UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
Commission file number 0-15748
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 06-1149695
(State of Organization) (I.R.S. Employer Identification No.)
900 Cottage Grove Road, South Building
Bloomfield, Connecticut 06002
(Address of principal executive offices)
Registrant's telephone number, including area code: (203) 726-6000
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of Each Class)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(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
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Not applicable.
<PAGE>
TABLE OF CONTENTS
PART I Page
Item 1. Business 3
Item 2. Properties 7
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
PART II
Item 5. Market for Registrant's Common Equity and Related
Security Holder Matters 11
Item 6. Selected Financial Data 12
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Item 8. Financial Statements and Supplementary Data 17
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 30
PART III
Item 10. Directors and Executive Officers of the Registrant 30
Item 11. Executive Compensation 32
Item 12. Security Ownership of Certain Beneficial Owners
and Management 32
Item 13. Certain Relationships and Related Transactions 33
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 34
SIGNATURES 36
<PAGE>
PART I
Item 1. Business
The registrant, CIGNA Income Realty-I Limited Partnership (the
"Partnership"), was formed on October 15, 1985, under the Delaware Revised
Uniform Limited Partnership Act for the purpose of acquiring, operating,
holding for investment and disposing of industrial and office buildings and
service center space and, to a lesser extent, residential properties. On
February 4, 1986, the Partnership commenced an offering of $35,000,000
(subject to increase up to $50,000,000) of Limited Partnership Interests
(the "Units") at $250 per Unit, pursuant to a Registration Statement on
Form S-11 under the Securities Act of 1933 (Registration No. 33-1818).
The offering terminated on December 1, 1987, with a total of
200,000 Units having been sold to the public. The holders of 110,042 Units
representing 64,146 non-taxable and 45,896 taxable Units were admitted to
the Partnership in 1986; the holders of the remaining 89,958 Units,
representing 51,109 non-taxable and 38,849 taxable Units, were admitted to
the Partnership in 1987. From the 200,000 Units sold, the Partnership
received net proceeds of $45,463,209. The Limited Partners of the
Partnership share in the ownership of the Partnership's real property
investments according to the number of Units held. The Partnership is
engaged solely in the business of real estate investment. A presentation
of information about industry segments is not applicable.
The General Partner of the Partnership is CIGNA Realty Resources,
Inc.-Tenth (the "General Partner"), which is a wholly owned subsidiary of
CIGNA Financial Partners, Inc. ("CFP"), which is in turn a wholly owned
subsidiary of Connecticut General Corporation, which is in turn a wholly
owned subsidiary of CIGNA Holdings Inc., which is a wholly owned subsidiary
of CIGNA Corporation, a publicly held corporation whose stock is traded on
the New York Stock Exchange.
The Partnership has acquired three commercial properties (including
one owned through a joint venture) located in Missouri, Massachusetts and
Florida, and one residential property located in Arizona. In order to
acquire the properties, the Partnership, which purchased properties for all
cash, invested a total of $41,254,243 and paid $179,539 in acquisition
expenses and fees to non-affiliates. In conjunction with these purchases,
the Partnership owes acquisition fees of $2,500,000 to an affiliate of the
General Partner. Pursuant to the limited partnership agreement of the
Partnership ("Partnership Agreement"), the fees are payable from adjusted
cash from operations subordinated to a 6% non-cumulative, non-compounded
annual return to Limited Partners on their adjusted invested capital or, if
necessary, from cash from property sales. To date, no such fees have been
paid and the General Partner expects payment to be made as properties are
sold.
<PAGE>
The Partnership has made the real property investments set forth in
the following table:
<TABLE>
<CAPTION>
Acquisition
Name, Type of Property Purchase Fees and Date of Type of
and Location Prices Expenses Size(e) Purchase Ownership
(a)(b)(c) (d)
<S> <C> <C> <C> <C> <C>
1. Woodlands Tech $7,820,000 $605,586 98,400 07/03/86 100% fee
Center sq. ft. simple
St. Louis, MO interest
2. Westford 12,598,206 733,542 162,835 11/01/86 73.92% fee
Corporate Center sq. ft. simple
Westford, MA (f) interest
3. Piedmont Plaza 10,636,037 640,406 147,750 05/01/87 100% fee
Shopping Center sq. ft. simple
Apopka, FL (g) interest
4. Overlook 10,200,000 700,005 224 10/14/88 100% fee
Apartments units simple
Scottsdale, AZ interest
<FN>
(a) Excludes all broker fees.
<FN>
(b) The Partnership did not incur any debt in connection with the acquisition of
investment properties.
<FN>
(c) The table does not reflect purchase price adjustments resulting from earnout and
master lease provisions.
<FN>
(d) Pursuant to the Partnership Agreement, acquisition fees to affiliates will be
paid from adjusted cash from operations or, if necessary, from cash from
property sales.
<FN>
(e) Represents net leasable area at acquisition date; current net leasable area may
vary due to completion of tenant finish.
<FN>
(f) The Partnership owns a 73.92% interest in the Westford Joint Venture Partnership
(the "Venture") which owns the Westford Corporate Center. Connecticut General
Equity Properties-I Limited Partnership, an affiliated partnership, is the co-
venturer. The financial information shown represents the Partnership's share of
the total investment. Reference is made to the Notes to Consolidated Financial
Statements for a description of the joint venture partnership through which the
Partnership participates in this real property investment.
<FN>
(g) Piedmont Plaza added 21,052 square feet subsequent to acquisition. See Item 7.
</TABLE>
<PAGE>
The Northwestern St. Louis County service center market, where
Woodlands Tech is located, has shown improvement in 1994. The overall
occupancy level is 94.7%. Since early 1993, St. Louis County service
centers have surpassed the 90% occupancy level. Several factors are
attributable to the improvement. The tightness of the suburban office
market has caused a trickle down effect to the high finish service center
market. Cost conscious office space users are again considering the
service center due to a lack of available inventory and a perceived price
increase for traditional office space. The absence of any new, speculative
product being introduced to the market and only one new building (38,700
square feet) development has left limited alternatives for service center
users. Office absorption in St. Louis reached 1.2 million square feet in
1994. Class B/C properties are benefitting from low West County vacancy.
West County had 140,000 square feet of Class B/C absorption in the first
six months of 1994, compared to 14,000 square feet in all of 1993. As a
result of the floods in the Midwest in 1993, tenants were forced out of 2.1
million square feet of service center space, many of which have made
permanent relocations to service centers in West County.
Woodland Tech Center ended 1994 at 94% occupancy, comparable to West
County. Lease rates for office/warehouse space smaller than 40,000 square
feet have begun to edge up. Overall, the supply of available service
center space remains sufficient to keep lease rates stable. Asking rental
rates for service center space are between $6.00 and $12.00 per square
foot. Although the vacancy rate is low, St. Louis County service center
rates have not increased as dramatically as office, but average $.50 per
square foot higher than a year ago. At Woodlands Tech Center leasing is in
the $7.75-$8.50 range with tenant improvements of $7.50. Second generation
space can cost as little as $2.00 and as much as $12.00 per square foot.
Service center rates are averaging between $6-$9 for 50-100% office space. As
the percentage of office space increases, the higher the rate within this range.
Rates on larger spaces have appreciated more than small spaces due to a
scarcity of space over 10,000 square feet. These large blocks are readily
absorbed due to a trickle down effect from the County's tight office
market.
The outlook for metropolitan Boston is generally positive with job
growth resulting from diversification in the area's employment base. While
the manufacturing industry continues to downsize, the service sector-
related industry has seen modest gains. The Boston submarket where
Westford Corporate Center is located lies between Routes 128 and I-495 in
an area known as the Northwest Corridor. During 1994, the property
increased occupancy to 100%, up from 75% at the close of 1993. This was an
excellent achievement given the market still suffers from the effects of
downsizing in the high tech industry. The Northwest Corridor submarket in
which Westford directly competes currently has 10.3 million square feet of
space with an 11% vacancy rate. Absorption through the end of 1994
totalled 541,000 square feet; however, with 5.6 million square feet of
vacant space still available, the market remains soft. Rents and occupancy
levels in the market are expected to remain stagnant or see very negligible
upward movement as the market works through an estimated two to three year
supply of available R&D space.
The Piedmont Plaza is located in Apopka, Florida, north of Orlando, in
northwest Orange County on Route 436. The trade area emcompasses (5-mile
radius) an estimated population of 139,198 (51,484 households). By the
year 1999, population is expected to grow to 156,000. The average
household income is $50,333. Single family home prices in the Apopka
market range from $60,000 to $120,000. The major industry in Apopka is
agricultural. As a result of Apopka's affordable housing and its
convenient location on the axis of two main roads, Route 4 and State Road
436, many residents work in downtown Orlando. The main tourist attractions
of Orlando are Disney World, Epcot Center and MGM Studios, which are
approximately 20 miles south of Apopka. The success of Piedmont Plaza,
however, is not primarily dependent on the number of tourists visiting
these attractions. There are twenty-one centers that compete with Piedmont
Plaza. Twelve of these centers are anchored by two or more tenants. Major
tenants in the market include Albertsons, Sports Authority, Wal-Mart,
Service Merchandise, Food Lion, Publix, Eckerds, Winn Dixie, Goodings, K-
Mart, Beall's, Xtra, Target, and Home Depot. Despite all the strong
retailers, the market has a vacancy rate of approximately 20%; anchored
centers have a vacancy rate of 15%. Rental rates in the market range from
$6.00 per square foot for unanchored centers up to $12-$15 per square foot
for anchored centers. All of the competitors pass through CAM, taxes and
insurance on a pro rata basis. Average expense pass-throughs are $2.25 per
square foot. Leasing concessions are typically one month per term year for
existing centers in proven locations and two months per term year for newer
centers. Tenant improvement allowances are available, from $3-$6 per
square foot, particularly with a newer center. Occupancy at Piedmont has
improved steadily over the
<PAGE>
past two years since
the occupancy of Builder's Square, ending 1994 at 95%. Smaller retail
space at Piedmont is typically in the $8-$12 per square foot range with one
month free for each lease year. Tenant allowances range from $0-$10 per
square foot as several stores do not have bathroom facilities built out.
