FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 312905, eff. 4/26/93.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period.........to.........
(Amended by Exchange Act Rel. No. 312905, eff. 4/26/93.)
Commission file number 0-14194
VMS NATIONAL PROPERTIES JOINT VENTURE
(Exact name of small business issuer as specified in its charter)
Illinois 36-3311347
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8700 West Bryn Mawr
Chicago, Illinois 60631
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (312) 399-8700
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports ), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) VMS NATIONAL RESIDENTIAL PORTFOLIO I
VMS NATIONAL RESIDENTIAL PORTFOLIO II
(Illinois limited partnerships)
VMS NATIONAL PROPERTIES (an Illinois partnership) AND SUBPARTNERSHIPS
<TABLE>
<CAPTION>
COMBINED BALANCE SHEET
(in thousands)
(Unaudited)
March 31, December 31,
1996 1995
<S> <C> <C>
Assets
Cash and cash equivalents:
Unrestricted $ 2,134 $ 1,984
Restricted-tenant security deposits 1,122 1,120
Accounts receivable 209 240
Escrows and other reserves 1,627 1,364
Other assets 494 511
Investment properties
Land 14,293 14,293
Buildings and personal property 133,826 133,517
Investment properties subject to abandonment
Land 559 559
Buildings and personal property 7,072 7,071
Less accumulated depreciation (73,585) (72,219)
$ 87,751 $ 88,440
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 339 $ 356
Tenant security deposits 1,086 1,080
Accrued interest 9,115 8,193
Accrued taxes 525 507
Other liabilities 746 559
Mortgage loans payable 121,784 121,845
Notes payable 31,382 30,610
Advances from affiliates of general partner 2,280 2,280
Deferred gain on extinguishment of debt 54,053 54,053
Liabilities subject to abandonment:
Tenant security deposits 50 53
Accrued interest 9,942 9,477
Accrued taxes 175 121
Other liabilities 68 242
Mortgage loans payable 6,291 6,278
Partners' Deficit (150,085) (147,214)
$ 87,751 $ 88,440
<FN>
See Accompanying Notes to Combined Financial Statements
</TABLE>
b) VMS NATIONAL RESIDENTIAL PORTFOLIO I
VMS NATIONAL RESIDENTIAL PORTFOLIO II
(Illinois limited partnerships)
VMS NATIONAL PROPERTIES (an Illinois partnership) AND SUBPARTNERSHIPS
COMBINED STATEMENTS OF OPERATIONS
(in thousands, except per interest data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Revenues:
Rental income $ 6,281 $ 6,974
Other income 272 372
Total revenues 6,553 7,346
Expenses:
Operating 1,736 2,200
General and administrative 268 280
Property management fees 264 294
Maintenance 682 805
Depreciation 1,435 1,754
Interest 4,549 5,634
Property taxes 519 593
Total expenses 9,453 11,560
Loss on disposal of property (17) (43)
Net loss $ (2,917) $ (4,257)
Net loss allocated to general partners $ (58) $ (85)
Net loss allocated to limited partners (2,859) (4,172)
$ (2,917) $ (4,257)
Net loss per limited
partnership interest:
Portfolio I (644 interests) $ (3,136) $ (4,571)
Portfolio II (268 interests) (3,132) (4,583)
<FN>
See Accompanying Notes to Combined Financial Statements
</TABLE>
c)<TABLE>
<CAPTION>
VMS NATIONAL RESIDENTIAL PORTFOLIO I
VMS NATIONAL RESIDENTIAL PORTFOLIO II
(Illinois limited partnerships)
VMS NATIONAL PROPERTIES (an Illinois partnership) AND SUBPARTNERSHIPS
COMBINED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(in thousands)
(Unaudited)
VMS National Residential Portfolio I
Limited Partners
General Accumulated Subscription
Partners Deficit Notes Total Total
<S> <C> <C> <C> <C> <C>
Partners' deficit at December 31, 1995 $ (3,382) $ (99,615) $ (587) $ (100,202) $ (103,584)
Collections of subscription notes -- -- 31 31 31
Net loss for the three months ended
March 31, 1996 (41) (2,019) -- (2,019) (2,060)
Partner's deficit at March 31, 1996 $ (3,423) $(101,634) $ (556) $ (102,190) $ (105,613)
</TABLE>
<TABLE>
VMS National Residential Portfolio I
Limited Partners
General Accumulated Subscription
Partners Deficit Notes Total Total
<S> <C> <C> <C> <C> <C>
Partners' deficit at December 31, 1995 $ (1,414) $ (41,831) $ (385) $ (42,216) $ (43,630)
