UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to .
Commission File Number: 0-17149
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.
(Exact name of registrant as specified in its charter)
Delaware 04-2889712
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
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. ____
----
<PAGE>
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.
BALANCE SHEETS
November 30, 1996 and August 31, 1996 (Unaudited)
(In thousands)
ASSETS
November 30 August 31
----------- ---------
Real estate investments:
Investment properties held for sale, net $ 8,900 $ 8,900
Land 230 230
Mortgage loan receivable 1,270 1,270
------- -------
10,400 10,400
Cash and cash equivalents 2,623 2,637
Interest and land rent receivable 10 10
Accounts receivable 57 87
Prepaid expenses 19 27
Deferred expenses, net 24 25
------- -------
$13,133 $13,186
======= =======
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable - affiliates $ 33 $ 33
Accounts payable and accrued expenses 268 307
Tenant security deposits 84 85
Deferred management fees 245 245
Partners' capital 12,503 12,516
------- -------
$13,133 $13,186
======= =======
See accompanying notes.
<PAGE>
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.
STATEMENTS OF INCOME
For the three months ended November 30, 1996 and 1995 (Unaudited)
(In thousands, except per Unit amounts)
1996 1995
---- ----
Revenues:
Interest from mortgage loan $ 29 $ 29
Land rent 5 12
Other interest income 32 35
--------- -------
66 76
Expenses:
Management fees 34 35
General and administrative 62 63
Amortization of deferred expenses 1 1
------- -------
97 99
------- -------
Operating loss (31) (23)
Income from operations of investment
properties held for sale, net 151 122
------- -------
Net income $ 120 $ 99
======= =======
Net income per Limited
Partnership Unit $0.15 $0.13
===== =====
Cash distributions per Limited
Partnership Unit $0.17 $0.25
===== =====
The above net income and cash distributions per Limited Partnership Unit are
based upon the 776,988 Units ($50 per Unit) of Limited Partnership Interest
outstanding during each period.
See accompanying notes.
<PAGE>
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
For the three months ended November 30, 1996 and 1995 (Unaudited)
(In thousands)
General Limited
Partners Partners
-------- --------
Balance at August 31, 1995 $ (90) $13,716
Net income 1 98
Cash distributions (2) (197)
------ -------
Balance at November 30, 1995 $ (91) $13,617
====== =======
Balance at August 31, 1996 $ (101) $12,617
Net income 1 119
Cash distributions (1) (132)
------ -------
Balance at November 30, 1996 $ (101) $12,604
====== =======
See accompanying notes.
<PAGE>
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.
STATEMENTS OF CASH FLOWS
For the three months ended November 30, 1996 and 1995 (Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
(In thousands)
1996 1995
---- ----
Cash flows from operating activities:
Net income $ 120 $ 99
Adjustments to reconcile net income
to net cash provided by operating activities:
Amortization of deferred expenses 1 1
Changes in assets and liabilities:
Accounts receivable 30 (15)
Prepaid expenses 8 6
Accounts payable and accrued expenses (39) 67
Tenant security deposits (1) 1
--------- ---------
Total adjustments (1) 60
--------- ---------
Net cash provided by operating activities 119 159
Cash flows from financing activities:
Distributions to partners (133) (199)
--------- ---------
Net decrease in cash and cash equivalents (14) (40)
Cash and cash equivalents, beginning of period 2,637 2,692
--------- ---------
Cash and cash equivalents, end of period $ 2,623 $ 2,652
========= =========
See accompanying notes.
<PAGE>
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.
Notes to Financial Statements
(Unaudited)
1. General
-------
The accompanying financial statements, footnotes and discussion should be
read in conjunction with the financial statements and footnotes contained in
the Partnership's Annual Report for the year ended August 31, 1996. In the
opinion of management, the accompanying financial statements, which have not
been audited, reflect all adjustments necessary to present fairly the results
for the interim period. All of the accounting adjustments reflected in the
accompanying interim financial statements are of a normal recurring nature.