Overlook Apartments is located in Scottsdale, Arizona, approximately
20 miles outside of downtown Phoenix. The Phoenix apartment market has
finally recovered from a state of imbalance which was caused by the extreme
over-building in the mid 1980s. New building permit activity peaked in
1984 at over 32,000 permits, but has declined steadily since then to less
than 2,000 per year in the last four years. The Phoenix economy continues
to improve, largely due to continued growth in population. This
improvement is most notably exhibited by the fact that unemployment in
Phoenix continues to fall well below the national average. The average
Phoenix unemployment rate for 1993 was 5.1% compared to 6.4% for 1992. The
projected average unemployment rates for 1994 and 1995 are 4.9% and 4.7%,
respectively. Currently, both the Phoenix metro area, and Scottsdale in
particular, are experiencing strong economic growth. The economic downturn
of the late 1980s and early 1990s has ended, and the forecast for the next
few years is for continued steady growth. Scottsdale's economy has
performed better than most communities for a number of reasons. These
include demographics, employment, construction and tourism. The residents
of Scottsdale tend to be older, better educated, and more affluent than the
average Phoenix metro area resident. The median age is currently 39.1
(versus 32.0 for the metro area), 66% have had at least some college
education (versus 45% for the metro area), and the estimated median family
income in 1990 was $48,202 (versus $36,078 for the metro area). Currently,
nearly 50% of the residents of Scottsdale have household incomes over
$50,000. As a result of this higher median annual income, the housing
market in Scottsdale is largely based around single-family homes.
As Scottsdale is continuing to be targeted as the "hot spot" for
development, both single-family and multi-family housing development
continue to increase. The northeast area of Scottsdale, near Overlook, is
an active area in the development of single-family planned communities.
The purchase of these new homes will continue to affect Overlook in 1995,
as long-term apartment residents buy homes. The North Scottsdale sub-
market is an incredibly competitive area for multi-family housing. The
market currently has 7,082 units in inventory with the potential 5,277 new
units to enter this market by the end of 1995. The multi-family
development will affect Overlook to a lessor extent, as much of the
development is occurring in north central Scottsdale with the exception of
one new development underway 0.5 miles west of Overlook. This 200+ unit
community will be "high-end" with garages. It is not projected to
significantly impact Overlook. The sub-market in which Overlook competes,
known as the Adobe Ranch market, currently consists of 5 properties
totalling 1,228 units. The average rent in the Adobe Ranch market is $560
a month versus $569 a month at Overlook. Overlook ended the year with
occupancy of 98%. While some of the competing complexes offer a wider
range of amenities, Overlook compensates by providing excellent on-site
service, well-maintained grounds, and a desirable location which offers
both easy access and mountain views. No concessions were necessary during
the year to maintain rents and occupancy. Turnover and occupancy are
expected to remain stable during 1995.
Approximate occupancy levels for the properties on a quarterly basis
are set forth in the table in Item 2.
The Partnership itself has no employees; however, the unaffiliated
property managers engaged by CIGNA Investments, Inc. ("CII", formerly CIGNA
Capital Advisers, Inc.) on behalf of the Partnership maintain on-site
staff. For a description of asset management services provided by CII and
the terms of transactions between the Partnership and affiliates of the
General Partner, see Item 13 below and the Notes to Consolidated Financial
Statements.
<PAGE>
The following list details gross revenues for each of the
Partnership's investment properties as a percentage of the Partnership's
total gross revenues during 1992, 1993 and 1994. Excluded from this
calculation is the joint venture partner's share of the gross revenues of
the Westford joint venture. In each year, interest income accounted for
the balance of gross revenues.
1992 1993 1994
1. Woodlands Tech Center
St. Louis, MO 23% 21% 17%
2. Westford Corporate Center
Westford, MA 20% 22% 24%
3. Piedmont Plaza Shopping Center
Apopka, FL 14% 23% 26%
4. Overlook Apartments
Scottsdale, AZ 38% 33% 31%
Losses from "passive activities" (which include any rental activity)
may only offset income from "passive activities". The Partnership is
engaged in passive activities and therefore its investors are subject to
these rules. Investors' passive losses in excess of passive income from
all sources are suspended and are carried over to future years when they
may be deducted against passive income generated by the Partnership in such
year (including gain recognized on the sale of the Partnership's assets) or
against passive income derived by investors from other sources. Any
suspended losses remaining subsequent to Partnership dissolution may be
used by investors to offset ordinary income.
Item 2. Properties
The Partnership owns the properties described in Item l herein. The
lease terms at the commercial properties generally range from three to
twenty years. Most of the leases contain provisions for one or more of the
following: automatic escalation, common area maintenance recapture and
recapture for operating expenses and taxes. See the Notes to Consolidated
Financial Statements for information regarding minimum future rentals under
existing leases and operating expense reimbursements. The residential
property generally has lease terms of one year or less. In the opinion of
the General Partner, the Partnership's properties are adequately insured.
Woodlands Tech Center is a single-story suburban masonry
office/warehouse located in west St. Louis county. The building was
completed in 1986 and purchased by the Partnership on July 3, 1986. The
7.6 acre site contains a net leasable area of approximately 97,554 square
feet. The space layout includes up to 24 suites (which may be combined)
ranging in size from 2,521 to 16,848 square feet. Ceiling heights are 8'6"
in the office space and 12' in the service center space. All spaces are
served by either a dock high or grade level track door. The spaces have
separate HVAC units and are fully sprinklered.
<PAGE>
The following table provides information on tenants that occupy ten
percent or more of Woodland Tech Center's net leasable area:
<TABLE>
<CAPTION>
Tenant Square Principal Base Lease Renewal Other
Footage Business Rent Per Dates Option Information
Annum
<S> <C> <C> <C> <C> <C> <C>
1. Honeywell, Inc. 16,848 Computer $153,864 01/01/91- Step up
Manufacturer 08/31/97 -- rents
2. ALTECH of 10,069 Computer $67,968 02/01/93- 1, 1 year --
Ladue, Inc. Sales/Leasing 01/31/96 ext.option
</TABLE>
The following table provides lease expiration information relative to
Woodlands Tech Center:
<TABLE>
<CAPTION>
Year Number of Square Annualized Percentage of
Leases Footage Base Rent Total
Expiring Annualized Base
Rent
<S> <C> <C> <C> <C>
1995 2 11,110 $110,193 15%
1996 7 40,157 $305,448 41%
1997 3 28,725 $236,496 32%
1998 1 3,505 $29,616 4%
1999 2 7,976 $60,372 8%
</TABLE>
The Westford property consists of two 2-story R&D/office buildings
containing 163,247 square feet of net rentable area (81,623 square feet
each). The property is located in Westford, Massachusetts, at the
interchange of Boston Road and Interstate 495. The construction consists
of steel frame with an exterior masonry finish. Each building has state of
the art features which include sprinklers, variable air volume HVAC, two
passenger elevators and security systems.
The following table provides information on tenants that occupy ten
percent or more of Westford Corporate Center's net leasable area:
<TABLE>
<CAPTION>
Tenant Square Principal Base Lease Renewal Other
Footage Business Rent Per Dates Option Information
Annum
<S> <C> <C> <C> <C> <C> <C>
1. Intel Corporation 16,469 Computer $173,748 08/15/85- -- --
Manufacturer 11/30/95
2. Cascade 65,146 Communications $372,238 10/01/93- 1, 3 year Step up
Communication 03/31/99 ext.option rents
Corporation
3. Sentry Insurance 81,632 Insurance $938,768 03/27/92- 1, 5 year --
03/26/99 ext.option
</TABLE>
<PAGE>
The following table provides lease expiration information relative
to Westford Corporate Center:
<TABLE>
<CAPTION>
Year Number of Square Annualized Percentage of
Leases Footage Base Rent Total
Expiring Annualized Base
Rent
<S> <C> <C> <C> <C>
1995 1 16,469 $173,748 12%
1999 2 146,778 $1,311,006 88%
</TABLE>
Piedmont Plaza is a one level, two-anchor, neighborhood strip
shopping center built in 1985. One anchor, Albertson's Supermarket, owns
their store and parking and is not a tenant. Small shop square footage
ratio to total center is 27% (38% of owned gross leasable area). The
property contains net leasable area of 150,700 square feet. The property
is located in Apopka, Florida, in northwest Orange County, on a major
commuter Route 436 (Semoran Boulevard) but with limited visibility of small
shop space from the main road. There is also an additional enclosed area
created for the Builders Square garden center and lumber yard.
