIV Associates, L.P. and Carlyle-XIII Associates, L.P. as limited
partners and Carlyle Managers, Inc. as the sole general partner. The
Partnership is a 20% shareholder of Carlyle Managers, Inc. and related to
this investment, has an obligation to fund, on demand, $200,000 (reduced
from $600,000 during 1996) of additional paid-in capital to Carlyle
Managers, Inc. (reflected in amounts due to affiliates in the accompanying
financial statements). The Partnership currently holds, indirectly as a
limited partner of Property Partners, L.P., an approximate 25% limited
partnership interest in JMB/NYC. The sole general partner of Property
Partners, L.P. is Carlyle Investors, Inc., of which the Partnership is a
20% shareholder. Related to this investment, the Partnership has an
obligation to fund, on demand, $200,000 (reduced from $600,000 during 1996)
of additional paid-in capital (reflected in amounts due to affiliates in
the accompanying financial statements). The general partner in each of
JMB/NYC and Property Partners, L.P. is an affiliate of the Partnership.
<PAGE>
In October 1994, the Partnership and its affiliated partners (together
with the Partnership, the "Affiliated Partners"), through JMB/NYC, entered
into an agreement (the "Agreement") with the affiliates (the "Olympia &
York affiliates") of Olympia & York Developments, Ltd. ("O&Y") who were the
venture partners in the joint ventures (the "Joint Ventures") which owned
237 Park Avenue, 1290 Avenue of the Americas and 2 Broadway, to resolve
certain disputes among the Affiliated Partners and the Olympia and York
affiliates. In general, the parties agreed to: (i) restructure the first
mortgage loan; (ii) sell the 2 Broadway Building; (iii) reduce or eliminate
approval rights of JMB/NYC with respect to virtually all property
management, leasing, sale or refinancing; (iv) amend the Joint Ventures'
agreements to eliminate any funding obligations by JMB/NYC and (v)
establish a new preferential cash distribution level for the Olympia & York
affiliates. In accordance with the Agreement and in anticipation of the
sale of the 2 Broadway Building, the unpaid first mortgage indebtedness
previously allocated to 2 Broadway was allocated in 1994 to 237 Park Avenue
and 1290 Avenue of the Americas.
As part of the Agreement, JMB/NYC and the Olympia & York affiliates
agreed to file a pre-arranged bankruptcy plan for reorganization under
Chapter 11 of the Bankruptcy Code in order to facilitate the restructuring
of the Joint Ventures between JMB/NYC and the Olympia & York affiliates and
the debt encumbering the two properties remaining after the sale of 2
Broadway. In June 1995, the 2 Broadway Joint Ventures filed their pre-
arranged bankruptcy plans for reorganization, and in August 1995, the
bankruptcy court entered an order confirming their plans of reorganization.
In September 1995, the sale of the 2 Broadway Building was completed. Such
sale did not result in any distributable proceeds to JMB/NYC or the Olympia
& York affiliates.
Bankruptcy filings for the Joint Ventures owning the 237 Park Avenue
and 1290 Avenue of the Americas properties were made in April 1996, and in
August 1996, an Amended Plan of Reorganization and Disclosure Statement
(the "Plan") was filed with the Bankruptcy Court for these Joint Ventures.
The Plan was accepted by the various classes of debt and equity holders and
confirmed by the Court on September 20, 1996 and became effective
October 10, 1996 ("Effective Date"). The Plan provides that JMB/NYC has an
indirect limited partnership interest which, before taking into account
significant preferences to other partners, equals approximately 4.9% of the
reorganized and restructured ventures owning 237 Park and 1290 Avenue of
the Americas. Neither O&Y nor any of its affiliates has any direct or
indirect continuing interest in the Properties. The new ownership
structure gives control of the Properties to an unaffiliated real estate
investment trust ("REIT") which is owned primarily by holders of the first
mortgage debt which encumbered the Properties prior to the bankruptcy.
JMB/NYC has, under certain limited circumstances, through January 1, 2001
rights of consent regarding sale of the Properties or the consummation of
certain other transactions that significantly reduce indebtedness of the
Properties.
The restructuring and reorganization discussed above eliminates any
potential additional obligation of the Partnership in the future to provide
additional funds under its previous joint venture agreements (other than
that related to a certain indemnification agreement provided in connection
with the restructuring). In 1995, the Partnership distributed to its
partners virtually all of its working capital funds leaving as the
Partnership's only asset its receivable from JMB Realty Corporation
("JMB"), an affiliate of the Corporate General Partner. This receivable
had been the Partnership's sole source of capital to fund continuing
operations of the Partnership. During 1996, such receivable was collected
and the proceeds thereof have been used by the Partnership toward funding
its portion of the collateral required pursuant to the $25 million
indemnification provided by the Partnership and the Affiliated Partners to
the REIT as of the Effective Date. The balance of the Partnership's share
of the collateral was advanced by JMB in order for the Partnership to
satisfy its full portion as discussed below. The Partnership's sole source
of capital to fund continuing operations are advances from JMB.
<PAGE>
Pursuant to the indemnification agreement, the Affiliated Partners are
jointly and severally obligated to indemnify, through a date no later than
January 2, 2001, the REIT to the extent of $25 million to ensure their
compliance with the terms and conditions relating to JMB/NYC's indirect
limited partnership interest in the restructured and reorganized joint
ventures that own the Properties. The Affiliated Partners contributed
approximately $7.8 million (of which the Partnership's share was
approximately $1.9 million) to JMB/NYC which was deposited into an escrow
account as collateral for such indemnification. These funds have been
invested in stripped U.S. Government obligations with a maturity date of
February 15, 2001. The Partnership's share of the reduction of the maximum
unfunded obligation under the indemnification agreement recognized as
income, is a result of interest earned on amounts contributed by the
Partnership and held in escrow by JMB/NYC. Such income earned reduces the
Partnership's share of the maximum unfunded obligation under the
indemnification agreement, which is reflected as a liability in the
accompanying financial statements.
The provisions of the indemnification agreement generally prohibit the
Affiliated Partners from taking any actions that could have an adverse
effect on the operations of the REIT. Compliance, therefore, is within the
control of the Affiliated Partners and non-compliance with such provisions
by either the Partnership or the other Affiliated Partners is highly
unlikely. Therefore, it is highly likely that the Partnership's share of
the collateral will be returned (including interest earned) at the
termination of the indemnification agreement. Upon return of such funds,
advances made by JMB (including accrued and deferred interest) will be
repaid. After establishing an appropriate working capital reserve, the
remainder, if any, would be available for distribution to the partners of
the Partnership.
