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 [Fee Required]
For the fiscal year ended December 31, 1995
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 0-15656
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
(Name of small business issuer 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 (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
None
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. $4,782,039
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, 1995. 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.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Description of Business
U.S. Realty Partners Limited Partnership (the "Partnership" or the
"Registrant") was formed on January 23, 1986. It is engaged in the business of
acquiring, operating and holding real properties for investment. The Registrant
commenced operations on August 26, 1986, and acquired its first property, a
newly constructed apartment property, on August 28, 1986. Prior to September 5,
1986, it acquired an existing apartment property, a newly constructed shopping
center and an existing shopping center.
On August 26, 1986, the Registrant delivered 1,222,000 Depositary Unit
Certificates, representing assignments of limited partnership interests
("DUCs"), to Wheat First Securities, Inc. and received $30,550,000 ($25.00 per
DUC) in proceeds. The DUCs were offered by several underwriters in minimum
investment amounts of 100 DUCs ($25.00 per DUC). The Registrant also received
$16,369,000 as proceeds from a contemporaneous private bond offering. The
Registrant used substantially all of the proceeds from these offerings to
acquire the four operating properties.
The DUCs were registered under the Securities Act of 1933 via Registration
Statement No. 33-2996 (the "Registration Statement").
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 due to an insurance company (see "Note D" of
financial statements). On April 23, 1993, the Partnership filed a
Reorganization Plan ("the Plan") with the United States Bankruptcy Court for the
District of South Carolina. The significant provision of the Plan was the
refinancing of the secured debt. On July 23, 1993, the Court entered an order
confirming the Partnership's Plan. On January 27, 1994, the Court closed the
case.
A further description of the Partnership's business is included in
"Management's Discussion and Analysis or Plan of Operation" included in "Item 6"
of this Form 10-KSB.
The Registrant has no full-time employees. Management and administrative
services are performed by U.S. Realty I Corporation, the Corporate General
Partner, and by affiliates of Insignia Financial Group, Inc. ("Insignia"), the
ultimate parent company of the Corporate General Partner. Pursuant to a
management agreement between them, Insignia provides property management
services to the Registrant.
The real estate business of leasing commercial and residential properties
is highly competitive and the Partnership is not a significant factor in this
industry. The Registrant's real property investments are subject to competition
from similar types of properties in the vicinities in which they are located.
In addition, various limited partnerships have been formed by the General
Partners and/or their affiliates to engage in business which may be competitive
with the Registrant.
Item 2. Description of Properties
The following table sets forth the Registrant's investments in properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C> <C> <C>
The Gallery - Huntsville 08/29/86 Fee ownership subject to Retail
Huntsville, Alabama first mortgage 101,258 s.f.
The Gallery - Knoxville 09/04/86 Fee ownership subject to Retail
Knoxville, Tennessee first mortgage 100,403 s.f.
Governor's Park Apartments 08/29/86 Fee ownership subject to Apartment
Little Rock, Arkansas first mortgage 154 units
Twin Lakes Apartments 08/28/86 Fee ownership subject to Apartment
Palm Harbor, Florida first mortgage 262 units
</TABLE>
Schedule of Properties:
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
The Gallery -
Huntsville $ 7,315,217 $1,797,761 5-35 S/L $ 8,661,617
The Gallery -
Knoxville 9,020,971 2,137,165 5-35 S/L 8,510,063
Governor's Park 5,947,614 2,108,246 5-35 S/L 2,550,792
Twin Lakes 10,700,921 2,797,211 5-35 S/L 5,737,021
$32,984,723 $8,840,383 $25,459,493
See "Note B" of the financial statements included in "Item 7" for a
description of the Partnership's depreciation policy.
Schedule of Mortgages:
Principal Principal
Balance At Stated Balance
December 31, Interest Period Maturity Due At
1995 Rate Amortized Date Maturity
U.S. Realty
Partnership $22,060,534 10.00% 95 months 08/01/01 (1)
(1) The balance at maturity is directly related to the ability of the
Partnership to make cash flow payments per the mortgage agreement.
Schedule of Rental Rates and Occupancy:
Average annual rental rate and occupancy for 1995 and 1994 for each
property:
Average Annual Average Annual
Rental Rates Occupancy
Property 1995 1994 1995 1994
The Gallery - Huntsville $ 9.18/s.f. $ 8.73/s.f. 94% 94%
The Gallery - Knoxville 11.60/s.f. 11.67/s.f. 95% 96%
Governor's Park 6,371/unit 6,222/unit 95% 96%
Twin Lakes 6,873/unit 6,657/unit 94% 93%
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 residential apartment complexes and commercial buildings
in the area. The Corporate General Partner believes that all of the properties
are adequately insured. The multi-family residential properties' lease terms
are for one year or less. No residential or commercial tenants lease 10% or
more of the available rental space.
As noted under "Item 1. Description of Business," the Partnership is in the
business of acquiring, operating and holding real properties for investment.
The Partnership holds two residential properties and two commercial properties.
These properties are fully leveraged and the Partnership is currently paying
principal and interest payments to reduce its liability.
The following is a schedule of the lease expirations for the years 1996-
2005:
Number of % of Gross
The Gallery Expirations Square Feet Annual Rent Annual Rent
Knoxville
1996 5 18,478 $195,454 16.15%
1997 2 3,714 42,654 3.53%
1998 6 16,150 193,538 15.99%
1999 3 14,354 141,232 11.67%
2000 1 3,600 41,400 3.42%
2001 1 13,330 116,304 9.61%
2002 2 7,290 112,375 9.29%
2003 0 0 0 0%
2004 2 11,078 187,145 15.47%
2005 0 0 0 0%
The Gallery
Huntsville
1996 8 24,650 $236,167 27.88%
1997 2 15,400 168,440 19.88%
1998 4 5,400 57,783 6.82%
1999 6 24,353 210,746 24.88%
2000 1 3,755 25,542 3.02%
2001 1 12,000 90,000 10.62%
2002 0 0 0 0%
2003 0 0 0 0%
2004 1 1,600 17,328 2.05%
2005 0 0 0 0%
The principal businesses located at these properties are retail sales outlets.
