FORM 10-QSB-QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 0-15656
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.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
BALANCE SHEET
(Unaudited)
(in thousands, except per unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Cash and cash equivalents $ 467
Receivables and deposits 287
Restricted escrows 138
Other assets 358
Investment properties:
Land $ 2,123
Buildings and related personal property 15,800
17,923
Less accumulated depreciation (7,156) 10,767
$12,017
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 43
Tenant security deposit liabilities 64
Accrued property taxes 212
Other liabilities 176
Due to Corporate General Partner 612
Mortgage note payable 11,080
Partners' Deficit
General partners $ (5)
Depositary unit certificate holders (2,440,000 units
authorized; 1,222,000 units issued and outstanding) (165) (170)
$12,017
See Accompanying Notes to Financial Statements
</TABLE>
b)
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 753 $ 743 $ 2,247 $ 2,187
Other income 62 33 131 112
Total revenues 815 776 2,378 2,299
Expenses:
Operating 279 294 854 828
General and administrative 55 59 149 153
Depreciation 136 118 405 348
Interest 207 135 439 842
Property taxes 77 126 206 185
Total expenses 754 732 2,053 2,356
Income (loss) from continuing
operations 61 44 325 (57)
(Loss) income from discontinued operations -- (57) -- 306
Gain on sale of discontinued
operations -- 1,971 -- 4,672
Net income $ 61 $ 1,958 $ 325 $ 4,921
Net income allocated to general
partners (1%) $ -- $ 20 $ 3 $ 49
Net income allocated to depositary
unit certificate holders (99%) 61 1,938 322 4,872
$ 61 $ 1,958 $ 325 $ 4,921
Net income per depositary unit certificate:
Income (loss) from continuing operations $ .05 $ .04 $ .26 $ (.05)
(Loss) income from discontinued operations -- (.05) -- .25
Gain on sale of discontinued
operations -- 1.60 -- 3.79
$ .05 $ 1.59 $ .26 $ 3.99
Distribution per depositary unit $ 5.76 $ -- $ 5.76 $ --
See Accompanying Notes to Financial Statements
</TABLE>
c)
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Depositary
Depositary Unit
Unit General Certificate
Certificates Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 1,222,000 $ 2 $30,550 $30,552
Partners' capital at
December 31, 1999 1,222,000 $ 4 $ 6,546 $ 6,550
Distributions to partners -- (12) (7,033) (7,045)
Net income for the nine months
ended September 30, 2000 -- 3 322 325
Partners' deficit at
September 30, 2000 1,222,000 $ (5) $ (165) $ (170)
See Accompanying Notes to Financial Statements
</TABLE>
d)
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 325 $ 4,921
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 405 457
Amortization of loan costs and lease commissions 1 4
Gain on sale of discontinued operations -- (4,672)
Change in accounts:
Restricted cash 512 96
Receivables and deposits (131) (338)
Other assets (8) 76
Accounts payable (110) 16
Tenant security deposit liabilities 6 (60)
Accrued property taxes 142 48
Due to Corporate General Partner 16 30
Other liabilities (345) (56)
Net cash provided by operating activities 813 522
Cash flows from investing activities:
Net proceeds from sale of investment property -- 16,004
Property improvements and replacements (406) (200)
Net withdrawals from (deposits to) restricted escrows 145 (8)
Net cash (used in) provided by investing
activities (261) 15,796
Cash flows from financing activities:
Payments on mortgage note payable (293) (443)
Repayment of mortgage note payable (3,517) (15,875)
Proceeds from mortgage note payable 11,080 --
Distribution to partners (7,045) --
Loan costs paid (310) --
Net cash used in financing activities (85) (16,318)
Net increase in cash and cash equivalents 467 --
Cash and cash equivalents at beginning of period -- --
Cash and cash equivalents at end of period $ 467 $ --
Supplemental disclosure of cash flow information:
Cash paid for interest $ 740 $ 848
See Accompanying Notes to Financial Statements
</TABLE>
e)
U.S. REALTY PARTNERS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2000
Note A - Basis of Presentation
The accompanying unaudited financial statements of U.S. Realty Partners Limited
Partnership (the "Partnership" or "Registrant") 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 U.S. Realty I Corporation (the "Corporate General Partner"),
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three and
nine month periods ended September 30, 2000 are not necessarily indicative of
the results that may be expected for the year ending December 31, 2000. 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, 1999.
