FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(D)
(As last amended by 34-31905, eff. 4/26/93)
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [No Fee Required]
For the fiscal year ended December 31, 1996
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period.........to.........
Commission file number 0-16010
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
(Name of small business issuer in its charter)
California 94-3004963
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Depositary Receipt
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $2,260,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of December 31, 1996: Market value information for the
Registrant's partnership interests is not available. Should a trading market
develop for these interests, it is management's belief that such trading would
not exceed $25,000,000.
PART I
ITEM 1.BUSINESS
Johnstown/Consolidated Income Partners (the "Partnership" or "Registrant") was
organized on January 9, 1986, as a limited partnership under the California
Revised Limited Partnership Act. On June 20, 1986, the Partnership registered
with the Securities and Exchange Commission ("SEC") under the Securities Act of
1933 (File No. 33-2637) and commenced a public offering for sale of $150 million
of Units. The Units represent economic rights attributable to the limited
partnership interests in the Partnership and entitle the holders thereof
(hereinafter referred to as "Unitholders") to the economic benefits attributable
to equity interests in the Partnership and to participate in certain
allocations and distributions of the Partnership. The limited partner of the
Partnership is Johnstown/Consolidated Depositary Corporation (the "Corporate
Limited Partner"), an affiliate of the General Partner (as hereinafter defined).
The Corporate Limited Partner serves as depositary for the Units pursuant to a
Depositary Agreement entered into with the Partnership. The Partnership
subsequently filed a Form 8-A Registration Statement with the SEC and registered
the Units under the Securities Exchange Act of 1934 (File No. 0-16010). The sale
of Units closed on June 19, 1987, with 129,266 Units sold at $250 each, for
gross proceeds of approximately $32.3 million to the Partnership. The
Partnership has retired a total of 456 Units which were returned to the
Partnership by Unitholders. The Partnership gave no consideration for the Units
retired. The Partnership may reacquire or retire any Units, at its absolute
discretion, but is under no obligation to do so.
By the end of fiscal year 1988, approximately 79% of the proceeds raised had
been invested in four (4) properties, five (5) mortgage loans, and approximately
$1.6 million in guaranteed mortgage-backed securities ("MBS"). Of the remaining
21%, 11.8% was required for organizational and offering expenses and sales
commissions and 9.2% was retained in Partnership reserves for working capital
as required by the Partnership Agreement.
The General Partner of the Partnership is ConCap Equities, Inc., a Delaware
corporation (the "General Partner" or "CEI"). The principal place of business
for the Partnership and the General Partner is One Insignia Financial Plaza,
Greenville, South Carolina 29602. The General Partner and the Corporate
Limited Partner shall together be called the "Partners."
The Partnership's primary business and only industry segment is real estate
related operations. The Partnership was formed for the benefit of its
Unitholders: (i) to acquire, own and operate existing income-producing
properties and newly constructed properties with income-producing capabilities
including office buildings, industrial properties, shopping centers, mobile home
parks and residential properties; (ii) to invest in mortgage loans originated
or purchased by the Partnership; and (iii) to invest in MBS's. As of December
31, 1996, the Partnership owned three (3) properties and a one-third (1/3)
undivided interest in another property. In years previous to 1996, the
Partnership liquidated its investments in MBSs, sold two (2) properties
(accepting a note on one of the sales), received payment on two (2) of the
mortgage loans, completed a judicial foreclosure on three (3) properties which
secured three (3) mortgage loans, and disposed of one (1) property which was
foreclosed upon by the lender.
As of December 31, 1996, the Partnership's working capital reserves are in
excess of the 5% of Net Invested Capital (as defined in the Partnership
Agreement) as required by the Partnership Agreement. See "Item 6 - Management's
Discussion and Analysis" for discussion of Partnership liquidity and capital
resources.
The real estate business is highly competitive. The Registrant's real property
investments are subject to competition from similar types of properties in the
markets in which they are located and the Partnership is not a significant
factor in its industry. In addition, various limited partnerships have been
formed by related parties to engage in business which may be competitive with
the Registrant.
The Registrant has no employees. Management and administrative services are
performed by affiliates of Insignia Financial Group, Inc. ("Insignia"), an
affiliate of the General Partner. The property manager is responsible for the
day-to-day operations of each property. The General Partner has also selected
affiliates of Insignia to provide real estate advisory and asset management
services to the Partnership. As advisor, such affiliates provide all
partnership accounting and administrative services, investment management, and
supervisory services over property management and leasing. For a further
discussion of property and partnership management, see "Item 12".
Upon the Partnership's formation in 1986, Consolidated Capital Equities
Corporation ("CCEC") was the sole General Partner of the Partnership, and
Johnstown/Consolidated Depositary Corporation, a wholly-owned subsidiary of
CCEC, was the sole limited partner. In 1988, Southmark Corporation
("Southmark") gained control of CCEC. In December 1988, CCEC filed for
reorganization under Chapter 11 of the United States Bankruptcy Code. As part
of its reorganization plan, CEI acquired CCEC's general partner interests in the
Partnership and in 15 other affiliated public limited partnerships (the
"Affiliated Partnerships") and replaced CCEC as managing general partner in all
16 partnerships. The selection of CEI as the sole managing general partner was
approved by a majority of the Unitholders in the Partnership and the limited
partners in each of the Affiliated Partnerships pursuant to a solicitation of
the Unitholders dated August 10, 1990. As part of this solicitation, the
Unitholders also approved an amendment to the Partnership Agreement to limit
changes of control of the Partnership.
All of CEI's outstanding stock is owned by GII Realty, Inc. In December 1994,
the parent of GII Realty, Inc., entered into a transaction (the "Insignia
Transaction") in which an affiliate of Insignia acquired an option (exercisable
in whole or in part from time to time) to purchase all of the stock of GII
Realty, Inc. and, pursuant to a partial exercise of such option, acquired 50.5%
of that stock. As a part of the Insignia Transaction, the Insignia affiliate
also acquired all of the outstanding stock of Partnership Services, Inc., an
asset management entity and Insignia acquired all of the outstanding stock of
Coventry Properties, Inc., a property management entity. In addition,
confidentiality, non-competition, and standstill arrangements were entered into
between certain of the parties. Those arrangements, among other things,
prohibit GII Realty's former sole shareholder from purchasing Partnership Units
for a period of three years. On October 24, 1995, the Insignia affiliate
exercised the remaining portion of its option to purchase all of the remaining
outstanding capital stock of GII Realty, Inc.
ITEM 2. DESCRIPTION OF PROPERTY
The Partnership originally acquired four (4) properties and funded five (5)
loans. At December 31, 1996, the Partnership owns three (3) properties and a
one-third (1/3) undivided interest in another property. The following table
sets forth the properties held by the Partnership. Additional information about
the properties is found in "Item 7 - Financial Statements", "Note K - Investment
Properties and Accumulated Depreciation."
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C> <C> <C>
Cedar Brooke 02/27/87 Fee ownership subject Apartment
Independence, Missouri to first mortgage 158 units
Florida #6 Mini-Warehouse 10/15/90 Fee ownership Storage Cente
Lauderhill, Florida 61,121 sq.ft.