The following table provides information on tenants that occupy ten
percent or more of Piedmont Plaza's net leasable area:
<TABLE>
<CAPTION>
Tenant Square Principal Base Lease Renewal Option Other
Footage Business Rent Per Dates Information
Annum
<S> <C> <C> <C> <C> <C> <C>
1. Builder's 107,400 Home $590,700 09/01/92- 10, 5 year Percentage
Square Improvement 08/31/12 ext. options rent
Retailer
</TABLE>
The following table provides lease expiration information relative
to Piedmont Plaza:
<TABLE>
<CAPTION>
Year Number of Square Annualized Percentage of
Leases Footage Base Rent Total
Expiring Annualized Base
Rent
<S> <C> <C> <C> <C>
1995 -- -- -- --
1996 4 17,800 $95,839 11%
1997 2 3,350 $27,575 3%
1998 2 2,400 $23,594 3%
1999 3 5,350 $64,004 7%
Thereafter 4 114,100 $680,755 76%
</TABLE>
<PAGE>
The following table compares approximate occupancy levels by
quarter for the Partnership's investment properties during 1990, 1991,
1992, 1993 and 1994:
Woodlands Tech Westford Piedmont Plaza Overlook
Center Corporate Shopping Center Apartments
St. Louis, MO Center Apopka, FL Scottsdale, AZ
Westford, MA
(a)
1990
At 89% 100% 79% 92%
03/31
At 91% 100% 93% 87%
06/30
At 96% 100% 97% 97%
09/30
At 92% 60% 27% 92%
12/31
1991
03/31 76% 10% 27% 89%
At 76% 10% 25% 90%
06/30
At 74% 10% 25% 98%
09/30
At 82% 10% 19% 94%
12/31
1992
03/31 82% 60% 16% 95%
At 85% 60% 17% 92%
06/30
At 85% 60% 87% 90%
09/30
At 90% 60% 89% 98%
12/31
1993
03/31 100% 60% 91% 99%
At 100% 60% 91% 91%
06/30
At 100% 60% 91% 96%
09/30
At 95% 75% 92% 99%
12/31
1994
At 95% 75% 92% 99%
03/31
At 100% 85% 94% 97%
06/30
At 94% 100% 93% 99%
09/30
At 94% 100% 95% 98%
12/31
(a) See the notes to Consolidated Financial Statements for a
description of the joint venture partnership through which the
Partnership has made this real property investment. The
Partnership owns a 73.92% interest in the joint venture which owns
the property.
<PAGE>
Item 3. Legal Proceedings
Neither the Partnership nor its properties are party to or the
subject of any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for Registrant's Common Equity and Related Security Holder
Matters
As of December 31, 1994, there were approximately 3,972 record
holders of Units. There is no established public trading market for Units.
The General Partner will not redeem or repurchase the Units.
The Revenue Act of 1987 adopted provisions which have an adverse
impact on investors in a "publicly traded partnership" ("PTP"). A PTP is a
partnership whose interests are traded on an established securities market
or readily tradable on a secondary market (or the substantial equivalent
thereof). If Registrant were classified as a PTP, (i) Registrant may be
taxed as a corporation, or (ii) income derived from an investment in
Registrant would be treated as non-passive income. In Notice 88-75, the
IRS established alternative safe harbors that allow interests in a
partnership to be transferred or redeemed in certain circumstances without
causing the partnership to be characterized as a PTP. Units of Registrant
are not listed or quoted for trading on an established securities exchange.
However, CFP will, upon request, provide a Limited Partner desiring to sell
or transfer Units with a list of secondary market firms which may provide a
means for matching potential sellers with potential buyers of Units, if
any. Frequent sales of Units utilizing these services could cause
Registrant to be deemed a PTP. Registrant has adopted a policy prohibiting
transfers of Units in secondary market transactions unless, notwithstanding
such transfers, Registrant will satisfy at least one of the safe harbors.
Although such a restriction could impair the ability of investors to
liquidate their investment, the service provided by CFP described above
should allow a certain number of transfers to be made in compliance with
the safe harbor. It is anticipated that such policy will remain in effect
until such time, if ever, as further clarification of the Revenue Act of
1987 permits Registrant to lessen the scope of these restrictions.
The Partnership declared quarterly cash distributions to limited
partners for 1994 and 1993 as set forth in the following table:
Cash Distribution per Unit
Quarter Date Paid 1994 1993
1st May 15 $3.12 $2.25
2nd August 15 3.12 3.00
3rd November 15 3.12 3.00
4th February 15 4.50 3.00
$13.86 $11.25
(a) Quarterly distributions are paid 45 days following the end of the
calendar quarter.
Reference is made to Item 6 for information on cash distributions paid
to limited partners during 1994, 1993, 1992, 1991, and 1990.
There are no material legal restrictions upon the Partnership's
ability to make distributions in accordance with the provisions of the
Partnership Agreement. The Partnership intends to continue its policy of
making quarterly distributions of distributable cash from operations.
Reference is made to the Notes to Consolidated Financial Statements for a
description of payments to the State of Connecticut on behalf of limited
partners and charged to limited partner capital accounts.
<PAGE>
Item 6. Selected Financial Data (a)
<TABLE>
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
December 31, 1994, 1993, 1992, 1991 and 1990
(not covered by Report of Independent Accountants)
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Total income (b) $5,019,967 $4,289,754 $3,462,774 $3,102,718 $5,077,800
Net income (loss) (c) 1,244,897 954,378 (6,219,956) (99,127) 1,992,688
Net income (loss)per Unit(c) 6.16 4.72 (30.79) (0.49) 9.86
Total assets (b) 32,525,759 33,782,661 35,176,295 44,162,951 45,294,013
Cash distributions to limited
partners (d) 2,472,000 2,400,000 2,562,000 1,248,000 2,068,211
Cash distributions perUnit(d) 12.36 12.00 12.81 6.24 10.34
<FN>
(a)The above selected financial data should be read in conjunction with the
consolidated financial statements and the related notes herein. Reference
is made to the Notes to Consolidated Financial Statements for a description
of payments to the State of Connecticut on behalf of limited partners.
These payments are charged to limited partner capital accounts and have not
been included as part of the above presentation.
<FN>
(b)Total income excludes the venture partner's share of income and total
assets exclude venture partner's equity interest. See the Notes to
Consolidated Financial Statements for a description of the joint venture.
<FN>
(c)Losses due to permanent impairment of assets are included in 1994 of
$280,000 ($1.39 per Unit) and in 1992 of $6,408,960 ($31.72 per Unit), net
of the venture partner's share.
<FN>
(d)Quarterly distributions are paid and recorded in the Partnership's
records as distributions 45 days following the close of the calendar
quarter. This information reflects data as of the dates recorded in the
Partnership's records.
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
From the $50,000,000 of Gross Proceeds of the offering, after deducting
selling expenses and other offering costs, the Partnership had $45,463,209
with which to make investments in real property, to pay other costs related
to such investments and for working capital reserves. At December 31,
1988, the Partnership had completed its investment of funds in real estate
at an aggregate cost of $41,254,243 and paid $179,539 in acquisition
expenses and fees to non-affiliates. Acquisition fees to affiliates in the
amount of $2,500,000 will be paid from adjusted cash from operations after
priority distributions to limited partners, or if necessary, from cash from
sale proceeds.
Each of the Partnership's four properties were purchased subject to
master lease agreements which ensured the Partnership of certain minimums
from rental income. By the end of 1989, all of the agreements had expired
and the Partnership received a total of $1,242,668. These funds were not
included in operating revenue since, for accounting purposes, they are
treated as a reduction of purchase price. In addition, two of the
properties' purchase agreements called for earnout payments, additions to
the purchase price, if the properties attained certain income levels. No
payments were earned or paid under the Overlook agreement and $308,589 was
earned and paid under the Woodlands Tech agreement. This payment was
accounted for as an addition to the purchase price.
At December 31, 1994, the Partnership's cash and cash equivalents,
excluding the joint venture's cash and cash equivalents, totalled
$1,503,790. The Partnership's share of cash and cash equivalents from the
Westford Office Venture was $1,405,233. Cash and cash equivalents will be
used to fund liabilities and partnership working capital reserves. Capital
improvements and leasing commissions are expected to be funded by cash from
operations as required. The Partnership paid distributions for the first,
second and third quarters of 1994 of $624,000 or $3.12 per Unit on May 15,
1994, August 15, 1994 and November 15, 1994, respectively, and for the
fourth quarter of $900,000 or $4.50 per Unit on February 15, 1995
approximating each quarter's adjusted cash from operations. The
Partnership's operations for 1995 should support continued distributions
from operations, subject to changes in reserves for liabilities or leasing
risk.
From the proceeds of the offering, the Partnership set aside a reserve
of $550,000 to fund a capital improvement program at the Piedmont Plaza
Shopping Center. During 1990, the property's anchor filed for bankruptcy
and, by December 31, 1990, vacated their space. By the end of 1991, the
Partnership had $160,000 remaining from the offering reserve, and
established an additional reserve of $1,552,350 accumulated from
Partnership operations. During 1991, a lease was signed with a new anchor
tenant. The lease required major renovations and a 21,052 square foot
expansion. The new anchor tenant moved into the expanded space at the
beginning of September 1992. The Partnership incurred approximately
$2,260,000 in lease up costs for the new anchor, including leasing
commissions and relocation costs of two smaller tenants. The reserves set
aside by the Partnership for Piedmont were depleted during 1992 along with an
additional $550,000 from the Partnership operating reserves.
Since the opening of Piedmont's new anchor's store in the third quarter
of 1992, the property has successfully leased much of the previously
vacated smaller space. Adjusted cash from operations for the year totalled
$860,000 after capital improvements and leasing commissions of $43,000.
The physical occupancy at December 31, 1994, stood at 95%. No significant
leasing activity is planned. Now that occupancy and net operating income
have stabilized, the General Partner plans to operate the property for the
remainder of 1995 and begin to market the property for sale in an attempt
to capitalize on the increase in the property's value from the new anchor.
Westford Corporate Center is owned by a joint venture partnership in
which the Partnership owns a 73.92% equity investment. Adjusted cash from
operations at Westford Corporate Center for 1994 was $734,000 ($543,000
attributable to the Partnership's interest) after tenant improvements and
leasing commissions of $256,000. During the second quarter, an existing
tenant expanded by an additional 10% of total space. During the third
quarter, the tenant
<PAGE>
expanded further, leasing the remaining 15% of vacant space. The third
quarter expansion has brought the property to 100% occupancy by September
30, 1994. A sale of the Westford property, 73.92% owned through a joint
venture, may be held off until the existing tenants' leases reach
expiration and are renewed or the space is leased to new tenants in 1998 or
1999.