Real estate taxes and rates in 1995 for each property were:
1995 1995
Billing Rate
The Gallery - Huntsville $ 57,074 5.80%
The Gallery - Knoxville 137,867 2.99%
Governor's Park 58,726 6.68%
Twin Lakes 176,008 2.05%
Item 3. Legal Proceedings
On August 1, 1993, August 1, 1992, and August 1, 1991, the Partnership was
unable to repay the Class C, Class B and Class A capital appreciation bonds,
respectively, to the bondholders. The Surety, which issued the surety bond,
repaid the debt. Based on the Surety Agreement, the Surety was entitled to
interest at a rate of prime plus 6% and a penalty premium of 5% on the
outstanding bonds due to the default on the bonds. On September 2, 1992, the
Surety, pursuant to the provisions of the Indenture dated August 1, 1986,
between the Partnership and the Trustee, elected to require the Trustee to
assign the Bond Notes to the Surety. Therefore, the Surety became the holder of
the Bond Notes. On October 26, 1992, the Surety gave notice to the Partnership
that an Event of Default had occurred and under the provisions of the Suretyship
Agreement declared the entire indebtedness immediately due and payable. The
General Partner reviewed all feasible alternatives and concluded that it was in
the best interest of the Partnership to file for protection under Chapter 11 of
the Federal Bankruptcy Code and did so on April 1, 1993.
On April 1, 1993, the Partnership filed for protection under Chapter 11 of the
Federal Bankruptcy Code (see "Item 6" below and "Notes A and D" to the financial
statements). On January 27, 1994, the Partnership emerged from bankruptcy.
On March 29, 1994, Insignia Financial Group, Inc., an affiliate of the Corporate
General Partner, was served with a complaint filed in the United States District
Court, Eastern District of Kentucky and styled Kenneth Ogle, et. al., v. U.S.
Shelter Corporation, et. al. The Corporate General Partner is a named defendant
in such suit and has also been served with such complaint. Such complaint
alleges, inter alia, that the Corporate General Partner engaged in a conspiracy
to defraud limited partners in the Partnership, made certain material
misstatements and omissions in the prospectus relating to the sale of limited
partnership interests in the Partnership, and breached its fiduciary duties to
the limited partners of the Partnership, and seeks the certification of such
suit as a class action. The Corporate General Partner and Insignia believe the
claims are without merit, and both intend to vigorously defend such suit.
However, the ultimate exposure, if any, to the Corporate General Partner or the
Partnership cannot be determined. Accordingly, no provision for any resulting
liability has been made in the financial statements.
Except for the issue stated, the Registrant is unaware of any pending or
outstanding litigation that is not of a routine nature. The Corporate General
Partner of the Registrant 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 ended December 31, 1995, no matter was submitted to a
vote of security holders through the solicitation of proxies or otherwise.
PART II
Item 5. Market for Partnership Equity and Related Partnership Matters
The Depositary Unit Certificates were initially listed on the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
under the symbol "USRLZ". As of December 31, 1995, the number of DUC holders of
record was 2,033. Transfer of DUCs is subject to certain suitability and other
requirements. Due to the security being delisted during 1990, no public trading
market has developed and it is not anticipated that such a market will develop
in the future. No distributions were made in 1995 or 1994. Pursuant to the
loan agreement, no distributions can be made until all long-term debt is repaid.
Item 6. Management's Discussion and Analysis or Plan of Operation
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Bankruptcy and Reorganization
On August 1, 1993, August 1, 1992, and August 1, 1991, the Partnership was
unable to repay the Class C, Class B and Class A capital appreciation bonds,
respectively, to the bondholders. The Surety, which issued the surety bond,
repaid the debt. Based on the Surety Agreement, the Surety was entitled to
interest at a rate of prime plus 6% and a penalty premium of 5% on the
outstanding bonds due to the default on the bonds. On September 2, 1992, the
Surety, pursuant to the provisions of the Indenture dated August 1, 1986,
between the Partnership and the Trustee, elected to require the Trustee to
assign the Bond Notes to the Surety. Therefore, the Surety became the holder of
the Bond Notes. On October 26, 1992, the Surety gave notice to the Partnership
that an Event of Default had occurred and under the provisions of the Suretyship
Agreement declared the entire indebtedness immediately due and payable. The
General Partner reviewed all feasible alternatives and concluded that it was in
the best interests of the Partnership to file for protection under Chapter 11 of
the Federal Bankruptcy Code.
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 due to an insurance company (see "Notes A and D" of
financial statements). On April 23, 1993, the Partnership filed a
Reorganization Plan ("Plan") with the United States Bankruptcy Court for the
District of South Carolina. The significant provision of the Plan was the
refinancing of the secured debt which occurred on July 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.
Results of Operations
The Partnership's net loss as shown in the financial statements for the year
ended December 31, 1995, was $279,432 versus $524,298 for 1994 (see "Note E" of
the financial statements for a reconciliation of these amounts to the
Partnership's federal taxable losses). The decrease in net loss is attributable
to an increase in other income combined with a decrease in operating expenses.
Other income increased due to increased lease cancellation fees, pet fees,
application fees, late charges, and clubhouse rentals at Twin Lakes and
Governor's Park 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 of the
properties.
Offsetting the changes noted above was a decrease in tenant reimbursements and
an increase in general and administrative expense. Tenant reimbursements
decreased as a result of a decrease in Common Area Maintenance ("CAM") expenses.
CAM expenses decreased due to a decrease in painting at The Gallery - Knoxville
in 1995. General and administrative expense increased as a result of increased
legal fees, reimbursements of services to affiliates and professional fees.
Legal fees increased as a result of the suit noted in "Item 3. Legal
Proceedings." Professional fees increased due to an increase in cost related to
processing and mailing tax information to the limited partners and a final
payment for professional fees related to the debt refinancing.
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.
