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 period ended September 30, 1997
-----------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
Commission file number 0-15459
---------
McNEIL REAL ESTATE FUND XXIII, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 33-0139793
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (972) 448-5800
-----------------------------
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
<PAGE>
MCNEIL REAL ESTATE FUND XXIII, L.P.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
--------------- ---------------
ASSETS
- ------
Real estate investments:
<S> <C> <C>
Land..................................................... $ 239,966 $ 239,966
Buildings and improvements............................... 6,146,430 6,029,898
-------------- --------------
6,386,396 6,269,864
Less: Accumulated depreciation.......................... (3,121,146) (2,915,422)
-------------- --------------
3,265,250 3,354,442
Cash and cash equivalents................................... 333,042 193,812
Cash segregated for security deposits....................... 43,947 43,296
Accounts receivable and other assets........................ 14,304 13,249
Escrow deposits............................................. 72,736 96,624
-------------- -------------
$ 3,729,279 $ 3,701,423
============== =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- ------------------------------------------
Mortgage note payable, net of discount...................... $ 3,734,562 $ 3,758,380
Accounts payable and accrued expenses....................... 65,565 73,579
Accrued property taxes...................................... 91,719 43,519
Payable to affiliates - General Partner..................... 361,948 258,782
Security deposits and deferred rental revenue............... 52,917 42,553
-------------- --------------
4,306,711 4,176,813
-------------- --------------
Partners' equity (deficit):
Limited partners - 45,000,000 Units authorized;
11,512,696 and 11,622,696 Units outstanding at
September 30, 1997 and December 31, 1996, respectively
(6,651,985 and 6,681,985 Current Income Units out-
standing at September 30, 1997 and December 31, 1996,
respectively; 4,860,711 and 4,940,711 Growth/Shelter
Units outstanding at September 30, 1997 and December
31, 1996, respectively)................................ (5,428,872) (5,327,850)
General Partner.......................................... 4,851,440 4,852,460
-------------- --------------
(577,432) (475,390)
-------------- --------------
$ 3,729,279 $ 3,701,423
============== ==============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXIII, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------- ---------------------------------
1997 1996 1997 1996
-------------- --------------- -------------- --------------
Revenue:
<S> <C> <C> <C> <C>
Rental revenue................ $ 359,219 $ 341,968 $ 1,044,833 $ 986,535
Interest...................... 3,355 1,291 8,353 5,511
------------- ------------- ------------- -------------
Total revenue............... 362,574 343,259 1,053,186 992,046
------------- ------------- ------------- -------------
Expenses:
Interest...................... 85,260 91,447 258,284 274,990
Depreciation.................. 66,286 66,330 205,724 196,866
Property taxes................ 30,573 32,124 91,719 91,876
Personnel expenses............ 52,781 51,638 146,964 152,418
Utilities..................... 12,749 15,777 70,817 78,626
Repair and maintenance........ 70,197 67,416 152,421 157,626
Property management
fees - affiliates........... 17,963 16,966 52,380 49,238
Other property operating
expenses.................... 15,416 22,527 42,475 57,863
General and administrative.... 9,048 9,961 31,916 31,407
General and administrative -
affiliates.................. 33,477 31,794 102,528 102,650
Reorganization expenses....... - - - 5,362
------------- ------------- ------------- -------------
Total expenses.............. 393,750 405,980 1,155,228 1,198,922
------------- ------------- ------------- -------------
Net loss......................... $ (31,176) $ (62,721) $ (102,042) $ (206,876)
============= ============= ============= =============
Net loss allocated to
limited partners - Current
Income Units.................. $ (2,806) $ (5,645) $ (9,184) $ (18,619)
Net loss allocated to
limited partners - Growth/
Shelter Units................. (28,059) (56,449) (91,838) (186,188)
Net loss allocated to
General Partner............... (311) (627) (1,020) (2,069)
------------- ------------- ------------- ------------
Net loss......................... $ (31,176) $ (62,721) $ (102,042) $ (206,876)
============= ============= ============= =============
Net loss per thousand limited
partnership units:
Current Income Units.......... $ (.42) $ (.85) $ (1.38) $ (2.79)
============= ============= ============= =============
Growth/Shelter Units.......... $ (5.77) $ (11.42) $ (18.89) $ (37.68)
============= ============= ============== ==============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXIII, L.P.