The level of any future distributable cash is dependent upon the
amount of advances made by JMB. The Partnership's sole source of capital
to pay for continuing operations is advances from JMB, which must be repaid
before any distributions are made. Advances made by JMB are evidenced by a
promissory note with a maximum principal sum of $2 million and are due June
30, 1999. The note bears interest at the applicable Federal rate, which
ranged between 5.55% and 6.14% per annum in 1997.
While the Partnership is not expected to terminate in the near term,
it currently appears unlikely that any significant distributions will be
made by the Partnership at any time due to the level of indebtedness
remaining on the Properties, the original purchase money notes payable by
JMB/NYC, the significant preference levels within the reorganized structure
and the liabilities of the Partnership.
PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits and
losses of the Partnership from operations are allocated 96% to the Holders
of Interests and 4% to the General Partners. However, certain provisions
of the Federal income tax law prohibit the allocation of net tax losses to
the Holders of Interests if the net tax losses exceed the Holders of
Interests' current basis in the Partnership. The Holders of Interests'
basis in the Partnership is essentially equal to their initial capital
contributions less cumulative cash distributions and losses incurred for
Federal income tax purposes plus the Holders of Interests' share of the
minimum taxable gain from a hypothetical disposition of the Properties.
For the year ended December 31, 1995, the Holders of Interests were
allocated tax losses in an amount equal their share of the increase in the
Partnership's minimum taxable gain. In 1996, the Holders of Interests were
allocated ordinary income and capital gain for Federal income tax purposes
in an amount that, when combined, equal their share of the decrease in the
Partnership's minimum taxable gain during 1996. Profits from the sale or
other disposition of all or substantially all of the Partnership's interest
in JMB/NYC or of the Properties are to be allocated to the General Partners
to the greater of 1% of such profits or the amount of cash distributable to
<PAGE>
the General Partners from any such sale or disposition (as described
below), plus an additional amount of such profits, if necessary, to reduce
deficits in the General Partners' capital accounts to a level consistent
with the gain anticipated to be realized from future sales. Losses from
the sale of all or substantially all of the Partnership's interest in
JMB/NYC or of the Properties are to be allocated 1% to the General
Partners. The remaining sale or disposition profits and losses are
allocable to the Holders of Interests. All such profits or losses
generally will be allocated among the Holders of Interests in proportion to
their percentage interests in the Partnership, subject to allocations of
taxable gain among the Holders of Interests in order to equalize their
capital accounts as a result of disproportionate allocations of losses
during the offering period.
The General Partners are not required to make any additional capital
contributions except under certain limited circumstances upon dissolution
and termination of the Partnership. Distributions of "Distributable Cash"
(as defined) of the Partnership are allocated 90% to the Holders of
Interests and 10% to the General Partners (of which 6.25% constitutes a
management fee).
TRANSACTIONS WITH AFFILIATES
In accordance with the Partnership Agreement, the General Partners are
required to loan back to the Partnership, for distribution to the Holders
of Interests, their share of Distributable Cash (as defined) if a
distribution made to all partners in a particular quarter does not result
in a distribution to the Holders of Interests which equates to a 7% per
annum return on their adjusted capital investment. Consequently, for the
distributions made to the partners in 1989 and 1990, the General Partners
have loaned $300,000 of Distributable Cash, as defined, (including such
amounts reflected as a management fee to the General Partners) to the
Partnership for distribution to the Holders of Interests. Any amounts
loaned bear interest at a rate not to exceed 10% per annum (currently 10%
per annum). As of December 31, 1997, $325,241 represented interest earned
on such loans, all of which was unpaid. These loans and accrued interest
can be repaid upon sale or refinancing only after the Holders of Interests
have received an amount equal to their contributed capital plus any
deficiency in a stipulated return thereon.
The Corporate General Partner and its affiliates are entitled to
reimbursement for direct expenses and out-of-pocket expenses relating to
the administration of the Partnership and operation of the Partnership's
real property investments. Additionally, the Corporate General Partner and
its affiliates are entitled to reimbursements for portfolio management,
legal and accounting services. Such costs were $20,020, $3,146 and $16,393
for 1997, 1996 and 1995, $3,469 of which was unpaid at December 31, 1997.
The Partnership had obligations to fund, on demand, $600,000 and
$600,000 to Carlyle Investors, Inc. and Carlyle Managers, Inc.,
respectively, of additional paid-in capital (reflected in the amounts due
to affiliates in the accompanying financial statements). During 1996,
these obligations were reduced to $200,000 and $200,000, respectively. As
of December 31, 1997, the obligations bore interest of 5.73% per annum and
cumulative interest accrued on these obligations was $272,639.
JMB advanced the Partnership $200,000 and $529,835 during 1997 and
1996, respectively. Advances made by JMB are evidenced by a promissory
note with a maximum principal sum of $2 million and are due June 30, 1999.
The note bears interest at the applicable Federal rate, which ranged
between 5.55% and 6.14% per annum in 1997. The balance of the note,
including accrued interest, is $775,499 and $536,685 as of December 31,
1997 and 1996, respectively. The Partnership's sole source of capital to
pay for continuing operations is advances from JMB.
<PAGE>
JMB has guaranteed that the Partnership will receive a certain minimum
return on its working capital (as defined), including amounts previously
accrued under the minimum return guarantee. In March 1995, JMB paid
$2,850,000 of the accrued amount due under this agreement to the
Partnership. During 1996, JMB funded its remaining obligation under the
working capital minimum guarantee of approximately $1,800,000 which was
used to fund 1996 operating costs and the Partnership's share of the
collateral required pursuant to the terms of the restructuring and
reorganization of the ownership interests in the Properties.
INVESTMENT IN UNCONSOLIDATED VENTURE
Summary financial information for JMB/NYC as of and for the years
ended December 31, 1997 and 1996 is as follows:
1997 1996
------------ ------------
Current assets. . . . . . . . . . . . $ 19,919 27,859
Current liabilities . . . . . . . . . -- --
------------ ------------
Working capital (deficit). . . . . 19,919 27,859
------------ ------------
Escrow deposits . . . . . . . . . . . 8,474,467 7,937,459
Other liabilities . . . . . . . . . . (103,661,504) (91,313,934)
Maximum obligation under the
indemnification agreement. . . . . . (25,000,000) (25,000,000)
Venture partners' deficit . . . . . . 94,932,058 86,068,182
------------ ------------
Partnership's capital (deficit). . $(25,235,060) (22,280,434)
============ ============
Represented by:
Invested capital . . . . . . . . . . $ 54,596,097 54,596,097
Cumulative net losses. . . . . . . . (70,457,408) (67,502,782)
Cumulative cash
distributions . . . . . . . . . . (9,373,749) (9,373,749)
------------ ------------
$(25,235,060) (22,280,434)
============ ============
Total income. . . . . . . . . . . . . $ 537,008 228,184,030
============ ============
Expenses. . . . . . . . . . . . . . . $ 12,355,510 11,202,134
============ ============
Net income (loss) (including income
from restructuring of $220,431,722
in 1996) . . . . . . . . . . . . . . $(11,818,502) 216,981,896
============ ============
During 1996, as a result of the adoption of the Plan, JMB/NYC
discontinued the application of the equity method of accounting for its
investments in unconsolidated ventures and reversed those previously
recognized losses from the unconsolidated ventures except for an amount
equal to the maximum obligation under the indemnification agreement of
$25,000,000. The Partnership's capital (deficit) in JMB/NYC differs from
its investment in unconsolidated venture as reflected in the accompanying
financial statements due to the Partnership's 1996 reversal of previously
recognized losses in JMB/NYC as a result of the restructuring and
reorganization.
