SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ________________
Commission File No. 0-15511
Development Partners
(A Massachusetts Limited Partnership)
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2895800
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer incorporation
or organization) Identification No.)
5110 Langdale Way, Colorado Springs, CO 80906
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(719) 576-5122
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 and 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 ___
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
September 30
1997 December 31,
(Unaudited) 1996
ASSETS
Property, at cost
<S> <C> <C>
Land $5,114,512 $5,114,512
Buildings and improvements 15,561,584 15,561,584
Equipment, furnishings and fixtures 1,784,826 1,687,793
--------------- -----------------
22,460,922 22,363,889
Less accumulated depreciation (5,067,352) (4,741,203)
--------------- -----------------
17,393,570 17,622,686
Cash and cash equivalents 455,530 537,735
Real estate tax escrows 54,437 27,976
Deposits and prepaid expenses 2,206 639
Accounts receivable 18,133 20,631
Investment in partnership 284,618 293,210
Deferred expenses, net of accumulated
amortization of $312,681 and $298,472 1,635 15,844
--------------- -----------------
Total assets $18,210,129 $18,518,721
=============== =================
LIABILITIES AND PARTNERS' EQUITY
Mortgage notes payable $8,520,306 $8,615,326
Accounts payable 95,007 57,602
Accrued expenses 175,306 164,447
Due to affiliates (Note 8) 831 10,680
Rents received in advance - 6,158
Tenant security deposits 80,161 66,305
--------------- -----------------
Total liabilities 8,871,611 8,920,518
General Partner's equity (84,209) (83,524)
Limited Partner's equity 9,422,727 9,681,727
--------------- -----------------
Total liabilities and partners' equity $18,210,129 $18,518,721
=============== =================
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
-------------
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
---- ---- ---- ----
Revenue:
<S> <C> <C> <C> <C>
Rental income $615,445 $580,485 $1,874,669 $1,861,690
Interest Income
5,185 6,345 16,939 24,295
-------------- -------------- --------------- -----------------
620,630 586,830 1,891,608 1,885,985
Expenses:
Operating Expenses 316,799 295,799 879,350 868,053
Interest 205,360 203,234 608,294 611,719
Depreciation and amortization 118,503 107,321 340,357 319,087
General and administrative 42,611 61,455 123,543 180,903
Equity in (income) loss
from partnership 5,658 7,495 8,591 2,413
-------------- -------------- --------------- -----------------
688,931 675,304 1,960,135 1,982,175
-------------- -------------- --------------- -----------------
Net income (loss) ($68,301) ($88,474) ($68,527) ($96,190)
============== ============== =============== =================
Net income (loss) allocated to:
General Partners ($683) ($885) ($685) ($962)
Per unit net income (loss) allocated to Investor Limited Partner interest:
36,411 units issued ($1.86) ($2.41) ($1.86) ($2.62)
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
-------------
Investor Total
General Limited Partners'
Partners Partners Equity
<S> <C> <C> <C>
Balance at December 31, 1995 (76,142) 10,152,380 10,076,238
Cash distributions (5,202) (254,877) (260,079)
Net income (2,180) (215,776) (217,956)
-------------- --------------- -----------------
Balance at December 31, 1996 (83,524) 9,681,727 9,598,203
Cash distributions - (191,158) (191,158)
Net income (loss) (685) (67,842) (68,527)
-------------- --------------- -----------------
Balance at September 30, 1997 ($84,209) $9,422,727 $9,338,518
============== =============== =================
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
-------------
Nine Months Ended
September 30
1997 1996
---- ----
Cash flows from operating activities:
<S> <C> <C>
Interest received 16,939 $29,619
Cash received from operating revenue 1,882,367 1,855,887
General and administrative expenses (142,181) (190,841)
Operating expense (847,825) (897,577)
Interest paid (608,294) (611,719)
----------------------------------
Net cash provided by operating activities 301,006 185,369
Cash flows from investing activities:
Purchase of fixed assets (97,033) (177,291)
Proceeds from maturities of short-term investments - 74,332
Deposits - (2,112)
Distributions from partnership - 26,842
----------------------------------
Net cash provided by investing activities (97,033) (78,229)
Cash flows from financing activities:
Distributions to partners (191,158) (191,158)
Principal payments on mortgage note payable (95,020) (86,594)
--------------- -----------------