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
For the Nine Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Equity (Deficit)
-------------- -------------- -----------------
<S> <C> <C> <C>
Balance at December 31, 1995.............. $ 4,854,261 $ (5,145,030) $ (290,769)
Redemption of limited partner units:
Current Income Units................... - (2,737) (2,737)
Growth/Shelter Units................... - (1,743) (1,743)
------------- ------------- -------------
Total redemption..................... - (4,480) (4,480)
------------- ------------- -------------
Net loss:
General Partner........................ (2,069) - (2,069)
Current Income Units................... - (18,619) (18,619)
Growth/Shelter Units................... - (186,188) (186,188)
------------- ------------- -------------
Total net loss....................... (2,069) (204,807) (206,876)
------------- ------------- -------------
Balance at September 30, 1996............. $ 4,852,192 $ (5,354,317) $ (502,125)
============= ============= =============
Balance at December 31, 1996.............. $ 4,852,460 $ (5,327,850) $ (475,390)
Net loss:
General Partner........................ (1,020) - (1,020)
Current Income Units................... - (9,184) (9,184)
Growth/Shelter Units................... - (91,838) (91,838)
------------- ------------- -------------
Total net loss....................... (1,020) (101,022) (102,042)
------------- ------------- -------------
Balance at September 30, 1997............. $ 4,851,440 $ (5,428,872) $ (577,432)
============= ============= =============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXIII, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------------------------
1997 1996
---------------- ----------------
Cash flows from operating activities:
<S> <C> <C>
Cash received from tenants............................... $ 1,059,977 $ 1,003,726
Cash paid to suppliers................................... (410,847) (540,114)
Cash paid to affiliates.................................. (51,742) (49,054)
Reorganization costs paid, net........................... - (5,362)
Interest received........................................ 8,353 5,511
Interest paid............................................ (245,296) (262,578)
Property taxes paid and escrowed......................... (67,646) (78,363)
-------------- --------------
Net cash provided by operating activities................... 292,799 73,766
-------------- --------------
Cash flows from investing activities:
Additions to real estate investments..................... (116,532) (113,791)
-------------- --------------
Cash flows from financing activities:
Principal payments on mortgage note
payable................................................ (37,037) (34,367)
Redemption of limited partner units...................... - (4,480)
-------------- --------------
Net cash used in financing activities....................... (37,037) (38,847)
-------------- --------------
Net increase (decrease) in cash and cash
equivalents.............................................. 139,230 (78,872)
Cash and cash equivalents at beginning of
period................................................... 193,812 233,222
-------------- --------------
Cash and cash equivalents at end of period.................. $ 333,042 $ 154,350
============== ==============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXIII, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Loss to Net Cash Provided by Operating Activities
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------------------------
1997 1996
---------------- -----------------
<S> <C> <C>
Net loss.................................................... $ (102,042) $ (206,876)
-------------- ---------------
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation............................................. 205,724 196,866
Amortization of discount on mortgage
note payable........................................... 13,219 12,627
Changes in assets and liabilities:
Cash segregated for security deposits.................. (651) 11,846
Accounts receivable and other assets................... (1,055) 9,718
Escrow deposits........................................ 23,888 21,654
Accounts payable and accrued expenses.................. (8,014) (57,539)
Accrued property taxes................................. 48,200 (9,038)
Payable to affiliates - General Partner................ 103,166 102,834
Security deposits and deferred rental
revenue.............................................. 10,364 (8,326)
-------------- --------------
Total adjustments.................................... 394,841 280,642
-------------- --------------
Net cash provided by operating activities................... $ 292,799 $ 73,766
============== ==============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXIII, L.P.
