<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
____
Filed by the Registrant /_x_/
__
Filed by a Party other than the Registrant /_/
Check the appropriate box:
__ __
/_/ Preliminary Proxy Statement /_/ Confidential, for Use
of the Commission Only
(as permitted by Rule
____ 14a-6(e)(2))
/_x_/ Definitive Proxy Statement
__
/_/ Definitive Additional Materials
__
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CORPORATE REALTY INCOME FUND I, L.P.
__________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
__________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
____
/_x_/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
__
/_/ $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
__
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
____________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
____________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
____________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
____________________________________________________________________________
(5) Total fee paid:
____________________________________________________________________________
____
/_x_/ Fee paid previously with preliminary materials.
____________________________________________________________________________
__
/_/ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
____________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
______________________________________________________________________________
(3) Filing Party:
______________________________________________________________________________
(4) Date Filed:
______________________________________________________________________________
<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
406 EAST 85TH STREET
NEW YORK, NEW YORK 10028
_________________________________________________________________
PROXY STATEMENT
_________________________________________________________________
WRITTEN CONSENT IN LIEU OF
SPECIAL MEETING OF THE LIMITED PARTNERS
_________________________________________________________________
INTRODUCTION
The accompanying form of proxy is solicited on behalf of the
General Partners of Corporate Realty Income Fund I, L.P. (the
"Partnership") to solicit written consents in lieu of a special
meeting of Limited Partners. Written consents and proxies must
be received by the Partnership before the date on which all votes
will be counted, which date will be the 28th day after the
earliest dated consent is delivered to the Partnership provided,
however, that such date may be extended from time to time by the
General Partners to a date not later than 60 days after such
earliest dated consent is delivered to the Partnership. The
Partnership has first mailed these proxy materials to Limited
Partners and Unitholders on or about June 16, 1995. The
Partnership's principal executive office is located at 406 East
85th Street, New York, New York 10028. Limited Partners and
Unitholders of record at the close of business on June 8, 1995
(the "Record Date") will be entitled to vote.
Proxies in the accompanying form which are properly dated,
executed, and duly returned to the Partnership and not revoked
will be voted as specified and, if executed without specifying a
vote, will be voted in favor of the proposal discussed in this
Proxy Statement. Each proxy granted is revocable and may be
revoked at any time prior to its exercise by obtaining,
completing, executing, and returning an additional proxy
indicating the changed vote. Additional proxies may be obtained
by calling the Partnership's independent proxy solicitation
company at 1-800-290-6426. The Unitholders may vote only by
giving a written proxy to SB Depositary Corp. (the "Assignor
Limited Partner"), as required by the Partnership's agreement of
limited partnership (the "Partnership Agreement") and as
discussed below.
As of June 8, 1995, 3,200,000 limited partnership interests
in the Partnership were outstanding with each interest (an
"Interest") entitled to one vote on all matters to be voted upon.
All of the Interests are held by the Assignor Limited Partner,
which issued to the Unitholders depositary units of limited
partnership interest in the Partnership (the "Units"). The Units
represent an assignment of the economic and other rights
attributable to the Interests. As of June 8, 1995, 3,200,000
Units were outstanding, with each Unit entitled to one vote on
all matters to be voted upon, but only by giving a proxy to the
Assignor Limited Partner to vote an Interest. The Assignor
<PAGE>
Limited Partner will only vote the Interests held by it in
accordance with, and to the extent of, Unitholders' proxies. The
persons named in the accompanying proxy will vote on behalf of
the Assignor Limited Partner as instructed by each Unitholder
with respect to the proposal discussed in this Proxy Statement.
MATTERS UPON WHICH TO VOTE
The General Partners recommend to the Unitholders that they
approve a proposal (the "Proposal") to (i) arrange for secured
borrowings, in the form of a credit line facility or otherwise,
(ii) use such financing proceeds to fund the acquisition and
improvement of additional commercial buildings, and (iii) amend
(the "Amendment") the Partnership Agreement to authorize such
transactions. The Amendment will be effective as of the date the
votes are counted if it is approved by the Limited Partners and
Unitholders.