Net cash used by financing activities (286,178) (277,752)
--------------- -----------------
Net decrease in cash and cash equivalents (82,205) (170,612)
Cash and cash equivalents at beginning of year 537,735 532,019
--------------- -----------------
Cash and cash equivalents at end of year $455,530 $361,407
=============== =================
<PAGE>
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
-------------
Reconciliation of net income (loss) to net cash provided by operating
activities:
Nine Months Ended
September 30
1997 1996
---- ----
<S> <C> <C>
Net income (loss) ($68,527) ($96,190)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 340,357 319,087
Equity in (income) loss from partnership 8,591 2,413
Change in assets and liabilities net of effects of investing and financing
activities:
Increase in real estate tax escrow (26,461) (24,764)
Decrease in prepaid expenses (1,567) 5,324
Decrease in accounts payable and accrued expenses 48,266 (2,917)
Decrease in due to (from) affiliates (7,351) (11,781)
Decrease in rents received in advance (6,158) -
Increase (decrease) in tenant security deposits 13,856 (5,803)
--------------- -----------------
Net cash provided by operating activities $301,006 $185,369
=============== =================
</TABLE>
<PAGE>
1. Organization of Partnership:
Development Partners (A Massachusetts Limited Partnership), (the "Partnership"),
formerly Berry and Boyle Development Partners, was formed on October 23, 1985.
GP L'Auberge Communities, L.P., a California Limited Partnership, (formerly
Berry and Boyle Management) and Berry and Boyle Realty Advisors ("Advisors") (A
Massachusetts Limited Partnership), are the General Partners. A total of 2,033
individual Limited Partners owning 36,411 Units have contributed $18,205,500 of
capital to the Partnership. At September 30, 1997, the total number of Limited
Partners was 2,003. Except under certain limited circumstances upon termination
of the Partnership, the General Partners are not required to make any additional
capital contributions. The General Partners or their affiliates will receive
various fees for services and reimbursement for various organizational and
selling costs incurred on behalf of the Partnership.
The accompanying consolidated financial statements present the activity of the
Partnership for the nine months ended September 30, 1997 and 1996.
The Partnership will continue until December 31, 2010, unless earlier terminated
by the sale of all or substantially all of the assets of the Partnership, or by
the dissolution and liquidation of the joint ventures.
2. Significant Accounting Policies:
A. Basis of Presentation
The consolidated financial statements include the accounts of the
Partnership and its subsidiaries: Canyon View Joint Venture and
Broadmoor Pines Joint Venture. All intercompany accounts and
transactions have been eliminated in consolidation. The Partnership
accounts for its investment in Casabella Associates utilizing the
equity method of accounting. The Partnership's investment account is
adjusted to reflect its pro rata share of profits, losses and
distributions from Casabella Associates.
The Partnership follows the accrual method of accounting.
B. Cash and Cash Equivalents
The Partnership considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents. The
carrying value of cash and cash equivalents approximates fair value. It
is the Partnership's policy to invest cash in income-producing
temporary cash investments. The Partnership mitigates any potential
risk from such concentration of credit by placing investments with high
quality financial institutions.
C. Significant Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
D. Depreciation
Depreciation is provided for by the use of the straight-line method
over estimated useful lives as follows:
Buildings and improvements 40 years
Equipment, furnishings and fixtures 5-15 years
E.. Deferred Expenses
Costs of obtaining various mortgages on the properties are being
amortized over the term of the related mortgage notes payable using the
straight-line method. Buy down fees relating to permanent loan
refinancings (see Note 7) are being amortized over a three year period.
Any unamortized costs remaining at the date of a refinancing are
expensed in the year of refinancing.
F. Income Taxes
No provision is made for income taxes since the Partners are required
to include on their tax returns their pro rata share of the
Partnership's taxable income or loss. If the Partnership's tax returns
are examined by the Internal Revenue Service or a state taxing
authority, and such an examination results in a change in partnership
taxable income or loss, such change will be reported to the Partners.
