<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
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: 33-1889
MARKETPLACE INCOME PROPERTIES, A NORTH CAROLINA LIMITED PARTNERSHIP
-------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1493986
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(State of other jurisdiction of (I.R.S. Employer
or organization) Identification No.)
Interstate Tower
P.O. Box 1012
Charlotte, NC 28201-1012
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(Address of principal executive offices)
(Zip Code)
704/379-9164
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(Registrant's telephone number, including area code)
(Former name, former address and fiscal year ended,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
3,000 limited partnership units outstanding as of April 30, 1995
Page 1 of 10 sequentially numbered pages
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MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
March 31,
1995 December 31,
(unaudited) 1994
------------ -------------
<S> <C> <C>
ASSETS
Rental Properties (at cost):
Land and improvements $ 3,873,911 $ 3,873,911
Buildings 20,513,873 20,456,387
Furniture and equipment 410,143 410,143
----------- -----------
24,797,927 24,740,441
Accumulated depreciation (5,575,933) (5,404,224)
----------- -----------
19,221,994 19,336,217
Cash and cash equivalents 1,230,384 1,258,117
Restricted Cash 168,338 64,553
Cash on deposit with lender 1,412,499 1,401,571
Accounts Receivable 150,171 118,036
Net Deferred Loan and Acquisition Costs 204,715 194,964
Other 52,973 69,694
----------- -----------
22,441,074 22,443,152
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Debt 15,652,254 15,705,327
Payables to general partners and affiliates 26,818 22,318
Other liabilities 410,601 262,708
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16,089,673 15,990,353
Minority interest 27,433 27,675
Partners' capital:
General partners 86,188 86,829
Limited partners 6,237,780 6,338,295
----------- -----------
$22,441,074 $22,443,152
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 3
MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(unaudited)
<TABLE>
<CAPTION>
Three Three
Months Months
Ended Ended
March 31, March 31,
1995 1994
-------- --------
<S> <C> <C>
Income:
Rent $706,186 $929,814
Interest and other 26,805 5,662
-------- --------
732,991 935,476
Expenses:
Interest 368,765 412,792
Depreciation 171,709 193,472
Amortization 14,172 14,678
Operations and maintenance 195,308 201,193
Professional fees 20,468 23,410
Partnership management fees 4,500 13,610
Administrative and Other 22,375 16,756
-------- --------
797,297 875,911
Income before minority interest (64,306) 59,565
Minority interest (242) 274
-------- --------
Net income (loss) $(64,064) $ 59,291
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
-------- ---------- ----------
<S> <C> <C> <C>
Balance, December 31, 1993 $68,401 $5,263,963 $5,332,364
Net income for the period 593 58,698 59,291
------- ---------- ----------
Balance, March 31, 1994 $68,994 $5,322,661 $5,391,655
======= ========== ==========
Balance, December 31, 1994 $86,829 $6,338,295 $6,425,124
Net loss for the period (641) (63,423) (64,064)
Distributions 0 (37,092) (37,092)
------- ---------- ----------
Balance, March 31, 1995 $86,188 $6,237,780 $6,323,968
======= ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 5
MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
Increase (Decrease) in Cash and Cash Equivalents
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1995 March 31, 1994
-------------- --------------
<S> <C> <C>
Net Income (Loss) $ (64,064) $ 59,291
---------- --------
Adjustments to reconcile net income to net cash provided by operations:
Increase in accounts receivable (32,135) (16,672)
Depreciation 171,709 193,472
Amortization 14,172 14,678
Minority Interest (242) 274
Increase in other assets (87,064) (93,427)
Increase in accrued liabilities 152,393 38,040
---------- --------
Total adjustments 218,833 136,365
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Net cash provided by operating activities 154,769 195,656
Cash flows from investing activities:
Improvements in rental properties (57,486) (2,578)
---------- --------
Net cash used by investing activities (57,486) (2,578)
Cash flows from financing activities:
Repayments of debt (53,073) (154,959)
Distributions to limited partners (37,092) 0
Increase in deposits with lender (10,928) 0
Increase in deferred loan costs (23,923) 0
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Net cash used by financing activities (125,016) (154,959)
Net increase in cash and cash equivalents (27,733) 38,119
Cash and cash equivalents at beginning of period 1,258,117 272,119
---------- --------
Cash and cash equivalents at end of period $1,230,384 $310,238
========== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 6
MARKETPLACE INCOME PROPERTIES,
A NORTH CAROLINA LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of Marketplace Income Properties, A North
Carolina Limited Partnership (the "Partnership") included herein have been
prepared for submission to the Securities and Exchange Commission on Form 10-Q.