The accompanying financial statements have been prepared on the accrual basis
of accounting in accordance with generally accepted accounting principles
which require management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities as of November 30, 1996 and August 31, 1996 and
revenues and expenses for the three months ended November 30, 1996 and 1995.
Actual results could differ from the estimates and assumptions used.
2. Mortgage Loan and Land Investments
-----------------------------------
The following first mortgage loan was outstanding at November 30, 1996 and
August 31, 1996 (in thousands):
Date of
Property Amount of Loan Interest Rate Loan and Term
-------- -------------- ------------- -------------
Park South Apartments $1,270 9% 12/29/88
Charlotte, North Carolina 13 years
The loan is secured by a first mortgage on the property and an assignment of
all tenant leases. Interest is payable monthly and the principal is due at
maturity.
The fair value of the Park South loan, which does not become prepayable until
December 1997, has been estimated using discounted cash flow analysis and
approximated the loan's carrying value as of November 30, 1996.
In addition to the above mortgage loan, the following land purchase-leaseback
transaction had also been entered into as of November 30, 1996 and August 31,
1996 (in thousands):
Cost of Land
Property to the Partnership Annual Base Rent
-------- ------------------ ----------------
Park South Apartments $ 230 $21 through 12/28/28
The land lease has a term of 40 years. Among the provisions of the lease
agreement, the Partnership is entitled to additional rent based upon gross
revenues in excess of a base amount, as defined. The Partnership received
additional rent of $7,000 during the three-month period ended November 30,
1995. No additional rent was received during the quarter ended November 30,
1996. The lessee has the option to repurchase the land for a specified period
of time beginning in December of 1997 at a price based on the fair market
value, as defined, but not less than the original cost to the Partnership.
The objectives of the Partnership with respect to its mortgage loan and land
investments are to provide current income from fixed mortgage interest
payments and base land rents, then to provide increases to this current
income through participation in the annual revenues generated by the property
as they increase above a specified base amount. In addition, the
Partnership's investment is structured to share in the appreciation in value
of the underlying real estate. Accordingly, upon either sale, refinancing,
maturity of the mortgage loan or exercise of the option to repurchase the
land, the Partnership will receive a 50% share of the appreciation above a
specified base amount.
3. Investment Properties Held for Sale
-----------------------------------
At November 30, 1996 and August 31, 1996, the Partnership owned two
operating investment properties directly as a result of foreclosure
proceedings prompted by defaults under the terms of first mortgage loans
held by the Partnership. Descriptions of the transactions through which the
Partnership acquired these properties and of the properties themselves are
summarized below:
Hacienda Plaza
--------------
The Partnership assumed ownership of Hacienda Plaza on June 22, 1990.
The property, which is comprised of 78,415 square feet of leasable office
and retail space in Pleasanton, California, was 84% leased as of November
30, 1996. The combined balance of the land and the mortgage loan investments
at the time title was transferred to the Partnership was $9,789,000. The
estimated fair value of the operating property at the date of foreclosure
was $8,200,000. Accordingly, a write-down of $1,589,000 was recorded in
fiscal 1990. Since the date of the foreclosure, the Partnership has recorded
provisions for possible investment loss totalling $3,300,000 to write down
the net carrying value of the Hacienda Plaza investment property to reflect
additional declines in its estimated fair value, net of selling expenses.
The resulting net carrying value of the Hacienda Plaza investment property
at both November 30, 1996 and August 31, 1996 is $4,900,000.
Spartan Place Shopping Center
-----------------------------
The Partnership assumed ownership of the Spartan Place Shopping Center,
in Spartanburg, South Carolina, on February 12, 1991. The property, which
consists of 151,489 square feet of leasable retail space, was 35% occupied
as of November 30, 1996. Rather than continue to support the cash shortfalls
between the cash flow from property operations and required debt service to
keep the mortgage loan current, the borrower agreed to transfer the title to
the property to the Partnership in fiscal 1991. The combined balance of the
land and the mortgage loan investment at the time title was transferred,
including the unamortized balance of deferred costs associated with the
original acquisition of the Spartan Place investments, was $8,419,000.