Liquidity and Capital Resources
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 year ended December 31, 1995, as compared to the
same period in 1994 as discussed above. Also contributing to the increase in
cash provided by operating activities was the increase in cash provided by
restricted cash. Net cash used in investing activities increased primarily as a
result of a decrease in net receipts from restricted escrows in 1995. Net
receipts were higher in 1994 due to exterior painting at The Gallery - Knoxville
and Twin Lakes. In addition, property improvements and replacements increased
during 1995. Net cash used in financing activities increased due to the
increase in principal payments for 1995.
The Partnership has no material capital programs scheduled to be performed in
1996, although certain routine capital programs and maintenance programs have
been budgeted. These capital programs and maintenance programs will be incurred
only if cash is available from operations or is received from the capital
reserve account.
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 $22,060,534 requires a balloon payment on August 1, 2001, at
which time the properties will either be refinanced or sold. Pursuant to the
loan agreement, Net Cash Flow of the Partnership is required to be paid to the
mortgage holder on a monthly basis to reduce accrued interest and principal. No
distributions can be made until all long-term debt is repaid.
As noted in "Item 3. Legal Proceedings," on March 29, 1994, Insignia Financial
Group, Inc., an affiliate of the Corporate General Partner, was served with a
complaint filed in the United States District Court, Eastern District of
Kentucky and styled Kenneth Ogle, et. al., v. U.S. Shelter Corporation, et. al.
The Corporate General Partner is a named defendant in such suit and has also
been served with such complaint. Such complaint alleges, inter alia, that the
Corporate General Partner engaged in a conspiracy to defraud limited partners in
the Partnership, made certain material misstatements and omissions in the
prospectus relating to the sale of limited partnership interests in the
Partnership, and breached its fiduciary duties to the limited partners of the
Partnership, and seeks the certification of such suit as a class action. The
Corporate General Partner and Insignia believe the claims are without merit, and
both intend to vigorously defend such suit. However, the ultimate exposure, if
any, to the Corporate General Partner or the Partnership cannot be determined.
Accordingly, no provision for any resulting liability has been made in the
financial statements.
Item 7. Financial Statements
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
LIST OF FINANCIAL STATEMENTS
Report of Independent Auditors
Balance Sheet - December 31, 1995
Statements of Operations - years ended December 31, 1995 and 1994
Statements of Changes in Partners' Capital (Deficit) - years ended
December 31, 1995 and 1994
Statements of Cash Flows - years ended December 31, 1995 and 1994
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
U. S. Realty Partners Limited Partnership
We have audited the accompanying balance sheet of U. S. Realty Partners Limited
Partnership as of December 31, 1995, 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, 1995. 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 audit 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 U. S. Realty Partners Limited
Partnership as of December 31, 1995, and the results of its operations and its
cash flows for each of the two years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
/s/ERNST & YOUNG LLP
Greenville, South Carolina
February 19, 1996
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
BALANCE SHEET
December 31, 1995
Assets
Restricted cash $ 356,867
Accounts receivable (Note C) 318,410
Escrows for taxes 137,481
Restricted escrows 211,754
Other assets 201,296
Investment properties (Notes D & G):
Land $ 6,533,830
Buildings and related personal property 26,450,893
32,984,723
Less accumulated depreciation (8,840,383) 24,144,340
$25,370,148
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 86,795
Tenant security deposits 137,981
Accrued taxes 61,662
Other liabilities 401,191
Due to corporate general partner 500,125
Mortgage note payable (Note D) 22,060,534
Partners' Capital (Deficit)
General partners $ (441,191)
Depository unit certificate holders
(2,440,000 units authorized, 1,222,000
units issued and outstanding) 2,563,051 2,121,860
$25,370,148
See Accompanying Notes to Financial Statements
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
Years Ended December 31,
1995 1994
Revenues:
Rental income $ 4,618,809 $4,460,925
Other income 163,230 126,642
Total revenues 4,782,039 4,587,567
Expenses:
Operating 972,813 1,087,781
General and administrative 266,409 189,794
Property management fees 282,348 295,582
Maintenance 343,048 325,306
Depreciation 839,046 827,700
Interest 2,337,819 2,393,300
Property taxes 417,292 440,405
Tenant reimbursements (397,304) (448,003)
Total expenses 5,061,471 5,111,865
Net loss (Note E) $ (279,432) $ (524,298)
Net loss allocated to general partner (1%) $ (2,794) $ (5,243)
Net loss allocated to depository unit
certificate holders (99%) (276,638) (519,055)
$ (279,432) $ (524,298)
Net loss per depository unit certificate $ (.23) $ (.42)
See Accompanying Notes to Financial Statements
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
<TABLE>
<CAPTION>
Depository
Limited Unit
Partnership General Certificate
Units Partners Holders Total
<S> <C> <C> <C> <C>
Original capital contributions 1,222,000 $ 2,000 $30,550,000 $50,002,000
Partners' capital (deficit)
at December 31, 1993 1,222,000 $(433,154) $ 3,358,744 $ 2,925,590
Net loss for the year
ended December 31, 1994 -- (5,243) (519,055) (524,298)
Partners' capital (deficit)
at December 31, 1994 1,222,000 (438,397) 2,839,689 2,401,292
Net loss for the year
ended December 31, 1995 -- (2,794) (276,638) (279,432)
Partners' capital (deficit)
at December 31, 1995 1,222,000 $(441,191) $ 2,563,051 $ 2,121,860
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (279,432) $ (524,298)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 839,046 827,700
Amortization 57,329 60,939
Bad debt expense 88,350 76,630
Change in accounts:
Restricted cash 252,860 (238,596)
Accounts receivable (76,286) (61,048)
Escrows for taxes 40,720 (55,677)
Other assets (12,124) 43,431
Accounts payable 13,496 23,592
Tenant security deposit liabilities 13,595 15,816
Accrued taxes (79,638) 8,915
Other liabilities 51,047 115,099
Net cash provided by operating activities 908,963 292,503
Cash flows from investing activities:
Property improvements and replacements (174,777) (98,585)
Deposits to restricted escrows (19,258) (26,499)
Receipts from restricted escrows 56,526 147,241
Net cash (used in) provided by
investing activities (137,509) 22,157
Cash flows from financing activities:
Payments on mortgage note payable (771,454) (314,660)
Net cash used in financing activities (771,454) (314,660)
Net change in cash -- --
Cash at beginning of period -- --
Cash at end of period $ -- $ --
Supplemental disclosure of cash flow information:
Cash paid for interest $2,245,935 $2,302,843
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS (Continued)
Supplemental Disclosure of Non-Cash Activity
Property improvements and replacements
Accounts payable was adjusted by $11,423 at December 31, 1994, for non-
cash amounts included in connection with property improvements and replacements.
