SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995 Commission File Number 0-
15430
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2893293
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
399 Boylston Street, 13th Fl.
Boston, Massachusetts 02116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(617) 578-1200
Former Name, former address and former fiscal year if changed since
last report
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 twelve (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 ___
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 1995
PART I
FINANCIAL INFORMATION
<PAGE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
BALANCE SHEET
(Unaudited)
June 30, 1995 December 31, 1994
--------------- ------------------
Assets
Real estate investments:
Property, net $16,043,654 $ 16,284,661
Joint ventures 9,163,444 9,326,690
----------- ------------
25,207,098 25,611,351
Cash and cash equivalents 1,313,975 1,638,294
Short-term investments 709,562 299,205
Interest and rent receivable 574,534 721,961
----------- ------------
$27,805,169 $ 28,270,811
=========== ============
Liabilities and Partners' Capital
Mortgage loan $ 4,300,023 $ 4,363,307
Accounts payable 249,111 274,141
Accrued management fee 51,820 60,456
----------- ------------
Total liabilities 4,600,954 4,697,904
----------- ------------
Partners' capital (deficit):
Limited partners ($1,000 per unit;
100,000 units authorized, 34,581 units
issued and outstanding) 23,278,307 23,643,312
General partners (74,092) (70,405)
----------- ------------
Total partners' capital 23,204,215 23,572,907
----------- ------------
$27,805,169 $ 28,270,811
=========== ============
(See accompanying notes to financial statements)
<PAGE>
<TABLE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS (Unaudited)
<CAPTION>
Quarter Ended Six Months Ended Quarter Ended Six Months Ended
June 30, 1995 June 30, 1995 June 30, 1994 June 30, 1994
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
Investment Activity
Property rentals $ 536,619 $ 1,171,663 $ 633,761 $ 1,267,522
Depreciation and amortization (123,420) (246,839) (123,420) (246,839)
Interest and other expenses (107,663) (218,473) (110,619) (220,713)
----------- ------------- ----------- -------------
305,536 706,351 399,722 799,970
Joint venture earnings 122,407 269,719 132,001 260,840
----------- ------------- ----------- -------------
Total real estate activity 427,943 976,070 531,723 1,060,810
Interest on cash equivalents
and short-term investments 28,074 55,200 15,638 29,711
----------- ------------- ----------- -------------
Total investment activity 456,017 1,031,270 547,361 1,090,521
----------- ------------- ----------- -------------
Portfolio Expenses
Management fee 51,820 112,276 60,457 120,913
General and administrative 33,319 65,126 31,990 60,720
----------- ------------- ----------- -------------
85,139 177,402 92,447 181,633
----------- ------------- ----------- -------------
Net income $ 370,878 $ 853,868 $ 454,914 $ 908,888
=========== ============= =========== =============
Net income per limited partnership
unit $ 10.62 $ 24.44 $ 13.02 $ 26.02
=========== ============= =========== =============
Cash distributions per limited
partnership unit $ 17.50 $ 35.00 $ 17.50 $ 35.00
=========== ============= =========== =============
Number of limited partnership units
outstanding during the period 34,581 34,581 34,581 34,581
=========== ============= =========== =============
<FN>
(See accompanying notes to financial statements)
</TABLE>
<PAGE>
<TABLE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<CAPTION>
Quarter Ended Six Months Ended Quarter Ended Six Months Ended
June 30, 1995 June 30, 1995 June 30, 1994 June 30, 1994
---------------- ----------------- --------------- ----------------
General Limited General Limited General Limited General Limited
Partners Partners Partners Partners Partners Partners Partners Partners
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
beginning
of period$(71,688)$23,516,305 $(70,405) $23,643,312$(62,839) $24,392,337$(61,266) $24,548,070
Cash
distributions
(6,113) (605,167) (12,226) (1,210,334) (6,113) (605,167) (12,226) (1,210,334)
Net income
3,709 367,169 8,539 845,329 4,549 450,365 9,089 899,799
--------- ----------- -------- ----------- -------- ------------------- -----------
Balance at
end of
period $(74,092) $23,278,307$(74,092) $23,278,307$(64,403) $24,237,535$(64,403) $24,237,535
========= =========== ======== =========== ======== =================== ===========
<FN>
(See accompanying notes to financial statements)
</TABLE>
<PAGE>
<TABLE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
SUMMARIZED STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended June 30,
-------------------------------
1995 1994
----------- -----------
<S> <C> <C>
Net cash provided by operating activities $1,361,477 $ 1,204,725
----------- ----------
Cash flows from investing activities:
Investment in property - (10,566)
Repayment of loan by joint venture 9,329 8,361
Decrease (increase) in short-term
investments, net (409,281) 251,882
----------- -----------
Net cash provided by (used in)
investing activities (399,952) 249,677
----------- -----------
Cash flows from financing activities:
Reduction of mortgage loan (63,284) (55,962)
Distributions to partners (1,222,560) (1,222,560)
----------- -----------
Net cash used in financing activities(1,285,844) (1,278,522)
----------- -----------
Net increase (decrease) in cash
and cash equivalents (324,319) 175,880
Cash and cash equivalents:
Beginning of period 1,638,294 1,210,688
----------- -----------
End of period $1,313,975 $ 1,386,568
=========== ===========
<FN>
(See accompanying notes to financial statements)
</TABLE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (Unaudited)
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the
Partnership's financial position as of June 30, 1995 and December 31,
1994 and the results of its operations, its cash flows and changes in
partners' capital (deficit) for the interim periods ended June 30, 1995
and 1994. These adjustments are of a normal recurring nature.