The consolidated financial statements were prepared by the general partner
without audit, and include all adjustments which are, in the opinion of the
general partner, necessary for a fair presentation of the results of operations
for the three month period ended March 31, 1995. The consolidated financial
statements were prepared in accordance with generally accepted accounting
principles, however, certain information and note disclosures normally included
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The consolidated financial statements
should be read in conjunction with the Partnership's 1994 Annual Report filed
with the Securities and Exchange Commission on Form 10-K. The results of
operations for the three month period ended March 31, 1995 are not necessarily
indicative of the results for a full year.
1. PARTNERSHIP MATTERS AND SIGNIFICANT ACCOUNTING POLICIES
On November 27, 1985, the Partnership was formed under the North Carolina
Uniform Limited Partnership Act. The Partnership acquired property on January
30, 1986 and will continue until December 31, 2015 unless sooner terminated
under the provisions of the Partnership Agreement. The Partnership has issued
3,000 limited partner units at $5,000 per unit. The total number of investors
at April 30, 1995 was 773. ISC Realty Corporation is the sole general partner.
The consolidated financial statements include the accounts of Marketplace
Income Properties and its subsidiary, Marketplace Income Properties of Florida,
collectively referred to as the Partnership. All significant intercompany
transactions have been eliminated in consolidation.
Distributions and Allocations of Income and Losses - Profits, gains and losses
of the Partnership are allocated between general and limited partners, as
provided in the Partnership Agreement. The net cash flow from operations in
each year is to be distributed 99% to limited partners and 1% to the general
partner.
Certain items in the financial statements for prior periods have been
reclassified to conform to the format presented for these statements.
2. RELATED PARTY TRANSACTIONS
For managing leases on the Partnership's nursing home properties during the
three months ended March 31, 1995, the general partner earned $4,500 and
$13,610 for the three months ended March 31, 1994. Amounts earned by the
general partner for the reimbursement of expenses of operating the Partnership
were $12,500 for the three months ended March 31, 1995 and 1994, respectively.
6
<PAGE> 7
PART 1. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
PARTNERSHIP MATTERS
The property investment portfolio consists of the Marketplace Mall in
Winston-Salem, NC, Mt. Pilot Shopping Center in Pilot Mountain, NC, Amelia
Plaza in Fernandina Beach, FL and Town & Country Convalescent Center in Tampa,
FL. Meadowbrook Manor in Siler City, NC was sold in June 1994.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents totaled $1,230,384 at March 31, 1995, up from
$1,258,117 at December 31, 1994.
The Registrant feels that these funds should be used as a reserve for the cost
of operating and maintaining the properties and obtaining necessary financing
for the Mall's tenant upfit. See Part II, Item 6 for further discussion of the
Marketplace Mall financing.
RESULTS OF OPERATION
THREE MONTHS ENDED MARCH 31, 1995 AS COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1994
The Partnership had a net loss of $64,064 for the three months ended March 31,
1995 compared to a net income of $59,291 for the same period of 1994. Rental
income decreased from $929,814 for the three months ended March 31, 1994 to
$706,186 for the three months ended March 31, 1995. The decrease is the result
of a reduction in rent due to the sale of Siler City of approximately $105,000
and a reduction of approximately $82,000 resulting from the lower lease payment
on Town & Country Convalescent Center. The remainder of the decrease is
primarily the result of a reduction in tenant reimbursements at the Mall.