See Accompanying Notes to Financial Statements
U. S. REALTY PARTNERS LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1995
Note A - Bankruptcy and Reorganization
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 due to an insurance company (the "Surety")
(see "Note D"). 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 significant provision of the Plan was the refinancing of
the secured debt. On July 23, 1993, the Court entered an order confirming the
Partnership's Plan. On January 27, 1994, the Court closed the case.
Pursuant to the Bankruptcy Code, the Partnership continued to operate its
business as debtor-in-possession while the case was pending.
Note B - Organization and Significant Accounting Policies
<TABLE>
<S> <C>
Organization: U.S. Realty Partners Limited Partnership (the "Partnership" or
"Registrant") was organized as a limited partnership under the laws of the State
of South Carolina pursuant to a Certificate of Limited Partnership filed January
24, 1986 and an Agreement of Limited Partnership dated January 23, 1986. The
partnership agreement terminates December 31, 2005, or earlier upon the sale of
all properties and distributions to the partners of all net proceeds thereof or
certain other events. The Partnership commenced operations on August 26, 1986,
and completed its acquisition of two apartment complexes and two shopping plazas
on September 4, 1986, all of which are located in the South.
The Depositary Unit Certificate ("DUC") holders are assignees of USS Assignor,
Inc. (the Limited Partner), an affiliate of the Corporate General Partner, and as
such will be entitled to receive the economic rights attributable to the Limited
Partnership Interests represented by their DUCs. DUC holders will for all
practical purposes be treated as limited partners of the Partnership.
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.
Allocation of Cash Distributions: Cash distributions by the Partnership are
allocated 98% to the DUC holders and 2% to the general partners until the DUC
holders have received annual noncumulative distributions equal to 10% of their
Adjusted Capital Values. Net cash from operations then will be distributed to
the general partners until the general partners collectively have received 7% of
net cash from operations distributed in that fiscal year. Thereafter, (after
repayment of any loans by the general partners to the Partnership), net cash from
operations will be distributed 93% to the DUC holders and 7% to the general
partners. According to the terms of the Partnership's loan agreements, no
distributions may be made until the long term debt is repaid.
Note B - Organization and Significant Accounting Policies (Continued)
During the first eight quarters following the issuance of the DUCs, the Corporate
General Partner was obligated to loan to the Partnership up to $810,740 to cover
any deficiency in the quarterly cash distributions. The Corporate General
Partner loaned the Partnership $300,000 under this guarantee, which expired
August 26, 1988. A deficiency arose when the DUC holders did not receive
annualized cash distributions equal to 10% of the average of their Adjusted
Capital Values. The loan bears interest at the lesser of the rates being paid by
the parent company of the Corporate General Partner or two percentage points over
the CitiBank, N.A. prime interest rate. The repayment of the loan would reduce
the amount subsequently available for distribution to the DUC holders. This loan
may not be repaid until the Partnership's long term debt is repaid. The balance
at December 31, 1995, including accrued interest is $500,125.
Allocation of Profits, Gains and Losses: Profits, gains and losses of the
Partnership are allocated between the Corporate General Partner and DUC holders
in accordance with the provisions of the partnership agreement.
Profits and losses generally will be allocated 99% to the DUC holders and 1% to
the Corporate General Partner. Net loss per DUC for the years ended December 31,
1995 and 1994, was computed as 99% of the net loss divided by 1,222,000
depositary units outstanding.
Investment Properties: 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. For the year ended December 31, 1995, no
adjustments for impairment of value were recorded. The impairment loss is
measured by comparing the fair value of the asset to its carrying amount. The
effect of adoption was not material.
Depreciation: Depreciation is provided by the straight-line method over the
estimated lives of the rental properties and related personal property. For
Federal income tax purposes, the accelerated cost recovery method is used: 1)
for real property over periods of 19 years for additions after May 8, 1985, and
before January 1, 1987, and 2) for personal property over 5 years for additions
after December 31, 1986, the modified accelerated cost recovery method is used
for depreciation of 1) real property additions over 27-1/2 years, and 2) personal
property additions over 7 years.
Amortization: Computer software costs are being amortized over six years. Lease
commissions are being amortized over a period of one to ten years using the
straight-line method over the term of the respective leases.
</TABLE>
Note B - Organization and Significant Accounting Policies (Continued)
<TABLE>
<S> <C>
Leases: The Partnership leases certain commercial space to tenants under various
lease terms. The leases are accounted for as operating leases in accordance with
Financial Accounting Standards Board Statement No. 13. Some of the leases
contain stated rental increases during their term. For leases with fixed rental
increases, rents are recognized on a straight-line basis over the terms of the
lease. This straight-line basis recognized $18,926 less and $47,729 more in
rental income than was collected in 1995 and 1994, respectively. Beginning in
1995, the cash collections under the terms of the leases exceed the straight-line
method of revenue recognition.
For all other leases, minimum rents are recognized over the terms of the leases.
The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership recognizes income as earned on these leases. In addition,
management finds it necessary to offer rental concessions during particularly
slow months or in response to heavy competition from other similar complexes in
the area. Concessions are charged to expenses as incurred.
Cash: The Partnership has no unrestricted cash.
Restricted Cash - Tenant Security Deposits: The Partnership requires security
deposits from all apartment lessees for the duration of the lease. Deposits are
refunded when the tenant vacates the apartment if there has been no damage.