The results of operations through December 31, 1995 were combined to
include JMB/NYC's unconsolidated ventures. For the year ended December 31,
1995, total income was $163,838,267, expenses were $180,511,256 and net
loss was $16,672,989. Total income and net loss for the year ended
December 31, 1995 includes a loss on sale of investment property of
$38,214,703, offset by an extraordinary gain on forgiveness of indebtedness
of $62,529,627 related to the sale of the 2 Broadway building in September
1995.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
JMB/Manhattan Associates, Ltd.:
We have audited the financial statements of JMB/NYC Office Building
Associates, L.P. (JMB/NYC) as of December 31, 1997 and 1996, and the
related statements of operations, partners' capital accounts (deficits),
and cash flows for the years, then ended. These financial statements are
the responsibility of the General Partners of JMB/Manhattan Associates,
Ltd. (the Partnership). Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit 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 the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of JMB/NYC as of
December 31, 1997 and 1996, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that
the Partnership will continue as a going concern. As discussed in the
notes to the financial statements, the Partnership has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern. The
General Partners' plans in regard to these matters are also described in
the notes to the financial statements. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 25, 1998
<PAGE>
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
ASSETS
------
1997 1996
------------ ------------
Current assets:
Cash. . . . . . . . . . . . . . $ 19,919 27,859
------------ ------------
Total current assets. . 19,919 27,859
------------ ------------
Escrow deposits . . . . . . . . . 8,474,467 7,937,459
------------ ------------
$ 8,494,386 7,965,318
============ ============
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Liabilities:
Maximum obligation under
the indemnification
agreement . . . . . . . . . . $ 25,000,000 25,000,000
Notes payable and accrued
interest. . . . . . . . . . . 103,661,504 91,313,934
------------ ------------
Commitments and contingencies
Total liabilities . . . 128,661,504 116,313,934
Partners' capital accounts (deficits):
JMB/Manhattan Associates, Ltd.:
Capital contributions . . . . 54,596,097 54,596,097
Cumulative net losses . . . . (70,457,408) (67,502,782)
Cumulative cash distributions (9,373,749) (9,373,749)
------------ ------------
(25,235,060) (22,280,434)
------------ ------------
Venture partners:
Capital contributions . . . . 606,073,597 606,073,597
Cumulative net losses . . . . (619,120,905) (610,257,029)
Cumulative cash distributions (81,884,750) (81,884,750)
------------ ------------
(94,932,058) (86,068,182)
------------ ------------
Total partners' capital
accounts (deficits) . (120,167,118) (108,348,616)
------------ ------------
$ 8,494,386 7,965,318
============ ============
See accompanying notes to financial statements.
<PAGE>
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997 AND 1996
1997 1996
------------ ------------
Income:
Interest income. . . . . . . . . $ 537,008 134,252
------------ -----------
537,008 134,252
------------ -----------
Expenses:
Interest expense . . . . . . . . 12,347,570 10,876,797
Depreciation . . . . . . . . . . -- 133,362
Other general and administrative 7,940 191,975
------------ -----------
12,355,510 11,202,134
------------ -----------
Income from unconsolidated
ventures (including income
from restructuring of
$220,431,722 in 1996) . . . . . -- 228,049,778
------------ -----------
Net earnings (loss) . . $(11,818,502) 216,981,896
============ ===========
See accompanying notes to financial statements.
<PAGE>
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 1997 AND 1996
JMB/MANHATTAN VENTURE
ASSOCIATES, LTD. PARTNERS
---------------- ------------
Balance (deficits) at
December 31, 1995. . . . . . . . $(78,535,221) (254,834,908)
Capital contributions . . . . . . 2,009,313 6,030,304
Net earnings (loss) . . . . . . . 54,245,474 162,736,422
------------ ------------
Balance (deficits) at
December 31, 1996. . . . . . . . (22,280,434) (86,068,182)
Net earnings (loss) . . . . . . . (2,954,626) (8,863,876)
------------ ------------
Balance (deficits) at
December 31, 1997. . . . . . . . $(25,235,060) (94,932,058)
============ ============
See accompanying notes to financial statements.
<PAGE>
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1997 AND 1996
1997 1996
------------ ------------
Cash flows from operating activities:
Net earnings (loss). . . . . . . $(11,818,502) 216,981,896
Items not requiring (providing) cash:
Depreciation. . . . . . . . . . -- 133,362
Income from unconsolidated
ventures (including income
from restructuring of
$220,431,722 in 1996). . . . . -- (228,049,778)
Changes in:
Escrow deposits. . . . . . . . (537,008) (134,252)
Accounts payable and
other accrued expenses. . . . -- (21,576)
Accrued interest . . . . . . . 12,347,570 10,876,797
------------ ------------
Net cash (used in)
provided by operating
activities . . . . . . . (7,940) (213,551)
------------ ------------
Cash flows from investing
activities:
Amounts deposited into
escrow . . . . . . . . . . . . -- (7,803,207)
------------ ------------
Net cash provided by
(used in) investing
activities . . . . . . . -- (7,803,207)
------------ ------------
Cash flows from financing
activities:
Capital contributions . . . . . -- 8,039,617
------------ ------------
Net cash provided by
(used in) financing
activities. . . . . . . -- 8,039,617
------------ ------------
Net increase (decrease)
in cash. . . . . . . . (7,940) 22,859
Cash, beginning of year. 27,859 5,000
------------ ------------
Cash, end of year. . . . $ 19,919 27,859
============ ============
Supplemental disclosure of
cash flow information:
Cash paid for interest . . . . $ -- --
============ ===========
Non-cash investing and
financing activities . . . . $ -- --
============ ===========
See accompanying notes to financial statements.