G. Rental Income
Leases require the payment of rent in advance, however, rental income
is recorded as earned.
H. Long-Lived Assets
The Partnership's long-lived assets include property and equipment and
deferred expenses. The Partnership evaluates rental properties for
impairment when conditions exist which may indicate that it is probable
that the sum of expected future cash flows (undiscounted) from rental
properties is less than its carrying value. Upon determination that a
permanent impairment has occurred, rental properties are reduced to
fair value. For the year ended December 31, 1996, and the quarter ended
September 30, 1997, permanent impairment conditions did not exist at
any of the Partnership's properties.
3. Cash and Cash Equivalents:
Cash and cash equivalents at September 30, 1997, and December 31, 1996,
consisted of the following:
1997 1996
-------- --------
Cash on hand ............................. $211,503 $326,649
Certificate of deposit ................... 211,086
Money Market Accounts .................... 244,027
------- --------
$455,530 $537,735
======== ========
4. Joint Venture and Property Acquisitions:
The Partnership has invested in three properties located in Scottsdale and
Tucson, Arizona and Colorado Springs, Colorado. The success of the Partnership
will depend upon factors which are difficult to predict including general
economic and real estate market conditions, both on a national basis and in the
areas where the Partnership's investments are located.
Canyon View
On September 29, 1987, the Partnership acquired a majority interest in the
Canyon View Joint Venture which owns and operates a 168-unit multifamily
residential property located in Tucson, Arizona. The Partnership has been
designated as the managing joint venture partner and will control all decisions
regarding the operation and sale of the property.
In accordance with the terms of the purchase agreement and the joint venture
agreement, through September 30, 1997, the Partnership has contributed total
capital of $6,889,588 to the Canyon View Joint Venture, which was used to repay
a portion of the construction loan from a third party lender, to pay certain
costs related to the refinancing of the permanent loan, to cover operating
deficits incurred during the lease up period and to fund certain capital
improvements. In addition, the Partnership funded $745,902 of property
acquisition costs which were subsequently treated as a capital contribution to
the joint venture.
For the nine months ended September 30, 1997 and 1996, the Canyon View Joint
Venture had a net loss of $56,408 and $94,647, respectively.
Net cash from operations (as defined in the joint venture agreement) will be
distributed as available to each joint venture partner not less often than
quarterly, as follows:
First, to the Partnership until it has received an annual
non-cumulative 11.25% priority return on its capital contribution for
such year.
Second, the balance 75% to the Partnership and 25% to the other joint
venture partner.
Income from operations will be allocated to the Partnership and the other joint
venture partner generally in accordance with the distribution of net cash from
operations.
Losses from operations will generally be allocated 100% to the Partnership.
In the case of certain capital transactions and distributions, as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
Broadmoor
On October 12, 1988, the Partnership acquired L'Auberge Broadmoor ("Broadmoor")
(formerly Broadmoor Pines), a 108-unit residential property located in Colorado
Springs, Colorado, and simultaneously contributed the property to a joint
venture comprised of the Partnership and the property developer (the "Broadmoor
Pines Joint Venture"). The Partnership control and owns a majority interest in
the Broadmoor Pines Joint Venture and, therefore, the accounts and operations of
the Broadmoor Pines Joint Venture have been consolidated into those of the
Partnership.
The co-venture partner was Highland Properties, Inc. ("Highland"), a Colorado
based residential development, construction and management firm. Highland
developed the property known as L'Auberge Broadmoor.
The Partnership has been designated the managing joint venture partner of the
Broadmoor Pines Joint Venture and will have control over all decisions affecting
the Broadmoor Pines Joint Venture and the property.
JANUARY 1, 1996, THROUGH JULY 2, 1996
Net cash from operations (as defined in the joint venture agreement) was to be
distributed as available to each joint venture partner quarterly, as follows:
First, to the Partnership an amount equal to 11.25% per annum,
noncumulative (computed daily on a simple noncompounded basis from the
date of completion funding) of its respective capital investment, as
defined in the joint venture agreement;
Second, the balance 80% to the Partnership, and 20% to the property
developer.