Notes to Financial Statements
(Unaudited)
September 30, 1997
NOTE 1.
- -------
McNeil Real Estate Fund XXIII, L.P. (the "Partnership"), formerly known as
Southmark Realty Partners III, Ltd., was organized on March 4, 1985 as a limited
partnership under provisions of the California Revised Limited Partnership Act
to acquire and operate residential properties. The general partner of the
Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited
partnership, an affiliate of Robert A. McNeil ("McNeil"). The principal place of
business for the Partnership and the General Partner is 13760 Noel Road, Suite
600, LB70, Dallas, Texas 75240.
In the opinion of management, the financial statements reflect all adjustments
necessary for a fair presentation of the Partnership's financial position and
results of operations. All adjustments were of a normal recurring nature.
However, the results of operations for the nine months ended September 30, 1997,
are not necessarily indicative of the results to be expected for the year ending
December 31, 1997.
NOTE 2.
- -------
The financial statements should be read in conjunction with the financial
statements contained in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1996, and the notes thereto, as filed with the
Securities and Exchange Commission, which is available upon request by writing
to McNeil Real Estate XXIII, L.P., c/o The Herman Group, 2121 San Jacinto St.,
26th Floor, Dallas, Texas 75201.
NOTE 3.
- -------
On June 30, 1994, the Partnership filed a voluntary petition for Chapter 11
reorganization. (The petition for Chapter 11 reorganization excluded the
Partnership's interest in Beckley Associates, the owner of Harbour Club II
Apartments.) The Partnership continued to conduct its affairs as a
debtor-in-possession, subject to the jurisdiction and supervision of the
Bankruptcy Court.
The Partnership's First Amended Plan of Reorganization ("Reorganization Plan"),
which contemplated a sale of Woodbridge Apartments, was submitted to the
Bankruptcy Court on February 13, 1995. The Partnership's Disclosure Statement of
Debtor-in-Possession ("Disclosure Statement") was approved by the Bankruptcy
Court on February 14, 1995.
<PAGE>
The Partnership's Reorganization Plan and Disclosure Statement were submitted
February 20, 1995, to a vote of the impaired creditors, as defined. The impaired
creditors included a class of creditors who had filed a judgment lien against
Woodbridge Apartments in connection with the Illinois rescission suit. The
judgment lien creditors filed objections to confirmation of the Reorganization
Plan. On April 18, 1995, the Bankruptcy Court did grant an order to sell
Woodbridge Apartments but denied confirmation of the Reorganization Plan. The
Partnership filed an appeal of the Bankruptcy Court's ruling and, in the
meantime, attempted to settle the matter with the judgment lien creditors, which
would allow for confirmation of the Reorganization Plan. On May 10, 1995, the
Reorganization Plan was amended to provide for full payment to the judgment lien
creditors. The Reorganization Plan, as amended, was subsequently confirmed by
the Bankruptcy Court on May 17, 1995.
Woodbridge Apartments was sold on May 25, 1995, and, in accordance with the
Reorganization Plan, the first and second mortgage notes payable and the related
outstanding accrued interest were paid. The Partnership also utilized $156,566
of the proceeds from the sale to pay the settlement and legal fees to the
judgment lien creditors, as discussed above.
On September 11, 1995, the Bankruptcy Court entered an Order Regarding
Objections to Claims that allowed the Partnership to pay outstanding
pre-petition claims totaling approximately $124,000 in October 1995.
The Reorganization Plan specified that advances and fees owed to affiliates of
the General Partner were limited to remaining cash, after the pre-petition
liabilities and reorganization expenses were paid. The Partnership had $37,228
of cash available to distribute to affiliate creditors. The remaining amounts
owed to affiliates of the General Partner as of May 17, 1995, were discharged
resulting in an extraordinary gain of $1,398,925 during the third quarter of
1995.