Management estimated that the fair value of the property, net of selling
expenses, at the time of the foreclosure was $7,840,000. Accordingly, a loss
of $579,000 was recorded in fiscal 1991 to adjust the carrying value to this
estimate and the investment was reclassified to investment properties held
for sale. Since the date of the foreclosure, the Partnership has recorded
provisions for possible investment loss totalling $3,840,000 to write down
the net carrying value of the Spartan Place investment property to reflect
additional declines in its estimated fair value, net of selling expenses.
The net carrying value of the investment property was $4,000,000 as of
November 30, 1996 and August 31, 1996.
During fiscal 1996, the Partnership entered into a preliminary
agreement to sell the Spartan Place property to a third party. Subsequent to
the buyer's due diligence period, however, the offer was withdrawn.
Subsequent to the termination of this sales contract, the Partnership has
remarketed the property to other interested parties while at the same time
examining potential financing strategies for the capital and tenant
improvement costs to be incurred should the Partnership decide to hold the
property through the required re-leasing period. The property, as noted
above, has a substantial amount of vacant space. Funds for such re-leasing
costs would be provided from a combination of Partnership cash reserves and
secured borrowings.
<PAGE>
The Partnership recognizes income from its investment properties held for
sale in the amount of the excess of the properties' gross revenues over the
sum of property operating expenses (including capital improvement expenses
and leasing commissions), taxes and insurance. Combined summarized operating
results for Hacienda Plaza and Spartan Place for the three-month periods
ended November 30, 1996 and 1995 are as follows (in thousands):
1996 1995
---- ----
Revenues:
Rental income and
expense reimbursements $ 394 $ 378
Other income 2 3
------- ------
396 381
Expenses:
Property operating expenses 161 203
Property taxes and insurance 84 56
-------- --------
245 259
-------- --------
Income from operations of
investment properties held
for sale, net $ 151 $ 122
======== ========
4. Related Party Transactions
--------------------------
The Adviser earned basic management fees of $34,000 and $35,000 for the
three-month periods ended November 30, 1996 and 1995, respectively. Accounts
payable - affiliates at both November 30, 1996 and August 31, 1996 consists
of management fees of $33,000 payable to the Adviser.
Included in general and administrative expenses for the three months ended
November 30, 1996 and 1995 is $36,000 and $33,000, respectively, representing
reimbursements to an affiliate of the Managing General Partner for providing
certain financial, accounting and investor communication services to the
Partnership.
Also included in general and administrative expenses for the three months
ended November 30, 1996 and 1995 is $3,000 and $5,000, respectively,
representing fees earned by an affiliate, Mitchell Hutchins Institutional
Investors, Inc., for managing the Partnership's cash assets.
5. Contingencies
-------------
As discussed in more detail in the Annual Report, the Partnership is involved
in certain legal actions. At the present time, the Managing General Partner
cannot estimate the impact, if any, of these matters on the Partnership's
financial statements, taken as a whole.
<PAGE>
PAINEWEBBER MORTGAGE PARTNERS FIVE, L. P.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Spartan Place Shopping Center, in Spartanburg, South Carolina, was 35%
occupied as of November 30, 1996. As previously reported, Circuit City vacated
one of the anchor tenant spaces at the property during the quarter ended May 31,
1995 to move to a location they believed to be better suited to their future
operations. Circuit City had occupied 16,412 square feet at the Center and
remains obligated to pay annual base rent of approximately $112,000, plus its
pro rata share of operating expenses, through the end of its lease term, in
January 2008. In addition, management of Phar-Mor, another anchor tenant, which
occupied 26% of the leasable space at Spartan Place, closed its store at Spartan
Place and terminated its lease in July 1995 as part of its bankruptcy
reorganization plan. A number of smaller shop space tenants also either went out
of business or failed to renew their leases during fiscal 1995 and 1996.