See notes to financial statements included in the Partnership's
1994 Annual Report on Form 10-K for additional information relating to
the Partnership's financial statements.
NOTE 1 - ORGANIZATION AND BUSINESS
Copley Realty Income Partners 1; A Limited Partnership (the
"Partnership") is a Massachusetts limited partnership organized for the
purpose of investing primarily in newly-constructed and existing income-
producing real properties. It commenced operations in August 1986, and
acquired the four real estate investments it currently owns prior to
the end of 1987. It intends to dispose of its investments within nine
years of their acquisition, and then liquidate; however, the managing
general partner could extend the investment period if it is in the best
interest of the limited partners.
NOTE 2 - PROPERTY
The following is a summary of the Partnership's investments in
property:
June 30, 1995 December 31, 1994
------------------ -----------------
Land $ 7,973,584 $ 7,973,584
Buildings and improvements 12,085,214 12,085,214
Accumulated depreciation (4,015,144) (3,774,137)
------------------ -----------------
Net carrying value $ 16,043,654 $ 16,284,661
================== =================
The Partnership's net investment in the Zehntel and United
Exposition properties was $12,058,180 and $3,985,474, respectively, at
June 30, 1995 and $12,221,487 and $4,063,174, respectively, at December
31, 1994.
NOTE 3 - REAL ESTATE JOINT VENTURES
The following summarized financial information is presented in the
aggregate for the investments in joint ventures:
Assets and Liabilities
----------------------
June 30, 1995 December 31, 1994
-------------- -----------------
Assets
Real property, at cost less accumulated
depreciation of $3,226,660 and $2,988,063
$ 11,785,583 $ 11,944,203
Other 411,510 446,568
------------- ----------------
12,197,093 12,390,771
Liabilities 164,954 159,604
------------- ----------------
Net assets $ 12,032,139 $ 12,231,167
============= ================
Results of Operations
---------------------
Six Months Ended June 30,
-------------------------------
1995 1994
---- ----
Revenue
Rental income $ 864,833 $ 881,370
Other 3,142 2,174
------------- ----------------
867,975 883,544
------------- ----------------
Expenses
Depreciation and amortization 280,865 296,811
Operating expenses 203,060 193,530
------------- ----------------
483,925 490,341
------------- ----------------
Net income $ 384,050 $ 393,203
============= ================
Liabilities and expenses exclude amounts owed and attributable to the
Partnership and (with respect to one joint venture) its affiliate on
behalf of their various financing arrangements with the joint ventures.
NOTE 4 - SUBSEQUENT EVENT
Distributions of cash from operations relating to the quarter
ended June 30, 1995 were made on July 27, 1995 in the aggregate amount
of $523,955 ($15.00 per limited partnership unit).
Copley Realty Income Partners 1; A Limited Partnership
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Liquidity and Capital Resources
The Partnership completed its offering of units of limited
partnership interest in April 1987, and a total of 34,581 units were
sold. The Partnership received proceeds of $30,812,718, net of selling
commissions and other offering costs, which have been invested in real
estate, used to pay related acquisition costs or retained as working
capital reserves.
At June 30, 1995, the Partnership had $2,023,537 in cash, cash
equivalents, and short-term investments, of which $523,955 was used for
cash distributions to partners on July 27, 1995; the remainder is being
retained for working capital reserves. The source of future liquidity
and cash distributions to partners will be cash generated by the
Partnership's real estate and short-term investments. Distributions of
cash from operations relating to the first and second quarters of 1995
were made at the annualized rate of 7.0% and 6.0%, respectively, on a
capital contribution of $1,000 per unit. The annualized distribution
rate for the comparable prior year quarters was 7.0%. The decrease in
the distribution rate in the second quarter is the result of the
contemplated restructuring and extension of a lease at the Zehntel
property.