Losses from operations and depreciation for the Broadmoor Pines Joint Venture
were allocated 100% to the Partnership.
All profits from operations to the extent of cash distributions shall first be
allocated to the Partnership and the property developer in the same proportion
as the cash distributions. Any remaining profits are allocated 80% to the
Partnership and 20% to the property developer.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
JULY 3, 1996, THROUGH SEPTEMBER 30, 1997
On July 3, 1996, the Partnership and certain affiliates consummated an agreement
with Highland Properties, Inc. ("Highland"), which separated the interests of
Highland and the Partnership, thus affording the Partnership greater flexibility
in the operation and disposition of the property. In consideration of a payment
by the Partnership to Highland totaling $8,683 and delivery of certain mutual
releases, Highland (i) relinquished its option to exercise its rights of first
refusal with regard to the sale of the property and (ii) assigned all of its
interest in the L'Auberge Broadmoor Joint Venture to the Partnership (while
preserving the economic interests of the venturer in these Joint Ventures),
which resulted in the dissolution of the L'Auberge Broadmoor Joint Venture.
Highland may still share in cash flow distributions or proceeds from the sale of
the property if certain performance levels are met.
Through September 30, 1997, the Partnership has made cash payments totaling
$6,079,200 and has funded $684,879 of property acquisition costs.
For the nine months ended September 30, 1997 and 1996, L'Auberge Broadmoor had a
net income of $107,889 and $158,762, respectively.
6.. Mortgage Notes Payable:
All of the property owned by the Partnership is pledged as collateral for the
mortgage notes payable outstanding at September 30, 1997, and December 31, 1996,
which consisted of the following:
1997 1996
---------- ----------
Canyon View ........................ $5,009,494 $5,074,647
Broadmoor .......................... 3,510,812 3,540,679
---------- ----------
$8,520,306 $8,615,326
Canyon View is subject to a nonrecourse first mortgage in the original principal
amount of $5,380,000. Under the terms of the note, monthly principal and
interest payments of $45,610, based on a fixed interest rate of 9.125%, are
required over the term of the loan. The maturity of the note has been extended
from July 15, 1997, to July 15, 1998, with the same interest rate.
Broadmoor is subject to a nonrecourse first mortgage in the principal amount of
$3,650,000. Interest only at the rate of 8% was payable monthly for the first
three years of the loan term. Commencing on September 15, 1993, monthly payments
of $31,980 including principal and interest, at the rate of 9.75%, were payable.
The maturity of the note is September 15, 1998.
Interest accrued at September 30, 1997 and 1996, consisted of $33,678 and
$33,678, respectively, relating to the Canyon View and L'Auberge Broadmoor.
The principal balance of the mortgage notes payable appearing on the
consolidated balance sheet approximates the fair value of such notes.
7. Partners' Equity:
Under the terms of the Partnership Agreement profits are generally allocated 98%
to the Limited Partners and 2% to the General Partners; losses are allocated 99%
to the Limited Partners and 1% to the General Partners.
Cash distributions to the partners are governed by the Partnership Agreement and
are made, to the extent available, 98% to the Limited Partners and 2% to the
General Partners.
The allocation of the related profits, losses, and distributions, if any, would
be different than described above in the case of certain events defined in the
Partnership Agreement, such as the sale of an investment property or an interest
in a joint venture partnership.
8. Related Party Transactions:
Due to affiliates at September 30, 1997 and December 31, 1996, consisted of $831
and $10,680, respectively, relating to reimbursable costs due to L'Auberge
Communities, Inc.
As of September 30, 1997 and 1996, general and administrative expenses included
$40,509 and $52,463, respectively, of salary reimbursements paid to the General
Partners for certain administrative and accounting personnel who performed
services for the Partnership.
For the nine months ended September 30, 1997 and 1996, $72,317and $81,988 of
property management fees had been paid or accrued to Residential
Services-L'Auberge, formerly Berry and Boyle Residential Services, an affiliate
of the General Partners of the Partnership.
