FORM 10-QSB--Quarterly Report Under Section 13 or 15 (d)
Of the Securities Exchange Act of 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-15656
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
South Carolina 57-0814502
(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 (803) 239-1000
Check whether the issuer (1) 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 .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) U.S. REALTY PARTNERS LIMITED PARTNERSHIP
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1995
<S> <C> <C>
Assets
Restricted cash $ 501,280
Accounts receivable 313,486
Escrow for taxes 478,155
Restricted escrows 239,536
Other assets 211,534
Investment properties:
Land $ 6,533,830
Buildings and related personal property 26,363,578
32,897,408
Less accumulated depreciation (8,626,408) 24,271,000
$26,014,991
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 48,778
Tenant security deposits 139,002
Accrued taxes 392,900
Other liabilities 383,416
Due to corporate general partner 494,125
Mortgage notes payable 22,341,907
Partners' Capital (Deficit)
General partners $ (440,261)
Depositary unit certificate holders
(2,444,000 units authorized;
1,222,000 units issued and outstanding) 2,655,124 2,214,863
$26,014,991
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
b) U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental income $1,191,408 $1,144,039 $3,405,618 $3,277,995
Other income 38,203 36,065 124,745 103,787
Total revenues 1,229,611 1,180,104 3,530,363 3,381,782
Expenses:
Operating 229,035 248,210 671,439 756,325
General and administrative 44,027 47,745 168,427 148,107
Property management fees 69,972 68,643 210,275 222,989
Maintenance 72,611 73,277 207,150 245,479
Depreciation 209,597 207,353 625,071 619,209
Amortization 14,257 15,395 42,689 45,793
Interest 587,892 597,318 1,761,830 1,800,858
Property taxes 111,055 116,123 318,855 347,344
Tenant reimbursements (90,039) (79,541) (288,944) (316,457)
Total expenses 1,248,407 1,294,523 3,716,792 3,869,647
Net loss $ (18,796) $ (114,419) $ (186,429) $ (487,865)
Net loss allocated
to general partners (1%) $ (188) $ (1,144) $ (1,864) $ (4,879)
Net loss allocated
to limited partners (99%) (18,608) (113,275) (184,565) (482,986)
$ (18,796) $ (114,419) $ (186,429) $ (487,865)
Net loss per Depositary
Unit Certificate $ (.01) $ (.09) $ (.15) $ (.39)
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
c) U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
<TABLE>
<CAPTION>
Depository
Depository Unit
Unit General Certificate
Certificates Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 1,222,000 $ 2,000 $30,550,000 $30,552,000
Partners' capital (deficit) at
December 31, 1994 1,222,000 $(438,397) $ 2,839,689 $ 2,401,292
Net loss for the nine months
ended September 30, 1995 -- (1,864) (184,565) (186,429)
Partners' capital (deficit) at
September 30, 1995 1,222,000 $(440,261) $ 2,655,124 $ 2,214,863
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
d) U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (186,429) $ (487,865)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation 625,071 619,209
Amortization of leasing commissions, computer
software costs and organizational costs 42,689 45,793
Bad debt expense 61,913 50,606
Change in accounts:
Restricted cash 108,447 (143,861)
Accounts receivable (44,926) (4,279)
Escrows for taxes (299,954) (291,584)
Other assets (7,722) 17,338
Accounts payable (13,098) (10,127)
Tenant security deposit liabilities 14,616 9,653
Accrued taxes 251,601 274,088
Other liabilities 27,272 89,161
Net cash provided by
operating activities 579,480 168,132
Cash flows from investing activities:
Property improvements and replacements (98,885) (74,528)
Deposits to restricted escrows (17,340) (28,593)
Receipts from restricted escrows 26,826 124,937
Net cash (used in) provided by
investing activities (89,399) 21,816
Cash flows from financing activities:
Payments on mortgage notes payable (490,081) (189,948)
Net cash used in financing
activities (490,081) (189,948)
Net increase in cash -- --
Cash at beginning of period -- --
Cash at end of period $ -- $ --
Supplemental disclosure of cash
flow information:
Cash paid for interest $1,695,563 $1,730,599
</TABLE>
[FN]
See Accompanying Notes to Financial Statements
e) U.S. REALTY PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the Corporate General Partner, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the nine month
period ended September 30, 1995, are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1995. For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's annual report on Form 10-KSB for the year ended December 31,
1994.
Certain reclassifications have been made to the 1994 information to conform
to the 1995 presentation.
Note B - Reconciliation of Cash Flows
The Partnership considers all cash to be restricted for tenant security
deposits and for the purpose of the deposit of Net Cash Flow, as defined by the
debt restructure in October of 1993.