Certain reclassifications have been made to the 1999 financial statements to
conform with the 2000 presentation.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust, with AIMCO being the surviving corporation
(the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in
the Corporate General Partner. The Corporate General Partner does not believe
that this transaction has had or will have a material effect on the affairs and
operations of the Partnership.
Note C - Refinance of Partnership Debt
On August 31, 2000, the Partnership refinanced its mortgage note payable with
Continental Casualty Consultants with a new mortgage from GMAC. The refinancing
replaced mortgage indebtedness of $3,517,000 with a rate of 10% which encumbered
both of the Partnership's investment properties. The new mortgage for Governor's
Park Apartments was for $3,800,000 at a rate of 7.93%. Payments of $31,619.38
are due on the first day of each month until the loan matures on September 1,
2020 at which time the loan will be fully amortized. The new mortgage for Twin
Lakes Apartments was for $7,280,000 at a rate of 7.98%. Payments of $60,802.25
are due on the first day of each month until the loan matures on September 1,
2020 at which time the loan will be fully amortized. Capitalized loan costs of
approximately $310,000 were incurred as a result of the refinancing. Prepayment
penalties are required on both new mortgages if repaid prior to maturity. The
Corporate General Partner received approximately $111,000 included in the
capitalized loan costs as a 1% fee for its assistance in obtaining the
refinancing in accordance with the terms of the Partnership Agreement.
Note D - Reconciliation of Cash Flow
The following is a reconciliation of the subtotal on the accompanying
consolidated statements of cash flows captioned "net cash provided by operating
activities" to "net cash provided by operations", as defined in the Partnership
Agreement. However, "net cash used in operations" should not be considered an
alternative to net income as an indicator of the Partnership's operating
performance or to cash flows as a measure of liquidity.
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
2000 1999
(in thousands)
<S> <C> <C>
Net cash provided by operating activities $ 813 $ 522
Payments on mortgage notes payable (293) (443)
Property improvements and replacements (406) (200)
Change in restricted escrows, net 145 (8)
Changes in reserves for net operating
liabilities (82) 188
Additional reserves (177) (59)
Net cash provided by operations $ -- $ --
</TABLE>
The Corporate General Partner reserved approximately $177,000 at September 30,
2000 to fund capital improvements and repairs at the Partnership's two
investment properties. During the nine months ended September 30, 2000, the
mortgage debt encumbering the Partnership's investment properties was refinanced
as discussed above. For the nine months ended September 30, 1999 the Partnership
considered 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 restructuring in
October of 1993.
Note E - Discontinued Operations
The Gallery - Knoxville and The Gallery - Huntsville were the only two
commercial properties owned by the Partnership and represented one segment of
the Partnership's operations. Both of these properties were sold during 1999 and
accordingly the results of the commercial segment have been shown as income from
discontinued operations and gain (loss) on sale of discontinued operations as of
September 30, 2000 and 1999. Revenues (losses) of these properties were
approximately $(34,000) and $625,000 for the three and nine months ended
September 30, 1999, respectively. No revenues from the properties were recorded
during the three and nine months ended September 30, 2000. (Loss) income from
discontinued operations was approximately $(57,000) and $306,000 for the three
and nine months ended September 30, 1999, respectively.
On February 1, 1999, The Gallery - Knoxville, located in Knoxville, Tennessee,
was sold to an unaffiliated third party for $9,300,000. After closing expenses
of approximately $391,000, the net proceeds received by the Partnership were
approximately $8,909,000. The Partnership was required to use the net proceeds
from the sale of the property to pay down the mortgage encumbering the
Partnership's properties. The sale of the property resulted in a gain on sale of
investment property of approximately $2,701,000. In connection with the sale, a
commission of approximately $93,000 was paid to the Corporate General Partner in
accordance with the terms of the Partnership Agreement.
On July 2, 1999, The Gallery - Huntsville, located in Huntsville, Alabama, was
sold to an unaffiliated third party for $7,310,000. After closing expenses of
approximately $215,000, the net proceeds received by the Partnership were
approximately $7,095,000. The Partnership was required to use the net proceeds
from the sale of the property to pay down the mortgage encumbering the
Partnership's properties. The sale of the property resulted in a gain on sale of
investment property of approximately $1,971,000. In connection with the sale, a
commission of approximately $73,100 was paid to the Corporate General Partner in
accordance with the Partnership Agreement.
Note F - Distributions
During the nine months ended September 30, 2000 the Partnership paid
distributions of approximately $7,045,000 (approximately $7,033,000 to the
limited partners or $5.76 per depositary unit) consisting of cash from
operations of approximately $620,000 (approximately $608,000 to the limited
partners or $0.50 per depositary unit) and cash from refinance proceeds all paid
to the limited partners of approximately $6,425,000 (approximately $5.26 per
depositary unit). No distributions were declared or paid during the nine months
ended September 30, 1999.