Re-leasing the Circuit City and Phar-Mor spaces to high-profile, strong credit
tenants will be critical to increasing shopper traffic at the center which will
be necessary to retain the existing tenants and to lease the vacant shop space.
However, such re-leasing plans could require a significant expansion and/or
repositioning of the shopping center. Alternatively, management has considered a
possible sale of the property prior to undertaking any major re-leasing
commitments and potentially spending significant funds or assuming financing for
capital and tenant improvements. During fiscal 1996, the Partnership entered
into a preliminary agreement to sell the Spartan Place property to a third
party. Subsequent to the buyer's due diligence period, however, the offer to
purchase the property was withdrawn. Subsequent to the termination of this sales
contract, the Partnership has remarketed the property to other interested
parties while at the same time examining potential financing strategies for the
capital and tenant improvement costs to be incurred should the Partnership
decide to hold the property through the required re-leasing period. The
Partnership has identified financing sources that would provide non-recourse
loans to the Partnership for the leasing costs, provided lease terms can be
finalized with prospective new anchor tenants. If firm commitments to lease the
vacant anchor spaces at Spartan Place cannot be obtained in the near term,
management may conclude that a sale of the property in an "as-is" condition
would be in the best interests of the Limited Partners. At the present time,
real estate values for retail shopping centers in certain markets are being
adversely impacted by the effects of certain consolidations and bankruptcies
among retailers which have resulted in an oversupply of space and the generally
flat rate of growth in overall retail sales. Such conditions resulted in
management revising downward its estimate of the fair value of the Spartan Place
property to $4,000,000 as of August 31, 1996.
The wholly-owned Hacienda Plaza office and retail complex was 84% leased as
of November 30, 1996, up from 83% as of August 31, 1996. As previously reported,
a substantial amount of retail space and undeveloped land remains available
within the same planned development area in which the property is located.
However, overall occupancy rates for the local office market improved
considerably during fiscal 1996, reaching the mid to high-90% range. Such
improvement is primarily the result of the resurgence in the growth of the high
technology industries. As a result, rental rates in the Pleasanton, California
office market have improved in recent months. In addition, a portion of the land
in the planned development area in which Hacienda Plaza is located has been
re-zoned and is being developed for residential use. Any residential development
in the immediate vicinity of Hacienda Plaza would reduce the amount of
developable land available for new competing office space and would increase the
pedestrian traffic for the retail tenants at the Partnership's property. As a
result of these conditions, operations of the Hacienda Plaza investment property
have stabilized after several years of intense local office and retail market
competition. At November 30, 1996, the occupancy level of the office portion of
the property stood at 89% while the retail portion of the property was 78%
occupied. During the current quarter, an existing office tenant expanded into
approximately 6,000 square feet of available space from its previous 2,400
square feet. As a result of the improving market conditions, the remaining
available office space is expected to be leased at higher rental rates than the
average for the existing tenant leases. Occupancy of the retail portion of
Hacienda Plaza declined during the current quarter due to the expiration of a
lease covering 2,315 square feet of space. The Managing General Partner expects
to continue to make selective capital improvements aimed at enhancing marketing
and leasing efforts until market conditions favorable to a sale of the property
can be achieved.
Occupancy at the Park South Apartments in Charlotte, North Carolina, was
92% for the quarter ended November 30, 1996. Operations of the property continue
to fully support the debt service and ground lease payments owed to the
Partnership despite a recent weakening in market conditions for existing
properties in the greater Charlotte area. Over the past year, more than 3,900
new apartment units have been added to the overall Charlotte market.
Approximately 1,500 of these new units are in southeast Charlotte, where Park
South is located, and 708 of these new units are in Park South's submarket. In
addition, a new rental community is under construction within one mile of Park
South which will include 400 rental units, a retail center and a movie theater.
This property's pre-leasing program began in late August. In order to remain
competitive with these new units, Park South currently offers reduced rental
rates and/or discounted move-in rates to prospective tenants. As an incentive to
renew leases, current tenants are offered minimal increases at the expiration of
their leases. The use of rental concessions and renewal incentives is expected
to continue throughout fiscal 1997.