<PAGE>
JMB/NYC OFFICE BUILDING ASSOCIATES, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
OPERATIONS AND BASIS OF ACCOUNTING
GENERAL
The accompanying financial statements have been prepared for the
purpose of complying with Rule 3.09 of Regulation S-X of the Securities and
Exchange Commission. The Partnership owns an indirect ownership interest
in JMB/NYC Office Building Associates, L.P. ("JMB/NYC") through Property
Partners, L.P. JMB/NYC is a limited partnership among Property Partners,
L.P., Carlyle-XIV Associates, L.P. and Carlyle-XIII Associates, L.P. as
limited partners and Carlyle Managers, Inc. as the sole general partner.
Capitalized terms used herein but not defined have the same meanings as in
the Notes to the Partnership's Financial Statements.
JMB/NYC holds an approximate 4.9% indirect interest (before taking
into account certain preferences to other partners) in a partnership owning
commercial real estate in the City of New York, New York through 237/1290
Upper Tier Associates, L.P. ("Upper Tier"), a Delaware limited partnership,
in which JMB/NYC is a 99% limited partner. Prior to October 10, 1996
("Effective Date"), JMB/NYC utilized the equity method of accounting for
such investments. The share of income from unconsolidated ventures in the
accompanying financial statements includes JMB/NYC's proportionate share of
the operations of the Properties through the Effective Date, as well as
income from restructuring, consisting primarily of the reversal of
previously recognized losses and adjustments necessary to record the
restructuring. During 1996, JMB/NYC reversed those previously recognized
losses resulting from its interest in the Properties that it is no longer
obligated to fund due to the conversion of its general partnership interest
in the joint ventures which owned the Properties to a limited partnership
interest and the terms of the restructuring. As a limited partner, JMB/NYC
has no future funding obligations and has no influence or control over the
day-to-day affairs of the joint ventures which own the Properties
subsequent to the Effective Date. Accordingly, JMB/NYC has discontinued
the application of the equity method of accounting for its indirect
interests in the Properties and additional losses from the Properties will
not be recognized. Should JMB/NYC subsequently be allocated income through
its investment in Upper Tier, JMB/NYC will resume applying the equity
method only after such income exceeds net losses not previously recognized.
Reference is made to the Notes to the Partnership's Financial Statements
filed with this annual report. Such notes are incorporated herein by
reference.
The records of JMB/NYC are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records
after making appropriate adjustments to present the accounts in accordance
with generally accepted accounting principles ("GAAP"). Such adjustments
are not recorded on the records of the JMB/NYC.
The preparation of financial statements in accordance with GAAP
requires JMB/NYC to make estimates and assumptions that affect the reported
or disclosed amount of assets and liabilities and the disclosures 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.
In the short-term, JMB/NYC's sole source for any significant
incremental cash for potential obligations is contributions from the
Affiliated Partners, which may be dependent on advances from their General
Partners. Reference is made to the Notes to the Partnership's Financial
Statements filed with this annual report. Such notes are incorporated
herein by reference.
<PAGE>
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the venture partners rather than the
ventures.
ESCROW DEPOSITS
The Affiliated Partners entered into a joint and several obligation to
indemnify the newly formed real estate investment trust to the extent of
$25 million to ensure their compliance with the terms and conditions
relating to JMB/NYC's indirect limited partnership interest in the
restructured and reorganized joint ventures that own the Properties. The
Affiliated Partners contributed approximately $7.8 million (of which
JMB/Manhattan Associates, Ltd.'s share was approximately $1.9 million) to
JMB/NYC which was deposited into an escrow account as collateral for such
indemnification. These funds have been invested in stripped U.S.
Government obligations with a maturity date of February 15, 2001.
Compliance with the provisions of the indemnification agreement is within
the control of the Affiliated Partners and non-compliance with such
provisions by either JMB/Manhattan Associates, Ltd. or the other Affiliated
Partners is highly unlikely. Therefore, it is highly likely that the
Affiliated Partners' collateral will be returned to them at the termination
of the indemnification agreement. The maximum obligation under the
indemnification agreement of $25,000,000 is reflected as a liability in the
accompanying financial statements at December 31, 1997 and 1996.
NOTES PAYABLE
Notes payable consist of the following at December 31, 1997 and 1996.
1997 1996
----------- ------------
Promissory notes payable, bearing
interest at 12.75% per annum;
cross-collaterally secured by
JMB/NYC's indirect interest in
the Properties, interest accrues
and is deferred, compounded monthly,
until December 31, 1991; monthly
payments of accrued interest,
based upon the level of distri-
butions to JMB/NYC, thereafter
until maturity; principal and
accrued interest due January 2,
2001. Accrued deferred interest
of $70,388,912 and $58,041,342
is outstanding at December 31,
1997 and 1996, respectively. . . $103,661,504 91,313,934
------------ -----------
Less current portion
of notes payable . . . . . -- --
------------ -----------
Long-term notes payable $103,661,504 91,313,934
============ ===========
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There were no changes in or disagreements with accountants during 1997
and 1996.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Corporate General Partner of the Partnership, JMB/Manhattan
Investors, Inc., is a wholly-owned subsidiary of JMB Investment Holdings-I,
Inc., a Delaware corporation, the outstanding shares of stock of which are
owned 25% by Northbrook Corporation, a Delaware corporation, and 75% by JMB
Realty Corporation, a Delaware corporation ("JMB"). Substantially all of
the outstanding shares of Northbrook Corporation are owned by JMB and
certain of its officers, directors, members of their families and their
affiliates. Substantially all of the shares of JMB are owned by its
officers, directors, members of their families and their affiliates. The
Corporate General Partner has responsibility for all aspects of the
Partnership's operations, subject to the requirement that generally the
sale of all or any substantial portion of the Partnership's interest in
JMB/NYC or of all or any substantial portion of JMB/NYC's interests in the
Properties, unless required by an agreement or instrument relating to such
interests, must be approved by an Associate General Partner of the
Partnership, BPA Associates, L.P., an Illinois limited partnership with
JMB/Manhattan Investors, Inc. as the sole general partner. The limited
partners of BPA Associates, L.P. are generally officers, directors and
affiliates of JMB or its affiliates. BPA Associates, L.P. is also the sole
general partner of APB Associates, an Illinois limited partnership, that is
the other Associate General Partner of the Partnership.
The Partnership is subject to certain conflicts of interest arising
out of its relationships with the General Partners and their affiliates as
well as the fact that the General Partners and their affiliates are engaged
in a range of real estate activities. Certain services have been and may
in the future be provided to the Partnership by affiliates of the General
Partners. In general, such services are to be provided on terms no less
favorable to the Partnership than could be obtained from independent third
parties and are otherwise subject to conditions and restrictions contained
in the Partnership Agreement. The Partnership Agreement permits the
General Partners and their affiliates to provide services to, and otherwise
deal and do business with, persons who may be engaged in transactions with
the Partnership, and permits the Partnership to borrow from, purchase goods
and services from, and otherwise to do business with, persons doing
business with the General Partners or their affiliates. The General
Partners and their affiliates may be in competition with the Partnership
under certain circumstances, including, for tenants for properties and/or
for the sale of properties. Because the timing and amount of cash
distributions and profits and losses of the Partnership may be affected by
various determinations by the General Partners under the Partnership
Agreement, including whether and when to sell (or consent to the sale of)
an investment property, the establishment and maintenance of reasonable
reserves, the timing of expenditures and the allocation of certain tax
items under the Partnership Agreement, the General Partners may have a
conflict of interest with respect to such determinations.