Restricted Escrows
Capital Improvement Account - The Partnership established an interest
bearing bank account (see "Note D"), for the purpose of deposit and expenditure
of cash flow for Capital Expenditures. The Partnership shall deposit from time
to time from revenues a reasonable allowance for Capital Expenditures, provided
the amount of such deposit shall have been approved in advance by the Surety.
The Partnership may withdraw any amounts on deposit in the Capital Expenditures
Account to pay for Capital Expenditures as they are made, provided the amount of
such withdrawals shall have been approved in advance by the Surety. At December
31, 1995, the balance was $72,583.
Working Capital Account - The Partnership established the "Working Capital
Account" for the purpose of providing a cash reserve available to the Partnership
(see "Note D"). On September 16, 1993, prior to making the first deposit into
the Net Cash Flow Fund, the Partnership deposited $150,000 into the Working
Capital Account. The bank holds the funds in the Working Capital Account for the
benefit of the Surety. The Partnership has the right to access these funds
without the consent of the Surety under specific guidelines mutually agreed to by
the Partnership and the Surety. Specifically, the Working Capital Account may be
used to fund negative cash flow, or emergency or immediate funding needs of a
property. At December 31, 1995, the balance was $133,142.
</TABLE>
Note B - Organization and Significant Accounting Policies (Continued)
<TABLE>
<S> <C>
Restricted Cash: The Partnership maintains a restricted cash account (the "Net
Cash Flow Fund") for the purpose of depositing Net Cash Flow, as defined in the
loan agreement, and to facilitate Cash Sweeps as defined in the loan agreement.
At December 31, 1995, the balance was $217,768. Total restricted cash of the
Partnership of $356,867 includes $139,099 of security deposits. On a monthly
basis the Net Cash Flow Fund shall be disbursed or retained, as follows:
(a) first, at any time as there shall be a balance of less than $150,000
in the Working Capital Account, an amount equal to the difference between the
actual balance and $150,000 but not in excess of twenty percent (20%) of such Net
Cash Flow shall be paid to the Partnership for deposit into the Working Capital
Account;
(b) second, to the payment of, or the reimbursement to the Partnership
for certain repairs and expenses and Capital Expenditures;
(c) third, to the payment of accrued but unpaid interest;
(d) fourth, to the payment of that portion of the Principal Balance equal
to accrued and unpaid interest therefore added to the Principal Balance pursuant
to the loan agreement;
(e) fifth, to the payment of the remaining Principal Balance and to any
and all other amounts payable to the Surety hereunder, including but not limited
to the additional interest.
Escrow for Taxes: These escrows are held by the Partnership and are designated
for the payment of real estate taxes.
Reclassifications: Certain reclassifications have been made to the 1994
financial statements to conform with 1995 presentation.
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 Partnership's cash and investments approximates fair value due to
short-term maturities. The Partnership's mortgage debt has payments due based on
Net Cash Flow as defined in the loan agreement. The fair value of the debt can
not be calculated using a discounted cash flow analysis as the future cash flow
is not determinable.
Advertising: The Partnership expenses the costs of advertising as incurred.
Advertising expense, included in operating expenses, was $27,679 and $33,706 for
the years ended December 31, 1995 and 1994, respectively.
Note C - Accounts Receivable
Accounts receivable at December 31, 1995, consisted of the following:
</TABLE>
Shopping center tenant rentals $ 109,807
Apartment tenant rentals 3,899
Common area maintenance, insurance and 18,585
Straight-line rent adjustment (Note B) 301,184
433,475
Less allowance for doubtful accounts (115,065)
$ 318,410
An analysis of the allowance for doubtful accounts is set forth below:
Years Ended December 31,
1995 1994
Balance at beginning of period $ 77,097 $ 36,985
Charged to expenses 88,350 76,630
Uncollectible amounts written
off against related assets -- (31,738)
Amounts collected (50,382) (4,780)
Balance at end of period $115,065 $ 77,097
Note D - Mortgage Note Payable
<TABLE>
<S> <C>
On October 15, 1993, the Partnership finalized the refinancing of all debt
encumbering its real estate assets. The debt has a stated interest rate of 10%,
which shall accrue and, to the extent such interest is not paid currently out of
Net Cash Flow, as defined in the loan agreement, shall be added to the principal
balance on each August 16 of each year prior to the maturity date of August 1,
2001; provided, however, that the amount of accrued and unpaid interest, shall at
no time exceed the sum of $1,740,733 and the balances in the Capital Expenditures
Account, the Working Capital Account, and the Tax Escrow Account established
under provisions of the loan agreement. Amounts in excess of this total must be
immediately paid by the Partnership. The loan agreement also calls for
additional interest of $58,648, which accrues annually on August 1, and is
payable on the earlier of the maturity date or the date on which the principal
balance and all accrued interest is paid.
Note D - Mortgage Note Payable (Continued)
The obligations of the Partnership to the Surety in connection with the issuance
of the debt are secured by a first mortgage or deed of trust on each of the
Partnership's properties and are cross-defaulted so that a default with respect
to one property is a default under each mortgage or deed of trust. The mortgage
note payable are non-recourse. The note does not require prepayment penalties if
repaid prior to maturity.
</TABLE>
The principal terms of the note payable is as follows:
Principal Principal
Balance At Stated Balance
December 31, Interest Period Maturity Due At
1995 Rate Amortized Date Maturity
U.S. Realty
Partnership $22,060,534 10.00% 95 months 08/01/01 (1)
(1) The balance at maturity is directly related to the ability of the
Partnership to make cash flow payments per the mortgage agreement.
At December 31, 1995 and 1994, $98,047 and $88,791, respectively, of accrued
interest was included in other liabilities.
Note E - Income Taxes
Under the provisions of the Internal Revenue Code, partnerships are not
subject to income taxes. Accordingly, no provision for income taxes is
made in the financial statements of the Partnership. Taxable income or
loss of the Partnership is reported in the income tax returns of its partners.