Florida #11 Mini-Warehouse 10/15/90 Fee ownership Storage Cente
Davie, Florida 64,240 sq.ft.
Phoenix Business Campus 08/26/86 Fee ownership Office Buildi
Atlanta, Georgia 79,196 sq.ft.
</TABLE>
SCHEDULE OF PROPERTIES:
(dollar amounts in thousands)
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
<S> <C> <C> <C> <C> <C>
Cedar Brooke $ 4,044 $2,528 5-19 years S/L $ 2,630
Florida #11 Mini-
Warehouse 2,749 563 5-20 years S/L 2,409
Phoenix Business
Campus 5,890 2,600 5-28 years S/L 2,783
Totals $12,683 $5,691 $ 7,822
Also, the Partnership's one-third interest in the Florida #6 Mini-Warehouse has
been classified as investment property held for sale. At December 31, 1996, the
Partnership's net carrying value of the property is approximately $850,000 and a
Federal tax basis of approximately $946,000. Johnstown/Consolidated Income
Partners/2, an affiliated Partnership, owns the remaining two-thirds interest in
the property.
See "Note A" of the Financial Statements included in "Item 7" for a description
of the Partnership's depreciation policy.
SCHEDULE OF MORTGAGES:
(dollar amounts in thousands)
Principal Principal
Balance At Balance
December 31, Interest Maturity Due At
Property 1996 Rate Date Maturity
Cedar Brooke $ 2,325 7.33% 11/03 $ 2,325
1st mortgage
SCHEDULE OF RENTAL RATES AND OCCUPANCY:
Average Annual Average
Rental Rates Occupancy
Property 1996 1995 1996 1995
Cedar Brooke $ 5,461/per unit $ 5,231/per unit 98% 99%
Florida #6 Mini-Warehouse 10.88/per sq. ft. 10.44/per sq. ft. 91% 90%
Florida #11 Mini-Warehouse 10.99/per sq. ft. 10.27/per sq. ft. 96% 96%
Phoenix Business Campus 7.52/per sq. ft. 8.76/per sq. ft. 62% 58%
The increase in average rental rates at Cedar Brooke and the Florida #6 and #11
Mini-Warehouses is due to higher rental rates being charged at the properties.
The decrease in the average rental rate at Phoenix Business Center is due to the
lower rental income in 1996 resulting from the continued negative impact on
vacancy created by the move out of a large tenant during the first quarter of
1995. The increase in average occupancy at the Phoenix Business Campus is due
to a new tenant who moved in in the fourth quarter, occupying 14% of the total
square footage.
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other similar properties in the area. The General Partner
believes that all of the properties are adequately insured. With the exception
of the Phoenix Business Campus, the properties' lease terms are for one year or
less and no tenant leases 10% or more of the available rental space.
The following is a schedule of lease expirations for the years 1997-2006 (dollar
amounts in thousands):
Number of % of Gross
Expirations Square Feet Annual Rent Annual Rent
Phoenix Business Campus
1997 1 3,990 $ 28 6.94%
1998 2 25,776 177 43.28%
1999 1 5,170 41 10.14%
2000 2 6,858 66 16.08%
2001 1 11,092 96 23.56%
2002-2006 0 -- -- --
The following schedule reflects information on tenants leasing 10% or more of
the leasable square footage for each property:
Square
Nature of Footage Annual Rent/ Lease
Business Leased Square Foot Expiration
Phoenix Business Campus
Computer software 17,342 $6.50 1-31-98
Airline services 8,434 $7.57 10-31-98
Mortgage lender 11,092 $8.67 9-30-01
SCHEDULE OF REAL ESTATE TAXES AND RATES:
Real estate taxes and rates in 1996 for each property were (dollar amounts in
thousands):
1996 1996
Billing Rate
Cedar Brooke $43 6.1%
Florida #6 Mini-Warehouse (a) 26 2.4%
Florida #11 Mini-Warehouse 65 2.6%
Phoenix Business Campus 28 3.8%
(a) Represents the Partnership's one-third share of real estate taxes.
ITEM 3. LEGAL PROCEEDINGS
The Partnership is unaware of any pending or outstanding litigation that is not
of a routine nature. The General Partner of the Partnership believes that all
such pending or outstanding litigation will be resolved without a material
adverse effect upon the business, financial condition, or operations of the
Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the year ended December 31, 1996, no matters were
submitted to a vote of the Unitholders, through the solicitation of proxies or
otherwise.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S UNITS OF DEPOSITARY RECEIPT AND RELATED
SECURITY HOLDER MATTERS
(A) No established public trading market for the Units exists nor is one
expected to develop.
(B) Title of Class: Number of Unitholders of Record:
Units of Depositary Receipt 2,660 as of December 31, 1996
(C) In March 1996, the General Partner paid distributions attributable to
cash flow from operations totalling approximately $490,000 or $3.81 per
Unit to the Unitholders, and a corresponding $5,000 General Partner
distribution. In September 1996, the General Partner paid distributions
attributable to cash flow from operations totalling approximately
$500,000 or $3.88 per Unit to the Unitholders, and a corresponding $5,000
distribution to the General Partner. Cumulative distributions to
Unitholders since the inception of the Partnership totaled approximately
$12.2 million at December 31, 1996.
In March 1995, the General Partner paid distributions attributable to
cash flow from operations totalling approximately $495,000 or $3.84 per
Unit to the Unitholders, and a corresponding $5,000 General Partner
distribution. In September 1995, the General Partner paid distribution
attributable to cash flow from operations totalling approximately
$495,000 or $3.84 per Unit to the unitholders along with a corresponding
General Partner distribution of approximately $5,000.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
The Partnership realized a net loss of approximately $109,000 for the year ended
December 31, 1996, compared to net income of approximately $350,000 for the year
ended December 31, 1995. The decrease in net income is primarily due to a
$123,000 decrease in other income, increased maintenance expense and the
$231,000 loss realized on the refinancing of the debt secured by the Cedar
Brooke Apartments in 1996, partially offset by decreased administrative
expenses.
The decrease in other income resulted from the Partnership receiving no
dividends on its investment in Southmark Preferred Stock during 1996.
Maintenance expense increased due to expenditures for exterior painting at the
Florida #11 Mini-Warehouse and exterior building improvements made at the Cedar
Brooke Apartments in efforts to increase the curb appeal of the Partnership's
properties. The maintenance expense increase was partially offset by the
decrease in general and administrative expenses resulting from the elimination
of expense reimbursements related to efforts of the Dallas partnership
administration staff during the management transition in 1995.
In November of 1996, the Partnership refinanced the mortgage note of
approximately $2,061,000, secured by the Cedar Brooke Apartments. Accordingly,
this debt is no longer regulated by the U.S. Department of Housing and Urban
Development. The new mortgage indebtedness of $2,325,000 requires monthly
interest only payments at a stated rate of 7.33% with a balloon payment due at
maturity. A loss on refinancing of approximately $231,000 was realized in 1996.