Collections of subscription notes -- -- 15 15 15
Net loss for the three months ended
March 31, 1996 (17) (840) -- (840) (857)
Partner's deficit at March 31, 1996 $ (1,431) $ (42,671) $ (370) $ (43,041) $ (44,472)
Combined total $ (4,854) $(144,305) $ (926) $(145,231) $(150,085)
<FN>
See Accompanying Notes to Combined Financial Statements
</TABLE>
d) VMS NATIONAL RESIDENTIAL PORTFOLIO I
VMS NATIONAL RESIDENTIAL PORTFOLIO II
(Illinois limited partnerships)
VMS NATIONAL PROPERTIES (an Illinois partnership) AND SUBPARTNERSHIPS
COMBINED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (2,917) $ (4,257)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 1,435 1,754
Amortization of discounts and loan costs 804 768
Loss on disposal of property 17 43
Change in accounts:
Escrows and other reserves (263) 895
Accounts receivable 31 35
Tenant security deposits-restricted (2) (23)
Other assets 13 (4)
Accounts payable (17) (372)
Tenant security deposit liabilities 3 32
Accrued taxes 72 215
Accrued interest 1,387 2,372
Other liabilities 12 (477)
Net cash provided by operating activities 575 981
Cash flows from investing activities:
Property improvements and replacements (395) (613)
Net cash used in investing activities (395) (613)
Cash flows from financing activities:
Payments on mortgage loans payable (75) (68)
Payments received on subscription notes 45 26
Net cash used in financing activities (30) (42)
Net increase in cash and cash equivalents 150 326
Cash and cash equivalents at beginning of period 1,984 2,476
Cash and cash equivalents at end of period $ 2,134 $ 2,802
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,337 $ 2,475
<FN>
See Accompanying Notes to Combined Financial Statements
</TABLE>
e) VMS NATIONAL RESIDENTIAL PORTFOLIO I
VMS NATIONAL RESIDENTIAL PORTFOLIO II
(Illinois limited partnership)
VMS NATIONAL PROPERTIES (an Illinois partnership) AND SUBPARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Going Concern
The combined financial statements have been prepared assuming that the VMS
National Properties Joint Venture (the "Venture") will continue as a going
concern. The combined financial statements do not include any adjustments that
might result from the outcome of the uncertainties described below, however,
such uncertainties raise substantial doubt about the Venture's ability to
continue as a going concern.
The Venture has incurred recurring operating losses, has a partners' deficit and
is in default of certain debt agreements. Continued operating losses and
insufficient cash flows to meet all obligations of certain of the Venture's
properties are expected to occur. Historically, the General Partner and its
affiliates had advanced funds to the Venture. The General Partner is not
obligated, and does not intend, to fund any future deficits. During 1994, the
General Partner and its affiliates assigned a portion of the unpaid advances to
an affiliate of Insignia Financial Group, Inc. The General Partner is
evaluating its options for the Venture should the Venture continue to suffer
substantial losses from operations and cash deficiencies.
In addition, the General Partner and its affiliates have incurred serious
financial difficulties that may affect the ability of the General Partner to
function in that capacity. The administration and management of the Venture are
dependent on the General Partner and its affiliates. Pursuant to an agreement
dated July 14, 1994, a transaction is pending in which the current General
Partner would be replaced by MAERIL, Inc., an affiliate of Insignia Financial
Group, Inc. The substitution of MAERIL, Inc. as the General Partner is
expected, but there is no assurance that the transaction will be consummated.
The pending replacement of the General Partner will not necessarily improve the
financial condition of the Venture.
The combined financial statements do not include any adjustments relating to the
recoverability of the recorded asset accounts or the amount of liabilities that
might be necessary should the Venture be unable to continue as a going concern.