On August 15, 1995, the Partnership sent an election form to each limited
partner which allowed them to choose whether to redeem their interest in the
Partnership. The redemption price was 1/1000th of a dollar per Unit. The limited
partners were required to respond within 30 days, and at the close of the 30 day
period, 311 limited partners had elected to redeem 4,485,345 Units. In
connection with the redemption, the partnership obtained a "no-action" letter
from the Securities and Exchange Commission ("SEC") that provided that (1) the
redemption could be accomplished without compliance with Rule 13e-3 of the
Securities Exchange Act of 1934, and (2) the SEC did not intend to pursue an
enforcement action if the Reorganization Plan was consummated. Redemption of the
affected Units was completed in January 1996.
On November 18, 1995, the Partnership submitted a request for an Application to
Close Case to the Bankruptcy Court, which was entered on December 11, 1995, and
was approved on February 15, 1996.
Expenses incurred by the Partnership in connection with its Chapter 11 filing
have been expensed as "reorganization expenses" in the accompanying Statements
of Operations.
NOTE 4.
- -------
The Partnership pays property management fees equal to 5% of the gross rental
receipts for its property to McNeil Real Estate Management, Inc. ("McREMI"), an
affiliate of the General Partner, for providing property management and leasing
services.
<PAGE>
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
The Partnership incurs asset management fees which are payable to the General
Partner. Through 1999, the asset management fee is calculated as 1% of the
Partnership's tangible asset value. Tangible asset value is determined by using
the greater of (i) an amount calculated by applying a capitalization rate of 9%
to the annualized net operating income of each property or (ii) a value of
$10,000 per apartment unit to arrive at the property tangible asset value. The
property tangible asset value is then added to the book value of all other
assets excluding intangible items. The fee percentage decreases subsequent to
1999. Asset management fees accrued prior to the confirmation of the
Reorganization Plan were discharged pursuant to the Reorganization Plan. Total
accrued but unpaid asset management fees incurred subsequent to confirmation of
the Reorganization Plan in the amount of $184,388 were outstanding at September
30, 1997.
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner and its affiliates are as follows:
Nine Months Ended
September 30,
-------------------------
1997 1996
---------- ---------
Property management fees..................... $ 52,380 $ 49,238
Charged to general and administrative -
affiliates:
Partnership administration................ 44,037 55,650
Asset management fee...................... 58,491 47,000
--------- --------
$ 154,908 $ 151,888
========= ========
Payable to affiliates - General Partner at September 30, 1997, and December 31,
1996, consists primarily of unpaid asset management fees and reimbursable costs
that are due and payable from current operations.
NOTE 5.
- -------
The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern. The Partnership has suffered
recurring losses from operations. Operations at Harbour Club II Apartments, the
Partnership's sole remaining property, are expected to be sufficient to provide
cash for operating expenses and debt service for 1997. However, the property is
in need of major capital improvements in order to maintain occupancy and rental
rates at a level sufficient to fund operating expenses and debt service in
future years. The Partnership's cash reserves are inadequate to fund the needed
capital improvements, and it is unlikely that cash flow from operating
<PAGE>
activities will be sufficient to provide for the needed capital improvements. No
outside sources of financing have been identified. Although affiliates of the
Partnership have previously provided working capital for the Partnership, there
can be no assurance that the Partnership will receive additional funds from the
General Partner or other affiliates. If the Partnership is unable to obtain
additional funds and cannot maintain operations at a level to pay operating
expenses and debt service, Harbour Club II Apartments may ultimately be
foreclosed on by the lender.
These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnership's operating activities provided $292,799 for the first nine
months of 1997 as compared to $73,766 for the first nine months of 1996. The
increased cash flow from operations came from increased cash receipts from
tenants and decreased expenditures paid to suppliers. See the discussion of
increased rental revenues and decreased expenses below. Also in 1997, cash paid
to suppliers decreased due to a $50,000 refund of an escrow account for property
replacements maintained by the former mortgage note holder.
Cash used for additions to real estate improvements totaled $116,532 for the
nine months ended September 30, 1997, only a small increase over the $113,791
expended for improvements for the same period of 1996.