PURPOSE AND EFFECT OF THE PROPOSAL
The Partnership originally intended to finance approximately
50% of the aggregate purchase price of its properties. Having
received net proceeds from its offering of Units totalling
approximately $74,000,000, the Partnership would have been
expected to invest approximately $150,000,000 in commercial and
industrial real properties. However, because of changes in the
<PAGE>
commercial real estate market, the Partnership acquired only six
properties for an aggregate purchase price of approximately
$80,000,000, of which $10,000,000 constituted loan proceeds. The
Proposal restores the General Partners' original authority, now
lapsed, to leverage the Partnership's properties and use the
financing proceeds to acquire additional commercial properties.
All six properties were net leased to single tenants on a
long-term basis. The Partnership anticipated holding such
properties for approximately five to ten years, during which time
it would receive net rental payments from the tenants, after
which it would seek to sell the properties at prices which would
hopefully provide long-term capital appreciation.
The Partnership has endured the bankruptcy of two of its
tenants, the expiration of a third lease and the amendment of
another to avoid an early termination, and declines in the
occupancy and rental rates for commercial properties. The
General Partners have successfully converted properties to multi-
tenant buildings and re-leased all vacated space, but at lower
rates than those paid by the original net lease tenants. In
addition, the rental income from the Partnership's other two
properties is expected to decrease after the expiration of the
initial terms of the existing single-tenant leases. As a result,
the Partnership's rental income from its properties and
distributions to Unitholders have decreased significantly and the
Partnership cannot presently expect to recover its entire
investment if it were to sell such properties. Moreover, because
<PAGE>
of the length of existing leases, the Partnership's properties
would be slow to reflect any improvements in market rents and
property values.
The Proposal is designed to accelerate the Partnership's
participation in any increases in commercial real estate rents
and property values. By using the equity in its properties to
finance the purchase of additional properties, the Partnership
would further diversify its assets and reduce the impact of
underperforming properties on its entire portfolio. The
acquisition of additional properties would also increase the
Partnership's net income and distributions to Unitholders, to the
extent the revenues from such properties exceed operating and
financing costs related to such properties. The General Partners
intend to seek multi-tenant commercial properties which, with
improvements, might achieve higher occupancy and rental rates.
If successful, this policy would further increase the
Partnership's net income and distributions to Unitholders and the
net value of the Partnership's portfolio of properties.
Unitholders who do not wish to await any improvement in the
value of the Partnership's properties may, of course, sell or
otherwise transfer their Units. Such Unitholders may find that
the demand for Units is increased as a result of the adoption of
the Partnership's repurchase program. Pursuant to such program,
the Partnership may, from time to time, in its sole discretion,
purchase Units offered for sale by Unitholders. Any such
purchases are subject to limits and other conditions imposed by
<PAGE>
the Partnership and applicable tax and securities laws. Any such
purchases will be funded from the Partnership's available cash,
which may include proceeds of Partnership borrowings. Any Units
repurchased by the Partnership will be cancelled, so that the
interest of the remaining Unitholders and Partners in items of
Partnership income, gain, loss, deduction, and credit would be
proportionately increased.
FINANCING TERMS AND EFFECTS
The General Partners have engaged in discussions with a
lender concerning potential terms of secured borrowings to
finance the acquisition and improvement of additional properties.
However, the Partnership has neither sought nor obtained a
commitment for any such financing. The following discussion
represents the General Partners' expectations regarding such loan
terms. The actual terms of any borrowings may differ from such
expectations, but will be within the limits established by the
Partnership Agreement.
The mortgage financing will be secured by all or most of the
Partnership's properties, including its existing properties. The
indebtedness will be non-recourse, meaning that the lender's
recourse will be limited to the properties which secure the debt;
neither the Partnership nor its Partners and Unitholders will be
liable for any deficiency between the value of the Partnership's
properties and the outstanding indebtedness.