Note E - Income Taxes (Continued)
The following is a reconciliation of reported net loss and Federal taxable loss:
Years Ended December 31,
1995 1994
Net loss as reported $(279,432) $ (524,298)
Add (deduct):
Depreciation differences (674,794) (748,744)
Difference in bad debt expense 37,966 40,113
Difference in rents recognized 50,143 (88,520)
Change in prepaid rentals (41,277) 28,353
Accrued expenses (4,515) --
Other (31,355) 27,509
Federal taxable loss $(943,264) $(1,265,587)
Federal taxable loss per DUC $ (.76) $ (1.03)
The following is a reconciliation between the Partnership's reported amounts
and Federal tax basis of net assets and liabilities:
Net assets as reported $ 2,121,860
Land and buildings 10,737,233
Accumulated depreciation (9,422,081)
Syndication 2,774,391
Other (59,563)
Net assets - tax basis $ 6,151,840
Note F - Transactions with Affiliated Parties
<TABLE>
<S> <C>
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 reimbursements of certain expenses incurred by
affiliates on behalf of the Partnership.
Note F - Transactions with Affiliated Parties (Continued)
Balances and other transactions with affiliates of Insignia Financial Group, Inc.
in 1995 and 1994 are:
1995 1994
Property management fees $282,348 $295,582
Reimbursement for services of affiliates 91,208 59,635
Due to General Partner 500,125 476,125
Reimbursement for services of affiliates includes an accrual of $14,716 for legal
services.
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.
</TABLE>
Note G - Real Estate and Accumulated Depreciation
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Land Property Acquisition
The Gallery Shopping Plaza
Huntsville, Alabama $4,070,301 $ 8,377,101 $(5,132,185)
The Gallery Shopping Plaza
Knoxville, Tennessee 3,376,382 9,036,788 (3,392,199)
Governor's Park Apartments
Little Rock, Arkansas 422,524 5,701,008 (175,918)
Twin Lakes Apartments
Palm Harbor, Florida 1,928,351 9,282,993 (510,423)
Totals $9,797,558 $32,397,890 $(9,210,725)
Note G - Real Estate and Accumulated Depreciation (Continued)
The cost removed, net of additions, subsequent to the acquisition is primarily
due to write-downs and removals in the prior years.
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1995
Buildings
And Related
Personal Accumulated Date of Date Depreciable
Description Land Property Total Depreciation Construction Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C> <C>
The Gallery -
Huntsville $2,341,306 $ 4,973,911 $ 7,315,217 $1,797,761 1986 08/29/86 5-35
The Gallery-
Knoxville 2,070,000 6,950,971 9,020,971 2,137,165 1984 09/04/86 5-35
5-35
Governor's Park 422,524 5,525,090 5,947,614 2,108,246 1985 08/29/86
5-35
Twin Lakes 1,700,000 9,000,921 10,700,921 2,797,211 1986 08/28/86
Totals $6,533,830 $26,450,893 $32,984,723 $8,840,383
</TABLE>
<TABLE>
<S> <C>
Each of the Partnership's properties is secured by a first mortgage or deed of
trust in connection with the issuance of an Amended and Restated Surety Note,
Bond Notes and Suretyship Agreement.
Reconciliation of "Real Estate and Accumulated Depreciation":
Years Ended December 31,
1995 1994
Real Estate
Balance at beginning of year $32,809,946 $32,699,938
Property improvements 174,777 110,008
Balance at End of Year $32,984,723 $32,809,946
Accumulated Depreciation
Balance at beginning of year $ 8,001,337 $ 7,173,637
Additions charged to expense 839,046 827,700
Balance at end of year $ 8,840,383 $ 8,001,337
Note G - Real Estate and Accumulated Depreciation (Continued)
The aggregate cost of the real estate for Federal income tax purposes at December
31, 1995 and 1994, is $43,721,956 and $43,547,178, respectively. The accumulated
depreciation taken for Federal income tax purposes at December 31, 1995 and 1994,
is $18,262,463 and $16,748,623, respectively.
Note H - Revenues
The future minimum rents to be received from commercial tenants under
noncancelable operating leases, including leases signed or extended by January
31, 1996, are as follows:
1996 $ 1,647,541
1997 1,351,798
1998 1,131,085
1999 835,798
2000 608,287
Thereafter 1,543,892
$ 7,118,401
Note I - Contingency
On March 29, 1994, Insignia Financial Group, Inc., an affiliate of the Corporate
General Partner, was served with a complaint filed in the United States District
Court, Eastern District of Kentucky and styled Kenneth Ogle, et. al., v. U.S.
Shelter Corporation, et. al. The Corporate General Partner is a named defendant
in such suit and has also been served with such complaint. Such complaint
alleges, inter alia, that the Corporate General Partner engaged in a conspiracy
to defraud limited partners in the Partnership, made certain material
misstatements and omissions in the prospectus relating to the sale of limited
partnership interests in the Partnership, and breached its fiduciary duties to
the limited partners of the Partnership, and seeks the certification of such suit
as a class action. The Corporate General Partner and Insignia believe the claims
are without merit, and both intend to vigorously defend such suit. However, the
ultimate exposure, if any, to the Corporate General Partner or the Partnership
cannot be determined. Accordingly, no provision for any resulting liability has
been made in the financial statements.
Except for the issue stated, the Registrant is unaware of any pending or
outstanding litigation that is not of a routine nature. The Corporate General
Partner of the Registrant 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 8. Changes in and Disagreements with Accountant 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 Individual and Corporate
General Partners are as follows:
Individual General Partner - N. Barton Tuck, Jr., age 57, is the Individual
General Partner of the Registrant. Mr. Tuck is Chairman of GolfSouth Management,
Inc. Until August 1990, he served as Chairman and Chief Executive Officer of
U.S. Shelter Corporation ("Shelter"), the former parent of AmReal Corporation
(parent of the Corporate General Partner of the Partnership). For six years
prior to 1966, Mr. Tuck was employed in Greenville, South Carolina by the
certified public accounting firm of S.D. Leidesdorf & Company. From 1966 to
1970, he was a registered representative with the investment banking firm of
Harris Upham & Co., Inc. in Greenville, South Carolina. Since 1970, Mr. Tuck has
been engaged in arranging equity investments for individuals and partnerships.