Adjusted cash from operations at Woodlands Tech for 1994 was $489,000
after capital improvements and leasing commissions of $74,500. Leasing for
the first six months included two new tenants totalling 5,378 square feet.
During the third quarter, a tenant occupying 6,682 square feet did not
renew their lease, as expected. Additionally, the property lost two
tenants occupying 5,913 of square feet during the third quarter. The
Partnership collected a $21,701 lease termination fee from the 2,521 square
foot tenant and was able to execute two new leases totalling 6,897 square
feet. The property ended the year with a physical occupancy of 94%. For
1995, the focus will be leasing 11,110 square feet of vacating space as a
result of lease expirations and leasing 3,560 of the existing vacant space.
Tenant improvements and leasing commissions are estimated at $155,000. The
Partnership's long term strategy includes a sale in approximately three
years.
Overlook has provided consistently strong results for the Partnership
throughout 1994. Adjusted cash from operations for 1994 totalled
approximately $977,000 including $16,000 of capital improvements. The
market in which Overlook operates has stabilized, allowing the property to
raise rates 5% during 1994 and eliminate rental concessions. Rental rates
will edge up again in 1995 as renewals and turnover occurs. The
Partnership's long term strategy for the property includes a holding period
of approximately four years.
Results of Operations
Partnership net operating income, (total revenue less property
operating expenses, general and administrative expenses, fees and
reimbursements to affiliates and provision for doubtful accounts) inclusive
of the venture partner's share of Venture, increased in 1994 to
approximately $3,288,000 compared to approximately $2,543,000 in 1993.
Significant improvements in property operations at Overlook Apartments,
Piedmont Plaza and Westford Corporate Center led to the positive result.
Increased occupancy at the Piedmont and Westford properties and continued
strong occupancy and rent increases at the Overlook property more than
offset decreased net operating income at Woodlands Tech Center, due
primarily to lower leasing rental rates.
At Piedmont Plaza, the anchor tenant which took occupancy in September
1992 continued to attract smaller tenants to the center. Average occupancy
for 1994 increased approximately 3.5% over 1993. During the third quarter,
the Partnership settled a dispute with the anchor tenant and collected
additional expense recovery amounts relating partially to 1992, 1993 and
1994. In addition, during the fourth quarter the Partnership recorded a
$100,000 bankruptcy settlement from the former anchor tenant. The result
was an approximately $312,000 increase in net operating income for 1994 as
compared with 1993.
During the third quarter of 1993, a lease was signed at Westford
Corporate Center for 24,585 square feet for occupancy on October 1, 1993.
The tenant subsequently expanded 15,507 and 25,054 square feet in April and
September of 1994, respectively. As a result, the Westford joint venture
net operating income increased approximately $348,000 for 1994 versus 1993,
of which the Partnership's share was approximately $257,000.
At Woodlands Tech Center net operating income decreased approximately
$63,000 in 1994 due primarily to decreased rental rates on new leases
signed in 1994 as compared to the rates of vacating tenants. The decrease
was offset by the receipt of a lease termination fee of approximately
$22,000.
Increased revenues at Overlook Apartments due to increased average
occupancy and stronger rates in 1994 were partially offset by increased
expenses for painting and refrigerator compressor replacements. The result
was an approximate $88,000 increase in net operating income in 1994 as
compared to 1993.
The balance of the increase in Partnership net operating income for
1994 was due primarily to increased interest
<PAGE>
income due to a higher average cash balance available and increased rates.
Results - 1994 compared with 1993
Base rental income increased approximately $340,000 for the year ended
December 31, 1994, as compared with 1993. The turnover of tenants and
signing of new leases increased rents by approximately $23,000 at Piedmont
Plaza and decreased rents at Woodlands Plaza by approximately $42,000. The
decrease at Woodlands was partially offset by the receipt in 1994 of a
lease termination fee of approximately $22,000. At Westford Corporate
Center, rent from a 24,585 square foot lease executed in the third quarter
of 1993 and the tenant's subsequent 15,507 and 25,054 square foot expansions
on April 1, 1994 and September 1, 1994, respectively, added approximately
$221,000 to the increase. Rental income at Overlook Apartments increased
approximately $116,000 as a result of rental rate increases, averaging 5%
upon renewal or turnover, and a reduction in concessions as the market
strengthened.
Other income increased approximately $464,000 for the year ended
December 31, 1994, as compared to 1993. Piedmont reported a $300,000
increase, principally related to expense recoveries from the anchor tenant
and a bankruptcy claim settlement from the former anchor tenant. Westford
posted an approximate $158,000 increase due primarily to expense charge-
back billings relating to the newly leased space.
Interest income increased for the year ended December 31, 1994, as
compared to 1993, due to an increase in the Partnership's average cash
balance and higher interest rates on short term investments.
Property operating expenses increased for the year ended December 31,
1994, as compared to 1993. Piedmont's repair and maintenance expense
increased as a result of the replacement of water and sewer meters,
partially offset by a decrease in roof repairs. Property taxes at Piedmont
increased slightly as a result of an increase in assessed value. Westford
had an increase in cleaning, maintenance and management fee expenses, and,
due to the extreme winter, spent substantially more on snowplowing in early
1994. Property taxes at Westford decreased as a result of a successful
property tax appeal (fiscal year is July 1, 1993 to June 30, 1994). The
tax appeal resulted in a decrease to the assessed value and a refund which
was received and posted to second quarter results. Repairs and maintenance
expense at Overlook Apartments increased due to carpet and refrigerator
compressor replacement expenditures and a painting and vinyl replacement
project.
The provision for doubtful accounts in 1993 related to a collection of
expense reimbursements problem at Piedmont Plaza.
Depreciation and amortization for the year ended December 31, 1994, as
compared with 1993, increased as a result of new tenant improvements and
leasing commissions at Westford and Woodlands and accelerated depreciation
and amortization of assets associated with vacated tenants at Woodlands.
In 1994 the Partnership recorded a permanent impairment loss relative
to Piedmont Plaza due to estimated future cash flow declines reflecting a
change in the estimated holding period.
The joint venture operations improved for the year ended December 31,
1994, as compared with 1993, due to a new tenant taking occupancy in the
fourth quarter of 1993 and its subsequent expansions in the second and
third quarters of 1994.
Results - 1993 compared with 1992
Base rental income increased to approximately $4,055,000 for the year
ended December 31, 1993, as compared with approximately $3,172,000 for
1992, as a result of increased occupancy at the Partnership's properties.
The impact of new tenants at Piedmont Plaza contributed approximately
$462,000 to the increase. At Westford Corporate Center, the new tenants
added approximately $226,000 to the increase. Woodlands Tech Center
tenants also
<PAGE>
contributed approximately $86,000 to the increase in base rental income.
Rental income at Overlook Apartments increased approximately $109,000 in
1993 as a result of higher average occupancy and also modest rental rate
increases and decreased concessions.
Other income increased approximately $125,000 for the year ended
December 31, 1993, as compared to 1992, due to expense charge-back billings
to the new major tenants at Piedmont and Westford. Piedmont reported a
$49,000 increase (net of a $23,000 adjustment to 1992 property tax
receivables from its anchor tenant). Westford posted a $67,000 increase
for the year.
Interest income decreased for the year ended December 31, 1993, as
compared with 1992, due to a lower cash balance available for short term
investment as reserves were adjusted downward through cash distributions to
limited partners.
Property taxes increased as a result of increases in assessed values at
Piedmont and Westford and an increase in Westford's mill rate.
Additionally, Piedmont's repairs and maintenance expenses increased as a
result of HVAC and roof repairs. Westford had growth in expenses
associated with the new tenants such as electricity expense and janitorial
services. Due to the extreme winter, Westford also spent substantially
more on snowplowing. Management fees were up approximately $88,000 as a
result of the gains in revenues.
The provision for doubtful accounts in 1992 was due to collection
problems at Piedmont Plaza after the loss of the previous anchor tenant in
late 1991.
Depreciation and amortization for the year ended December 31, 1993, as
compared with 1992, posted a net decrease mainly as a result of the 1992
permanent impairment losses at Piedmont Plaza and Westford Corporate
Center. The decrease was partially offset by increased depreciation and
increased amortization of leasing commissions at Westford and Piedmont.
The joint venture operations improved for the year ended December 31,
1993, as compared with 1992, due to the new tenants in 1992 and 1993.
Inflation
With inflation at a low rate during 1994, 1993 and 1992, the effect of
inflation and changing prices on current revenue and income from operations
has been minimal.
Any significant inflation in future periods is likely to increase
rental rates (from leases to new tenants or renewals of leases
to existing tenants) assuming no major changes in market conditions. At
the same time, it is anticipated that property operating expenses will be
similarly affected. Assuming no major changes in occupancy levels,
increases in rental income are expected to cover inflation driven increases
in the cost of operating the properties and in property taxes. Inflation
may also contribute to capital appreciation of the Partnership's investment
properties over a period of time as rental rates and replacement costs of
properties increase.
The escalation clauses and recapture provisions that exist on certain
leases at Woodlands Tech Center, Westford Corporate Center and Piedmont
Plaza offer the Partnership some protection against inflation.
Escalation clauses dilute the increases in operating expenses due to
inflation. As operating expenses attributable to inflation increase, so
will the escalation revenues due to the Partnership, offsetting, at least
in part, the increase in total expenses. The recapture provisions protect
the Partnership from rising costs of common area maintenance as well as
taxes and other operating expenses by passing through, at least partially,
these increases to the lessees.