The General Partners expect the financing to be initially
structured as a secured revolving line of credit, against which
the Partnership could draw funds as and when additional
properties are acquired and/or improved. Outstanding amounts
drawn by the Partnership would bear interest at a variable rate
determined by the prime rate or other index announced from time
to time by the lender. In addition to such interest, the lender
will receive a financing fee (computed as a percentage of the
credit line facility) plus payment of its out-of-pocket costs,
such as appraisal, architect, and legal fees. Monthly payments
of interest only will be required until maturity, at which time
the entire principal amount will be due. Such financing would be
short-term, with a probable maturity of only one year, so that
the facility must be extended or refinanced each year.
The General Partners intend to replace the credit line
facility with a fixed rate mortgage loan after the Partnership
has completed its purchase of additional properties. Any such
financing would likely require monthly payments of principal and
interest until maturity, at which time a substantial balloon
payment of remaining principal would likely be due and payable.
The General Partners expect that any such loan would feature a
short to medium term of approximately three to seven years.
The Partnership's lenders can be expected to impose limiting
conditions on the Partnership's ability to borrow funds. Such
conditions would include debt service coverage (the Partnership's
net income before debt service would have to exceed debt service
<PAGE>
payments by a stated multiple) and loan to portfolio value (the
outstanding indebtedness could not exceed a stated percentage of
the value of the Partnership's properties). These limitations
are separate from those imposed by the Partnership Agreement, as
described below.
The General Partners expect to approximate the Partnership's
original intention of a loan to value ratio of 50%. Accordingly,
it is expected that the Partnership's total borrowings will
approximate 50% of the sum of (x) the appraised values of the
Partnership's original six properties plus (y) the purchase price
of additional properties acquired by the Partnership pursuant to
the Proposal. The Partnership is not limited as to borrowing for
any individual property; the aggregate borrowings on all
properties may not exceed an amount equal to the sum of (i) 60%
of the aggregate purchase price of all properties which are not
refinanced plus (ii) 80% of the aggregate value of all refinanced
properties.
The effects of the Proposal's leveraging are, on the one
hand, to increase the funds available for investment by the
Partnership and, on the other hand, to increase the risk of loss
on a leveraged property. To be profitable, the Partnership's
properties will need to generate cash flow in amounts sufficient
to not only cover operating expenses but also to pay all
financing costs. The higher the rate of interest on the
financing, the more difficult it will be for the Partnership to
meet its obligation and the greater the possibility of default.
<PAGE>
If the Partnership defaults on secured indebtedness, the lender
may foreclose and the Partnership could lose its investment in
the property.
It is anticipated that the Partnership's mortgage financing
will not provide for the amortization of the entire principal
amount of such loans or a substantial portion thereof prior to
maturity. Such mortgages involve greater risks than mortgages
where the principal amount is amortized over the term of the loan
because the ability of the Partnership to repay the outstanding
principal amount of the balloon loan at maturity may depend upon
the Partnership's ability to obtain adequate refinancing, which
will in turn depend upon economic conditions in general and the
value of the underlying properties in particular. There is no
assurance that the Partnership will be able to replace the credit
line facility with a fixed rate loan or pay or refinance any
balloon payment mortgage at maturity.
VOTE REQUIRED FOR APPROVAL
Approval of the Proposal, including adoption of the
Amendment, requires the affirmative vote of a majority of the
outstanding Interests.
<PAGE>
THE AMENDMENT
The Amendment consists of revisions to Paragraphs 15.2.13,
and 15.4.18, and the deletion of Paragraph 15.4.34, of the
Partnership Agreement.
Paragraph 15.2.13 of the Partnership Agreement would be
revised in its entirety, to permit investment of financing
proceeds in additional properties, to read as follows:
"15.2 Powers of the General Partners. The conduct of the
Partnership's business shall be controlled by the General
Partners. The General Partners shall have all authority, rights
and powers conferred by law and those required or appropriate to
the management of the Partnership's business which, by way of
illustration but not by way of limitation, shall, subject only to
the provisions of Paragraph 15.4 following, include the right,
authority and power:
15.2.13 to reinvest all Cash From Initial Financing and all
Cash from Sales and Refinancings;"
Paragraph 15.4.18 of the Partnership Agreement would be
revised in its entirety, to permit investment of financing
proceeds in additional properties, to read as follows:
"15.4 Limitations. Neither the General Partners nor any
Affiliate shall have the authority to:
15.4.18 reinvest in Property any Adjusted Cash From
Operations;"
<PAGE>
Paragraph 15.4.34 of the Partnership Agreement would be
deleted in its entirety, to permit greater amounts of non-
amortizing, balloon payment financing (such financing is
presently limited to 25% of the total purchase price of acquired
properties).