At November 30, 1996, the Partnership had available cash and cash
equivalents of $2,623,000. Such cash and cash equivalents will be used for the
working capital requirements of the Partnership, distributions to the partners
and, if necessary, for leasing costs related to the Spartan Place and Hacienda
Plaza properties. The quarterly distribution rate has been increased from 1% to
2% per annum on remaining invested capital. Distributions are expected to remain
at this level until Spartan Place is either sold or its operations have been
stabilized. The source of future liquidity and distributions to the partners is
expected to be from the operations and future sale of the two wholly-owned
investment properties, mortgage interest and land rent payments from the
Partnership's mortgage loan and ground lease investments, interest income on the
Partnership's cash reserves, the repayment of the mortgage loan receivable and
the sale of the underlying parcel of land. In addition, as discussed further
above, the Partnership may obtain certain secured borrowings to finance the
potential leasing costs to be incurred at the Spartan Place property.
Results of Operations
Three Months Ended November 30, 1996
- ------------------------------------
The Partnership's net income increased by $21,000 for the three months
ended November 30, 1996, when compared to the same period in the prior year. The
primary reason for the increase in net income is a $29,000 increase in income
from operations of investment properties held for sale. Income from operations
of investment properties held for sale increased due to an increase in net
operating income at Hacienda Plaza of $33,000. Net operating income at Hacienda
Plaza increased due to an increase in rental income and decreases in leasing
commissions and repairs and maintenance expenses. The increase in net operating
income at Hacienda Plaza was partially offset by a decrease in net operating
income at Spartan Place of $4,000 mainly due to an increase in capital
improvement expenses. The increase in income from operations of investment
properties held for sale was partially offset by an increase in the
Partnership's operating loss of $8,000. Operating loss increased mainly due to a
decrease in land rent revenue of $7,000. Land rent revenue decreased because the
Partnership did not receive any additional rent in excess of the specified base
amount from Park South Apartments pursuant to the terms of the ground lease
during the current three-month period.
<PAGE>
PART II
Other Information
Item 1. Legal Proceedings
- -------------------------
In November 1994, a series of purported class actions (the "New York Limited
Partnership Actions") were filed in the United States District Court for the
Southern District of New York concerning PaineWebber Incorporated's sale and
sponsorship of various limited partnership investments, including those offered
by the Partnership. The lawsuits were brought against PaineWebber Incorporated
and Paine Webber Group Inc. (together "PaineWebber"), among others, by allegedly
dissatisfied partnership investors. In March 1995, after the actions were
consolidated under the title In re PaineWebber Limited Partnership Litigation,
the plaintiffs amended their complaint to assert claims against a variety of
other defendants, including Fifth Mortgage Partners, Inc. and Properties
Associates 1985, L.P. ("PA1985"), which are the General Partners of the
Partnership and affiliates of PaineWebber. On May 30, 1995, the court certified
class action treatment of the claims asserted in the litigation.
The amended complaint in the New York Limited Partnership Actions alleged
that, in connection with the sale of interests in PaineWebber Mortgage Partners
Five, L.P., PaineWebber, Fifth Mortgage Partners, Inc. and PA1985 (1) failed to
provide adequate disclosure of the risks involved; (2) made false and misleading
representations about the safety of the investments and the Partnership's
anticipated performance; and (3) marketed the Partnership to investors for whom
such investments were not suitable. The plaintiffs, who purported to be suing on
behalf of all persons who invested in PaineWebber Mortgage Partners Five, L.P.,
also alleged that following the sale of the partnership interests, PaineWebber,
Fifth Mortgage Partners, Inc. and PA1985 misrepresented financial information
about the Partnership's value and performance. The amended complaint alleged
that PaineWebber, Fifth Mortgage Partners, Inc. and PA1985 violated the
Racketeer Influenced and Corrupt Organizations Act ("RICO") and the federal
securities laws. The plaintiffs sought unspecified damages, including
reimbursement for all sums invested by them in the partnerships, as well as
disgorgement of all fees and other income derived by PaineWebber from the
limited partnerships. In addition, the plaintiffs also sought treble damages
under RICO.