<PAGE>
Item 8. Financial Statements and Supplementary Data
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
Index
Page
Report of Independent Accountants 18
Financial Statements:
Balance Sheets, December 31, 1994 and 1993 19
Statements of Operations, For the Years Ended December 31, 1994,
1993 and 1992 20
Statements of Partners' Capital, For the Years Ended December 31, 1994,
1993 and 1992 21
Statements of Cash Flows, For the Years Ended December 31, 1994, 1993
and 1992 22
Notes to Financial Statements 23
Schedules:
III - Real Estate and Accumulated Depreciation,
December 31, 1994 29
Schedules not filed:
All schedules other than those indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the financial statements or related notes.
<PAGE>
Report of Independent Accountants
To the Partners of
CIGNA Income Realty - I
Limited Partnership
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of CIGNA
Income Realty - I Limited Partnership at December 31, 1994 and 1993, and
the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Partnership's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally
accepted auditing standards which 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, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Hartford, Connecticut
February 17, 1995
<PAGE>
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
<TABLE>
Consolidated Balance Sheets
December 31, 1994 and 1993
<CAPTION>
Assets 1994 1993
<S> <C> <C>
Property and improvements, at cost:
Land and improvements $9,492,296 $9,596,173
Buildings 27,310,597 27,469,861
Tenant improvements 5,168,282 4,891,532
Furniture and fixtures 820,904 815,435
42,792,079 42,773,001
Less accumulated depreciation 11,635,309 10,115,121
Net property and improvements 31,156,770 32,657,880
Cash and cash equivalents 3,404,809 3,049,518
Accounts receivable (net of allowance of $725
in 1994 and $3,777 in 1993) 375,506 316,697
Prepaid expenses and other assets 20,614 8,066
Deferred charges, net 611,084 691,097
Total $35,568,783 $36,723,258
</TABLE>
<TABLE>
<CAPTION>
Liabilities and Partners' Capital
<S> <C> <C>
Liabilities:
Accounts payable (including $20,526 in 1994 and
$40,742 in 1993 due to affiliates) $211,187 $255,217
Tenant security deposits 108,426 94,348
Unearned income 14,252 12,069
Deferred acquisition fees due to
affiliates 2,500,000 2,500,000
Total liabilities 2,833,865 2,861,634
Venture partner's equity in joint venture 3,043,024 2,940,597
Partners' capital:
General Partner:
Capital contributions 1,000 1,000
Cumulative net income 25,640 13,191
26,640 14,191
Limited partners (200,000 Units):
Capital contributions, net of
offering costs 45,463,209 45,463,209
Cumulative net income 2,538,389 1,305,941
Cumulative cash distributions (18,336,344) (15,862,314)
29,665,254 30,906,836
Total partners' capital 29,691,894 30,921,027
Total $35,568,783 $36,723,258
<FN>
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
<TABLE>
Consolidated Statements of Operations
For the Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
<S> <S> <S> <S>
Income:
Base rental income $4,394,632 $4,054,590 $3,172,104
Other income 943,355 479,468 354,893
Interest income 121,905 89,689 190,876
5,459,892 4,623,747 3,717,873
Expenses:
Property operating expenses 1,588,395 1,484,361 1,251,347
General and administrative 419,267 427,975 434,424
Fees and reimbursements to affiliates 161,006 154,472 99,249
Provision for doubtful accounts 3,519 13,794 54,944
Depreciation and amortization 1,660,381 1,568,450 1,727,741
Loss due to permanent impairment
of assets 280,000 -- 7,400,000
4,112,568 3,649,052 10,967,705
Income (loss) inclusive of venture
partner's share of
venture operations 1,347,324 974,695 (7,249,832)
Venture partner's share
of venture (income) loss (102,427) (20,317) 1,029,876
Net income (loss) $1,244,897 $954,378 $(6,219,956)
Net income (loss):
General Partner $12,449 $9,544 $(62,200)
Limited partners 1,232,448 944,834 (6,157,756)
$1,244,897 $954,378 $(6,219,956)
Net income (loss) per Unit $6.16 $4.72 $(30.79)
Cash distributions per Unit $12.37 $12.01 $12.84
<FN>
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
<TABLE>
Consolidated Statements of Partners' Capital
For the Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
General Limited
Partner Partners Total
<S> <S> <S> <S>
Balance at December 31, 1991 $66,847 $41,089,549 $41,156,396
Cash distributions -- (2,568,239) (2,568,239)
Net loss (62,200) (6,157,756) (6,219,956)
Balance at December 31, 1992 4,647 32,363,554 32,368,201
Cash distributions -- (2,401,552) (2,401,552)
Net income 9,544 944,834 954,378
Balance at December 31, 1993 14,191 30,906,836 30,921,027
Cash distributions -- (2,474,030) (2,474,030)
Net income 12,449 1,232,448 1,244,897
Balance at December 31, 1994 $26,640 $29,665,254 $29,691,894
<FN>
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
<PAGE>
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
<TABLE>
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1994, 1993 and 1992
<CAPTION>
1994 1993 1992
<C> <C> <C>
Cash flows from operating activities:
Net income (loss) $1,244,897 $954,378 $(6,219,956)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Deferred rent credits 30,682 5,588 10,716
Provision for doubtful accounts 3,519 13,794 54,944
Depreciation and amortization 1,660,381 1,568,450 1,727,741
Loss due to permanent
impairment of assets 280,000 -- 7,400,000
Venture partner's share of venture's operations
and loss due to permanent
impairment of assets 102,427 20,317 (1,029,876)
Accounts receivable (62,328) (157,448) (65,278)
Accounts payable (13,283) 5,309 44,527
Other, net 3,713 39,403 40,032
Net cash provided by
operating activities 3,250,008 2,449,791 1,962,850
Cash flows from investing activities:
Purchases of property
and improvements (330,303) (288,267) (2,963,584)
Payment of leasing commissions (90,862) (73,314) (583,078)
Net cash used in investing
activities (421,165) (361,581) (3,546,662)
Cash flows from financing activities:
Cash distributions to limited
partners (2,473,552)(2,403,507) (2,564,732)
Net increase (decrease) in cash
and cash equivalents 355,291 (315,297) (4,148,544)
Cash and cash equivalents,
beginning of year 3,049,518 3,364,815 7,513,359
Cash and cash equivalents, end of year $3,404,809 $3,049,518 $3,364,815
Supplemental disclosure of non-cash information:
Accrued purchase of property
and improvements $ -- $31,225 $ --
<FN>
The Notes to Consolidated Financial Statements are an integral part of these statements.
</TABLE>
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
<PAGE>
Notes to Consolidated Financial Statements
1.Organization and Basis of Accounting
The General Partner of CIGNA Income Realty-I Limited Partnership (the
"Partnership") is CIGNA Realty Resources, Inc. - Tenth (the "General
Partner"), an indirect wholly owned subsidiary of CIGNA Corporation.
The accompanying consolidated financial statements include the
accounts of the Partnership and its consolidated venture, Westford Office
Venture. The effect of all transactions between the Partnership and the
consolidated venture have been eliminated.
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting purposes and are adjusted for federal
income tax reporting. The net effects of the adjustments as of December 31,
1994, 1993 and 1992, principally relating to the classification of
syndication costs, permanent impairment losses and differences in
depreciation methods, are summarized as follows:
<TABLE>
<CAPTION>
1994 1993 1992
Financial Tax Financial Tax Financial Tax
Reporting Reporting Reporting Reporting Reporting Reporting
<S> <C> <C> <C> <C> <C> <C>
Total assets $35,568,783 $44,459,133 $36,723,258 $45,291,922 $38,096,575 $46,624,888
Partners' capital:
General Partner 26,640 101,973 14,191 85,261 4,647 75,077
Limited partners 29,665,254 41,531,782 30,906,836 42,351,326 32,363,554 43,744,637
Net income (loss)(a):
General Partner 12,449 16,712 9,544 10,184 (62,200) 4,348
Limited partners 1,232,448 1,654,486 944,834 1,008,241 (6,157,756) 430,403
Net income (loss) 6.16 14.59- 4.72 11.43- (30.79) 8.35-
per Unit(a) (.34) (3.64) (6.29)
<FN>
(a) Included in 1994 and 1992 are $280,000 ($1.39 per Unit) and
$6,408,960 ($31.72 per Unit) of losses due to permanent
impairment of assets for financial reporting.
</TABLE>
For tax reporting only, all depreciation is allocated 1% to the
General Partner and 99% to the taxable limited partners in accordance with
the Partnership Agreement. The two amounts on a per Unit basis presented
for 1994, 1993 and 1992 for tax reporting represent the differing
allocations to taxable and nontaxable limited partners.
2. Summary of Significant Accounting Policies
a) Property and Improvements: Property and improvements are
recorded at cost less accumulated depreciation. The cost
represents the initial purchase price, subsequent capitalized
costs and adjustments, including certain acquisition expenses and
permanent impairment losses. Amounts received under master lease
agreements from the sellers of the properties have been treated
as a reduction of purchase price. Payments to the seller of the
Woodlands Tech Center under an earnout provision have been
treated as an increase in purchase price.
<PAGE>
Depreciation on property and improvements is calculated on the
straight-line method based on the estimated useful lives of the
real property (15 to 31.5 years), tangible personal property (7
years) and tenant improvements (respective lease terms).
Maintenance and repair expenses are charged to operations as
incurred.
As a result of inherent changes in market values of real estate
property and improvements, the Partnership reviews potential
impairment annually. The undiscounted future cash flows for each
property, as estimated by the Partnership, are compared to the
net book value. If the carrying value is greater than the sum of
the estimated future undiscounted cash flows, and deemed
permanent, an impairment loss is recorded.