Mr. Tuck is a graduate of the University of North Carolina. Mr. Tuck has
delegated to the Corporate General Partner all of his authority, as a general
partner of the Partnership, to manage and control the Partnership and its
business and affairs.
Corporate General Partner - The names and ages of, as well as the positions
and offices held by, the executive officers and directors of U.S. Realty I
Corporation are set forth below. There are no family relationships between or
among any officers or directors.
Name Age Position
William H. Jarrard, Jr. 49 President
Ronald Uretta 39 Vice President and
Treasurer
John K. Lines 36 Vice President and
Secretary
Kelley M. Buechler 38 Assistant Secretary
Mr. Jarrard, who had previously served as Vice President, became President
in August 1994. In June 1994, Mr. Lines became Secretary and Ms. Buechler, who
had previously held the position, became Assistant Secretary.
William H. Jarrard has been President of the Corporate General Partner
since August 1994 and Managing Director - Partnership Administration of Insignia
since January 1991. During the five years prior to joining Insignia in 1991, he
served in similar capacities for U. S. Shelter.
Ronald Uretta has been Insignia's Chief Financial Officer and Treasurer
since January 1992. Since September 1990, Mr. Uretta has also served as the
Chief Financial Officer and Controller of Metropolitan Asset Group. From May
1988 until September 1990, Mr. Uretta was a self-employed financial consultant.
From January 1978 until January 1988, Mr. Uretta was employed by Veltri Raynor &
Company, independent certified public accountants.
John K. Lines, Esq. has been Vice President and Secretary of the Corporate
General Partner since August 1994, Insignia's General Counsel since June 1994,
and General Counsel and Secretary since July 1994. From May 1993 until June
1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen
Financial Corporation, West Palm Beach, Florida. From October 1991 until May
1993, Mr. Lines was a Senior Attorney with BANC ONE CORPORATION, Columbus, Ohio.
From May 1984 until October 1991, Mr. Lines was an attorney with Squire Sanders &
Dempsey, Columbus, Ohio.
Kelley M. Buechler is Assistant Secretary of the Corporate General Partner
and Assistant Secretary of Insignia since 1991. During the five years prior to
joining Insignia in 1991, she served in similar capacities for U. S. Shelter.
Ms. Buechler is a graduate of the University of North Carolina.
Item 10. Executive Compensation
Neither the Individual General Partner nor any of the directors and officers
of the Corporate General Partner received any remuneration from the Registrant.
Item 11. Security Ownership of Certain Beneficial Owners and Management
As of December 31, 1995, no person was known by the Registrant to be the
beneficial owner of more than 5% of the Limited Partnership Units of the
Registrant.
No director or officer of the Corporate General Partner owns any Units.
Item 12. Certain Relationships and Related Transactions
The Individual General Partner and the Corporate General Partner received no
cash distributions from operations as General or Limited Partners during or with
respect to, the fiscal year ended December 31, 1995. For a description of the
share of cash distributions from operations, if any, to which the general
partners are entitled, reference is made to the material contained in the
Prospectus under the heading PROFITS AND LOSSES AND CASH DISTRIBUTIONS.
During the first eight quarters following the issuance of the DUCs, the
Corporate General Partner was obligated to loan to the Partnership up to $810,740
to cover any deficiency in the quarterly cash distributions. The Corporate
General Partner loaned the Partnership $300,000 under this guarantee, which
expired August 26, 1988. A deficiency arose when the DUC holders did not receive
annualized cash distributions equal to 10% of the average of their Adjusted
Capital Values. The loan bears interest at the lesser of the rates being paid by
the parent company of the Corporate General Partner or two percentage points over
the CitiBank, N.A. prime interest rate. The repayment of the loan would reduce
the amount subsequently available for distribution to the DUC holders. This loan
may not be repaid until the Partnership's long term debt is repaid. The balance
at December 31, 1995, including accrued interest is $500,125.
The Registrant has a property management agreement with an affiliate of
Insignia for the day-to-day management of the Partnership's properties. This
service includes the supervision of leasing, rent collection, maintenance,
budgeting, employment of personnel and payment of operating expenses. An
affiliate of Insignia receives a property management fee equal to 5% of rental
revenues for residential properties, and 6% for commercial properties. During
the fiscal year ended December 31, 1995, $282,348 was paid for property
management fees.
For a more detailed description of the management fee, see the material
contained in the Prospectus under the heading CONFLICTS OF INTEREST - Property
Management Services.
For a further description of payments made by the Registrant to affiliates
for services and as reimbursement of certain expenses incurred by affiliates on
behalf of the Registrant, see "Note F" of Notes to Financial Statements in this
report.
Item 13. Exhibits, and Reports on Form 8-K
(a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
(b) Reports on Form 8-K filed in the fourth quarter of fiscal year
1995:
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.
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 Principal
Executive Officer
Date: March 21, 1996
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 and Director March 21, 1996
William H. Jarrard, Jr. Principal Executive Officer
/s/Ronald Uretta Treasurer March 21, 1996
Ronald Uretta Principal Financial Officer
and Principal Accounting Officer
</TABLE>
EXHIBIT INDEX
Exhibit
<TABLE>
<S> <C>
3 See Exhibit 4(a)
4 (a) Amended and Restated Certificate and Agreement of Limited
Partnership (included as Exhibit A to the Prospectus of Registrant
dated August 19, 1986 contained in Amendment No. 4 Registration
Statement, No. 33-2996, of Registrant filed August 19, 1986 (the
"Prospectus") and is incorporated herein by reference).
(b) Subscription Agreement and Signature Page (included as Exhibit B to
the Prospectus and is incorporated herein by reference).
(c) Instruments governing the Bonds (filed as Exhibit 10C to Amendment
No. 4 to Registration Statement, No. 33-2996, of Registrant filed
August 19, 1986 and incorporated herein by reference).