Note G - 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 (i) certain
payments to affiliates for services and (ii) reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership. The following amounts were
paid or accrued to the Corporate General Partner and its affiliates during the
nine months ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in
operating expenses) $116 $114
Reimbursement for services of affiliates
(included in general and administrative,
operating expenses and investment properties) 63 61
Due to Corporate General Partner 612 590
Loan costs (included in other assets) 111 --
Real estate brokerage commissions (included in gain
on sale of discontinued operations) -- 166
During the nine months ended September 30, 2000 and 1999, affiliates of the
Corporate General Partner were entitled to receive 5% of gross receipts from
both of the Registrant's residential properties for providing property
management services. The Registrant paid to such affiliates approximately
$116,000 and $114,000 for the nine months ended September 30, 2000 and 1999,
respectively.
An affiliate of the Corporate General Partner received reimbursement of
accountable administrative expenses amounting to approximately $63,000 and
$61,000 for the nine months ended September 30, 2000 and 1999, respectively.
In connection with both the sale of The Gallery - Knoxville and The Gallery -
Huntsville the Corporate General Partner was entitled to a commission of 1% of
the selling price. Accordingly, $93,000 was paid during April 1999 as a
commission on the sale of The Gallery - Knoxville and $73,100 was paid during
July 1999 as a commission on the sale of The Gallery - Huntsville.
In connection with the refinancing of the debt encumbering the Partnership and
its properties, the Corporate General Partner was entitled to a fee of 1% of new
debt obtained. Accordingly, approximately $111,000 was paid during September
2000 (see Note C - Refinancing of Partnership debt).
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 733,745 limited partnership
units in the Partnership representing 60.04% of the outstanding units. A number
of these units were acquired pursuant to tender offers made by AIMCO or its
affiliates. It is possible that AIMCO or its affiliates will make one or more
additional offers to acquire additional limited partnership interests in the
Partnership for cash or in exchange for units in the operating partnership of
AIMCO. Under the Partnership Agreement, unitholders holding a majority of the
Units are entitled to take action with respect to a variety of matters which
would include without limitation, voting on certain amendments to the
Partnership Agreement and voting to remove the Corporate General Partner. As a
result of its ownership of 60.04% of the outstanding units, AIMCO is in a
position to influence all voting discussions with respect to the Registrant.
When voting on matters, AIMCO would in all likelihood vote the Units it acquired
in a manner favorable to the interest of the Corporate General Partner because
of their affiliation with the Corporate General Partner.
Note H - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership had two reportable segments: residential properties and
commercial properties. The Partnership's residential property segment consists
of two apartment complexes located in Arkansas and Florida. The Partnership
rents apartment units to tenants for terms that are typically twelve months or
less. The commercial property segment consisted of a shopping center located in
Alabama, which was sold on July 2, 1999 and a shopping center in Tennessee which
was sold on February 1, 1999. As a result of the sale of both commercial
properties during 1999, the commercial segment is shown as discontinued
operations.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment are the same as
those of the Partnership as described in the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999.
Factors management used to identify the enterprise's reportable segment:
The Partnership's reportable segment consists of investment properties that
offer different products and services. The reportable segments are each managed
separately because they provide distinct services with different types of
products and customers.
Segment information for the three and nine month periods ended September 30,
2000 and 1999 is shown in the tables below. The "Other" column includes
partnership administration related items and income and expense not allocated to
the reportable segment (in thousands).