The carrying value of real estate investments in the financial
statements is at cost or is reduced to its lower net realizable value
if the investment's carrying value is determined not to be recoverable
through expected undiscounted future cash flows. Carrying value may be
greater or less than current appraised value. At June 30, 1995, the
appraised value of the United Exposition investment exceeded its
related carrying value by approximately $1,300,000. The total
appraised value of the remaining investments at June 30, 1995 was
approximately $1,500,000 less than their total carrying value. The
current appraised value of real estate investments has been determined
by the managing general partner and is generally based on a combination
of traditional appraisal approaches performed by the advisor and
independent appraisers. Because of the subjectivity inherent in the
valuation process, the current appraised value may differ significantly
from that which could be realized if the real estate were actually
offered for sale in the marketplace.
Results of Operations
Form of Real Estate Investments
The United Exposition and Zehntel investments are wholly-owned
properties fully leased by single tenants. The tenants are responsible
for substantially all property operating expenses. The Anaheim
Distribution Center investment is structured as a joint venture with a
real estate management/development firm. The Medlock Oaks investment
is structured as a joint venture with an affiliate of the Partnership
and is managed by a third-party property manager.
Operating Factors
The Zehntel investment, which is comprised of two R&D buildings
totaling 145,000 square feet, is fully leased to a single tenant
through June, 1996. The Partnership is negotiating an agreement with
the lessee to extend its lease on the 60,000 square foot building
through December, 2000. The proposed extension will be retroactive
to April 1,1995, and will result in a reduction in lease payments from
the previous contractual obligation. This same tenant has been
subleasing the 85,000 square foot building and upon expiration of the
original lease in June, 1996, the Partnership will enter into a direct
lease with the sublease tenant in this building.
Occupancy at Medlock Oaks was 97% at June 30, 1995, and 100% at
December 31, 1994 and June 30, 1994. Occupancy at Anaheim Distribution
Center was 100% at both June 30, 1995 and December 31, 1994, and 86% at
June 30, 1994.
During the first quarter of 1995, the Partnership initiated
discussions with its joint venture partner in Anaheim Distribution
Center to dissolve the joint venture. These discussions continue;
however, there can be no assurance that this dissolution will be
completed.
Investment Results
Total investment activity for the first six months of 1995
decreased approximately 5% as compared to the same period of 1994.
This decrease was primarily due to a reduction in rental revenue
recognized on the Zehntel investment due to the contemplated lease
restructure and extension.
Earnings from joint venture investments were $269,719 and $260,840
for the first six months of 1995 and 1994, respectively. The increase
in 1995 is due to an increase in net operating income at Anaheim
Distribution Center of $32,782, due primarily to increased occupancy,
partially offset by a decrease in net operating income at Medlock Oaks
of $23,903 as a result of the occupancy decrease.
Interest on cash equivalents and short-term investments increased
by $25,489 or 86% between the two six month periods due to higher
invested balances, as well as higher short-term yields.
Cash flow provided by operations between the two six-month periods
increased by approximately $157,000. Approximately $94,000 of this
increase during 1995 relates to Medlock Oaks which retained cash at the
property level during the first quarter of 1994 to fund leasing costs
associated with two tenant renewals. In addition, cash flow
distributed from Anaheim Distribution Center increased by approximately
$62,000, due primarily to improved occupancy. Cash flow from the
remaining two properties was relatively unchanged.
Portfolio Expenses
General and administrative expenses primarily consist of real
estate appraisal, accounting, printing and servicing agent fees. These
expenses for the first six months of 1995 increased $4,406 or 7% as
compared to the same period in 1994 primarily due to the favorable
final settlement of prior year administrative expense reimbursements
during the second quarter of 1994, partially offset by a decrease in
printing costs.
The Partnership management fee is 9% of distributable cash flow
from operations after any increase or decrease in working capital
reserves as determined by the managing general partner. Management
fees decreased between the two six-month periods due to the decrease in
distributable cash flow.
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 1995
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: None.
b. Reports on Form 8-K: No reports on Form 8-K were filed
during the quarter ended June 30, 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.
COPLEY REALTY INCOME PARTNERS 1; A LIMITED
PARTNERSHIP
(Registrant)
August 11, 1995
Peter P. Twining
Managing Director and General Counsel of
Managing General Partner,
First Income Corp.
August 11, 1995
Marie A. Welch
Investment Officer and Chief Accounting
Officer of Managing General Partner,
First Income Corp.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 1313975
<SECURITIES> 709562
<RECEIVABLES> 574534
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2598071
<PP&E> 29222242
<DEPRECIATION> (4015144)
<TOTAL-ASSETS> 27805169
<CURRENT-LIABILITIES> 4600954
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 23204215
<TOTAL-LIABILITY-AND-EQUITY> 27805169
<SALES> 0
<TOTAL-REVENUES> 1496582
<CGS> 0
<TOTAL-COSTS> 246839
<OTHER-EXPENSES> 177402
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 218473
<INCOME-PRETAX> 853868
<INCOME-TAX> 0
<INCOME-CONTINUING> 853868
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<NET-INCOME> 853868
<EPS-PRIMARY> 24.44
<EPS-DILUTED> 24.44
</TABLE>