In November 1993, the Financial Accounting Standards Board issued
a Proposed Statement of Financial Accounting Standards,
"Accounting for the Impairment of Long-Lived Assets". Under the
Proposed Statement, entities should continue to compare the sum
of the expected undiscounted future net cash flows to the
carrying amount of the asset. If an impairment exists, the loss
shall be measured as the amount by which the carrying value of
the asset exceeds the fair value of the asset. Fair value of the
asset shall be measured by its market value if an active market
for that asset exists. If no market price is available, a
forecast of expected discounted future net cash flows should be
used. The discount rate applied should be commensurate with the
risk involved. The effective date of a final statement is fiscal
years beginning after June 15, 1995. The effect of the Proposed
Statement on the financial position and results of operations of
the Partnership in the year of adoption can not be reasonably
estimated.
b) Cash and Cash Equivalents: Short-term investments with a
maturity of three months or less at the time of purchase are
generally reported as cash equivalents.
c) Deferred Charges: Deferred charges consist of leasing
commissions and rental concessions that are being amortized using
the straight-line method over the respective lease terms.
d) Partners Capital: Offering costs comprised of sales commissions
and other issuance expenses have been charged to the partners'
capital accounts as incurred.
e) Income Taxes: No provision for income taxes has been made as the
liability for such taxes is that of the partners rather than the
Partnership.
f) Basis of Presentations: Certain amounts in the 1992 and 1993
financial statements have been reclassified to conform with the
1994 presentation.
3. Investment Properties
The Partnership has acquired, either directly or through a joint
venture, two commercial office complexes, one shopping plaza and one
apartment complex located in Missouri, Massachusetts, Florida and Arizona,
respectively. Leases in effect are generally for a term of twenty years or
less for the commercial properties, and for one year or less for the
residential property. No mortgage debt was incurred in the purchases.
With respect to the Partnership's accounting policy for
impairment of assets, the Partnership has recognized permanent impairment of
asset losses in 1994 and 1992. In 1994, the Partnership recorded an
impairment of $280,000 relative to Piedmont Plaza due to a reduction in the
estimated holding period. In 1992, the Partnership
<PAGE>
recorded impairments of $3,600,000 and $3,800,000 relative to Piedmont Plaza
and Westford Corporate Center, respectively. At Piedmont, estimated future
cash flows declined reflecting changes in estimated potential revenue from
future leasing. As a result of the oversupply of space and the continued
downward pressure on rental rates in the market which Piedmont operates,
expected future rental rates would be renewed and/or renegotiated at lower
rates. At Westford, the estimated holding period was reduced.
4. Deferred Charges
Deferred charges at December 31, 1994 and 1993 consist of the
following:
1994 1993
Deferred leasing commissions $1,038,495 $ 947,633
Accumulated amortization (484,872) (344,679)
553,623 602,954
Deferred rent credits 57,461 88,143
$ 611,084 $ 691,097
5. Venture Agreements
The Partnership has acquired a 73.92% interest in the Westford
Office Venture (the "Venture"), which owns the Westford Corporate Center in
Westford, Massachusetts. The remaining equity interest in the Venture is
held by Connecticut General Equity Properties-I Limited Partnership, an
affiliated limited partnership.
Summary financial information for the Venture as of and for the
years ended December 31, 1994, 1993 and 1992 follows:
1994 1993 1992
Total assets $12,671,892 $12,343,992 $12,236,605
Total liabilities 749,320 814,161 784,678
Total income 1,686,829 1,280,650 978,140
Net income (loss)(a) 392,741 77,904 (3,948,912)
(a) 1992 includes a $3,800,000 loss due to permanent impairment
of assets.
Pursuant to the Joint Venture Agreement, net income or loss,
cash distributions from operations, net income and distributable cash from
the sale or disposition of the property are generally allocated to the
venturers in accordance with their percentage capital contributions.
Percentage interests are subject to change if any future contributions made
by the venturers to the Venture are disproportionate to their percentage
interests.
No distributions were made by the Venture in 1994, 1993 or
1992.
<PAGE>
6. Leases
All of the commercial properties have leases currently in
effect which have been accounted for as operating leases. The majority have
terms which range from three to five years. Following is a schedule of
minimum annual future rentals based upon non-cancelable leases currently in
effect, assuming no exercise of tenant renewal options.
Year ending December 31:
1995 $3,028,558
1996 2,651,567
1997 2,380,939
1998 2,153,288
1999 1,075,359
Thereafter 7,768,617
Certain of the leases contain escalation and expense recapture
clauses which provide that tenants will pay their pro rata share of any
increases in common area maintenance, taxes and other operating expenses
over base period amounts. The Partnership earned $636,926 in 1994, $367,523
in 1993 and, $224,596 in 1992 as a result of such provisions.
7. Transactions with Affiliates
An affiliate of the General Partner provided investment
property acquisition services to the Partnership for fees of $2,500,000
which will be payable from adjusted cash from operations after priority
distributions to the Partners or, if necessary, from sales proceeds.
Fees and other expenses related to the General Partner or its
affiliates during the periods ended December 31, 1994, 1993 and 1992 are as
follows:
1994 1993 1992
Property management fee (a)(b) $297,014 $276,079 $190,622
Printing 10,127 12,382 13,732
Reimbursement (at cost) for
out of pocket expenses 40,927 34,048 39,277
(a) In 1994, 1993 and 1992, $187,062, $168,037 and $144,382, respectively,
of these fees were for services contracted by CIGNA Investments, Inc.,
an affiliate of the General Partner, on behalf of the Partnership but
paid directly by the Partnership to independent third party property
management companies.
(b) In 1994, 1993 and 1992, $26,418, $18,727 and $14,958, respectively, was
attributable to the joint venture partner's share of the Venture.
<PAGE>
8. Partners' Capital
During 1991, the State of Connecticut enacted new income tax
legislation, a part of which affects partnerships. The portfolio income
allocations made by the Partnership to the limited partners are considered
Connecticut based income and subject to Connecticut tax. On April 13, 1994,
the Partnership paid the tax due on its 1993 Form CT-G State of Connecticut
Group Income Tax Return. The Partnership has elected to pay the
tax due on the limited partners' share of portfolio income and, therefore,
paid tax due of $1,552 directly to the State of Connecticut. The
Partnership also accrued the 1994 estimated payment of $2,030 as of December
31, 1994. These amounts were treated as reductions of partners' capital and
reported as distributions in the accompanying financial statements.
9. Partnership Agreement
Pursuant to the terms of the Partnership Agreement, net income or loss
before depreciation and cash distributions from operations are to be
allocated 1% to the General Partner and 99% to the Limited Partners. All
depreciation in each taxable year shall be allocated 1% to the General
Partner and 99% to the taxable Limited Partners. Cash distributions from
operations are generally allocated as follows:
- 100% to the Limited Partners until each Limited Partner has
received aggregate distributions in respect of the fiscal year of
the Partnership equal to 6% non-cumulative and non-compounded on
Adjusted Invested Capital, as defined.
- 100% to the General Partner until it has received aggregate
distributions in respect of the fiscal year of the Partnership
equal to 1% non-cumulative and non-compounded of the sum of all
amounts distributed to the Limited Partners pursuant to item 1
above and all amounts received by the General Partner pursuant to
this item 2.
- 100% to the General Partner or its Affiliates in an amount equal to
any acquisition fees which remain unpaid.
- 100% to an affiliate of the General Partner as a subordinated
incentive management fee in an amount generally equal to 9% of
adjusted cash from operations, but only after the Partners have
received their priority distributions pursuant to items 1 and 2
above.
- The remainder, 99% to the Limited Partners and 1% to the General
Partner.
Net income or loss from the sale or disposition of investment
properties is to be generally allocated as follows:
- To each Partner having a negative balance in his capital account in
the proportion in which such Partner's negative balance bears to
the aggregate of the negative balances of all Partners.
- To the Partners who received allocations of depreciation in the
same ratio as the amount of such depreciation previously allocated.
- To the Partners to the extent of, and in proportion to, the amount
of cash distributions from sales to be received by each, other than
the return of original invested capital.
- To the Partners in proportion to the cash from sales distributed in
the return of original invested capital.
<PAGE>
Distributable cash from the sale or disposition of investment
properties is to be generally allocated in the following order:
- 100% to the General Partner or its affiliates in an amount equal to
any acquisition fees which remain unpaid.
- 100% to the Limited Partners until each Limited Partner has
received aggregate distributions equal to his original invested
capital.
- 100% to the Limited Partners until each Limited Partner has
received distributions in an aggregate amount which shall be equal
to a 10% per annum cumulative non-compounded return on his adjusted
invested capital.
- To an affiliate of the General Partner in payment of a subordinated
disposition fee in an amount equal to the lesser of 3% of the gross
sales price of the property or one-half of the normal and
competitive rate charged for similar services by unaffiliated
parties.
- With respect to the remainder, 85% to the Limited Partners and 15%
to the General Partner.
10. Subsequent Events
On February 15, 1995, the Partnership paid a cash distribution of
$900,000 to the limited partners.