Interest income increased from $5,662 for the three months ended March 31, 1994
to $26,805 for the three months ended March 31, 1995 as a result of increased
cash reserves and interest earned on cash deposits held with the lender at the
Mall.
Interest expense for the three months ended March 31, 1995 was $368,765
compared with $412,792 for the same period of 1994. The decrease in 1995 as
compared to 1994 was primarily due to the payoff of the mortgage on Siler City
Nursing Home in June 1994.
Depreciation expense decreased from $193,472 for the three months ended March
31, 1994 to $171,709 for the three months ended March 31, 1995 as a result of
the sale of Siler City Nursing Home in June 1994.
Partnership management fees decreased from $13,610 for the three months ended
March 31, 1994 to $4,500 for the three months ended March 31, 1995 as a result
of the decreased rental income received from Town & Country Convalescent Center
in 1995, as well as, Siler City Nursing Home which was sold in June 1994.
7
<PAGE> 8
Administrative and other expenses increased from $16,756 for the three months
ended March 31, 1994 to $22,375 for the three months ended March 31, 1995. The
increase is due to an increase in lease commissions of approximately $3,800 at
Amelia Plaza and an increase in property related general administrative
expenses of approximately $1,800.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSIONS OF MATTER TO A VOTE OF SECURITIES HOLDERS
None
ITEM 5. OTHER INFORMATION
In conjunction with the previously reported Modification Agreement
and Escrow Agreement with the lender on the Mall, the Registrant has continued
to remit only the monthly cash flow from the Mall and has ceased funding the
full payment with cash flow from other properties. On April 25, 1995, the
Registrant received a commitment letter from another lender that will provide a
minimum of $5,500,000 and a maximum of $6,000,000 in funds to payoff the
existing first mortgage on the Mall. The current lender, State Mutual Life
Assurance Company, has provided the opportunity to prepay the first mortgage at
a discounted amount of $6,300,000 and forgive the second mortgage on the Mall.
The Registrant intends to use the committed financing towards the discounted
payoff amount and anticipates the balance of the required payoff will be funded
from existing cash reserves.
Construction on the Mall's new tenant space began during the first quarter of
1995. Construction draws will be funded from the cash on deposit with the
lender.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
8
<PAGE> 9
Exhibit 27 - Financial Data Schedule, "for SEC use only".
(b) Reports on Form 8-K
No reports on Form 8-K were required to be filed during the
three months ended March 31, 1995.
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.
MARKETPLACE INCOME PROPERTIES
A NORTH CAROLINA LIMITED PARTNERSHIP
------------------------------------
(REGISTRANT)
BY: /s/ J. CHRISTOPHER BOONE
------------------------
PRESIDENT
ISC REALTY CORPORATION
GENERAL PARTNER
CHIEF FINANCIAL AND EXECUTIVE OFFICER
DATE: May 11, 1995
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9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MARKETPLACE INCOME PROPERTIES FOR THE THREE MONTHS ENDED
MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 1,230,384
<SECURITIES> 0
<RECEIVABLES> 150,171
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,846,027
<PP&E> 24,797,927
<DEPRECIATION> (5,575,933)
<TOTAL-ASSETS> 22,441,074
<CURRENT-LIABILITIES> 410,601
<BONDS> 15,652,254
<COMMON> 0
0
0
<OTHER-SE> 632,396
<TOTAL-LIABILITY-AND-EQUITY> 22,441,074
<SALES> 0
<TOTAL-REVENUES> 732,991
<CGS> 0
<TOTAL-COSTS> 195,308
<OTHER-EXPENSES> 233,224
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 368,765
<INCOME-PRETAX> (64,064)
<INCOME-TAX> 0
<INCOME-CONTINUING> (64,064)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (64,064)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