The directors and the executive and certain other officers of the
Corporate General Partner are as follows:
<PAGE>
NAME OFFICE
- ---- ------
Judd D. Malkin Chairman and Director
Neil G. Bluhm President
Stuart C. Nathan Vice President and Director
Howard Kogen Vice President and Treasurer
Gary Nickele Vice President, General Counsel and Director
H. Rigel Barber Vice President
Gailen J. Hull Vice President
There is no family relationship among any of the foregoing officers or
directors. The foregoing directors have been elected to serve a one-year
term until the annual meeting of the Corporate General Partner to be held
on August 11, 1998. All of the foregoing officers have been elected to
serve one-year terms until the first meeting of the Board of Directors held
after the annual meeting of the Corporate General Partner to be held on
August 11, 1998. All of the forgoing officers have served in the
capacities indicated since the date of incorporation of the Corporate
General Partner on December 27, 1984, except that Judd D. Malkin and Gary
Nickele became Directors on August 8, 1995, Neil G. Bluhm was Vice
President (rather than President) from October 14, 1993, until August 8,
1995, Stuart C. Nathan was President (rather than Vice President) from
October 14, 1993, until August 8, 1995, and has been a Director for
approximately the past five years and Howard Kogen became Treasurer on
January 1, 1991. There are no arrangements or understandings between or
among any of said directors or officers and any other person pursuant to
which the director or any officer was elected as such.
The foregoing directors and officers are also officers and/or
directors of JMB. JMB is the corporate general partner of Carlyle Real
Estate Limited Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited
Partnership-XI ("Carlyle-XI"), Carlyle Real Estate Limited Partnership-XII
("Carlyle- XII"), Carlyle Real Estate Limited Partnership-XIII
("Carlyle-XIII"), Carlyle Real Estate Limited Partnership-XIV
("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV ("Carlyle-XV"),
Carlyle Real Estate Limited Partnership-XVI ("Carlyle-XVI"), Carlyle Real
Estate Limited Partnership-XVII ("Carlyle-XVII"), JMB Mortgage Partners,
Ltd.-III ("Mortgage Partners-III"), JMB Mortgage Partners, Ltd.-IV
("Mortgage Partners-IV"), Carlyle Income Plus, Ltd. ("Carlyle Income Plus")
and Carlyle Income Plus, L.P.-II ("Carlyle Income Plus-II") and the
managing general partner of JMB Income Properties, Ltd.-IV ("JMB
Income-IV"), JMB Income Properties, Ltd.-V ("JMB Income-V"), JMB Income
Properties, Ltd.-VII ("JMB Income-VII"), JMB Income Properties Ltd.-X ("JMB
Income-X"), JMB Income Properties, Ltd.-XI, ("JMB Income-XI"), JMB Income
Properties, Ltd.-XII ("JMB Income-XII"), and JMB Income Properties, Ltd.-
XIII, ("JMB Income-XIII"). JMB is also the sole general partner of the
associate general partners of most of the foregoing partnerships.
The foregoing directors and officers are also officers and/or
directors of various affiliated companies of JMB including Income Growth
Managers, Inc. (the corporate general partner of IDS/JMB Balanced Income
Growth, Ltd. ("IDS/BIG")) and Arvida/JMB Managers, Inc. (the general
partner of Arvida/JMB Partners, L.P. ("Arvida")). Most of such officers
and the director are also partners, directly or indirectly, of certain
partnerships which are associate general partners in the following real
estate limited partnerships: the Partnership, Carlyle-VII, Carlyle-XI,
Carlyle-XII, Carlyle-XIII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI, Carlyle-
XVII, JMB Income-VII, JMB Income-X, JMB Income-XI, JMB Income-XII, JMB
Income-XIII, Mortgage Partners-III, Mortgage Partners-IV, Carlyle Income
Plus, Carlyle Income Plus-II and IDS/BIG. Certain of such officers and
directors are also officers and the sole director of Carlyle Managers,
Inc., the general partner of JMB/NYC.
The business experience during the past five years of each such
director and officer of the Corporate General Partner of the Partnership
includes the following:
<PAGE>
Judd D. Malkin (age 60) is Chairman of the Board and a director of JMB
and its Chief Financial Officer. He is also an individual general partner
of JMB Income-IV and JMB Income-V. Mr. Malkin has been associated with JMB
since October, 1969. Mr. Malkin is also a director of Urban Shopping
Centers, Inc. ("USC, Inc."), an affiliate of JMB that is a real estate
investment trust in the business of owning, managing and developing
shopping centers. He is a Certified Public Accountant.
Neil G. Bluhm (age 60) is President and a director of JMB. He is also
an individual general partner of JMB Income-IV and JMB Income-V. Mr. Bluhm
has been associated with JMB since August, 1970. Mr. Bluhm is also a
principal of Walton Street Real Estate Fund I, L.P. and a director of USC,
Inc. He is a member of the Bar of the State of Illinois and a Certified
Public Accountant.
Stuart C. Nathan (age 56) is Executive Vice President and a director
of JMB. He has been associated with JMB since July, 1972. He is a member
of the Bar of the State of Illinois.
Howard Kogen (age 62) is Senior Vice President and Treasurer of JMB.
He has been associated with JMB since March, 1973. He is a Certified
Public Accountant.
Gary Nickele (age 45) is Executive Vice President and General Counsel
of JMB. He has been associated with JMB since February, 1984. Mr. Nickele
holds a J.D. degree from the University of Michigan Law School and is a
member of the Bar of the State of Illinois.
H. Rigel Barber (age 49) is Executive Vice President and Chief
Executive Officer of JMB. He has been associated with JMB since March,
1982. Mr. Barber received a J.D. degree from the Northwestern Law School.
He is a member of the Bar of the State of Illinois.
