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 March 31, 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 ___
<PAGE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 1995
PART I
FINANCIAL INFORMATION
Page(s)
Item 1. Financial Statements -------
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations -------
<PAGE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
--------------- -------------------
Assets
<S> <C> <C>
Real estate investments:
Property, net $16,164,157 $ 16,284,661
Joint ventures 9,289,557 9,326,690
-------------- ----------------
25,453,714 25,611,351
Cash and cash equivalents 1,380,786 1,638,294
Short-term investments 507,591 299,205
Interest and rent receivable 697,460 721,961
-------------- ----------------
$28,039,551 $ 28,270,811
============== ================
<CAPTION>
Liabilities and Partners' Capital
<S> <C> <C>
Mortgage loan $4,330,645 $ 4,363,307
Accounts payable 203,833 274,141
Accrued management fee 60,456 60,456
-------------- ----------------
Total liabilities 4,594,934 4,697,904
-------------- ----------------
Partners' capital (deficit):
Limited partners ($1,000 per unit;
110,000 units authorized, 34,581
units issued and outstanding) 23,516,305 23,643,312
General partners (71,688) (70,405)
-------------- ----------------
Total partners' capital 23,444,617 23,572,907
-------------- ----------------
$28,039,551 $ 28,270,811
============== ================
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS (Unaudited)
<TABLE>
<CAPTION>
Quarter ended March 31,
1995 1994
<S> <C> <C>
Investment Activity
Property rentals $ 635,044 $ 633,761
Depreciation and amortization (123,419) (123,419)
Interest and other expenses (110,810) (110,094)
----------------- --------------
400,815 400,248
Joint venture earnings 147,312 128,839
----------------- --------------
Total real estate activity 548,127 529,087
Interest on cash equivalents
and short-term investments 27,126 14,073
----------------- --------------
Total investment activity 575,253 543,160
----------------- --------------
Portfolio Expenses
Management fee 60,456 60,456
General and administrative 31,807 28,730
----------------- --------------
92,263 89,186
----------------- --------------
Net Income $ 482,990 $ 453,974
============== ===============
Net income per limited partnership
unit $ 13.83 $ 13.00
============== =================
Cash distributions per limited
partnership unit $ 17.50 $ 17.50
================ ==============
Number of limited partnership units
outstanding 34,581 34,581
================ ===============
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
Quarter Ended March 31, 1995
<S> <C> <C> <C>
Balance at beginning of quarter $ (70,405) $ 23,643,312 $23,572,907
Cash distributions (6,113) (605,167) (611,280)
Net income 4,830 478,160 482,990
---------- ------------ ------------
Balance at end of quarter $ (71,688) $ 23,516,305 $23,444,617
========== ============ ============
<CAPTION>
General Limited
Partners Partners Total
Quarter Ended March 31, 1994
<S> <C> <C> <C>
Balance at beginning of quarter $(61,266) $ 24,548,070 $ 24,486,804
Cash distributions (6,113) (605,167) (611,280)
Net income 4,540 449,434 453,974
---------- ------------ ------------
Balance at end of quarter $(62,839) $ 24,392,337 $ 24,329,498
========== ============ ============
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
SUMMARIZED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended March 31,
-------------------------------
1995 1994
----------- -----------
<S> <C> <C>
Net cash provided by operating
activities $588,528 $505,934
----------- ----------
Cash flows from investing activities:
Investment in property - (10,566)
Repayment of loan by joint venture 4,601 4,123
Decrease (increase) in short-term
investments, net (206,695) 251,882
Net cash provided by (used in) ----------- -----------
investing activities (202,094) 245,439
----------- -----------
Cash flows from financing activities:
Reduction of mortgage loan (32,662) (28,244)
Distributions to partners (611,280) (611,280)
----------- -----------
Net cash used in financing activities (643,942) (639,524)
----------- -----------
Net increase (decrease) in cash
and cash equivalents (257,508) 111,849
Cash and cash equivalents:
Beginning of period 1,638,294 1,210,688
----------- -----------
End of period $1,380,786 $ 1,322,537
=========== ===========
</TABLE>
(See accompanying notes to financial statements)
<PAGE>
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 March 31, 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 March 31, 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:
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
------------------ -----------------
<S> <C> <C>
Land $ 7,973,584 $ 7,973,584
Buildings and improvements 12,085,214 12,085,214
Accumulated depreciation (3,894,641) (3,774,137)
------------------ -----------------
Net carrying value $ 16,164,157 $ 16,284,661
================== =================
</TABLE>
The Partnership's net investment in the Zehntel and United Exposition
properties was $12,139,833 and $4,024,324, respectively, at March 31, 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:
<TABLE>
Assets and Liabilities
----------------------
<CAPTION>
March 31, 1995December 31, 1994
-----------------------------------
<S> <C> <C>
Assets
Real property, at cost less
accumulated depreciation of
$3,104,699 $11,853,051 $11,944,203
and $2,988,063,respectively
Other 474,369 446,568
--------------------------------
12,327,420 12,390,771
Liabilities 151,897 159,604
--------------------------------
Net assets $ 12,175,523 $ 12,231,167
================================
<CAPTION>
Results of Operations
---------------------
Quarter Ended March 31,
-------------------------------
1995 1994
---- ----
<S> <C> <C>
Revenue
Rental income $ 438,307 $ 417,321
Other 1,592 2,286
------------- ------------
439,899 419,607
------------- ------------
Expenses
Depreciation and amortization 137,355 148,651
Operating expenses 98,982 81,779
------------- ------------
236,337 230,430
------------- ------------
Net income $ 203,562 $ 189,177
============= ============
</TABLE>
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 March
31, 1995 were made on April 27, 1995 in the aggregate amount of $611,280 ($17.50
per limited partnership unit).