<TABLE>
<CAPTION>
Three Months Ended September 30, 2000 Residential Other Totals
<S> <C> <C> <C>
Rental income $ 753 $ -- $ 753
Other income 53 9 62
Interest expense 77 130 207
Depreciation 136 -- 136
General and administrative expense -- 55 55
Segment profit (loss) 247 (186) 61
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 2000 Residential Other Totals
<S> <C> <C> <C>
Rental income $ 2,247 $ -- $ 2,247
Other income 108 23 131
Interest expense 77 362 439
Depreciation 405 -- 405
General and administrative expense -- 149 149
Segment profit (loss) 813 (488) 325
Total assets 11,929 88 12,017
Capital expenditures for investment
properties 406 -- 406
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended September 30, 1999 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 743 $ -- $ -- $ 743
Other income 26 -- 7 33
Interest expense -- -- 135 135
Depreciation 118 -- -- 118
General and administrative expense -- -- 59 59
Loss from discontinued operations -- (57) -- (57)
Gain on sale of discontinued
operations -- 1,971 -- 1,971
Segment profit (loss) 231 1,914 (187) 1,958
</TABLE>
<TABLE>
<CAPTION>
Nine months Ended September 30, 1999 Residential Commercial Other Totals
(discontinued)
<S> <C> <C> <C> <C>
Rental income $ 2,187 $ -- $ -- $ 2,187
Other income 91 -- 21 112
Interest expense -- -- 842 842
Depreciation 348 -- -- 348
General and administrative expense -- -- 153 153
Income from discontinued operations -- 306 -- 306
Gain on sale of discontinued
operations -- 4,672 -- 4,672
Segment profit (loss) 917 4,978 (974) 4,921
Total assets 10,758 77 1,336 12,171
Capital expenditures for investment
properties 200 -- -- 200
</TABLE>
Item 2. Management's Discussion and Analysis or Plan of Operation
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussions of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operation. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
The Partnership's investment properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for the nine
months ended September 30, 2000 and 1999:
Average
Occupancy
Property 2000 1999
Twin Lakes Apartments
Palm Harbor, Florida 96% 97%
Governor's Park Apartments
Little Rock, Arkansas 95% 95%
Results of Operations
The Registrant's net income for the three and nine months ended September 30,
2000 was approximately $61,000 and $325,000, respectively, as compared to
approximately $1,958,000 and $4,921,000 for the three and nine months ended
September 30, 1999. The decrease in net income for the three and nine months
ended September 30, 2000 is primarily attributable to the gain on sale of
discontinued operations of approximately $2,701,000 and $1,971,000 realized on
the sales of The Gallery - Knoxville and The Gallery - Huntsville, respectively.
The Gallery - Knoxville was sold to an unaffiliated third party on February 1,
1999 for $9,300,000. After closing expenses of approximately $391,000 the net
proceeds received by the Partnership were approximately $8,909,000. The Gallery
- Huntsville was sold to an unaffiliated third party on July 2, 1999 for
$7,310,000. After closing expenses of approximately $215,000 the net proceeds
received by the Partnership were approximately $7,095,000. The Partnership was
required to use the proceeds from the sales of the properties to pay down the
mortgage encumbering the Partnership's properties. The decrease in net income is
also attributable to a decrease in income from discontinued operations as a
result of the above mentioned sales.
Excluding the impact of the operations and sale of both commercial properties,
the Registrant's income from continuing operations for the three and nine months
ended September 30, 2000 was approximately $61,000 and $325,000 as compared to a
net income (loss) from continuing operations of approximately $44,000 and
$(57,000) for the three and nine months ended September 30, 1999. The increase
in net income for the nine months ended September 30, 2000 is due primarily to a
decrease in total expenses and, to a lesser extent, an increase in total
revenues. Total expenses decreased primarily due to a decrease in interest
expense. Interest expense decreased as a result of the reduction of the mortgage
encumbering the Partnership's investment properties, with the net proceeds from
the sale of The Gallery - Knoxville and The Gallery - Huntsville as noted above.
The decrease in total expenses for the nine months ended September 30, 2000 was
partially offset by increases in operating, depreciation, and property tax
expenses. The increase in operating expense is due primarily to increases in
salaries and related employee benefits and to an increase in repairs and
maintenance at the Partnership's residential properties. Depreciation expense
increased as a result of recent capital improvements performed at both of the
Partnership's investment properties. Property tax expense increased as a result
of an adjustment to the accrual for property tax expense during 1999 as a result
of prior overaccruals.
Total revenues increased for both the three and nine months ended September 30,
2000 as a result of an increase in rental income and other income. The increase
in rental income is due primarily to an increase in the average rental rates at
both of the Partnership's residential properties. Other income increased as a
result of an increase in interest income due to higher cash balances being
maintained in the Partnership's interest bearing accounts.
The increase in net income for the three months ended September 30, 2000 was
primarily due to an increase in total revenues as discussed above which was
partially offset by a slight increase in total expenses. Total expenses
increased as a result of an increase in depreciation expense as discussed above
and an increase in interest expense. Interest expense increased as a result of
the refinancings of the Partnership's two investment properties during August
2000 as discussed below.
General and administrative expenses remained relatively constant for the three
and nine month periods ended September 30, 2000. Included in general and
administrative expenses are management reimbursements to the Corporate General
Partner allowed under the Partnership Agreement. Costs associated with the
quarterly and annual communications with investors and regulatory agencies and
the annual audit required by the Partnership Agreement are also included.
