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 June 30, 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, 21st Fl, New York, New York 10028
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 794-3292
406 East 85th Street, New York, NY 10028
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 ____
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<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
Index
Page No.
--------
Part I Financial information 3
Balance Sheets --
June 30, 1998 and December 31, 1997 4
Statements of Operations --
For the three months ended June 30, 1998 and 1997 5
Statements of Operations --
For the six months ended June 30, 1998 and 1997 6
Statements of Cash Flows --
For the six months ended June 30, 1998 and 1997 7
Notes to the Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II Other information 11
Signatures 12
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<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.
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<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
BALANCE SHEETS
June 30, 1998 and December 31, 1997
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Real estate, at cost:
Land $19,875,846 $19,875,846
Buildings and improvements 94,456,768 92,162,859
Equipment and furniture 78,029 78,029
------------- -------------
114,410,643 112,116,734
Less accumulated depreciation (20,061,744) (18,592,878)
------------- -------------
94,348,899 93,523,856
Cash and cash equivalents at cost,
which approximates market value 858,845 855,840
Accounts receivable 298,319 478,380
Due from partners -- 158,248
Note receivable 15,881 2,628
Step rent receivables 2,849,362 2,955,384
Deferred charges, net of accumulated amortization
of $697,870 in 1998 and $507,542 in 1997 824,756 1,015,084
Lease commissions and legal fees, net of accumulated amortization
of $1,562,053 in 1998 and $1,329,755 in 1997 1,912,062 1,844,392
Deposits 71,742 71,742
Prepaid expenses -- 41,414
------------- -------------
Total assets $101,179,866 $100,946,968
============= =============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Mortgage loan payable $41,067,600 $41,578,800
Accounts payable and accrued expenses 2,289,942 1,986,273
Due to partners 2,395,678 --
Other liabilities 1,070,048 1,141,712
------------- -------------
46,823,268 44,706,785
------------- -------------
Partners' Capital:
General partners:
Capital contributions 1,000 1,000
Net income 376,145 375,926
Cash distributions (549,225) (530,944)
------------- -------------
(172,080) (154,018)
------------- -------------
Limited partners: ($25 per unit; 4,000,000 units
authorized, 2,969,026 and 3,043,106 issued and
outstanding in 1998 and 1997, respectively)
Capital contributions, net of offering costs 71,740,765 71,818,166
Net income 37,238,272 37,216,567
Cash distributions (54,450,359) (52,640,532)
------------- -------------
54,528,678 56,394,201
------------- -------------
Total partners' capital 54,356,598 56,240,183
------------- -------------
Total liabilities and partners' capital $101,179,866 $100,946,968
============= =============
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
STATEMENTS OF OPERATIONS
For the three months ended June 30, 1998 and 1997
(Unaudited)
1998 1997
---------- ----------
Income:
Rental $4,413,323 $3,763,357
Interest and other income 32,361 43,713
---------- ----------
4,445,684 3,807,070
---------- ----------
Expenses:
Interest 810,510 784,461
Depreciation 733,554 748,865
Amortization 211,313 200,383
Property operating 1,994,212 1,561,392
Management fees 312,334 258,545
General and administrative 83,499 204,764
---------- ----------
4,145,422 3,758,410
---------- ----------
Net income $ 300,262 $ 48,660
========== ==========
Net income allocated:
To the general partners $ 3,003 $ 487
To the limited partners 297,259 48,173
---------- ----------
$ 300,262 $ 48,660
========== ==========
Net income per unit of
limited partnership interest $0.10 $0.02
========== ==========
See accompanying notes to financial statements.
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<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
STATEMENTS OF OPERATIONS
For the six months ended June 30, 1998 and 1997
(Unaudited)
1998 1997
---------- ----------
Income:
Rental $7,978,623 $7,332,052
Interest and other income 38,559 45,112
---------- ----------
8,017,182 7,377,164
---------- ----------
Expenses:
Interest 1,633,756 1,520,109
Depreciation 1,468,866 1,354,333
Amortization 422,626 400,766
Property operating 3,713,965 3,081,370
Management fees 587,402 484,542
General and administrative 168,643 304,784
---------- ----------
7,995,258 7,145.904
---------- ----------
Net Income from real estate operations 21,924 231,260
Gain on sale of real estate -- 912,501
---------- ----------
Net income $ 21,924 $1,143,761
========== ==========
Net income allocated:
To the general partners $ 219 $ 11,438
To the limited partners 21,705 1,132,323
---------- ----------
21,924 $1,143,761
========== ==========
Net income per unit of limited partnership interest $0.01 $0.37
========== ==========
See accompanying notes to financial statements.