<PAGE>
<TABLE>
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP SCHEDULE III
(a Delaware limited partnership
and Consolidated Venture)
Real Estate and Accumulated Depreciation
<CAPTION>
December 31, 1994
Initial Cost to Partnership (A)(B) Costs
Capitalized
Subsequent to Accumulated Date of Date Life on Which
Acquisition(C) Depreciation Construction Acquired Depreciation
Land, Building (F) in Latest
Improvements Statement of
Land and Land Buildings and Furniture and and Furniture Operations is
Description Improvements Improvements Fixtures and Fixtures Computed
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Woodlands Tech $1,245,400 $6,090,171 $ -- $1,263,886 $2,738,458 1986 07/03/86 2-31.5 years
Center
St. Louis, MO
Westford 3,223,875 13,759,689 -- (2,273,205) 4,209,052 1986 11/01/86 2-31.5 years
Corporate Center(G)
Westford, MA
Piedmont Plaza 4,367,093 6,201,165 -- (1,312,827) 2,301,171 1985 05/01/87 2-31.5 years
Shopping Center
Apopka, FL
Overlook 2,932,103 6,462,901 788,608 43,220 2,386,628 1988 10/14/88 7-27.5 years
Apartments
Scottsdale, AZ
Totals $11,768,471 $32,513,926 $788,608 $(2,278,926) $11,635,309
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at Which Carried at Close of Period (D)(E)
Land and Land Building and Tenant Furniture
Improvements Improvements Improvements and Total
Fixtures
Description
<S> <C> <C> <C> <C> <C>
Woodlands Tech $1,245,400 $6,159,375 $1,194,682 $ -- $8,599,457
Center
St. Louis, MO
Westford 2,501,875 10,716,382 1,492,102 -- 14,710,359
Corporate Center(G)
Westford, MA
Piedmont Plaza 2,801,995 3,971,938 2,481,498 -- 9,255,431
Shopping Center
Apopka, FL
Overlook 2,943,026 6,462,902 -- 820,904 10,226,832
Apartments
Scottsdale, AZ
Totals $9,492,296 $27,310,597 $5,168,282 $820,904 $42,792,079
<FN>
(A) The cost to the Partnership represents the initial purchase price of the
properties including certain acquisition fees and expenses. In accordance
with the Partnership Agreement, all properties were acquired without incurring any long-term debt.
<FN>
(B) The Partnership received $516,550, $245,531, $173,232 and $371,389 from the
sellers of Woodlands Tech Center, Westford Corporate Center, Piedmont Plaza and Overlook
Apartments, respectively, under master lease agreements, which were treated as
a reduction of initial cost. The Partnership paid $308,589 under an earnout agreement with the
sellers of Woodlands Tech Center, which was treated as an addition to initial cost.
<FN>
(C) Includes permanent impairment losses in 1994 relative to Piedmont Plaza in the amount of
$280,000 and in 1992 relative to Piedmont Plaza and Westford Corporate Center in the
amounts of $3,600,000 and $3,800,000, respectively.
<FN>
(D) The aggregate cost of the real estate owned at December 31, 1994 for federal income
tax purposes is $49,480,907.
<FN>
(E) Reconciliation of real estate owned:
</TABLE>
<TABLE>
<CAPTION>
Description 1994 1993 1992
<S> <C> <C> <C>
Balance at beginning of period $42,773,001 $42,453,509 $47,132,714
Additions during period 299,078 319,492 2,720,795
Reductions during period(C) (280,000) -- (7,400,000)
Balance at end of period $42,792,079 $42,773,001 $42,453,509
<FN>
(F) Reconciliation of accumulated depreciation:
</TABLE>
<TABLE>
<CAPTION>
Description 1994 1993 1992
<S> <C> <C>
Balance at beginning of period $10,115,121 $8,652,572 $7,011,670
Additions during period 1,520,188 1,462,549 1,640,902
Balance at end of period $11,635,309 $10,115,121 $8,652,572
<FN>
(G) Includes ownership interest of the venture partner.
</TABLE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
The General Partner of the Partnership, CIGNA Realty Resources,
Inc.-Tenth, a Delaware corporation, is an indirectly, wholly owned
subsidiary of CIGNA Corporation, a publicly held corporation whose stock is
traded on the New York Stock Exchange. The General Partner has
responsibility for and control over the affairs of the Partnership.
The directors and executive officers of the General Partner as of
February 28, 1995, are as follows:
Name OfficeServed Since
R. Bruce Albro DirectorMay 2, 1988
Philip J. Ward DirectorMay 2, 1988
John Wilkinson DirectorSeptember 7, 1993
John D. Carey President, Controller
September 7, 1993
September 4, 1990
Verne E. Blodgett Vice President, CounselApril
2, 1990
Joseph W. Springman Vice President, Assistant
Secretary September 7, 1993
David C. Kopp SecretarySeptember 29, 1989
Marcy F. Blender TreasurerAugust 1, 1994
There is no family relationship among any of the foregoing directors or
officers. There are no arrangements or understandings between or among said
officers or directors and any other person pursuant to which any officer or
director was selected as such.
The foregoing directors and officers are also officers and/or directors
of various affiliated companies of CIGNA Realty Resources, Inc. - Tenth,
including CIGNA Financial Partners, Inc. (the parent of CIGNA Realty
Resources, Inc. - Tenth), CIGNA Investments, Inc., CIGNA Corporation (the
parent of CIGNA Investments, Inc.) and Connecticut General Corporation (the
parent of CIGNA Financial Partners, Inc.).
<PAGE>
The business experience of each of the directors and executive officers
of the General Partner of the Partnership is as follows:
R. BRUCE ALBRO - DIRECTOR
Mr. Albro, age 52, a Senior Managing Director of CIM, joined
Connecticut General's Investment Operations in 1971 as a Securities Analyst
in Paper, Forest Products, Building and Machinery. Subsequently, he served
as a Research Department Unit Head, as an Assistant Portfolio Manager, then
as Director of Equity Research and a member of the senior staff of CIGNA
Investment Management Company and as a Portfolio Manager in the Fixed Income
area. He then headed the Marketing and Merchant Banking area for CII.
Prior to his current assignment of Division Head, Portfolio Management
Division, he was an insurance portfolio manager, and prior to that, he was
responsible for Individual Investment Product Marketing. In addition, Mr.
Albro currently serves as President of the CIGNA Funds Group and other CIGNA
affiliated mutual funds. Mr. Albro received a Master of Arts degree in
Economics from the University of California at Berkeley and a Bachelor of
Arts degree in Economics from the University of Massachusetts at Amherst.
PHILIP J. WARD - DIRECTOR
Mr. Ward, age 46, is Senior Managing Director and Division Head of
CIGNA Investment Management (CIM), in charge of the Real Estate Investment
Division of CIM. He was appointed to that position in December 1985. Mr.
Ward joined Connecticut General's Mortgage and Real Estate Department in
1971 and became an officer in 1976. Since joining the company he has held
real estate investment assignments in Mortgage and Real Estate Production
and in Portfolio Management. Prior to his current position, Mr. Ward held
assignments in CIGNA Investments Inc., responsible for the Real Estate
Production area, CIGNA Realty Advisors, Inc. and Congen Realty Advisory
Company, all wholly-owned subsidiaries of CIGNA Corporation and/or
Connecticut General. Mr. Ward has held various positions with the General
Partner. His experience includes all forms of real estate investments, with
recent emphasis on acquisitions and joint ventures. Mr. Ward is a 1970
graduate of Amherst College with a Bachelor of Arts degree in Economics. He
is a member of the Society of Industrial and Office Realtors, the National
Association of Industrial and Office Parks, the Urban Land Institute and the
International Council of Shopping Centers. He is a member of the Board of
Directors of DeBartolo Realty Corporation and Cadillac Fairview, Inc.
JOHN WILKINSON - DIRECTOR
Mr. Wilkinson, age 51, is Senior Vice President and Chief Financial
Officer of the CIGNA Individual Insurance Division. He was appointed to
that position in January 1992. Mr. Wilkinson joined the company in 1970 and
became an officer in 1978. In 1981 he joined CIGNA Individual Financial
Services Division (now CIGNA Individual Insurance) and was appointed Vice
President in 1988 in that Division. Mr. Wilkinson continued to work in the
Insurance Marketing area as Vice President until he was appointed to his
current position. Mr. Wilkinson is a 1965 graduate of the U.S. Naval
Academy. He is a Registered Principal of CIGNA Financial Advisors, Inc., a
Fellow of the Society of Actuaries, a member of the American Academy of
Actuaries, a Chartered Life Underwriter and Chartered Financial Counsellor.
JOHN D. CAREY - PRESIDENT, CONTROLLER
Mr. Carey, age 31, joined CIGNA in 1990. Prior to joining CIGNA, he
held the position of manager at KPMG Peat Marwick in the audit department
and was a member of the Real Estate Focus Group. His experience includes
accounting and financial reporting for public and private real estate
limited partnership syndications. Mr. Carey is a graduate of Central
Connecticut State University with a Bachelor of Science Degree and is a
Certified Public Accountant.
<PAGE>
VERNE E. BLODGETT - VICE PRESIDENT, COUNSEL
Mr. Blodgett, age 57, is an Assistant General Counsel of CIGNA
Corporation. He joined Connecticut General Life Insurance Company in 1975
as an investment attorney and has held various positions in the Legal
Division of Connecticut General Life Insurance Company prior to his
appointment as Assistant General Counsel in 1981. Mr. Blodgett received a
Bachelor of Arts degree from Yale University and graduated with honors from
the University of Connecticut School of Law. He is a member of the
Connecticut and the American Bar Associations.
JOSEPH W. SPRINGMAN - VICE PRESIDENT, ASSISTANT SECRETARY
Mr. Springman, age 53, is Managing Director and department head
responsible for asset management. He joined CIGNA's Real Estate operations
in 1970. He has held positions as an officer or director of several real
estate affiliates of CIGNA. His past real estate assignments have included
Development and Engineering, Property Management, Director, Real Estate
Operations, Portfolio Management and Vice President, Real Estate Production.
Prior to assuming his asset management post, Mr. Springman was responsible
for production of real estate and mortgage investments. He received a
Bachelor of Science degree from the U.S. Naval Academy.
DAVID C. KOPP - SECRETARY
Mr. Kopp, age 49, is Secretary of CII, Corporate Secretary of
Connecticut General Life Insurance Company and Assistant Corporate Secretary
and Assistant General Counsel, Insurance and Investment Law of CIGNA
Corporation. He also serves as an officer of various other CIGNA Companies.
He joined Connecticut General Life Insurance Company in 1974 as a commercial
real estate attorney and held various positions in the Legal Department of
Connecticut General Life Insurance Company prior to his appointment as
Corporate Secretary in 1977. Mr. Kopp is an honors graduate of Northern
Illinois University and served on the law review at the University of
Illinois College of Law. He is a member of the Connecticut Bar Association
and is Past President of the Hartford Chapter, American Society of Corporate
Secretaries.