<PAGE>
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity; Capital Resources
At the close of the offering on February 26, 1987, the Partnership had admitted
2,033 Limited Partners who contributed capital of $18,205,500 to the
Partnership. These offering proceeds, net of organizational and offering costs
of $2,730,825, provided $15,474,675 of net proceeds to be used for the purchase
of income-producing residential properties, including related fees and expenses,
and working capital reserves. The Partnership has expended $14,384,167 to (i)
acquire its joint venture interests in the Canyon View Joint Venture, Broadmoor
Pines Joint Venture and Casabella Associates, (ii) pay acquisition expenses,
including acquisition fees to one of the General Partners, and (iii) pay certain
costs associated with the refinancing of the Canyon View and Broadmoor Pines
permanent loans. The Partnership distributed $56,437 to the Limited Partners as
a return of capital resulting from excess reserves. The remaining net proceeds
of $1,034,071 have been used to establish initial working capital reserves
sufficient to meet the future needs of the Partnership, including contributions
to the various properties that may be required. As of September 30, 1997,
$605,677 cumulatively was contributed to the properties for this purpose.
The working capital reserves of the Partnership consist of cash and cash
equivalents and short-term investments. Together these amounts provide the
Partnership with the necessary liquidity to carry on its day-to-day operations
and to make necessary contributions to the various joint ventures. Thus far in
1997, the aggregate net decrease in working capital reserves has been $82,205.
This decrease resulted primarily from cash provided by operations of $301,006,
offset by distributions to partners of $191,158, purchases of fixed assets
totaling $97,033, and principal payments on mortgage notes payable of $95,020.
Canyon View
As of September 30, 1997, the property was 89% occupied, compared to 74%
approximately one year ago. At September 30, 1997 and 1996, the market rents for
the various unit types were as follows:
Unit Type .............................. 1997 1996
- ---------------------------------------------- ------ ------
One bedroom one bath ......................... $ 725 $ 725
Two bedroom two bath ......................... 795 810
Two bedroom two bath w/den ................... 1,010 980
Broadmoor Pines
As of September 30, 1997, the property was 88% occupied, compared to 93%
approximately one year ago. At September 30, 1997 and 1996, the market rents for
the various unit types were as follows:
Unit Type ............................. 1997 1996
- ---------------------------------------------- ------ ------
One bedroom two bath w/den ................... $ 930 $ 885
Two bedroom two bath ......................... 1,045 995
Two bedroom two bath w/den ................... 1,255 1,195
Casabella
As of September 30, 1997, the property was 86% occupied, compared to 73%
approximately one year ago. At September 30, 1997 and 1996, the average monthly
rents collected for the various unit types were as follows:
Unit Type ............................. 1997 1996
- ---------------------------------------------- ------ ------
One bedroom two bath w/den ................... $ 820 $ 820
Two bedroom two bath ......................... 940 940
Two bedroom two bath w/den ................... 1,160 1,160
Results of Operations
The Partnership's operating results for the three months ended September 30,
1997, consisted of interest income, administrative expenses and the
Partnership's share of the income from Casabella Associates and the income
allocated from Canyon View and Broadmoor Pines, as follows:
<TABLE>
Canyon Broadmoor Investment Consolidated
View Pines Partnership Totals
<S> <C> <C> <C> <C>
Total revenue $312,316 $304,788 $3,526 $620,630
Expenses:
General and administrative 42,611 42,611
Operations 179,195 137,604 316,799
Depreciation and amortization 63,544 54,959 118,503
Interest 117,117 88,243 205,360
Equity in (income) loss from partnership 5,658 5,658
--------------- ---------------- ------------- -----------
359,856 280,806 48,269 688,931
--------------- ---------------- ------------- -----------
Net income ($47,540) $23,982 ($44,743) ($68,301)
=============== ================ ============= ===========
The Partnership's operating results for the three months ended September 30,