Note 2 - Basis of Presentation
The accompanying unaudited combined financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. 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 Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 1996, are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1996. For further information, refer to the financial
statements and footnotes thereto included in the Venture's annual report on Form
10-K for the fiscal year ended December 31, 1995.
Note 3 - Petition For Relief Under Chapter 11
On February 22, 1991, VMS National Properties Joint Venture filed for Chapter 11
bankruptcy protection in the United States Bankruptcy Court in the Central
District of California. The initial filing included only the residential
apartment complexes directly owned by VMS National Properties Joint Venture
(entities included in the filing hereinafter referred to collectively as the
Debtor) and excluded the 10 Subpartnerships consisting of 10 residential
apartment complexes encumbered by financing insured or held by the Department of
Housing and Urban Development ("HUD"), and the investing limited partnerships,
VMS National Residential Portfolio I (Portfolio I) and VMS National Residential
Portfolio II (Portfolio II). Due to the partnership agreements existing between
the Venture, Portfolio I and Portfolio II, which provide the Venture with
exclusive rights to the limited partner investor contributions, the Venture's
initial filing was amended to reflect the Venture's right to receive any excess
limited partner investor contributions.
The Venture's "Second Amended and Restated Plan of Reorganization" (the "Plan")
was confirmed by the Bankruptcy Court in March 1993 and became effective
September 30, 1993, ("Effective Date"). (See "Note 4").
Note 4 - Plan of Reorganization
The primary aspects of the Venture's Second Amended and Restated Plan of
Reorganization included the following:
a. The Venture retained 17 properties from the existing portfolio (the
"retained properties"), and abandoned title of the remaining properties
(the "non-retained properties") to the Federal Deposit Insurance
Corporation (the "FDIC"). The retained properties consist of one HUD
property and sixteen non-HUD properties. Two of the non-retained
properties remain at March 31, 1996.
b. The Venture restructured the existing senior lien debt obligations on the
retained properties (except for one of the retained properties which has a
first mortgage lien insured by HUD and two of the retained properties
which have senior liens formerly payable to the FDIC, as successor to
Beverly Hills Mortgage Corporation, "BH") to provide for an interest rate
of 8.75% per annum effective as of the first day of the month of the
Effective Date with payments based on a 30 year amortization commencing on
the first monthly payment due thereafter and a maturity date of January
15, 2000.
The senior lien collateralized by HUD on one of the retained properties
was not modified, and the senior liens formerly held by the FDIC were
modified to accrue at 9% per annum effective as of the first day of the
month of the Effective Date with monthly payments of interest only made at
7% per annum commencing with the first monthly payment due thereafter on
the FDIC value, as defined in "c" below.
c. As it pertains to the existing BH junior mortgages on the retained
properties, the FDIC reduced its claim on two of the properties to
$300,000 per property evidenced by a non-interest bearing note scheduled
to mature January 15, 2000, and has left in place liens for the full
amount of its claims at the petition date for all other retained
properties. Interest on the former FDIC loans for these retained
properties accrues at 10% per annum on the FDIC value (total property
value per the FDIC's June 1992 valuations less the property's senior lien
indebtedness) commencing as of the first day of the month of the Effective
Date and monthly payments of interest only at 7% per annum on the FDIC
value will commence with the first monthly payment due thereafter. (The
retained property governed by HUD Regulatory Agreements is to make
payments of interest only following the approval by HUD of the Surplus
Cash calculation.) On October 28, 1995, the FDIC sold all of the debt it
held related to the retained properties to BlackRock Capital Finance,
L.P. The debt amounts and terms were not modified.
d. The Venture distributed the following amounts in conjunction with the
terms of the Plan: (1) approximately $5,980,000 to satisfy unsecured
prepetition creditor claims of the nonaffiliated note payable to Security
Pacific National Bank, trade creditors, and property taxes on the
retained properties; (2) approximately $1,056,000 to provide for allowed
and unclassified administrative claims; and (3) approximately $5,960,000
to make capital improvements at the retained properties.