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The General Partners of the Partnership are 1345 Realty
Corporation (the "Corporate General Partner") and Robert F.
Gossett, Jr. All of the shares of capital stock of the Corporate
General Partner are owned by Mr. Gossett and his wife. The
Proposal may increase the compensation payable to the General
Partners by the Partnership, as discussed below.
The Proposal will not result in any additional acquisition
fees payable to the General Partners because such fees cannot be
paid in connection with the refinancing of the Partnership's
original six properties. Similarly, the General Partners will
not receive any increased asset management fees because such fees
are determined solely by the investment of net proceeds of the
Partnership's offering of Units (which offering was completed in
1987). However, to the extent the Partnership acquires (and
eventually disposes of) additional properties and thereby
increases its net cash from operations and its net cash from
sales of properties, the General Partners will receive the
following additional compensation: property management fees
<PAGE>
ranging from 1% to 6% of gross revenues from the operation of the
Partnership's additional properties depending on the type of
property, length and nature of the lease, and the extent of
leasing services performed by the General Partners; partnership
management fees equal to 7% of any increase in the Partnership's
adjusted cash from operations, to the extent the revenues
generated by the Partnership's additional properties exceed the
expenses associated with such properties, including financing
costs; the General Partners' interest as Partners of the
Partnership, equal to 1% of any increase in distributions to
Partners, to the extent such increase is attributable to
operation of the Partnership's additional properties; and upon
the sale of any such additional Partnership properties, the
General Partners will be entitled to 1% of any distributions of
such sale proceeds until the Limited Partners and Unitholders
have received an 8% per annum priority return, then a property
disposition fee in an amount up to 1% of the gross sales price of
such additional properties, and, finally, 25% of any remaining
distributions to the Partners and Unitholders from such sales
proceeds.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
As of June 8, 1995, no person was known by the Partnership
to be the beneficial owner of more than five percent (5%) of the
<PAGE>
outstanding Units.
As of June 8, 1995, neither of the General Partners nor any
of the directors or officers of the Corporate General Partner
owned any Units of the Partnership.
On November 30, 1994 and effective as of July 1, 1994,
Robert F. Gossett, Jr., the Individual General Partner of the
Partnership, acquired for his own account and for the account of
his wife, Pauline G. Gossett, all of the outstanding capital
stock of the Corporate General Partner of the Partnership. Such
capital stock was acquired from Smith Barney (Delaware) Inc.
Mr. Gossett funded such acquisition from available personal
funds, without any loan proceeds. As a result of such
acquisition, Mr. Gossett owns or controls, directly or
indirectly, the entire interest of the General Partners in the
Partnership.
There are no arrangements, known to the Partnership,
which may at a subsequent date result in a change in control of
the Partnership.
EXPENSE OF SOLICITATION
The cost of preparing this Proxy Statement and all
other costs in connection with this solicitation of proxies is
being borne by the Partnership. In addition to the solicitation
of proxies by use of the mails, the Partnership and the General
Partners and their respective officers and regular employees,
<PAGE>
acting on behalf of the Partnership, may solicit proxies by
telephone, telegraph, or personal interview. In addition, the
Partnership has retained D.F. King & Co., Inc., an independent
proxy solicitation company, to aid in the solicitation of
proxies, for which the Partnership will pay an estimated fee of
$5,000, plus expenses. The Partnership will, at its expense,
request custodians, nominees, and fiduciaries to forward proxy
soliciting material to the beneficial owners of Units held of
record by such persons.
Your cooperation in giving this matter your immediate
attention and in returning your proxies promptly will be
appreciated.
By Order of the General Partners
1345 REALTY CORPORATION
By Robert F. Gossett, Jr., President
ROBERT F. GOSSETT, JR.