Gailen J. Hull (age 49) is Senior Vice President of JMB. Mr. Hull has
been associated with JMB since March, 1982. He holds a Masters degree in
Business Administration from Northern Illinois University and is a
Certified Public Accountant.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. The General Partners
are entitled to receive a share of cash distributions, when and as cash
distributions are made to the Holders of Interests, and a share of profits
or losses. In 1997, the General Partners received no distributions from
the Partnership. In accordance with the Partnership Agreement, the General
Partners have loaned their aggregate share of certain prior distributions
($300,000 at December 31, 1997) of Distributable Cash, as defined,
(including such amounts reflected as a management fee to the General
Partners) to the Partnership. Any amounts loaned bear interest at a rate
not to exceed 10% per annum (currently 10% per annum). As of December 31,
1997, $325,421 represents interest earned on such loans, all of which was
unpaid. The General Partners received a share of Partnership income for
tax purposes aggregating $54,629 in 1997.
The General Partners of the Partnership or their affiliates may be
reimbursed for their direct expenses or out-of-pocket expenses relating to
the administration of the Partnership and the acquisition and operation of
the Partnership's real property investments. The General Partners or their
affiliates are also entitled to reimbursements for portfolio management,
legal and accounting services. Such costs were $20,020 for 1997, $3,469 of
which was unpaid at December 31, 1997.
The Partnership had obligations to fund, on demand, $600,000 and
$600,000 to Carlyle Investors, Inc. and Carlyle Managers, Inc.,
respectively, of additional paid-in capital. During 1996, these
obligations were reduced to $200,000 and $200,000, respectively. As of
December 31, 1997, these obligations bore interest of 5.73% per annum and
interest accrued on these obligations aggregated $272,639.
JMB advanced approximately $200,000 to the Partnership during 1997
pursuant to the terms of a promissory note payable made by JMB with a
maximum principal sum of $2 million and is due June 30, 1999. As of
December 31, 1997, the loan bore interest of 5.61% per annum. The
outstanding balance of the note is $775,499 at December 31, 1997 and
includes accrued interest of $45,664. The Partnership's sole source of
capital to pay continuing operations is advances from JMB.
The Partnership is permitted to engage in various transactions
involving affiliates of the Corporate General Partner of the Partnership.
The relationship of the Corporate General Partner (and its director and
officers) to its affiliates is also set forth above in Item 10.
<PAGE>
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No person or group is known by the Partnership to own beneficially more than 5% of the outstanding
Interests of the Partnership.
(b) The Corporate General Partner, its officers and director and the Associate General Partners own the
following Interests of the Partnership.
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership
Interests Neil G. Bluhm 19 Interests (1) 1.9%
indirectly
Limited Partnership
Interests Judd D. Malkin 19 Interests (1) 1.9%
indirectly
Limited Partnership
Interests Corporate General 19 Interests (1) 1.9%
Partner, its officers indirectly
and directors and
the Associate General
Partners as a group
<FN>
(1) Includes 19 Interests owned an investment partnership of which Messrs. Neil Bluhm and Judd Malkin are
the managing general partners and have shared voting and investment power with respect to the Interests so owned.
Reference is made to Item 10 for information concerning ownership of the Corporate General Partner.
(c) There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date
result in a change in control of the Partnership.
</TABLE>
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with
the Corporate General Partner, affiliates or their management other than
those described in Items 10, 11 and 12 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial
Statements and Supplementary Data filed with this report).
(2) Exhibits.
3. Amended and Restated Agreement of Limited
Partnership is hereby incorporated herein by reference to Exhibit 3 to the
Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-14547)
dated March 30, 1993.
4-A.* Long-term debt contract relating to the mortgage
note secured by the 237 Park Avenue Building in New York, New York.
4-B.* Long-term debt contract relating to the mortgage
note secured by the 1290 Avenue of the Americas Building in New York, New
York.
10-A.* Interest Rate Guaranty Agreement dated July 1,
1984 between JMB Realty Corporation and JMB/Manhattan Associates, Ltd.
dated April 30, 1984.
10-B.* Loan Agreement between JMB/Manhattan Associates,
JMB/Manhattan Investors, Inc., BPA Associates and APB Associates relating
to the loan back of cash distributions of the Partnership.
10-C.* Consent Agreement dated April 30, 1985 between
JMB/NYC Office Building Associates, O&Y Equity Corporation, Olympic and
York, 2 Broadway Limited Partnership and Fame Associates relating to the
rights of mortgage loan participation.
10-D.* Mortgage Spreader and Consolidation Agreement
and Trust Indenture dated March 20, 1984 between O&Y Equity Corporation and
affiliates and Manufacturer's Hanover Trust Company relating to the
$970,000,000 first mortgage loan on the 2 Broadway, 1290 Avenue of the
Americas and 237 Park Avenue Buildings.
10-E.* $9,758,363 12.75% promissory note, due March 20,
1999 between JMB/NYC Office Building Associates and Olympia and York
Holdings Corporation relating to the 1290 Avenue of Americas Building
10-F.* $4,514,229 12.75% promissory note, due March 20,
1999 between JMB/NYC Office Building and Olympia and York Holdings
Corporation relating to the 237 Park Avenue Building.
<PAGE>
10-G. Agreement of Limited Partnership of Property
Partners, L.P. is hereby incorporated by reference to the Partnership's
Report for March 31, 1993 on Form 10-Q (File No. 0-14547) dated May 14,
1993.
10-H. Second Amended and Restated Articles of
Partnership of JMB/NYC Office Building Associates is hereby incorporated by
reference to the Partnership's Report for December 31, 1993 on Form 10-K
(File No. 0-14547) dated March 28, 1994.
10-I. Amended and Restated Certificate of
Incorporation of Carlyle-XIV Managers, Inc. (known as Carlyle Managers,
Inc.) is hereby incorporated by reference to the Partnership's Report for
December 31, 1993 on Form 10-K (File No. 0-14547) dated March 28, 1994.
10-J. Amended and Restated Certificate of
Incorporation of Carlyle-XIII Managers, Inc. (known as Carlyle Investors,
Inc.) is hereby incorporated by reference to the Partnership's Report for
December 31, 1993 on Form 10-K (File No. 0-14547) dated March 28, 1994.
10-K. $600,000 demand note between JMB/Manhattan
Associates, L.P. and Carlyle Managers, Inc., is hereby incorporated by
reference to the Partnership's Report for December 31, 1993 on Form 10-K
(File No. 0-14547) dated March 28, 1994.
10-L. $600,000 demand note between JMB/Manhattan
Associates, L.P. and Carlyle Investors, Inc., is hereby incorporated by
reference to the Partnership's Report for December 31, 1993 on Form 10-K
(File No. 0-14547) dated March 28, 1994.
10-M. Amendment No. 1 to the Second Amended and
Restated Articles of Partnership of JMB/NYC Office Building Associates,
L.P. dated January 1, 1994, by and between Carlyle Managers, Inc., Carlyle-
XIII Associates, L.P., Carlyle-XIV associates, L.P. and Property Partners,
L.P., as the limited partners, is hereby incorporated herein by reference
to the Partnership's Report for March 31, 1995 on Form 10-Q (File No. 0-
14547) dated May 11, 1995.