This loss resulted from the write-off of unamortized mortgage discounts and loan
costs.
Included in maintenance expenses is approximately $69,000 of major repairs
and maintenance comprised primarily of exterior painting and exterior building
improvements for the year ended December 31, 1996.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
At December 31, 1996, the Partnership held unrestricted cash and cash
equivalents of approximately $1,583,000 compared to approximately $1,967,000 at
December 31, 1995. Net cash provided by operating activities decreased slightly
due primarily to reduced rental and other income, an increase in interest
payments and higher maintenance expenses. Net cash provided by investing
activities decreased as a result of the Partnership investing primarily in
shorter term cash equivalents during 1996, rather than longer term securities
and due to the establishment of a restricted capital escrow in conjunction with
the refinancing of the mortgage indebtedness secured by the Cedar Brooke
Apartments (see "Note E" on the Notes to the Financial Statements in "Item 7").
Net cash used in financing activities decreased as a result of the refinancing
of Cedar Brooke in 1996.
The Partnership is required by the Partnership Agreement to maintain working
capital reserves for contingencies of not less than 5% of Net Invested Capital
as defined in the Partnership Agreement. In the event expenditures are made
from these reserves, operating revenue shall be allocated to such reserves to
the extent necessary to maintain the foregoing level. Reserves, including cash
and cash equivalents, tenant security deposits and investments totalling
approximately $2,083,000 at December 31, 1996, exceeded the Partnership's
reserve requirement of approximately $1,385,000.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and meet other operating needs of the Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
mortgage indebtedness of $2,325,000, matures in 2003, at which time the debt
will either be refinanced or the property sold. Future cash distributions will
depend on the levels of net cash generated from operations, capital expenditure
requirements, property sales and the availability of cash reserves. As part of
the Partnership's ongoing attempt to maximize return to the Unitholders, the
Partnership is under negotiations to sell its one-third interest in the Florida
#6 Mini-Warehouse. Currently, the property disposition is not considered
imminent. Cash distributions of approximately $1 million were paid during each
of the years ended December 31, 1996 and 1995.
ITEM 7. FINANCIAL STATEMENTS
JONHSTOWN/CONSOLIDATED INCOME PARTNERS
LIST OF FINANCIAL STATEMENTS
Report of Independent Auditors
Balance Sheet B December 31, 1996
Statements of Operations - Years ended December 31, 1996
and 1995
Statements of Changes in Partners' Capital (Deficit) - Years ended December
31, 1996 and 1995
Statements of Cash Flows - Years ended December 31, 1996 and 1995
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Johnstown/Consolidated Income Partners
We have audited the accompanying balance sheet of Johnstown/Consolidated Income
Partners as of December 31, 1996, and the related statements of operations,
changes in partners' capital (deficit) and cash flows for each of the two years
in the period ended December 31, 1996. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Johnstown/Consolidated Income
Partners as of December 31, 1996, and the results of its operations and its cash
flows for each of the two years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Greenville, South Carolina
January 30, 1997
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
BALANCE SHEET
(in thousands, except unit data)
December 31, 1996
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents:
Unrestricted $ 1,583
Restricted - tenant security deposits 53
Investments 447
Accounts receivable, net of allowance 28
Escrows for taxes and insurance 308
Restricted escrows 67
Other assets 246
Investment property held for sale 850
Investment properties:
Land $ 1,571
Buildings and related personal property 11,112
12,683
Less accumulated depreciation (5,691) 6,992
$10,574
Liabilities and Partners' Capital (Deficit)
Accounts payable $ 104
Tenant security deposits 61
Accrued taxes 47
Other liabilities 82
Mortgage notes payable 2,325
Partners' Capital (Deficit)
General partner $ (166)
Corporate limited partner on behalf
of the Unitholders - (128,810 Units 8,121 7,955
issued and outstanding)
<FN> $10,574
See Accompanying Notes to Financial Statements
</TABLE>
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1996 1995
Revenues:
Rental income $2,093 $2,172
Other income 167 290
Total revenues 2,260 2,462
Expenses:
Operating 725 722
General and administrative 293 335
Maintenance 252 196
Depreciation 514 519
Interest 191 180
Property taxes 163 160
Total expenses 2,138 2,112
Income before extraordinary item 122 350
Extraordinary loss on early
extinguishments of debt (231) --
Net (loss) income $ (109) $ 350
Net (loss) income allocated to general
partner (1%) $ (1) $ 3
Net (loss) income allocated to limited
partners (99%) (108) 347
$ (109) $ 350
Per Unit of Depositary Receipt:
Income before extraordinary item .95 2.69
Extraordinary loss on early
extinguishments of debt (1.79) --
Net (loss) income per Unit of Depositary Receipt: $ (.84) $ 2.69
See Accompanying Notes to Financial Statements
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
YEARS ENDED DECEMBER 31, 1996 AND 1995
(in thousands, except unit data)
Unitholders
Units of Units of
Depositary General Depositary
Receipt Partner Receipt Total
Original capital contributions 129,266 $ 1 $32,317 $32,318
Partners' capital (deficit) at
December 31, 1994 128,810 (148) 9,862 9,714
Distributions paid -- (10) (990) (1,000)
Net income for the year ended
December 31, 1995 -- 3 347 350
Partners' capital (deficit)
at December 31, 1995 128,810 (155) 9,219 9,064
Distributions paid -- (10) (990) (1,000)
Net loss for the year ended
December 31, 1996 -- (1) (108) (109)
Partners' capital (deficit) at
December 31, 1996 128,810 $ (166) $ 8,121 $ 7,955
See Accompanying Notes to Financial Statements
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1996 1995
Cash flows from operating activities:
Net (loss) income $ (109) $ 350
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 514 519
Amortization of lease commissions,
loan costs and mortgage discounts 43 39
Loss on refinancing 231 --
Bad debt expense 96 20
Change in accounts:
Restricted cash (1) (25)
Accounts receivable (91) (21)
Escrows for taxes and insurance (29) (3)
Other assets 43 (41)
Accounts payable 88 (13)
Tenant security deposit liabilities 9 8
Accrued taxes 47 --
Other liabilities (8) 50
Net cash provided by operating
activities 833 883
Cash flows from investing activities:
Property improvements and replacements (152) (112)
Purchase of investments -- (1,009)
Proceeds from sale of investments -- 2,713
Deposits to restricted escrows (327) (21)
Receipts from restricted escrows 138 --
Net cash (used in) provided by
investing activities (341) 1,571
Cash flows from financing activities:
Payments on mortgage notes payable (50) (51)
Repayment of mortgage notes payable (2,061) --
Proceeds from long-term borrowings 2,325 --
Loan costs paid (90) --
Distributions to partners (1,000) (1,000)
Net cash used in financing
activities (876) (1,051)
Net (decrease) increase in cash and
cash equivalents (384) 1,403
Cash and cash equivalents at beginning of period 1,967 564
Cash and cash equivalents at end of period $ 1,583 $ 1,967
Supplemental disclosure of cash flow information:
Cash paid for interest $ 164 $ 147
See Accompanying Notes to Financial Statements
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Johnstown/Consolidated Income Partners (the "Partnership" or "Registrant"), a
California limited partnership, was formed on January 9, 1986, to acquire and
operate commercial and residential properties and to invest in mortgage loans
and mortgage-backed securities. Consolidated Capital Equities Corporation
("CCEC"), the general partner, and Johnstown/Consolidated Depositary Corporation
(the "Corporate Limited Partner"), which serves as depositary of certain Units
of Depositary Receipt ("Units"), contributed $1,000 and $100,000, respectively.