1996 consisted of interest income, administrative expenses, the Partnership's
share of the loss from Casabella Associates and the income allocated from Canyon
View and Broadmoor Pines, as follows:
Canyon Broadmoor Investment Consolidated
View Pines Partnership Totals
<S> <C> <C> <C> <C>
Total revenue $272,190 $308,295 $6,345 $586,830
Expenses:
General and administrative 61,455 61,455
Operations 172,488 123,311 295,799
Depreciation and amortization 60,911 46,410 107,321
Interest 116,548 86,686 203,234
Equity in (income) loss from partnership 7,495 7,495
-------------- ---------------- --------------- ------------
349,947 256,407 68,950 675,304
-------------- ---------------- --------------- -------------
Net income ($77,757) $51,888 ($62,605) ($88,474)
============== ================ =============== =============
The Partnership's operating results for the nine months ended September 30,
1997, consisted of interest income, administrative expenses, the Partnership's
share of the income from Casabella Associates and the income allocated from
Canyon View and Broadmoor Pines, as follows:
Canyon Broadmoor Investment Consolidated
View Pines Partnership Totals
<S> <C> <C> <C> <C>
Total revenue $992,103 $887,379 $12,126 $1,891,608
Expenses:
General and administrative 123,543 123,543
Operations 511,402 367,948 879,350
Depreciation and amortization 189,270 151,087 340,357
Interest 347,839 260,455 608,294
Equity in (income) loss from 8,591 8,591
partnership
--------------- ---------------- ------------- ------------
1,048,511 779,490 132,134 1,960,135
--------------- ---------------- ------------- ------------
Net income ($56,408) $107,889 ($120,008) ($68,527)
=============== ================ ============= ============
The Partnership's operating results for the nine months ended September 30,
1996, consisted of interest income, administrative expenses, the Partnership's
share of the income from Casabella Associates and the income allocated from
Canyon View and Broadmoor Pines, as follows:
Canyon Broadmoor Investment Consolidated
View Pines Partnership Totals
<S> <C> <C> <C> <C>
Total revenue $944,416 $918,568 $23,001 $1,885,985
Expenses:
General and administrative 10 - 180,893 180,903
Operations 507,309 360,744 868,053
Depreciation and amortization 180,743 138,344 319,087
Interest 351,001 260,718 611,719
Equity in (income) loss from partnership - - 2,413 2,413
-------------- ---------------- -------------- ---------------
1,039,063 759,806 183,306 1,982,175
-------------- ---------------- -------------- ---------------
Net income ($94,647) $158,762 ($160,305) ($96,190)
============== ================ ============== ===============
</TABLE>
Comparison of Operating Results for the Nine Months Ended September 30, 1997 and
1996:
Total revenue remained stable with an increased of $5,623. General and
administrative expenses decreased by $57,360 or 32% due to lower legal costs, as
well as the re-stabilization of costs associated with the Partnership
administrative, financial and investor services functions following the office
relocation to Colorado Springs.
Operating expenses increased by less than 1% or $11,297.
Thus far in 1997, the Partnership has made the following cash distributions to
its Partners:
Limited Partners $ 191,158
General Partners -
$191,158
<PAGE>
PART II - OTHER INFORMATION
----------------
ITEM 1. Legal Proceedings
Response: None
ITEM 2. Changes in Securities
Response: None
ITEM 3. Defaults Upon Senior Securities
Response: None
ITEM 4. Submission of Matters to a Vote of Security Holders
Response: None
ITEM 5. Other Information
Response: None
ITEM 6. Exhibits and Reports on Form 8-K
Response: None
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.
DEVELOPMENT PARTNERS
(A Massachusetts Limited Partnership)
By: GP L'Auberge Communities, L.P., a California Limited Partnership,
General Partner
By: L'Auberge Communities, Inc., its General Partner
By: ____/s/ Stephen B. Boyle________________
President
Date November 12, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Sep-30-1997
<CASH> 455,530
<SECURITIES> 0
<RECEIVABLES> 18,133
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 22,460,922
<DEPRECIATION> (5,067,352)
<TOTAL-ASSETS> 18,210,129
<CURRENT-LIABILITIES> 351,305
<BONDS> 8,520,306
0
0
<COMMON> 0
<OTHER-SE> 9,338,518
<TOTAL-LIABILITY-AND-EQUITY> 18,210,129
<SALES> 0
<TOTAL-REVENUES> 1,874,669
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,343,250
<LOSS-PROVISION> 0
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