10-N. Amendment No.1 to the Agreement of Limited
Partnership of Property Partners, L.P. dated January 1, 1994 by and between
Carlyle Investors, Inc. a Delaware corporation as general partner, and
JMB/Manhattan Associates, Ltd., a Delaware limited partnership, as limited
partner, is hereby incorporated herein by reference to the Partnership's
Report for March 31, 1995 on Form 10-Q (File No. 0-14547) dated May 11,
1995.
<PAGE>
10-O. Amended, Restated and Consolidated Promissory
Note between JMB/NYC Office Building Associates, L.P. and Olympia & York
Massachusetts Financial Company dated May 31, 1995, is hereby incorporated
herein by reference to the Partnership's Report for December 31, 1995 on
Form 10-K (File No. 0-14547) dated March 25, 1996.
10-P. Amended, Restated and Consolidated Security
Agreement between JMB/NYC Office Building Associates, L.P. and Olympia &
York Massachusetts Financial Company dated May 31, 1995, is hereby
incorporated herein by reference to the Partnership's Report for December
31, 1995 on Form 10-K (File No. 0-14547) dated March 25, 1996.
10-Q. Agreement of Sale between 2 Broadway Associates,
L.P. and 2 Broadway Acquisition Corp. dated August 10, 1995, is hereby
incorporated herein by reference to the Partnership's Report for December
31, 1995 on Form 10-K (File No. 0-14547) dated March 25, 1996.
10-R. Agreement of Conversion of 1290 Associates into
1290 Associates, L.L.C. dated October 10, 1995 among JMB/NYC Office
Building Associates, L.P., an Illinois limited partnership, O&Y Equity
Company, L.P., a Delaware limited partnership and O&Y NY Building Corp., a
Delaware corporation, is hereby incorporated herein by reference to the
Partnership's Report for December 31, 1995 on Form 10-K (File No. 0-14547)
dated March 25, 1996.
10-S. Agreement of Conversion of 237 Park Avenue
Associates into 237 Park Avenue Associates, L.L.C., dated October 10, 1995
among JMB/NYC Office Building Associates, L.P., an Illinois limited
partnership, O&Y Equity Company, L.P., a Delaware limited partnership and
O&Y NY Building Corp., a Delaware corporation, is hereby incorporated
herein by reference to the Partnership's Report for December 31, 1995 on
Form 10-K (File No. 0-14547) dated March 25, 1996.
10-T. Disclosure Statement for the Second Amended
Joint Plan of Reorganization of 237 Park Avenue Associates, L.L.C. and 1290
Associates, L.L.C. dated August 9, 1996 is hereby incorporated herein by
reference to the Partnership's Report for September 30, 1996 on Form 10-Q
(File No. 0-14547) dated November 8, 1996.
10-U. Consent of Director of Carlyle-XIV Managers,
Inc. (known as Carlyle Managers, Inc.) dated October 31, 1996 is hereby
incorporated herein by reference to the Partnership's Report for December
31, 1996 on Form 10-K (File No. 0-14547) dated March 21, 1997.
10-V. Consent of Director of Carlyle-XIII, Managers,
Inc. (known as Carlyle Investors, Inc.) dated October 31, 1996 is hereby
incorporated herein by reference to the Partnership's Report for December
31, 1996 on Form 10-K (File No. 0-14547) dated March 21, 1997.
<PAGE>
10-W. Allonge to demand note between JMB/Manhattan
Associates, L.P. and Carlyle Managers, Inc. dated October 31, 1996 is
hereby incorporated herein by reference to the Partnership's Report for
December 31, 1996 on Form 10-K (File No. 0-14547) dated March 21, 1997.
10-X. Allonge to demand note between JMB/Manhattan
Associates, L.P. and Carlyle Investors, Inc., dated October 31, 1996 is
hereby incorporated herein by reference to the Partnership's Report for
December 31, 1996 on Form 10-K (File No. 0-14547) dated March 21, 1997.
10-Y. $2,000,000 promissory note between JMB/Manhattan
Associates, Ltd. and JMB Realty Corporation dated October 7, 1996 is hereby
incorporated herein by reference to the Partnership's Report for December
31, 1996 on Form 10-K (File No. 0-14547) dated March 21, 1997.
10-Z. Indemnification agreement between Property
Partners, L.P., Carlyle-XIII Associates, L.P., and Carlyle-XIV Associates,
L.P. dated as of October 10, 1996 is hereby incorporated herein by
reference to the Partnership's Report for December 31, 1996 on Form 10-K
(File No. 0-14547) dated March 21, 1997.
10-AA. Agreement of Limited Partnership of 237/1290
Lower Tier Associates, L.P. dated as of October 10, 1996 is hereby
incorporated herein by reference to the Partnership's Report for December
31, 1996 on Form 10-K (File No. 0-14547) dated March 21, 1997.
10-BB. Amended and Restated Limited Partnership
Agreement of 237/1290 Upper Tier Associates, L.P. dated as of October 10,
1996 is hereby incorporated herein by reference to the Partnership's Report
for December 31, 1996 on Form 10-K (File No. 0-14547) dated March 21, 1997.
21. List of Subsidiaries
27. Financial Data Schedule
--------------------
* Previously filed as Exhibits to the Partnership's
Registration Statement on Form 10 (as amended) of the Securities Exchange
Act of 1934 (File no. 2-88687) filed April 29, 1986 and hereby incorporated
herein by reference.
(b) No reports on Form 8-K have been filed since the beginning of
the last quarter of the period covered by this report.
No annual report for the year 1997 or proxy material has been sent to the
Holders of Interests. An annual report will be sent to the Holders of
Interests subsequent to this filing.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
JMB/MANHATTAN ASSOCIATES, LTD.
By: JMB/Manhattan Investors, Inc.
Corporate General Partner
GAILEN J. HULL
By: Gailen J. Hull
Vice President
Date: March 25, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: JMB/Manhattan Investors, Inc.
Corporate General Partner
STUART C. NATHAN
By: Stuart C. Nathan, President and Director
Principal Executive Officer
Date: March 25, 1998
JUDD D. MALKIN
By: Judd D. Malkin, Chairman
Principal Financial Officer
Date: March 25, 1998
GAILEN J. HULL
By: Gailen J. Hull, Vice President
Principal Accounting Officer
Date: March 25, 1998
<PAGE>
JMB/MANHATTAN ASSOCIATES, LTD.