The Units represent economic rights attributable to the limited partnership
interests in the Partnership and entitle the holders thereof ("Unitholders") to
the economic benefits attributable to equity interests in the Partnership and to
participate in certain allocations and distributions of the Partnership. For
this reason, partners' capital (deficit) is herein represented as an interest of
the Unitholders. As of December 31, 1996, the Partnership owned one residential
and two commercial properties and a one-third undivided interest in another
commercial property, all of which are located near major urban areas in the
United States.
At the time of the Partnership's formation, CCEC was the sole general partner of
the Partnership, and the Corporate Limited Partner was a wholly-owned subsidiary
of CCEC. In 1988, Southmark Corporation ("Southmark") gained control of CCEC.
In December 1988, CCEC filed for reorganization under Chapter 11 of the United
States Bankruptcy Code. As part of its reorganization plan, ConCap Equities,
Inc. ("General Partners" or "CEI") acquired CCEC's general partner interests in
the Partnership and in 15 other affiliated public limited partnerships (the
"Affiliated Partnerships") and acquired the stock of the corporate limited
partner, replacing CCEC as managing general partner in all 16 partnerships. All
of CEI's outstanding stock is owned by GII Realty, Inc., an affiliate of
Insignia Financial Group, Inc. ("Insignia").
All of CEI's outstanding stock is owned by GII Realty, Inc. In December 1994,
the parent of GII Realty, Inc., entered into a transaction (the "Insignia
Transaction") in which, an affiliate of Insignia, acquired an option
(exercisable in whole or in part from time to time) to purchase all of the stock
of GII Realty, Inc. and, pursuant to a partial exercise of such option, acquired
50.5% of that stock. As a part of the Insignia Transaction, the Insignia
affiliate also acquired all of the outstanding stock of Partnership Services,
Inc., an asset management entity and Insignia acquired all of the outstanding
stock of Coventry Properties, Inc., a property management entity. In addition,
confidentiality, non-competition, and standstill arrangements were entered into
between certain of the parties. Those arrangements, among other things,
prohibit GII Realty's former sole shareholder from purchasing Partnership Units
for a period of three years. On October 24, 1995, the Insignia affiliate
exercised the remaining portion of its option to purchase all of the remaining
outstanding capital stock of GII Realty, Inc.
The principal place of business for the Partnership and for the General Partner
is One Insignia Financial Plaza, Greenville, South Carolina, 29602.
Cash and cash equivalents:
Unrestricted - Unrestricted cash includes cash on hand and in banks, demand
deposits, money market funds and certificates of deposit with original
maturities of 90 days or less. At certain times the amount of cash deposited at
a bank may exceed the limit on insured deposits.
Restricted cash - tenant security deposits - The Partnership requires
security deposits from new lessees for the duration of the lease with such
deposits being considered restricted cash. Deposits are refunded when the
tenant vacates, provided the tenant has not damaged its space and is current on
its rental payments.
Depreciation
Buildings and improvements are depreciated using the straight-line method over
the estimated useful lives of the assets, ranging from 5 to 28 years.
Effective December 31, 1996, the Florida #6 Mini-Warehouse was classified as
held for sale and no additional depreciation expense will be recorded during the
period the assets are held for sale.
Reclassifications
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
Investments
The Partnership accounts for its investments in accordance with "Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities." Investments, consisting primarily of U.S. Treasury
notes with original maturities more than ninety days, are considered to be held-
to-maturity securities. As the Investments' fair value approximate their cost,
any unrealized gains or losses are immaterial and therefore have not been
recorded in the accompanying financial statements. The cost of Investments sold
is determined using the specific identification method.
The Investments mature as follows (dollar amounts in thousands):
Description Cost Maturity
U.S. Treasury Note $ 447 October 1997
Fair Value
In 1995, the Partnership implemented "Statement of Financial Accounting
Standards No. 107, Disclosure about Fair Value of Financial Instruments," which
requires disclosure of fair value information about financial instruments for
which it is practicable to estimate that value. The carrying amount of the
Partnerships' cash and cash equivalents approximates fair value due to short-
term maturities. The Partnership estimates the fair value of its fixed rate
mortgages by discounted cash flow analysis, based on estimated borrowing rates
currently available to the Partnership.
Investment Properties
Prior to 1995, investment properties were carried at the lower of cost or
estimated fair value, which was determined using the higher of the property's
non-recourse debt amount, when applicable, or the net operating income of the
investment property capitalized at a rate deemed reasonable for the type of
property. During 1995, the Partnership adopted "FASB Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of", which requires impairment losses to be recorded on long-lived
assets used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. The impairment loss is measured by comparing the
fair value of the asset to its carrying amount. The effect of adoption was not
material.
Investment Property Held for Sale
In accordance with "FASB Statement No. 121" at December 31, 1996, the
Partnership has classified the Florida #6 Mini-Warehouses as an investment
property held for sale. The property has been recorded at the lower of its
carrying amount or its fair value less costs to sell. For the year ended
December 31, 1996 and 1995, the property realized total net income of
approximately $91,000 and $76,000, respectively.
Rental Income
The Partnership leases its residential property and its commercial mini-
warehouses under short-term operating leases. Lease terms are generally one
year or less in duration. The Partnership expects that in the normal course of
business these leases will be renewed or replaced by other leases. Commercial
office property leases vary from one to five years. Rental income is recognized
on a straight-line basis over the life of the applicable leases.
Deferred Loan Fees
Deferred loan fees are amortized using the straight-line method over the lives
of the related mortgage notes. Unamortized deferred fees are included in other
assets.
Lease Commissions
Lease commissions are capitalized and amortized using the straight-line method
over the life of the applicable lease. Unamortized lease commissions are
included in other assets.
Allocation of Net Income and Net Loss
The Partnership Agreement provides for net income and net losses for both
financial and tax reporting purposes to be allocated 99% to the Unitholders and
1% to the General Partner.
Advertising Costs
The Partnership expenses the cost of advertising as incurred. Advertising
expense, which is included in operating expenses, was approximately $39,000 for
the years ended December 31, 1996 and 1995.
Units of Depositary Receipts
Johnstown/Consolidated Depositary Corporation (the "Corporate Limited Partner"),
an affiliate of the General Partner, serves as a depositary of certain Units of
Depositary Receipt ("Units"). The Units represent economic rights attributable
to the limited partnership interests in the Partnership and entitle the holders
thereof ("Unitholders") to certain economic benefits, allocations and
distributions of the Partnership. For this reason, Partners' capital (deficit)
is herein represented as an interest of the Unitholder.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NOTE B - RELATED PARTY TRANSACTIONS
The Partnership has no employees and is dependent on the General Partner and
affiliates of Insignia for the management and administration of all of the
Partnership activities, as provided for in the Partnership agreement.