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<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 21,924 $ 1,143,761
------------ ------------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,891,492 1,755,099
Gain on sale of real estate -- (912,501)
Changes in operating assets and liabilities
Decrease (increase) in:
Accounts receivable 180,061 70,474
Due from partners 153,926 99,797
Notes receivable (13,253) 3,804
Step rent receivables 106,022 60,474
Lease commissions (299,968) (280,798)
Deferred charges --
Prepaid expenses 41,414 (52,122)
Increase (decrease) in:
Accounts payable and accrued expenses 303,669 (904,897)
Due to partners 2,400,000 1,140
Other liabilities (71,664) 92,786
------------ ------------
Total adjustments 4,691,699 (66,744)
------------ ------------
Net cash provided by operating activities 4,713,623 1,077,017
------------ ------------
Cash flows from investing activities:
Acquisition of real estate (2,293,909) (12,775,408)
Sale of real estate -- 12,475,923
------------ ------------
Net cash used in investing activities (2,293,909) (299,485)
------------ ------------
Cash flows from financing activities:
Mortgage proceeds -- 1,000,000
Mortgage paid (511,200) (480,000)
Capital repurchase (77,401) (211,291)
Cash distributions to partners (1,828,108) (1,845,528)
------------ ------------
Net cash used in financing activities (2,416,709) (1,536,819)
------------ ------------
Net increase (decrease) in cash and cash equivalents 3,005 (759,287)
Cash and cash equivalents at beginning of period 855,840 2,025,925
------------ ------------
Cash and cash equivalents at end of period $ 858,845 $ 1,266,638
============ ============
</TABLE>
See accompanying notes to financial statements.
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<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 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.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Rental income received in cash $4,466,334 $3,830,095 $8,084,645 $7,392,526
Step rent receivables (53,011) (66,738) (106,022) (60,474)
----------- ----------- ----------- -----------
Rental income recognized $4,413,323 $3,763,357 $7,978,623 $7,332,052
=========== =========== =========== ===========
</TABLE>
3. Leases
Minimum future rentals under noncancellable operating leases as of June 30,
1998 are as follows:
Year ending December 31
-----------------------
1998 $ 5,544,000
1999 11,229,000
2000 10,213,000
2001 7,264,000
2002 5,137,000
Thereafter 15,494,000
------------
Total $54,881,000
============
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 and six months ended
June 30, 1998 and 1997, escalation charges amounted to $567,440 and $1,103,778
in 1998 and $706,336 and $1,369,043 in 1997, respectively.
8 of 12
<PAGE>
CORPORATE REALTY INCOME FUND I, L.P.
(a Delaware limited partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
4. Transactions with General Partners and Affiliates
Fees incurred and reimbursable expenses for the three and six months ended
June 30, 1998 are:
Three Six
Months Months
------ ------
Partnership management fees $63,636 $127,272
Property management fees 248,698 460,130
5. Supplemental Disclosure of Cash Flow Information
Cash paid for interest during the six months ended June 30, 1998 and 1997
amounted to $1,633,756 and $1,520,109, respectively.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations for the six months ended June 30, 1998.
Liquidity and Capital Resources
At June 30,1998, the Partnership had cash and working capital of
approximately $858,000 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.
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 $41,067,600.
Results of Operations
Rental revenues and expenses during the second quarter of 1998 increased
from 1997 as a result of the renewed leases and filled in vacancies in the New
York Property.
During the second quarter, the Partnership spent approximately $1.1 million
in tenant and building improvements and related lease expenses. Such
improvements, which are called for under the negotiated leases, enhance the
appraised values of the properties.
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<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.
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<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: August 12, 1998 By:Robert F. Gossett, Jr.
-----------------------------------
President, Director
Date: August 12, 1998 By:Pauline G. Gosset
-----------------------------------
Secretary
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<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, 1996 and
unaudited financial statements as at and for the six months ended June 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 785898
<NAME> Corporate Realty Income Fund I, L.P.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 858,845
<SECURITIES> 0
<RECEIVABLES> 289,319
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,173,045
<PP&E> 114,410,643
<DEPRECIATION> 20,061,744
<TOTAL-ASSETS> 101,179,866
<CURRENT-LIABILITIES> 5,755,668
<BONDS> 41,067,600
0
0
<COMMON> 54,528,678
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 101,179,866
<SALES> 7,978,623
<TOTAL-REVENUES> 8,017,182
<CGS> 0
<TOTAL-COSTS> 6,192,859
<OTHER-EXPENSES> 168,643
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,633,756
<INCOME-PRETAX> 21,924
<INCOME-TAX> 0
<INCOME-CONTINUING> 21,924
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,924
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
