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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 March 31, 1998
___ 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 0-15796
Corporate Realty Income Fund I, L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3311993
(State of organization) (I.R.S. Employer
identification No.)
475 Fifth Avenue, New York, New York 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 696-0772
- --------------------------------------------------------------------------------
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 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 ___
1 of 12
<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
Index
Page No.
Part I Financial information 3
Balance Sheets --
March 31, 1998 and December 31, 1997 4
Statements of Operations --
For the three months ended March 31, 1998 and 1997 5
Statements of Cash Flows --
For the three months ended March 31, 1998 and 1997 6
Notes to the Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II Other information 10
Signatures 11
2 of 12
<PAGE>
Part I. Financial Information
Item I. Financial Statements
The summarized financial information contained herein is unaudited; however, in
the opinion of management, all adjustments necessary for a fair presentation of
such financial information have been included.
3 of 12
<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
BALANCE SHEETS
March 31, 1998 and December 31, 1997
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Real estate, at cost:
Land $ 19,875,846 $ 19,875,846
Buildings and improvements 93,420,096 92,162,859
Equipment and furniture 78,029 78,029
------------- -------------
113,373,971 112,116,734
Less accumulated depreciation 19,328,190 18,592,878
------------- -------------
94,045,781 93,523,856
Cash and cash equivalents at cost,
which approximates market value 592,362 855,840
Accounts receivable 422,457 478,380
Due from general partners -- 158,248
Notes receivable 18,133 2,628
Step rent receivables 2,902,373 2,955,384
Deferred charges, net of accumulated amortization
of $602,706 in 1998 and $507,542 in 1997 919,920 1,015,084
Lease commissions and legal fees, net of accumulated amortization
of $1,445,904 in 1998 and $1,329,755 in 1997 1,973,267 1,844,392
Deposits 71,742 71,742
Other assets 340,097 41,414
------------- -------------
Total assets $ 101,286,132 $ 100,946,968
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Mortgage loan payable $ 41,323,200 $ 41,578,800
Accounts payable and accrued expenses 1,446,106 1,986,273
Due to general partners 2,163,984 --
Other liabilities 1,367,284 1,141,712
------------- -------------
Total liabilities 46,300,574 44,706,785
------------- -------------
Partners' Capital:
General partners:
Capital contributions 1,000 1,000
Net income 373,143 375,926
Cash distributions (540,108) (530,944)
------------- -------------
(165,965) (154,018)
------------- -------------
Limited partners: ($25 per unit; 4,000,000 units
authorized, 2,985,531 and 3,043,106 issued and
outstanding in 1998 and 1997, respectively)
Capital contributions, net of offering costs 71,753,666 71,818,166
Net income 36,941,012 37,216,567
Cash distributions (53,543,155) (52,640,532)
------------- -------------
55,151,523 56,394,201
------------- -------------
Total partners' capital 54,985,558 56,240,183
------------- -------------
Total liabilities and partners' capital $ 101,286,132 $ 100,946,968
============= =============
</TABLE>
See accompanying notes to financial statements.
4 of 12
<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
STATEMENTS OF OPERATIONS
For the three months ended March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Income:
Rental $ 3,565,300 $ 3,568,695
Interest and other income 6,198 1,399
----------- -----------
3,571,498 3,570,094
----------- -----------
Expenses:
Interest 823,246 735,648
Depreciation 735,312 605,468
Amortization 211,313 200,383
Property operating 1,719,753 1,519,978
Management fees 275,068 225,997
General and administrative 85,144 100,020
----------- -----------
3,849,836 3,387,494
----------- -----------
Net income/(loss) from real estate operations (278,338) 182,600
Gain on sale of real estate -- 912,501
----------- -----------
Net income/(loss) $ (278,338) $ 1,095,101
=========== ===========
Net income/(loss) allocated:
To the general partners $ (2,783) $ 10,951
To the limited partners (275,555) 1,084,150
----------- -----------
$ (278,338) $ 1,095,101
=========== ===========
Net income/(loss) per unit of limited partnership interest $ (0.09) $ 0.36
=========== ===========
</TABLE>
See accompanying notes to financial statements.