The Partnership Agreement provides that the Partnership shall pay in monthly
installments to the General Partner, or an affiliate, a yearly asset management
fee equal to: (i) 3/8 of 1% of the original principal balance of mortgage loans
outstanding at the end of the month preceding the installment payment; (ii) 1/8
of 1% of the market value of guaranteed mortgage-backed securities as of the end
of the Partnership quarter immediately preceding the installment payment; and
(iii) 5/8 of 1% of the purchase price of the properties plus improvements for
managing the Partnership's assets. In the event the property was not owned at
the beginning or end of the year, such fee shall be pro-rated for the short-year
period of ownership. Under this provision, fees of approximately $98,000 were
paid to the General Partner and affiliates for each of the years ended December
31, 1996 and 1995, respectively, and are included in general and administrative
expenses.
The Partnership has paid property management fees based upon collected gross
rental revenues for property management services in each of the years ended
December 31, 1996 and 1995. Property management fees of approximately $95,000
and $115,000 were paid to an affiliate of the General Partner for each of the
years ended December 31, 1996 and 1995, respectively. These fees are included
in operating expenses.
The Partnership Agreement also provides for reimbursement to the General Partner
and its affiliates for costs incurred in connection with the administration of
Partnership activities. Reimbursements for services of affiliates of
approximately $135,000 and $136,000 were paid to the General Partner and
affiliates for each of the years ended December 31, 1996 and 1995, respectively.
Reimbursements of costs are classified as general and administrative expenses.
Included in these amounts are approximately $6,000 and $4,000 of leasing
commissions for 1996 and 1995, respectively, that were paid to an affiliate of
Insignia. Leasing commissions are capitalized and included in other assets.
In addition, during 1996, the Partnership paid approximately $12,000 to
affiliates of the General Partner for reimbursement of services related to the
Cedar Brooke loan refinancing (see "Note E"). These charges have been
capitalized as loan costs and will be amortized over the life of the loan.
In July 1995, the Partnership began insuring its properties under a master
policy through an agency and insurer unaffiliated with the General Partner. An
affiliate of the General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy. The current agent
assumed the financial obligations to the affiliate of the General Partner who
receives payment on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
General Partner by virtue of the agent's obligations is not significant.
In December 1995, an affiliate of the General Partner, Liquidity Assistance,
LLC, purchased 10,062 units from an unaffiliated Limited Partner at a cash price
of $61.04 per unit, or approximately $614,000.
NOTE C - COMMITMENT
The Partnership is required by the Partnership Agreement to maintain working
capital for contingencies of not less than 5% of Net Invested Capital as defined
in the Partnership Agreement. In the event expenditures are made from these
reserves, operating revenues shall be allocated to such reserves to the extent
necessary to maintain the foregoing level. Reserves, including cash and cash
equivalents, tenant security deposits and investments totalling approximately
$2,083,000 at December 31, 1996, exceeded the Partnership's reserve requirement
of approximately $1,385,000.
NOTE D - DISTRIBUTIONS
In March 1996, the General Partner paid distributions attributable to cash flow
from operations of approximately $490,000 or $3.81 per Unit to the Unitholders
along with a corresponding General Partner distribution of $5,000. In September
1996, the General Partner paid distributions of approximately $500,000 or $3.88
per Unit to the Unitholders, along with a corresponding General Partner
distribution of approximately $5,000.
In March of 1995, the General Partner paid distributions attributable to cash
flow from operations totalling approximately $495,000 or $3.84 per Unit to the
Unitholders along with a corresponding General Partner distribution of
approximately $5,000. In September 1995, the General Partner paid distributions
attributable to cash flow from operations totalling approximately $495,000 or
$3.84 per Unit to the Unitholders along with a corresponding General Partner
distribution of approximately $5,000.
NOTE E - REFINANCING
In November of 1996 the Partnership refinanced the mortgage note of
approximately $2,061,000, secured by the Cedar Brooke Apartments. Accordingly,
this debt is no longer regulated by the U.S. Department of Housing and Urban
Development. Under the terms of the financing agreement, the new mortgage
indebtedness of $2,325,000 requires monthly interest only payments at a stated
interest rate of 7.33% with a balloon payment due November 1, 2003. A loss on
refinancing of approximately $231,000 resulting from the write-off of
unamortized mortgage discounts and loan costs was realized in 1996. Through the
refinancing, a capital improvement reserve of approximately $303,000 was
established and approximately $90,000 of loan costs were incurred. These loan
costs will be amortized over the life of the loan.
NOTE F - MORTGAGE NOTES PAYABLE
The principal terms of mortgage notes payable is as follows (dollar amounts in
thousands):
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1996 Interest Rate Date Maturity
Cedar Brooke
1st mortgage $2,325 $14(a) 7.33% 11/03 $2,325
(a) Interest-only payment.
NOTE F - MORTGAGE NOTES PAYABLE (CONTINUED)
The estimated fair value of the Partnerships' debt approximates its carrying
value of $2,325,000. This value represents a general approximation of possible
value and is not necessarily indicative of the amounts the Partnership might pay
in actual market transactions. There are no scheduled maturities of principal
during the next five years. A balloon payment of $2,325,000 representing
principal is due in 2003.
NOTE G - OPERATING LEASES
Lessor
Tenants of Phoenix Business Campus are responsible for their own utilities and
maintenance of their space, and payment of their proportionate share of common
area maintenance, utilities, insurance and real estate taxes. A portion of the
real estate taxes, insurance, and common area maintenance expenses are paid
directly by the Partnership. The Partnership is then reimbursed by the tenants
for their proportionate share.
The future minimum rental payments at the Partnership's commercial property to
be received under operating leases that have initial or remaining noncancellable
lease terms in excess of one year as of December 31, 1996, are as follows (in
thousands):
Years Ending December 31,
1997 $ 433
1998 275
1999 179
2000 141
2001 - Thereafter 78
$ 1,106
NOTE K - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Written off)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
(in thousands)
Cedar Brooke $2,325 $ 275 $ 4,040 $ (271)
Florida #11
Mini-Warehouse -- 979 1,741 29
Phoenix Business Campus -- 496 6,148 (754)
Totals $2,325 $1,750 $11,929 $ (996)
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1996
Buildings
And
Related Accumulated Date Depreciable
Description Land Personal Total Depreciation Acquired Life-Years
(amounts in thousands)
<S> <C> <C> <C> <C> <C> <C>
Cedar Brooke $ 213 $ 3,831 $ 4,044 $2,528 2/27/87 5-19
Florida #11 979 1,770 2,749 563 10/15/90 5-20
Mini-Warehouse
Phoenix Business 379 5,511 5,890 2,600 8/26/86 5-28
Campus
Totals $ 1,571 $11,112 $12,683 $5,691
Also, the Partnership's one-third interest in the Florida #6 Mini-Warehouse has
been classified as investment property held for sale. At December 31, 1996, the
Partnership's net carrying value of the property is approximately $850,000.