Scheduled monthly principal payments on the Partnership's mortgage note totaled
$37,037 for the nine months ended September 30, 1997 as compared to $34,367 for
the same period of 1996. In accordance with terms of the Partnership's
Reorganization Plan, the Partnership redeemed 4,485,345 limited partnership
units from the limited partners for a total of $4,480 during the first half of
1996.
Short-term liquidity:
At September 30, 1997, the Partnership held $333,042 of cash and cash
equivalents. The General Partner anticipates rental operations at Harbour Club
II Apartments for the remainder of 1997 will provide sufficient rental revenue
to pay for the operating expenses of the property and debt service payments on
the property's mortgage note. However, rental operations at Harbour Club II
Apartments are not expected to be sufficient to fund necessary capital
improvements to the property nor to pay the Partnership's other expenses. To the
extent available, the Partnership will use its cash reserves to fund limited
capital improvements and the Partnership's other expenses.
<PAGE>
Although the sale of Woodbridge Apartments in May 1995 provided some additional
cash reserves for the Partnership, the Partnership still faces liquidity
problems because of urgently needed capital improvements at Harbour Club II
Apartments for which no financing has been secured. Operating activities at
Harbour Club II Apartments for 1997 are expected to provide sufficient positive
cash flow for normal operating expenses and debt service payments. However, the
needed capital improvements will require the use of other sources of cash. No
such sources have been identified. The Partnership has no established lines of
credit from outside sources. Effective January 23, 1997, the mortgage note
payable was sold by HUD to an unaffiliated lender.
The General Partner has in the past, at its discretion, advanced funds to the
Partnership that were used to fund working capital requirements. Such advances
were discharged as a result of the Chapter 11 proceedings. The General Partner
is not obligated to advance funds to the Partnership and there is no assurance
that the Partnership will receive additional funds.
Long-term liquidity:
The Partnership has been in a distressed cash situation for several years.
Although Harbour Club II Apartments is able to operate in such a manner as to
provide for operating expenses and debt service payments, the property has not
proven the capability to produce the cash flow necessary for capital
improvements nor to support Partnership operations. The inability to make
necessary capital improvements has led to deteriorating conditions at the
property. In the opinion of management, if capital improvements are not made to
make the property more marketable, the estimated fair value of the property may
be further impaired.
These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
The Partnership determined to evaluate market and other economic conditions to
establish the optimum time to commence liquidation of the Partnership's property
in accordance with the terms of the Amended Partnership Agreement. Although
there can be no assurance as to the timing of the liquidation due to real estate
market conditions, the general difficulty of disposing of real estate, and other
general economic factors, it is anticipated that such liquidation would result
in the dissolution of the Partnership followed by a liquidating distribution to
Unitholders by December 2001.
Distributions
To maintain adequate cash balances, the Partnership suspended distributions to
Current Income Unit holders in 1988. There have been no distributions to
Growth/Shelter Unit holders. Distributions to Unit holders will remain suspended
for the foreseeable future. The General Partner will continue to monitor the
cash reserves and working capital needs of the Partnership to determine when
cash flows will support distributions to the Unit holders.
<PAGE>
FINANCIAL CONDITION
- -------------------
The occupancy rate at Harbour Club II Apartments increased to 93% at September
30, 1997. The occupancy rate at December 31, 1996, was 92%. Harbour Club II
Apartments was able to provide enough cash flow from operations to meet ordinary
operating expenses as well as the debt service for its related mortgage note for
the first nine months of 1997; however, as discussed above, the property is in
need of major capital improvements in order to compete in its local market.
Harbour Club II Apartments is part (Phase II) of a four-phase apartment complex
located in Belleville, Michigan. Phases I and III of the complex are owned by
partnerships in which the General Partner is the general partner; while Phase IV
is owned by an unaffiliated partnership. McREMI managed all four phases of the
complex until December 1992, when the property management agreement between
McREMI and the unaffiliated partnership was canceled. Additionally, in January
1993, Phase I defaulted on its mortgage note. In July 1997, the mortgage note
was reinstated after Phase I has made all the delinquent payments and late
charges. Regular monthly mortgage payments were resumed in July 1997.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Rental revenue at Harbour Club II Apartments increased $17,251 and $58,298, or
5.0% and 5.9%, for the three and nine month periods ended September 30, 1997,
respectively, as compared to the same periods of 1996. Increases in base rental
rates at Harbour Club II Apartments were the principal factor leading to the
increase in rental revenue. Vacancy and other rental losses were essentially
unchanged in 1997 compared to 1996.