5 of 12
<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1998 and 1997
Increase/(Decrease) in Cash
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income/(loss) $ (278,338) $ 1,095,101
------------ ------------
Adjustments to reconcile net income/(loss) to net cash provided by operating
activities:
Depreciation and amortization 946,625 805,851
Gain on sale of real estate -- (912,501)
Changes in operating assets and liabilities:
Decrease (increase) in:
Accounts receivable 55,923 172,715
Due from affiliates 322,232 97,933
Note receivable (15,505) 1,893
Step rent receivables 53,011 (6,264)
Lease commissions (245,024) (158,688)
Other assets (298,683) (334,023)
Increase (decrease) in:
Accounts payable and accrued expenses (540,167) (806,341)
Other liabilities 225,572 134,315
------------ ------------
Total adjustments 503,984 (1,005,110)
------------ ------------
Net cash provided by operating activities 225,646 89,991
------------ ------------
Cash flows from investing activities:
Acquisition of real estate (1,257,237) (12,294,252)
Sale of real estate -- 12,475,923
------------ ------------
Cash provided by/(used in) investing activities (1,257,237) 181,671
------------ ------------
Cash flows from financing activities:
Due to affiliates 2,000,000 --
Mortgage paid (255,600) (240,000)
Capital repurchase (64,500) (75,250)
Cash distributions to partners (911,787) (924,792)
------------ ------------
Cash provided by/(used in) financing activities 768,113 (1,240,042)
------------ ------------
Net decrease in cash and cash equivalents (263,478) (968,380)
Cash and cash equivalents at beginning of period 855,840 2,025,925
------------ ------------
Cash and cash equivalents at end of period $ 592,362 $ 1,057,545
============ ============
</TABLE>
See accompanying notes to financial statements.
6 of 12
<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
1. General
The accompanying financial statements and related notes should be read in
conjunction with the Partnership's annual report for the year ended December 31,
1997 as certain footnote disclosures which would substantially duplicate those
contained in such audited financial statements have been omitted from this
report.
2. Rental Income
In accordance with the Financial Accounting Standards Board Statement No.
13, "Accounting for Leases," the Partnership recognizes rental income on a
straight-line basis over the fixed term of the lease period. Step rent
receivables represent unbilled future rentals. The following reconciles rental
income received in cash to rental income recognized.
Three Months Ended
----------------------------
1998 1997
----------- -----------
Rental income received in cash $ 3,618,311 $ 3,562,431
Step rent receivables (53,011) 6,264
----------- -----------
Rental income recognized $ 3,565,300 $ 3,568,695
=========== ===========
3. Leases
Minimum future rentals under noncancellable operating leases as of March
31, 1998 are as follows:
Year ending December 31
1998 $ 8,935,000
1999 11,229,000
2000 10,213,000
2001 7,264,000
2002 5,137,000
Thereafter 15,494,000
-----------
Total $58,272,000
===========
In addition to the minimum lease amounts, the leases provide for escalation
charges to the tenants for operating expenses and real estate taxes. Escalation
charges have been included in rental income. For the three months ended March
31, 1998 and 1997, escalation charges amounted to $536,338 and $662,707,
respectively.
7 of 12
<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
4. Transactions with General Partners and Affiliates
Fees incurred and reimbursable expenses for the three months ended March
31, 1998 are:
Three
Months
------
Partnership management fees $ 63,636
Property management fees 211,432
5. Supplemental Disclosure of Cash Flow Information
Cash paid for interest during the three months ended March 31, 1998 and
1997 amounted to $823,246 and $735,648, respectively.
8 of 12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations for the three months ended March 31, 1998.
Liquidity and Capital Resources
At March 31, 1998, the Partnership had cash and working capital of
approximately $592,000 which was invested in unaffiliated money market funds and
interest-bearing bank accounts. In addition, the Partnership has the right to
borrow an additional $1,400,000 under its existing line-of-credit. During the
first quarter of 1998, the general partner advanced money to the Partnership
sufficient to cover tenant and building improvements made during the period and
property taxes paid in advance.
The Partnership expects sufficient cash flow to be generated from
operations to meet its current operating and debt service requirements on a
short-term and long-term basis. The Partnership's only significant liability is
a mortgage loan of approximately $41,323,200.
Results of Operations
Rental revenue during the first quarter of 1998 was comparable to that of
1997. Property operating expenses were higher for 1998 when compared to 1997 due
to increased property taxes and repairs needed for certain buildings.
9 of 12
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) None.
(b) No reports on Form 8-K were filed during the quarter in which this report
is filed.
10 of 12
<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.
CORPORATE REALTY INCOME FUND I, L.P
(Registrant)
Date: May 15, 1998 By: Robert F. Gossett, Jr.
--------------------------------
President, Director
Date: May 15, 1998 By: Pauline G. Gossett
--------------------------------
Secretary
11 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
registrant's audited financial statements as at and for the year ended December
31, 1997 and unaudited financial statements as at and for the three months ended
March 31, 1998 and 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> 592,362
<SECURITIES> 0
<RECEIVABLES> 422,457
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,032,952
<PP&E> 113,373,971
<DEPRECIATION> 19,328,190
<TOTAL-ASSETS> 101,286,132
<CURRENT-LIABILITIES> 4,977,374
<BONDS> 41,323,200
0
0
<COMMON> 55,151,523
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 101,286,132
<SALES> 3,565,300
<TOTAL-REVENUES> 3,571,498
<CGS> 0
<TOTAL-COSTS> 2,941,446
<OTHER-EXPENSES> 85,144
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 823,246
<INCOME-PRETAX> (278,338)
<INCOME-TAX> 0
<INCOME-CONTINUING> (278,338)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (278,338)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
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