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------- ----
3. Amended and Restated Agreement
of Limited Partnership Yes
4-A. Long-term debt contract relating
to the mortgage note secured
by the 237 Park Avenue Building
in New York, New York. Yes
4-B. Long-term debt contract relating
to the mortgage note secured
by the 1290 Avenue of the
Americas Building in New York,
New York. Yes
10-A. Interest Rate Guaranty Agreement
dated July 1, 1984 between JMB Realty
Corporation and JMB/Manhattan
Associates, Ltd. dated April 30,
1984. Yes
10-B. Loan Agreement between JMB/Manhattan
Associates, JMB/Manhattan Investors,
Inc., BPA Associates and APB Associates
relating to the loan back of cash
distributions of the Partnership. Yes
10-C. Consent Agreement dated April 30,
1985 between JMB/NYC Office Building
Associates, O&Y Equity Corporation,
Olympic and York, 2 Broadway Limited
Partnership and Fame Associates
relating to the rights of mortgage
loan participation. Yes
10-D. Mortgage Spreader and Consolidation
Agreement and Trust Indenture dated
March 20, 1984 between O&Y Equity
Corporation and affiliates and
Manufacturer's Hanover Trust Company
relating to the $970,000,000 first
mortgage loan on the 2 Broadway,
1290 Avenue of the Americas and
237 Park Avenue Buildings. Yes
10-E. $9,758,363 12.75% promissory note,
due March 20, 1999 between JMB/NYC
Office Building Associates and
Olympia and York Holdings Corporation
relating to the 1290 Avenue of Americas
Building Yes
10-F. $4,514,229 12.75% promissory note,
due March 20, 1999 between JMB/NYC
Office Building and Olympia and York
Holdings Corporation relating to
the 237 Park Avenue Building. Yes
<PAGE>
10-G. Agreement of Limited Partnership
of Property Partners, L.P. Yes
10-H. Second Amended and Restated
Articles of Partnership of
JMB/NYC Office Building Associates Yes
10-I. Amended and Restated Certificate
of Incorporation of Carlyle-XIV
Managers, Inc. (known as Carlyle
Managers, Inc.) Yes
10-J. Amended and Restated Certificate
of Incorporation of Carlyle-XIII
Managers, Inc. (known as Carlyle
Investors, Inc.) Yes
10-K. $600,000 demand note between
JMB/Manhattan Associates, Ltd.
and Carlyle Managers, Inc. Yes
10-L. $600,000 demand note between
JMB/Manhattan Associates, Ltd.
and Carlyle Investors, Inc. Yes
10-M. Amendment No. 1 to JMB/NYC Office
Building Associates Yes
10-N. Amendment No. 1 to agreement of
limited partnership of Property
Partners, L.P. Yes
10-O. Amended, Restated and Consolidated
Promissory Note between JMB/NYC
Office Building Associates, L.P. and
Olympia & York Massachusetts
Financial Company Yes
10-P. Amended, Restated and Consolidated
Security Agreement between JMB/NYC
Office Building Associates, L.P. and
Olympia & York Massachusetts
Financial Company. Yes
10-Q. Agreement of Sale between 2 Broadway
Associates, L.P. and 2 Broadway
Acquisition Corp., dated August 10,
1995. Yes
10-R. Agreement of Conversion of 1290
Associates into 1290 Associates,
L.L.C. dated October 10, 1995. Yes
10-S. Agreement of Conversion of 237
Park Avenue Associates into
237 Park Avenue Associates,
L.L.C. dated October 10, 1995 Yes
10-T. Disclosure Statement for the
Second Amended Joint Plan of
Reorganization of 237 Park Avenue
Associates, L.L.C. and 1290
Associates, L.L.C. dated August 9,
1996 Yes
10-U. Consent of Director of
Carlyle-XIV Managers, Inc. (known
as Carlyle Managers, Inc.) dated
October 31, 1996 Yes
<PAGE>
10-V. Consent of Director of
Carlyle-XIII Managers, Inc. (known
as Carlyle Investors, Inc.) dated
October 31, 1996 Yes
10-W. Allonge to demand note between
JMB/Manhattan Associates, L.P.
and Carlyle Managers, Inc. dated
October 31, 1996 Yes
10-X. Allonge to demand note between
JMB/Manhattan Associates, L.P.
and Carlyle Investors, Inc.
dated October 31, 1996 Yes
10-Y. $2,000,000 promissory note between
JMB/Manhattan Associates, Ltd.
and JMB Realty Corporation dated
October 7, 1996 Yes
10-Z. Indemnification agreement between
Property Partners, L.P., Carlyle-XIII
Associates, L.P., and Carlyle-XIV
Associates, L.P. dated as of
October 10, 1996 Yes
10.AA. Agreement of Limited Partnership of
237/1290 Lower Tier Associates, L.P.
dated as of October 10, 1996 Yes
10-BB. Amended and Restated Limited
Partnership Agreement of 237/1290 Upper
Tier Associates, L.P. dated as of
October 10, 1996 Yes
21. List of Subsidiaries No
27. Financial Data Schedule No
EXHIBIT 21
LIST OF SUBSIDIARIES
The Partnership is a partner of Property Partners, L.P. which is a
partner of JMB/NYC Office Building Associates, L.P., a limited partnership,
which has an indirect limited partnership interest which, before taking
into account significant preferences to the other unaffiliated partner,
equals approximately 4.9% of the reorganized and restructured ventures
owning 237 Park Avenue and 1290 Avenue of the Americas (the "Properties").
The new ownership structure gives control of the Properties to an
unaffiliated real estate investment trust which is owned primarily by
holders of the first mortgage debt which encumbered the Properties prior to
the bankruptcy. Prior to the restructuring, JMB/NYC was a member or
partner in (i) 237 Park Avenue Associates, L.L.C., a New York limited
liability company, (formerly 237 Park Avenue Associates, a New York general
partnership) which holds title to the 237 Park Avenue Building, (ii) 1290
Associates, L.L.C., a New York limited liability company, (formerly 1290
Associates, a New York general partnership) which holds title to the 1290
Avenue of the Americas Building, (all of these office buildings are in New
York, New York). The partners in the JMB/NYC Office Building Associates,
L.P. are affiliates of the General Partners of the Partnership. Reference
is made to the Notes for a description of the terms of such joint venture
partnerships. The Partnership is a 20% shareholder in Carlyle Managers,
Inc. and a 20% shareholder in Carlyle Investors, Inc., both of which are
Illinois corporations.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 971
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 971
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 971
<CURRENT-LIABILITIES> 1,308,226
<BONDS> 775,499
<COMMON> 0
0
0
<OTHER-SE> (6,214,137)
<TOTAL-LIABILITY-AND-EQUITY> 971
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 208,179
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 132,965
<INCOME-PRETAX> (206,892)
<INCOME-TAX> 0
<INCOME-CONTINUING> (206,892)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (206,892)
<EPS-PRIMARY> (199)
<EPS-DILUTED> (199)
</TABLE>