<PAGE>
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 March 31, 1995, the Partnership had $1,888,377 in cash, cash
equivalents, and short-term investments, of which $611,280 was used for cash
distributions to partners on April 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
quarter of 1995 and 1994 were made at the annualized rate of 7.0% on a capital
contribution of $1,000 per unit.
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 March 31, 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 March 31, 1995 was
approximately $1,900,000 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 tenant at Zehntel has subleased one of the
buildings. 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 occupancy at Medlock Oaks was 93% at March 31, 1995, 100% at December
31, 1994, and 98% at March 31, 1994. Occupancy at Anaheim Distribution Center
was 100% at both March 31, 1995 and December 31, 1994, and 86% at March 31,
1994.
During the first quarter, the Partnership initiated discussions with its
joint venture partner in Anaheim Distribution Center to dissolve the joint
venture. There can be no assurance that this dissolution will be completed.
Investment Results
Total investment activity for the first three months of 1995 increased
approximately 6% as compared to the same period of 1994. Results for the wholly
- - - - - -owned properties were relatively unchanged, reflecting stable occupancy
attributable to long-term leases. Interest expense relates solely to the
mortgage loan on the Zehntel buildings and is decreasing due to amortization of
principal.
Earnings from joint venture investments were $147,312 and $128,839 for the
first three months of 1995 and 1994, respectively. The increase in 1995 is due
to an increase in net operating income at Anaheim Distribution Center of
$23,891, due primarily to increased occupancy. This increase was partially
offset by a decrease in net operating income at Medlock Oaks as a result of the
occupancy decrease.
Net income for the three months ended March 31, 1995 increased by
approximately $29,000 as compared to the corresponding period of 1994, while
cash provided by operations between the two periods increased by approximately
$83,000. This difference is primarily due to the retention of operating cash
during the first quarter of 1994 at the joint venture to fund leasing costs
associated with two tenant renewals at Medlock Oaks.
Portfolio Expenses
General and administrative expenses primarily consist of real estate
appraisal, accounting, printing and servicing agent fees. These expenses for
the first three months of 1995 increased $3,077 or 11% as compared to the
comparable period in 1994 primarily due to the final settlement of 1993
administrative expense reimbursements during the first 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.
Inflation
By their nature, real estate investments tend not to be adversely affected
by inflation. Inflation may tend to result in appreciation in the value of the
Partnership's real estate investments over time, if rental rates and replacement
costs increase. Recently, declines in real property values, due to market and
economic conditions, have overshadowed the overall positive effect inflation may
have on the value of the Partnership's investments.
<PAGE>
COPLEY REALTY INCOME PARTNERS 1;
A LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 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 March 31, 1995
<PAGE>
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)
May 10, 1995
Peter P. Twining
Managing Director and General Counsel
of Managing General Partner,
First Income Corp.
May 10, 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 1380786
<SECURITIES> 507591
<RECEIVABLES> 697460
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2585837
<PP&E> 25453714
<DEPRECIATION> 0
<TOTAL-ASSETS> 28039551
<CURRENT-LIABILITIES> 4594934
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 28039551
<SALES> 0
<TOTAL-REVENUES> 809482
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 215682
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 110810
<INCOME-PRETAX> 482990
<INCOME-TAX> 0
<INCOME-CONTINUING> 482990
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 482990
<EPS-PRIMARY> 13.83
<EPS-DILUTED> 13.83
</TABLE>