Note C Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Corporate General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
Transactions between the partnership and affiliates of Insignia Financial
Group, Inc. for the quarter ended September 30, 1995 and 1994 were as follows:
For the Nine Months Ended
September 30,
1995 1994
Property management fees $210,275 $222,989
Reimbursement for services of affiliates 55,376 37,864
Interest expense 18,000 18,000
Marketing services 1,785 --
Note C - Transactions with Affiliated Parties - continued
The Partnership insures its properties under a master policy through an
agency and insurer unaffiliated with the Corporate General Partner. An
affiliate of the Corporate 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 Corporate
General Partner, who receives payments on these obligations from the agent. The
amount of the partnership's insurance premiums accruing to the benefit of the
affiliate of the Corporate General Partner by virtue of the agent's obligations
is not significant.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
On April 1, 1993, the Partnership filed for protection under Chapter 11 of
the Federal Bankruptcy Code. The filing was made due to the Partnership's
inability to repay its secured debt as a result of a deficiency of funds
necessary to retire debt to an insurance company. On April 23, 1993, the
Partnership filed the Reorganization Plan (the "Plan") with the United States
Bankruptcy Court for the District of South Carolina (the "Court"). The
significant provision of the Plan was the refinancing of the secured debt which
occurred on October 15, 1993. On July 23, 1993, the Court entered an order
confirming the Partnership's Plan. On January 27, 1994, the Court closed the
case.
The Partnership's investment properties consist of two apartment complexes
and two commercial shopping centers. The following table sets forth the average
occupancy of the properties for the nine months ended September 30, 1995 and
1994:
Average
Occupancy
Property 1995 1994
Twin Lakes Apartments
Palm Harbor, Florida 94% 92%
Governor's Park Apartments
Little Rock, Arkansas 96% 96%
The Gallery - Huntsville
Huntsville, Alabama 94% 87%
The Gallery - Knoxville
Knoxville, Tennessee 94% 92%
The Corporate General Partner attributes The Gallery - Huntsville's increase
in occupancy to leasing an additional 12,740 square feet to CAT's Music and Q-
Zar.
The Partnership's net loss for the nine months ended September 30, 1995, was
$186,429 compared to a net loss of $487,865 for the same period in 1994. The
Partnership reported a net loss for the three months ended September 30, 1995,
of $18,796 compared to a net loss of $114,419 for the same period in 1994. The
decrease in net loss is attributable to an increase in rental and other income
combined with decreases in operating and maintenance expenses. Rental income
increased due to increased occupancy at The Gallery - Huntsville. Other income
increased due to increased lease cancellation fees at Governor's Park and Twin
Lakes and late fees associated with the collection of rent at the two commercial
properties. Operating expenses decreased due to a decrease in advertising in
1995 as a result of fewer concessions being offered at all properties.
Maintenance expenses decreased due to the completion of exterior painting in
1994 at Twin Lakes and The Gallery Shopping Center - Knoxville.
Offsetting the changes noted above was a decrease in tenant reimbursements
and an increase in general and administrative expenses. Tenant reimbursements
decreased as a result of over-billing in 1994 combined with a decrease in Common
Area Maintenance ("CAM") expenses due to a decrease in painting at The Gallery -
Knoxville in 1995. General and administrative expenses increased as a result of
increased reimbursements paid to the General Partner. Also, contributing to the
increase in general and administrative expenses was an increase in professional
fees related to the restructuring of debt.
As part of the ongoing business plan of the Partnership, the Corporate
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 Corporate 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 Corporate General Partner will be able to sustain
such a plan.
Based on the terms of the debt structure, all cash is considered restricted.
Cash flows provided by operating activities increased as a result of the
decrease in net loss for the nine months ended September 30, 1995, as compared
to the same period in 1994 as discussed above. Net cash used in investing
activities increased primarily as a result of restricted escrow withdrawals in
1994 for exterior painting at The Gallery - Knoxville and Twin Lakes. Net cash
used in financing activities increased due to the increase in principal payments
for 1995.
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 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 $22,341,907 requires a balloon payment on August 1, 2001, at
which time the properties will either be refinanced or sold. Pursuant to the
loan agreement, no distributions can be made until all long-term debt is repaid.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K: None filed during the quarter ended
September 30, 1995.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
By: U. S. Realty I Corporation
Corporate General Partner
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Ronald Uretta
Treasurer
(Principal Financial Officer
and Principal Accounting Officer)
Date: November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from US Realty
Partners LTD 1995 Third Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB.
</LEGEND>
<CIK> 0000788955
<NAME> US REALTY PARTNERS LTD
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 313,486
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 32,897,408
<DEPRECIATION> 8,626,408
<TOTAL-ASSETS> 26,014,991
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 22,341,907
<COMMON> 0
0
0
<OTHER-SE> 2,214,863
<TOTAL-LIABILITY-AND-EQUITY> 26,014,991
<SALES> 0
<TOTAL-REVENUES> 3,530,363
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,716,792
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (186,429)
<EPS-PRIMARY> (.15)
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