Johnstown/Consolidated Income Partners/2, an affiliated Partnership, owns the
remaining two-thirds interest in the property.
Reconciliation of "Investment Properties and Accumulated Depreciation" (in
thousands):
Years Ended December 31,
1996 1995
Investment Properties
Balance at beginning of year $13,624 $15,482
Property improvements 152 112
Allocation of allowance for possible loss -- (1,970)
Reclassification of investment property
held for sale (1,093) --
Balance at End of Year $12,683 $13,624
Accumulated Depreciation
Balance at beginning of year $ 5,420 $ 4,900
Additions charged to expense 514 520
Reclassification of investment property
held for sale (243) --
Balance at end of year $ 5,691 $ 5,420
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1996 and 1995, respectively, is approximately $14,596,000 and
$14,444,000. The accumulated depreciation taken for Federal income tax purposes
at December 31, 1996 and 1995, respectively, is approximately $5,828,000 and
$5,215,000.
NOTE L - INCOME TAXES
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.
Differences between the net loss or income as reported and Federal taxable
income result primarily from (1) depreciation over different methods and lives
and on differing cost bases of apartment properties, (2) change in rental income
received in advance. The following is a reconciliation of reported net loss or
income and Federal taxable income (in thousands, except unit data):
1996 1995
Net (loss) income as reported $ (109) $ 350
Add (deduct):
Depreciation differences (99) (81)
Unearned income 26 59
Other 340 (231)
Accruals and prepaids 30 (35)
Federal taxable income $ 188 $ 62
Federal taxable income $ 1.45 $ .48
per limited partnership unit
The following is a reconciliation betweent the Partnership's reported amounts
and Federal tax basis of net assets and liabilities (in thousands):
Net assets as reported $ 7,955
Land and buildings 820
Accumulated depreciation 106
Syndication and distribution costs 3,825
Other 165
Net assets - Federal tax basis $12,871
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Registrant has no officers or directors. The Managing General Partner
manages and controls the Registrant and has general responsibility and authority
in all matters affecting its business.
The name of the directors and executive officers of ConCap Equities, Inc.
("CEI"), the Partnership's General Partner, as of December 31, 1996, their ages
and the nature of all positions with CEI presently held by them are set forth
below. There are no family relationships between or among any officers and
directors.
Name Age Position
William H. Jarrard, Jr. 50 President
Ronald Uretta 41 Vice President/Treasurer
Martha L. Long 37 Senior Vice President -
Finance/Controller
John K. Lines 37 Vice
President/Secretary
Kelley M. Buechler 39 Assistant Secretary
William H. Jarrard, Jr. has been President of CEI since December 1996 and
Managing Director - Partnership Administration of Insignia since January 1991.
Mr. Jarrard served as Managing Director - Partnership Administration and Asset
Management from July 1994 until January 1996.
Ronald Uretta has been Insignia's Treasurer since January 1992. Since August
1996, he has also served as Chief Operating Officer. He has also served as
Secretary from January 1992 to June 1994 and as Chief Financial Officer from
January 1992 to August 1996. Since September 1990, Mr. Uretta has also served
as the Chief Financial Officer and Controller of Metropolitan Asset Group.
Martha L. Long, Senior Vice President - Finance and Controller. In June 1994,
Ms. Long joined Insignia as its Controller, and was promoted to Senior Vice-
President - Finance in January 1997. Prior to this time, she was Senior Vice-
President and Controller of The First Savings Bank, FSB in Greenville, SC.
John K. Lines has been Secretary of CEI since December 1994 and General Counsel
and Secretary of Insignia since July 1994. From May 1993 until June 1994, Mr.
Lines was the Assistant General Counsel and Vice President of Ocwen Financial
Corporation in West Palm Beach, Florida. From October 1991 until April 1993,
Mr. Lines was a Senior Attorney with Banc One Corporation in Columbus, Ohio.
From May 1984 until October 1991, Mr. Lines was employed as an associate with
Squire Sanders & Dempsey in Columbus, Ohio.
Kelley M. Buechler has been Assistant Secretary of CEI since December 1994 and
Assistant Secretary of Insignia since 1991. During the five years prior to
joining Insignia in 1991, she served in a similar capacity for U.S. Shelter.
CEI is the General Partner of the Partnership and 15 other affiliated
partnerships as of December 31, 1996.
ITEM 10. EXECUTIVE COMPENSATION
No direct compensation was paid or payable by the Partnership to directors or
officers for the year ended December 31, 1996, nor was any direct compensation
paid or payable by the Partnership to directors or officers of the General
Partner for the year ended December 31, 1996. The Partnership has no plans to
pay any such remuneration to any directors or officers of the General Partner in
the future.
See "Item 7 - Financial Statements, Note B - Related Party Transactions", for
amounts of compensation and reimbursement of salaries paid by the Partnership to
the General Partner and its affiliates and the former general partner and former
affiliates.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
Except as provided below, as of March 1997, no person was known to CEI to
own of record or beneficially more than five percent of the Units of the
Partnership.
Number of Percent
Name and Address Units of total
Insignia affiliates 11,572 8.98%
One Insignia Financial Plaza
Greenville, SC 29602
The majority of the Units noted above were acquired by Liquidity Assistance
LLC, an affiliate of Insignia, from an unaffiliated Unitholder in December
1995 at a price of $61.10 per unit.
(b) Beneficial Owners of Management
Neither CEI nor any of the directors or officers or associates of CEI own
any Units of the Partnership of record or beneficially.
(c) Changes in Control
Beneficial Owners of CEI
As of March 1997, the following persons were known to CEI to be the
beneficial owners of more than 5 percent (5%) of its common stock:
NUMBER OF PERCENT
NAME AND ADDRESS CEI SHARES OF TOTAL
GII Realty, Inc. 100,000 100%
One Insignia Financial Plaza
Greenville, SC 29602
GII Realty, Inc. is owned by an affiliate of Insignia. (See "Item 1")
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Current Management and Others
Except for the transactions described below, neither CEI nor any of its
directors, officers or associates, or any associates of any of them, has had any
interest in any other transaction to which the Partnership is a party. Please
refer to "Item 7 - Financial Statements, Note B - Related Party Transactions",
for the amounts and items of permissible compensation and fees paid to the
General Partner and its affiliates and other related parties for the last two
years.
The Partnership Agreement provides that the Partnership shall pay in monthly
installments to the General Partner, or an affiliate, a yearly asset management
fee equal to: (i) 3/8 of 1% of the original principal balance of mortgage loans
outstanding at the end of the month preceding the installment payment; (ii) 1/8
of 1% of the market value of guaranteed mortgage-backed securities ("MBS") as of
the end of the Partnership quarter immediately preceding the installment
payment; and (iii) 5/8 of 1% of the purchase price of the properties plus
improvements for managing the Partnership's assets. In the event the property
was not owned at the beginning or end of the year, such fee shall be pro-rated
for the short year period of ownership.