(d) First Amendment to U.S. Realty Partners Limited Partnership Amended
and Restated Agreement of Limited of Partnership (dated August 15,
1986) dated October 14, 1993. [Filed as Exhibit 4(c) to Form 10QSB
for the quarter ended September 30, 1993 and incorporated herein by
reference.]
10(i) Contracts related to acquisition of properties:
(a) Purchase Agreement dated January 31, 1986 between The Gallery,
Ltd./LNDC Venture and U.S. Realty Partners Limited Partnership to
acquire The Gallery Shopping Plaza, Knoxville, Tennessee (filed as
Exhibit 10D to Amendment No. 1 to Registration Statement, No. 33-
2996, of the Registrant filed August 19, 1986 incorporated herein
by reference).
(b) Form of Purchase Agreement by which U.S. Realty Partners Limited
Partnership expects to acquire The Gallery Shopping Plaza,
Huntsville, Alabama (filed as Exhibit 10E to Amendment No. 2 to
Registration Statement, No. 33-2996, of the Registrant filed August
19, 1986 and incorporated herein by reference).
EXHIBIT INDEX
Exhibit
(ii) Form of Management Agreement with U.S. Shelter Corporation (filed with
Amendment No. 4 to Registration Statement No. 33-2996, of Registrant
filed August 19, 1986 and is incorporated herein by reference).
(iii) (a) Form of Master Lease and Management and Leasing Sub-Agreement related
to Purchase Agreement (see 10(b) between Cazana/Huntsville Shopping
Center, Ltd. and U.S. Shelter Corporation) to acquire The Gallery
Shopping Plaza, Huntsville, Alabama (filed as Exhibit 10E to Amendment
No. 4 to Registration Statement, No. 33-2996, of the Registrant filed
August 19, 1986 and incorporated herein by reference).
(b) Amended and Restated Surety Note, Bond Notes and Suretyship Agreement
by and between U.S. Realty Partners Limited Partnership and
Continental Casualty Company, dated October 15, 1993. *
(c) First Amended and Restated Mortgage, Assignment of Rents and Security
Agreement dated as of October 15, 1993 from U.S. Realty Partners
Limited Partnership, a Delaware limited partnership, to Continental
Casualty Company, an Illinois insurance company, securing Twin Lakes
Apartments, Palm Harbor, Florida. *
(d) State of Florida Uniform Commercial Code - Statement of Change - Form
UCC - 3 Rev. 11-88 by U.S. Realty Partners Limited Partnership and
Continental Casualty Company. *
(e) First Amended and Restated Mortgage, Assignment of Rents and Security
Agreement dated as of October 15, 1993 from U.S. Realty Partners
Limited Partnership, a Delaware limited partnership, to Continental
Casualty Company, an Illinois insurance company, securing Governor's
Park (formerly St. Croix) Apartments, Little Rock, Arkansas. *
(f) Uniform Commercial Code - Standard Form Pulaski County, Arkansas,
Statements of Continuation, Partial Release, Assignment, etc. - Form
UCC-3 by U.S. Realty Partners Limited Partnership and Continental
Casualty Company. *
EXHIBIT INDEX
Exhibit
(g) First Amended and Restated Mortgage, Assignment of Rents and Security
Agreement dated as of October 15, 1993 from U.S. Realty Partners
Limited Partnership, a Delaware limited partnership, to Continental
Casualty Company, an Illinois insurance company, securing Gallery
Shopping Plaza, Huntsville, Alabama.*
(h) State of Alabama - Uniform Commercial Code, Statements of
Continuation, Partial Release Assignments, etc. - Form UCC-3 by U.S.
Realty Partners Limited Partnership and Continental Casualty Company.
*
(i) First Amended and Restated Mortgage, Assignment of Rents and Security
Agreement dated as of October 15, 1993 from U.S. Realty Partners
Limited Partnership, a Delaware limited partnership, to Continental
Casualty Company, an Illinois insurance company, securing Gallery
Shopping Plaza, Knoxville, Tennessee.*
(j) State of Tennessee Uniform Commercial Code Statements of Continuation
Partial Release, Assignment, etc. - Form UCC-3 by U.S. Realty Partners
Limited Partnership and Continental Casualty Company. *
(k) First Amended and Restated Assignment of Rents and Leases dated
October 15, 1993 from U.S. Realty Partners Limited Partnership to
Continental Casualty Company, securing Gallery Shopping Plaza,
Huntsville, Alabama and Gallery Shopping Plaza, Knoxville, Tennessee.
*
(l) Depositary Agreement dated as of October 15, 1993, among U.S. Realty
Partners Limited Partnership, First Union National Bank of South
Carolina and Continental Casualty Company. *
(m) Financial Statement - Form UCC-1, State of South Carolina, Office of
Secretary of State Jim Miles by US Realty Partners Limited Partnership
and Continental Casualty Company. *
(n) Incumbency Certificate by U.S. Realty I Corporation and U.S. Realty
Partners Limited Partnership. *
* Filed as Exhibits 10iii (a) through (m) to Form 10QSB for the quarter
ended September 30, 1993 and incorporated herein by reference.
99 Prospectus of Registrant dated August 19, 1986 (included in Registration
Statement, No. 33-2996, of Registrant and incorporated herein by
reference).
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from US Realty
Partners Ltd. 1995 Year-End 10-KSB and is qualified in its entirety by reference
to such 10-KSB filing.
</LEGEND>
<CIK> 0000788955
<NAME> U.S. REALTY PARTNERS LTD.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 318,410
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 32,984,723
<DEPRECIATION> 8,840,383
<TOTAL-ASSETS> 25,370,148
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 22,060,534
0
0
<COMMON> 0
<OTHER-SE> 2,121,860
<TOTAL-LIABILITY-AND-EQUITY> 25,370,148
<SALES> 0
<TOTAL-REVENUES> 4,782,039
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,061,471
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,337,819
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (279,432)
<EPS-PRIMARY> (.23)
<EPS-DILUTED> 0
<FN>
<F1>The Partnership has an unclassified balance sheet.
</FN>
</TABLE>