MARCY F. BLENDER - TREASURER
Marcy F. Blender, age 38, is Assistant Vice President, Bank Resources
of CIGNA Corporation. In this capacity she is responsible for bank
relationship management, bank products and services, bank compensation and
control, and bank exposure management. Marcy joined Insurance Company of
North America (INA) in 1979. She has held a variety of financial and
investment positions with INA and later with the merged CIGNA Corporation
before assuming her current responsibilities in 1992. She received a B.A.
degree from Rutgers University and an M.B.A. from Drexel University. She is
a Certified Public Accountant.
Item 11. Executive Compensation
Officers and directors of the General Partner receive no current or
proposed direct compensation from the Partnership in such capacities.
However, certain officers and directors of the General Partner received
compensation from the General Partner and/or its affiliates (but not from
the Partnership) for services performed for various affiliated entities,
which may include services performed for the Partnership, but such
compensation was not material in the aggregate.
Item 12. Security Ownership of Certain Beneficial Owners and Management
No person or group is known by the Partnership to own beneficially more
than 5% of the outstanding Units of
<PAGE>
interest of the Partnership.
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.
As of February 28, 1995, the individual directors, and the directors
and officers as a group, of the General Partner beneficially owned
Partnership Units and shares of the common stock of CIGNA, parent of the
General Partner, as set forth in the following table:
Units
Shares
Beneficially
Beneficially Percent of
Name Owned(a)
Owned(b) Class
R. Bruce Albro (c) 0 6,076 *
Philip J. Ward (d) 0 17,680 *
John Wilkinson (e) 0 13,753 *
All directors and officers
Group (8) (f) 0 44,069 *
* Less than 1% of class
(a) No officer or director of the General Partner possesses a right
to acquire beneficial ownership of additional Units of interest
of the Partnership.
(b) The directors and officers have sole voting and investment
power over all the shares of CIGNA common stock they own
beneficially.
(c) Shares beneficially owned includes options to acquire 3,920
shares and 2,156 shares which are restricted as to disposition.
(d) Shares beneficially owned includes options to acquire 10,985
shares and 3,274 shares which are restricted as to disposition.
(e) Shares beneficially owned includes options to acquire 11,251
shares and 2,027 shares which are restricted as to disposition.
(f) Shares beneficially owned by directors and officers include
28,511 shares of CIGNA common stock which may be acquired upon
exercise of stock options and 10,111 shares which are
restricted as to disposition.
Item 13. Certain Relationships and Related Transactions
The General Partner of the Partnership is generally entitled to
receive l% of cash distributions, subordinated to a priority distribution of
6% non-cumulative, non-compounded return to the limited partners on their
adjusted invested capital and l% of profits or losses. In 1994, the General
Partner received no cash distributions and a share of the Partnership's net
income of $12,449. Reference is also made to the Notes to Consolidated
Financial Statements included in this annual report for a description of
such distributions and allocations. The relationship of the General Partner
(and its directors and officers) to its affiliates is set forth in Item 10
above.
CII provided asset management services to the Partnership
during 1994 for the Woodlands Tech Center, Westford Corporate Center and
Piedmont Plaza at fees calculated at 6% of gross revenues collected less
amounts earned by independent third party property management companies
contracted by CII on behalf of the Partnership. For Overlook Apartments
fees are calculated at 5% of gross revenues collected less amounts earned by
independent third party property management companies contracted by CII on
behalf of the Partnership. In 1994, CII earned asset management fees
amounting to $297,014 for such services, of which $18,776 was unpaid as of
December 31, 1994. Independent third party property managers earned
$187,062 of management fees, of which $11,711 was unpaid as of December 31,
1994. Included in these amounts is $26,418 earned by CII, $2,430 of which
was unpaid at December
<PAGE>
31, 1994, and $13,209 which was paid to independent third party property
managers, respectively, relating to the joint venture partner's share of the
Venture.
A nonrecurring acquisition fee for evaluating and selecting
real property to be acquired equal to the lesser of (1) 5% of the Gross
Proceeds from sales of Units, or (2) the normal and customary charges by
third parties for such services, is to be paid to CII. To date, no such
fees have been paid since no payment is due until priority distributions
have been paid as described above. A subordinated incentive management fee
of 9% of adjusted cash from operations will be payable to CII, but only
after the limited partners have received their priority distributions as
described above, the General Partner has received its 1% distribution
described above and acquisition fees have been paid.
The General Partner and its affiliates may be reimbursed for
their direct expenses incurred in the administration of the Partnership. In
1994, the General Partner and its affiliates were entitled to reimbursement
for such out of pocket expenses in the amount of $51,054 of which $1,750 was
unpaid as of December 31, 1994.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K
(a) 1. Financial Statements. See Index to Financial
Statements in Item 8.
2. Financial Statement Schedules
(a) Real Estate and Accumulated Depreciation.
See Index to Financial Statements in Item
8.
3. Exhibits
3 Partnership Agreement, incorporated by
reference to Exhibit A to the Prospectus of
Registrant, dated October 15, 1985, as
amended, filed pursuant to Rule 424(b) under
the Securities Act of 1933, File No. 33-1818.
4 Certificate of Limited Partnership dated
October 11, 1985, as filed October 15, 1985,
incorporated by reference to Exhibit 4 to Form
S-11 Registration Statement under the
Securities Act of 1933, File No. 33-1818.
10 (a) Acquisition and Disposition Services
Agreement, dated as of February 4, 1986,
between CIGNA Income Realty-I Limited
Partnership and CIGNA Capital Advisers, Inc.,
incorporated by reference to Exhibit 10(a) to
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987.
(b) Supervisory Property Management Agreement,
dated as of February 4, 1986, between CIGNA
Income Realty-I Limited Partnership and CIGNA
Capital Advisers, Inc., incorporated by
reference to Exhibit 10(b) to Registrant's
Annual Report on Form 10-K for the fiscal year
ended December 31, 1987.
(c) Agreements concerning Certain Capital
Contributions, dated as of February 3, 1986,
between CIGNA Financial Partners, Inc. and
CIGNA Realty Resources, Inc.-Tenth,
incorporated by reference to Exhibit 10(c) to
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987.
<PAGE>
(d) Real Estate Purchase Agreement relating to
Woodlands Tech Center (including, as Exhibit
I, the Master Lease Agreement between CIGNA
Income Realty-I Limited Partnership, as
landlord, and Turco Development Company, as
master tenant) dated July 3, 1986, between
Registrant, as purchaser, and Turco
Development Company, as seller, incorporated
by reference to Exhibit 10(a) to Current
Report on Form 8-K dated July 3, 1986.
(e) Real Estate Purchase Agreement dated September
10, 1986, between Westford Office Venture, as
purchaser, and Robert M. Doyle and Ian S.
Gillespie as Trustees of Westford Office
Center Trust, as seller, incorporated by
reference to Exhibit 10(f) to Registrant's
Annual Report on Form 10-K for the fiscal year
ended December 31, 1986.
(f) Amended and Restated Joint Venture Agreement
between Registrant and Connecticut General
Equity Properties-I Limited Partnership dated
as of November l, 1986, relating to the
acquisition of the Westford Corporate Center,
incorporated by reference to Exhibit 10(g) to
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1986.
(g) Management Agreement dated September 10, 1986,
between Westford Office Venture and Codman
Management Co., incorporated by reference to
Exhibit 10(h) to Registrant's Annual Report on
Form 10-K for the fiscal year ended December
31, 1986.
(h) Real Estate Purchase Agreement dated December
5, 1986, between Piedmont Plaza Partnership
and Piedmont Plaza, Ltd. relating to the
acquisition of Piedmont Plaza Shopping Center,
incorporated by reference to Exhibit 10(j) to
Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987.
(i) Real Estate Purchase Agreement relating to
Overlook Apartments (including, as Exhibit
4.3.11, the Management and Leasing Agreement
between CIGNA Income Realty-I Limited
Partnership and Brentwood - Doramus, Inc.)
dated February 22, 1988, between Registrant,
as purchaser, and TCR-Adobe Ranch I Limited
Partnership, as seller, incorporated by
reference to Exhibit 10(k) to Registrant's
Annual Report on Form 10-K for the fiscal year
ended December 31, 1988.
27 Financial Data Schedules
(b) No reports on Form 8-K were filed during the last
quarter of the fiscal year.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
By: CIGNA Realty Resources, Inc. - Tenth,
General Partner
Date: March 29, 1995 By: /s/ John D. Carey
John D. Carey, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf of the
Registrant and in the capacities (with respect to the General Partner) and
on the date indicated.
/s/ R. Bruce Albro Date: March 29, 1995
R. Bruce Albro, Director
/s/ Philip J. Ward Date: March 29, 1995
Philip J. Ward, Director
/s/ John Wilkinson Date: March 29, 1995
John Wilkinson, Director
/s/ John D. Carey Date: March 29, 1995
John D. Carey, President, Controller
(Principal Executive Officer)
(Principal Accounting Officer)
/s/ Marcy F. Blender Date: March 29, 1995
March F. Blender, Treasurer
(Principal Financial Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<FISCAL-YEAR-END> Dec-31-1994
<PERIOD-END> Dec-31-1994
<PERIOD-TYPE> Year
<CASH> 3404809
<SECURITIES> 0
<RECEIVABLES> 375506
<ALLOWANCES> 725
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 42792079
<DEPRECIATION> 11635309
<TOTAL-ASSETS> 35568783
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 35568783
<SALES> 0
<TOTAL-REVENUES> 5459892
<CGS> 0
<TOTAL-COSTS> 2168668
<OTHER-EXPENSES> 2042808
<LOSS-PROVISION> 3519
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 1244897
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1244897
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