The Partnership has paid property management fees based upon collected gross
rental revenue for property management services in each of the years ended
December 31, 1996 and 1995, respectively.
All of the above-referenced agreements with affiliates of CEI and related
parties of the Partnership are subject to the conditions and limitations imposed
by the Partnership Agreement.
ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
See Exhibit Index contained herein for listing of exhibits.
(b) Reports on Form 8-K filed during the fourth quarter of 1996:
None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
By: CONCAP EQUITIES, INC.
General Partner
/s/William H. Jarrard, Jr.
President
/s/Ronald Uretta
Ronald Uretta
Vice President/Treasurer
Date: March 24, 1997
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
date indicated.
/s/William H. Jarrard, Jr. President
William H. Jarrard, Jr.
/s/Ronald Uretta Vice President/Treasurer
Ronald Uretta
INDEX OF EXHIBITS
EXHIBIT NO. DOCUMENT DESCRIPTION
3 Certificates of Limited Partnership, as
amended to date (Incorporated by refer-
ence to the Annual Report on Form 10-K
for the year ended December 31, 1991)
10.1 Property Management Agreement No. 114
dated October 23, 1990, by and between the
Partnership and CCEC (Incorporated by refer-
ence to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 1990).
10.2 Property Management Agreement No. 309
dated October 23, 1990, by and between the
Partnership and CCEC (Incorporated by refer-
ence to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 1990).
10.3 Bill of Sale and Assignment dated October
23, 1990, by and between CCEC and ConCap
Services Company (Incorporated by reference
to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.4 Assignment and Assumption dated October
23, 1990, by and between CCEC and ConCap
Management Limited Partnership ("CCMLP")
(Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended
September 30, 1990).
10.5 Assignment and Agreement as to Certain
Property Management Services dated October
23, 1990, by and between CCMLP and ConCap
Capital Company (Incorporated by reference
to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990).
10.6 Assignment and Assumption Agreement dated
October 23, 1990, by and between CCMLP
and The Hayman Company (100 Series of
Property Management Contracts) (Incorporated
by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990).
10.7 Assignment and Assumption Agreement dated
October 23, 1990, by and between CCMLP and
Metro ConCap, Inc. (300 Series of Property
Management Contracts) (Incorporated by refer-
ence to the Quarterly Report on Form 10-Q for
the quarter ended September 30, 1990).
10.8 Property Management Agreement No. 121
dated October 1, 1991, by and between the
Partnership, Johnstown/Consolidated Income
Partners/2 ("JCIP/2") and CCMLP (Incorporated
by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.9 Property Management Agreement No. 122
dated October 1, 1991, by and between the
Partnership and CCMLP (Incorporated by
reference to the Annual Report on Form 10-K
for the year ended December 31, 1991).
10.10 Assignment and Assumption Agreement dated
October 1, 1991, by and between CCMLP and
The Hayman Company (Property Management
Agreements No. 121 and 122) (Incorporated by
reference to the Annual Report on Form 10-K for
the year ended December 31, 1991).
10.11 Assignment and Agreement as to Certain
Property Management Services dated October
1, 1991, by and between CCMLP and ConCap
Capital Company (Incorporated by reference
to the Annual Report on Form 10-K for the year
ended December 31, 1991).
10.12 Assignment and Assumption Agreement dated
September 1, 1991, by and between the Partner-
ship, and JCIP Associates, Ltd. (Incorporated
by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.13 Construction Management Cost Reimbursement
Agreement dated January 1, 1991, by and between
the Partnership and Metro ConCap Inc. (Incorpor-
ated by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.14 Construction Management Cost Reimbursement
Agreement dated January 1, 1991, by and between
the Partnership and The Hayman Company (the
"Hayman Construction Management Agreement")
(Incorporated by reference to the Annual Report
on Form 10-K for the year ended December 31,
1991).
10.15 Assignment and Assumption Agreement dated
September 1, 1991, by and between the Partner-
ship, and JCIP Associates, Ltd. (Hayman Con-
struction Management Agreement) (Incorporated
by reference to the Annual Report on Form 10-K for
the year ended December 31, 1991).
10.16 Construction Management Cost Reimbursement
Agreement dated October 1, 1991, by and between
the Partnership and The Hayman Company (Incor-
porated by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).
10.17 Construction Management Cost Reimbursement
Agreement dated October 1, 1991, by and between
the Partnership, Johnstown/Consolidated Income
Partners/2 and The Hayman Company (Incorporated
by reference to the Annual Report on Form 10-K for
the year ended December 31, 1991).
10.18 Investor Services Agreement dated October 23, 1990
by and between the Partnership and CCEC (Incorpor-
ated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990).
10.19 Assignment and Assumption Agreement (Investor
Services Agreement) dated October 23, 1990, by and
between CCEC and ConCap Services Company
(Incorporated by reference to the Annual Report on
Form 10-K for the year ended December 31, 1990).
10.20 Letter of Notice dated December 20, 1991, from
Partnership Services, Inc. ("PSI") to the
Partnership regarding the change in ownership and
dissolution of ConCap Services Company whereby PSI
assumed the Investor Services Agreement (Incorporated
by reference to the Annual Report on Form 10-K for the
year ended December 31, 1991).
10.21 Financial Services Agreement dated October 23,
1990, by and between the Partnership and CCEC
(Incorporated by reference to the Quarterly Report
on Form 10-Q for the quarter ended September 30,
1990).
10.22 Financial Services Agreement dated October 23, 1990,
by and between the Partnership and CCEC (Incorpor-
ated by reference to the Quarterly Report on Form
10-Q for the quarter ended September 30, 1990).
10.23 Letter of Notice dated December 20, 1991,
from PSI to the Partnership regarding the
change in ownership and dissolution of ConCap
Capital Company whereby PSI assumed the Financial
Services Agreement (Incorporated by reference to
the Annual Report on Form 10-K for the year ended
December 31, 1991).
10.24 Property Management Agreement No. 502 dated
February 16, 1993, by and between the Partnership
and Coventry Properties, Inc. (Incorporated by refer-
ence to the Annual Report on Form 10-K for the year
ended December 31, 1992).
10.25 Property Management Agreement No. 516 dated
June 1, 1993, by and between the Partnership and
Coventry Properties, Inc.
10.26 Property Management Agreement No. 517 dated
June 1, 1993, by and between the Partnership and
Coventry Properties, Inc.
10.27 Assignment and Agreement as to Certain Property
Management Services dated November 17, 1993,
by and between Coventry Properties, Inc. and
Partnership Services, Inc.
10.28 Assignment and Agreement as to Certain Property
Management Services dated November 17, 1993,
by and between Coventry Properties, Inc. and
Partnership Services, Inc.
10.29 Stock and Asset Purchase Agreement, dated December 8,
1994 (the "Gordon Agreement"), among MAE-ICC, Inc.