Interest income increased 52% for the first nine months of 1997 as compared to
the same period of 1996. The increase is the result of increased levels of
Partnership cash and cash equivalents invested in interest-earning accounts.
Expenses:
Total Partnership expenses decreased $12,230 and $43,694, or 3.0% and 3.6%, for
the three and nine month periods ended September 30, 1997, respectively, as
compared to the same periods of 1996. Decreases in interest expense, utilities
and other property operating expenses were primarily responsible for the
decrease in total Partnership expenses.
Interest expense decreased $16,706 or 6.1% for the nine months ended September
30, 1997 as compared to the same period of 1996. The former holder of the
mortgage note, the Department of Housing and Urban Development ("HUD"), required
mortgage insurance premiums be paid with the scheduled monthly debt service
payments. Early in 1997, HUD sold its interest in the mortgage note to another
unaffiliated holder. The new note holder does not require mortgage insurance
premiums. This change accounts for $14,613 of the decrease in interest expense.
Utility expenses decreased $7,809 or 9.9% for the nine months ended September
30, 1997 as compared to the same period of 1996. Specifically, the Partnership
incurred decreased charges for electricity and for water and sewer charges in
1997.
<PAGE>
Other property operating expenses decreased $15,388 or 27% for the nine months
ended September 30, 1997 as compared to the same period of 1996. Approximately
60% of the decrease is attributable to decreased expenses for audits and other
regulatory compliance costs associated with the mortgage note held by HUD. The
new mortgage note holder does not require the Partnership to adhere to the
restrictive government reporting standards that were required when the mortgage
note was held by HUD. The Partnership also experienced a decrease in bad debt
losses in 1997 compared to 1996.
Reorganization expenses incurred by the Partnership in connection with its
Chapter 11 filing were $5,362 for the nine months ended September 30, 1996. No
such costs were incurred in 1997.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits.
Exhibit
Number Description
------- -----------
4. Amended and Restated Limited Partnership
Agreement dated March 30, 1992.
(Incorporated by reference to the Current
Report of the Registrant on Form 8-K dated
March 30, 1992, as filed on April 10, 1992).
11. Statement regarding computation of Net
Income (Loss) per Thousand Limited
Partnership Units: Net income (loss) per
thousand limited partner units is computed
by dividing net income (loss) allocated to
the limited partners by the weighted average
number of limited partnership units
outstanding expressed in thousands. Per unit
information has been computed based on 6,652
and 6,682 Current Income Units (in
thousands) outstanding in 1997 and 1996,
respectively, and 4,861 and 4,941
Growth/Shelter Units (in thousands)
outstanding in 1997 and 1996, respectively.
27. Financial Data Schedule for the quarter
ended September 30, 1997.
b) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended September 30, 1997.
<PAGE>
McNEIL REAL ESTATE FUND XXIII, L.P.
(Debtor-in-Possession)
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:
McNEIL REAL ESTATE FUND XXIII, L.P.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
November 13, 1997 By: /s/ Ron K. Taylor
- ----------------- ------------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)
November 13, 1997 By: /s/ Carol A. Fahs
- ----------------- ------------------------------------------
Date Carol A. Fahs
Vice President of McNeil Investors, Inc.
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 333,042
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,386,396
<DEPRECIATION> (3,121,146)
<TOTAL-ASSETS> 3,729,279
<CURRENT-LIABILITIES> 0
<BONDS> 3,734,562
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,729,279
<SALES> 1,044,833
<TOTAL-REVENUES> 1,053,186
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 896,944
<LOSS-PROVISION> 0
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