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
At September 30, 2000, the Partnership had cash and cash equivalents of
approximately $467,000. During the nine months ended September 30, 2000, the
Partnership refinanced the mortgage encumbering the Registrant's investment
properties as discussed below. At September 30, 1999 all of the Partnership's
cash is restricted pursuant to the terms of the previous mortgage loan which
encumbered the Partnership's properties. The increase in cash and cash
equivalents of approximately $467,000 for the nine months ended September 30,
2000, from the Partnership's calendar year is due to approximately $813,000 of
cash provided by operating activities which was partially offset by
approximately $261,000 of cash used in investing activities and approximately
$85,000 of cash used in financing activities. Cash used in investing activities
consisted of property improvements and replacements which was partially offset
by net withdrawals from restricted escrows. Cash used in financing activities
consisted primarily of the repayment of the mortgage encumbering the
Partnership's investment properties, distributions to the partners, loan costs,
and payments of principle made on the mortgage encumbering the Partnership's
investment properties, partially offset by the proceeds from the new loans
obtained on the Partnership's investment properties. The Partnership invests its
working capital reserves in money market accounts.
On August 31, 2000, the Partnership refinanced its mortgage note payable with
Continental Casualty Consultants with a new mortgage from GMAC. The refinancing
replaced mortgage indebtedness of $3,517,000 with a rate of 10% which encumbered
both of the Partnership's investment properties. The new mortgage for Governor's
Park Apartments was for $3,800,000 at a rate of 7.93%. Payments of $31,619.38
are due on the first day of each month until the loan matures on September 1,
2020 at which time the loan will be fully amortized. The new mortgage for Twin
Lakes Apartments was for $7,280,000 at a rate of 7.98%. Payments of $60,802.25
are due on the first day of each month until the loan matures on September 1,
2020 at which time the loan will be fully amortized. Capitalized loan costs of
approximately $310,000 were incurred as a result of the refinancing.
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 various properties to adequately maintain the
physical assets and other operating needs of the Partnership and to comply with
Federal, State, and local, legal and regulatory requirements. Capital
improvements planned for each of the Registrant's properties are detailed below.
Governor's Park Apartments
The Partnership has budgeted, but is not limited to, approximately $113,700 for
capital improvements during the current year consisting primarily of floor
covering, appliances and major landscaping. The Partnership completed
approximately $57,000 in capital expenditures at Governor's Park Apartments
during the nine months ended September 30, 2000, consisting primarily of major
landscaping, floor covering and appliance replacements. These improvements were
funded with cash from operations.
Twin Lakes Apartments
The Partnership has budgeted, but is not limited to, approximately $455,000 for
capital improvements during the current year consisting primarily of roof and
structural improvements, floor covering and appliance replacement and major
landscaping. The Partnership completed approximately $349,000 in capital
expenditures at Twin Lake Apartments during the nine months ended September 30,
2000, consisting primarily of roof replacements, floor covering replacement,
drapery/blind replacements and other building improvements. These improvements
were funded with cash from operations.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such capital
improvements are completed, the Partnership's distributable cash flow, if any,
may be adversely affected at least in the short term.
The Partnership's assets are currently thought to be sufficient for any
near-term needs (exclusive of capital improvements) of the Partnership. The
mortgage indebtedness of approximately $11,080,000 bears interest at rates
between 7.93% and 7.98% and are due to mature on September 1, 2020.
During the nine months ended September 30, 2000 the Partnership paid
distributions of approximately $7,045,000 (approximately $7,033,000 to the
limited partners or $5.76 per depositary unit) consisting of cash from
operations of approximately $620,000 (approximately $608,000 to the limited
partners or $0.50 per depositary unit) and cash from refinance proceeds all paid
to the limited partners of approximately $6,425,000 (approximately $5.26 per
depositary unit). No distributions were declared or paid during the nine months
ended September 30, 1999. The Partnership's distribution policy is reviewed on a
quarterly basis. Future cash distributions will depend on the levels of net cash
generated from operations, the availability of cash reserves, and timing of the
debt maturities, refinancing and/or sale of the properties. There can be no
assurance, however, that the Partnership will generate sufficient funds from
operations after required capital expenditures to permit further distributions
to its partners during the remainder of 2000 or subsequent periods.
PART II - OTHER INFORMATION
ITEM 6. 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 during the quarter ended September
30, 2000:
None.
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/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date: November 13, 2000