("MAE-ICC"), Gordon Realty Inc. ("Gordon"), GII
Realty, Inc. ("GII Realty"), and certain other
parties. (Incorporate by reference to Form 8-K dated
December 8, 1994)
10.30 Exercise of the Option (as defined in the Gordon
Agreement), dated December 8, 1994, between
MAE-ICC and Gordon. (Incorporated by reference to
Form 8-K dated December 8, 1994)
10.31 Exercise of the remaining portion of the option (as
defined in the Gordon Agreement), dated December 8,
1994, between MAE-ICC and Gordon. (Incorporated by
reference to Form 8-K dated October 24, 1995)
10.32 Multifamily Note dated November 1, 1996, between
Johnstown/Consolidated Income Partners, a California
limited partnership, and Lehman Brokers Holdings Inc.
d/b/a Lehman Capital, A Division of Lehman Brothers
Holdings, Inc.
11 Statement regarding computations of Net Income
per Limited Partnership Unit (Incorporated by
reference to Note 1 of Item 8 - Financial Statements
of this Form 10-K).
16.1 Letter, dated August 12, 1992, from Ernst & Young to
the Securities and Exchange Commission regarding
change in certifying accountant. (Incorporated by
reference to Form 8-K dated August 6, 1992).
16.2 Letter dated May 9, 1995 from the Registrant's
former independent accountant regarding its concurrence
with the statements made by the Registrant regarding a
change in the certifying accountant. (Incorporated by
reference to Form 8-K dated May 3, 1995)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Johnstown
Consolidated Income Partners 1996 Year-End 10-KSB and is qualified in its
entirety by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000787621
<NAME> JOHNSTOWN CONSOLIDATED INCOME PARTNERS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,583
<SECURITIES> 447
<RECEIVABLES> 28
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 12,683
<DEPRECIATION> 5,691
<TOTAL-ASSETS> 10,574
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 2,325
0
0
<COMMON> 0
<OTHER-SE> 7,955
<TOTAL-LIABILITY-AND-EQUITY> 10,574
<SALES> 0
<TOTAL-REVENUES> 2,260
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,138
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 191
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (231)
<CHANGES> 0
<NET-INCOME> (109)
<EPS-PRIMARY> (.84)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
Exhibit 10.32 Loan No. 734105908
Cedar Brooke
MULTIFAMILY NOTE
US $2,325,000.00
New York, New York
As of November 1, 1996
FOR VALUE RECEIVED, the undersigned promise to pay LEHMAN BROTHERS HOLDINGS
INC. d/b/a Lehman Capital, A Division of Lehman Brothers Holdings Inc., 3 World
Financial Center, New York, New York 10285, or order, the principal sum of Two
Million Three Hundred Twenty-five Thousand and 00/100 Dollars, with interest on
the unpaid principal balance from the date of this Note, until paid, at the rate
of 7.33 percent per annum. Interest only shall be payable at 3 World Financial
Center, New York, New York 10285, or such other place as the holder hereof may
designate in writing, in consecutive monthly installments of Fourteen Thousand
Two Hundred One and 88/100 Dollars (US $14,201.88) on the first day of each
month beginning December 1, 1996, until the entire indebtedness evidenced hereby
is fully paid, except that any remaining indebtedness, if not sooner paid, shall
be due and payable on November 1, 2003.
If any installment under this Note is not paid when due, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof. The holder
hereof may exercise this option to accelerate during any default by the
undersigned regardless of any prior forbearance. In the event of any default in
the payment of this Note, and if the same is referred to an attorney at law for
collection or any action at law or in equity is brought with respect hereto, the
undersigned shall pay the holder hereof all expenses and costs, including, but
not limited to, attorney's fees.
Prepayments shall be applied against the outstanding principal balance of
this Note and shall not extend or postpone the due date of any subsequent
monthly installments or change the amount of such installments, unless the
holder hereof shall agree otherwise in writing. The holder hereof may require
that any partial prepayments be made on the date monthly installments are due
and be in the amount of that part of one or more monthly installments which
would be applicable to principal.
From time to time, without affecting the obligation of the undersigned or
the successors or assigns of the undersigned to pay the outstanding principal
balance of this Note and observe the covenants of the undersigned contained
herein, without affecting the guaranty of any person, corporation, partnership
or other entity for payment of the outstanding principal balance of this Note,
without giving notice to or obtaining the consent of the undersigned, the
successors or assigns of the undersigned or guarantors, and without liability on
the part of the holder hereof, the holder hereof may, at the option of the
holder hereof, extend the time for payment of said outstanding principal balance
or any part thereof, reduce the payments thereon, release anyone liable on any
of said outstanding principal balance, accept a renewal of this Note, modify the
terms and time of payment of said outstanding principal balance, join in any
extension or subordination agreement, release any security given herefor, take
or release other or additional security, and agree in writing with the
undersigned to modify the rate of interest or period of amortization of this
Note or change the amount of the monthly installments payable hereunder.
Presentment, notice of dishonor, and protest are hereby waived by all
makers, sureties, guarantors and endorsers hereof. This Note shall be the joint
and several obligation of all makers, sureties, guarantors and endorsers, and
shall be binding upon them and their successors and assigns.
The indebtedness evidenced by this Note is secured by a Mortgage or Deed of
Trust dated as of the date hereof, and reference is made thereto for rights as
to acceleration of the indebtedness evidenced by this Note. This Note shall be
governed by the law of the jurisdiction in which the Property subject to the
Mortgage or Deed of Trust is located.
The undersigned shall pay any installment of interest due hereunder within
ten (10) calendar days after such installment of interest is due. The
undersigned shall pay any other installment due hereunder or due in accordance
with the terms of the Mortgage or Deed of Trust securing this Note, within
thirty (30) calendar days of the date such installment is due.
Oral agreements or commitments to loan money, extend credit or to forbear
from enforcing repayment of a debt including promises to extend or renew such
debt are not enforceable. To protect you (borrower(s)) and us (creditor) from
misunderstanding or disappointment, any agreements we reach covering such
matters are contained in this writing, which is the complete and exclusive
statement of the agreement between us, except as we may later agree in writing
to modify it. The foregoing disclosure has been added pursuant to Sec. 432.045
R.S.Mo. and for purposes thereof, the term "this writing" shall be deemed to
mean the Instrument, this Note and all other documents entered into between
Borrower and lender of even date herewith.
Reference is made to that certain Rider to Multifamily Note (Prepayment
Premium/Yield Maintenance), that certain Default Interest Rider to Multifamily
Note and that certain Exculpation Rider to Note and Security Instrument, each
dated as of the date hereof and each hereby incorporated herein.
IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same
to be executed by its representatives thereunto duly authorized.
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS
a California limited partnership
By: ConCap Equities, Inc., a Delaware
corporation, its general partner
By:/s/ William H. Jarrard
Name: William H. Jarrard
Title: Vice President
PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION WITHOUT RECOURSE.
This 1st day of November, 1996.
LEHMAN BROTHERS HOLDINGS INC. d/b/a
Lehman Capital, A Division of Lehman
Brothers Holdings Inc., a Delaware
corporation
By: /s/ Larry J. Kravetz
Name: Larry J. Kravets
Title: Vice President