In January 1996, PaineWebber signed a memorandum of understanding with the
plaintiffs in the New York Limited Partnership Actions outlining the terms under
which the parties have agreed to settle the case. Pursuant to that memorandum of
understanding, PaineWebber irrevocably deposited $125 million into an escrow
fund under the supervision of the United States District Court for the Southern
District of New York to be used to resolve the litigation in accordance with a
definitive settlement agreement and plan of allocation. On July 17, 1996,
PaineWebber and the class plaintiffs submitted a definitive settlement agreement
which has been preliminarily approved by the court and provides for the complete
resolution of the class action litigation, including releases in favor of the
Partnership and the General Partners, and the allocation of the $125 million
settlement fund among investors in the various partnerships at issue in the
case. As part of the settlement, PaineWebber also agreed to provide class
members with certain financial guarantees relating to some of the partnerships.
The details of the settlement are described in a notice mailed directly to class
members at the direction of the court. A final hearing on the fairness of the
proposed settlement was held in December 1996, and a ruling by the court as a
result of this final hearing is currently pending.
In February 1996, approximately 150 plaintiffs filed an action entitled
Abbate v. PaineWebber Inc. in Sacramento, California Superior Court against
PaineWebber Incorporated and various affiliated entities concerning the
plaintiffs' purchases of various limited partnership interests, including those
offered by the Partnership. The complaint alleges, among other things, that
PaineWebber and its related entities committed fraud and misrepresentation and
breached fiduciary duties allegedly owed to the plaintiffs by selling or
promoting limited partnership investments that were unsuitable for the
plaintiffs and by overstating the benefits, understating the risks and failing
to state material facts concerning the investments. The complaint seeks
compensatory damages of $15 million plus punitive damages against PaineWebber.
In September 1996, the court dismissed many of the plaintiffs' claims as barred
by applicable securities arbitration regulations. Mediation with respect to the
Abbate action was held in December 1996. As a result of such mediation, a
tentative settlement between PaineWebber and the plaintiffs was reached which
would provide for complete resolution of such action. PaineWebber anticipates
that releases and dismissals with regard to this action will be received by
February 1997.
Under certain limited circumstances, pursuant to the Partnership Agreement
and other contractual obligations, PaineWebber affiliates could be entitled to
indemnification for expenses and liabilities in connection with the litigation
described above. However, PaineWebber has agreed not to seek indemnification for
any amounts it is required to pay in connection with the settlement of the New
York Limited Partnership Actions. At the present time, the General Partners
cannot estimate the impact, if any, of the potential indemnification claims on
the Partnership's financial statements, taken as a whole. Accordingly, no
provision for any liability which could result from the eventual outcome of
these matters has been made in the accompanying financial statements of the
Partnership.
Item 2. through 5. NONE
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: NONE
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed by the registrant during the quarter
for which this report is filed.
<PAGE>
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.
By: FIFTH MORTGAGE PARTNERS, INC.
Managing General Partner
By: /s/ Walter V. Arnold
--------------------
Walter V. Arnold
Senior Vice President and Chief
Financial Officer
Dated: January 13, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Partnership's audited financial statements for the quarter ended November 30,
1996 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> NOV-30-1996
<CASH> 2,623
<SECURITIES> 0
<RECEIVABLES> 1,337
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,709
<PP&E> 9,130
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,133
<CURRENT-LIABILITIES> 385
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 12,503
<TOTAL-LIABILITY-AND-EQUITY> 13,133
<SALES> 0
<TOTAL-REVENUES> 217
<CGS> 0
<TOTAL-COSTS> 97
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 120
<INCOME-TAX> 0
<INCOME-CONTINUING> 120
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 120
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