Dated: June 16, 1995
<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
406 EAST 85TH STREET
NEW YORK, NEW YORK 10028
PROXY CARD
PROXY TO SOLICIT WRITTEN CONSENT IN LIEU OF A SPECIAL MEETING OF LIMITED
PARTNERS. THIS PROXY IS SOLICITED ON BEHALF OF THE GENERAL PARTNERS. The
undersigned hereby appoints Robert F. Gossett, Jr. and Madeline Matlak, and
each of them, acting on behalf of SB Depositary Corp., as proxies for the
undersigned, with full power of substitution, to vote all limited
partnership interests attributable to depositary units of limited
partnership interest ("Units") in Corporate Realty Income Fund I, L.P. (the
"Partnership") which the undersigned is entitled to vote as Unitholder of
record on June 8, 1995, hereby revoking any proxy or proxies heretofore
given by the undersigned to any person or persons with respect to such
Units. Said proxies are instructed to vote as specified in the spaces on
the reverse side.
Please sign as name(s) appear(s)
hereon. PROXIES MUST BE DATED
WHEN SIGNED. When signing as
attorney, executor, administrator,
trustee or guardian, the full title
of such should be given.
__________________Date______________
Signature of Unitholder
__________________Date______________
Signature if held jointly
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED ONLY AS DIRECTED. IF YOU
SIGN, DATE, AND RETURN THIS PROXY WITHOUT SPECIFYING A VOTE, YOUR UNITS
WILL BE VOTED FOR THE PROPOSAL.
Receipt is acknowledged of the Proxy Statement relating to this solicitation.
PROPOSAL - To authorize the Partnership to FOR __ AGAINST __ ABSTAIN __
incur additional borrowings and use such loan
proceeds to finance the acquisition and
improvement of other commercial buildings and
to amend the agreement of limited partnership
of the Partnership to permit such transactions.
<PAGE>
CORPORATE REALTY INCOME FUND
406 EAST 85TH STREET (bullet) NEW YORK, NY 10028
June 16, 1995
Dear Unitholder:
The General Partners of Corporate Realty Income Fund I, L.P. are seeking
your authorization to purchase additional commercial real estate on behalf
of the Partnership and to mortgage existing Partnership properties
to finance such purchases.
The Partnership's original objective was to buy $150 million worth of
buildings, financed equally with equity and debt. After buying six
buildings at a cost of $80 million (using only $10 million in debt), we
suspended our acquisition program. Thereafter, real estate values declined
substantially.
All of the Partnership's buildings are currently fully leased and generate
positive cash flows. However, because current rents are less than the
original rents, the Partnership's cash flows and property values have been
reduced from their acquisition levels. Without some action such as proposed
here, these cash flows and values cannot increase before the current leases
expire over the next five or more years. We anticipate that if the properties
were liquidated today and the proceeds distributed, the Unitholders would
receive cash equal to approximately one-half of their original investment.
The commercial real estate markets have begun an upturn. The General
Partners believe that now is an opportune time to resume the Partnership's
previously suspended acquisition program. The objective of this program is
to increase the Partnership's cash flow and to accelerate any increase in
the value of its properties. However, due to the passage of time, the
General Partners no longer have the authority to implement this
acquisition program without your authorization, which we now seek.
The General Partners are also pleased to announce the Partnership's adoption
of a repurchase program pursuant to which the Partnership may, from time to
time, in its sole discretion, purchase Units offered for sale by Unitholders.
Any such purchases will be subject to volume limits and other conditions
imposed by the Partnership and applicable tax and securities laws. This
repurchase program is intended to provide additional opportunities for
Unitholders to liquidate their Units at prevailing market prices.
For questions, please call the Partnership's solicitation agent, D.F. King
& Co., Inc., at (800) 290-6426.
Sincerely,
Robert F. Gossett, Jr.,
Individual General Partner
and President, 1345 Realty Corporation,
Corporate General Partner
THE GENERAL PARTNERS RECOMMEND A VOTE IN FAVOR OF THE PROPOSAL. YOU ARE
URGED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE
PROVIDED.