This capital improvement reserve was exhausted during 1995.
e. The VMS/Stout Joint Venture was granted an allowed claim in the amount of
$49,534,819 for the Assignment and Long-Term Loan Arrangement Notes
payable to them by the Venture. Payments totalling $3,475,000 in
conjunction with this allowed claim were made to the nonaffiliated members
of the VMS/Stout Joint Venture on October 7, 1993. The Venture also
executed a $4,000,000 promissory note dated September 1, 1993, to
ContiTrade Services Corporation (the ContiTrade Note) in connection with
these allowed note claims. The ContiTrade Note represents a
prioritization of payments to ContiTrade of the first $4,000,000 in
repayments made under the existing Assignment and Long-Term Loan
Arrangement Notes payable to the VMS/Stout Joint Venture, and does not
represent an additional $4,000,000 claim payable to ContiTrade. In
addition to prioritizing ContiTrade's receipt of the first $4,000,000 in
repayments on the old notes, the ContiTrade Note provides for 5%
noncompounding interest on the outstanding principal balance calculated
daily on the basis of a 360 day year. The ContiTrade Note is secured by a
Deed of Trust, Assignment of Rents and Security Agreement on each of the
Venture's retained properties, and provides ContiTrade with other approval
rights as to the ongoing operations of the Venture's retained properties.
The ContiTrade Note matures January 15, 2000. The remaining $42,059,819
is noninterest bearing.
f. The Venture entered into a Revised Restructured Amended and Restated Asset
Management Agreement (the Revised Asset Management Agreement) with
Insignia. Effective October 1, 1993, Insignia took over the asset
management of the Venture's retained properties and partnership functions.
The Revised Asset Management Agreement provides for an annual compensation
of $500,000 to be paid to Insignia in equal monthly installments. In
addition, Insignia will receive reimbursement for all out-of-pocket costs
incurred in connection with their services up to $200,000 per calendar
year. These service fees are to be paid from the available operating cash
flow of the Venture's retained complexes after the payment of operating
expenses and priority reserve fundings for insurance, real estate and
personal property taxes, senior mortgage payments, minimum interest
payment requirements on the former FDIC mortgages, and any debt service
and principal payments currently due on any liens or encumbrances senior
to the ContiTrade Deeds of Trust. If insufficient operating cash flow
exists after the funding of these items, the balance of Insignia's service
fees may be paid from available partnership cash sources. Additionally,
the service fee payable to Insignia will be reduced proportionately for
each of the Venture's retained complexes which are sold or otherwise
disposed of from time to time. The Venture engaged Insignia to commence
property management of all of the Venture's retained complexes effective
January 1, 1994.
Note 5 - Contingencies
The Venture and certain affiliates of the Venture, including the Managing
General Partner and certain officers and directors of the Managing General
Partner, are parties to certain pending legal proceedings filed as of March 31,
1996. The legal proceedings which the Venture is included in relate primarily
to the limited partners' investment in the Venture. The adverse outcome of any
one or more legal proceedings against the Venture or any of its affiliates which
provides financial support or services to the Venture could have a materially
adverse effect on the present and future operations of the Venture. The
eventual outcome of these matters cannot be determined at this time.
Accordingly, no provision for any liability that may result has been made in the
combined financial statements.
Note 6 - Investment in Properties Subject to Abandonment
The Venture's investment in 10 properties for which it has obtained Bankruptcy
Court approval to abandon, and to which it still held legal title to two of
these properties at March 31, 1996, have been presented as "Investment in
Properties Subject To Abandonment" on the Venture's Combined Balance Sheet at
March 31, 1996, and December 31, 1995. The extraordinary gain on the
extinguishment of debt for all of these properties will exceed the ordinary loss
from the write down of the net carrying values of these properties to their
estimated fair market values. Therefore, no allowance or provision for the loss
in asset value has been made in the Venture's Combined Statements of Operations
for the three months ended March 31, 1996.
Note 7 - HUD Contingencies
The Venture, VMS Realty Management, Inc. and HUD are engaged in discussions
covering the appropriateness of certain Crosswood Park and Venetian Bridges
Grand Canal I disbursements totalling approximately $603,000 and $133,000,
respectively, made during the years 1987 through 1991. The parties are
attempting to resolve this issue, but the ultimate outcome cannot presently be
determined. The General Partner is vigorously defending its past actions and
does not believe the eventual outcome of these discussions will have a material
adverse effect on the operations of the Venture. Given the General Partner's
beliefs and the uncertainty regarding the eventual resolution of the amounts in
question, the responsible parties and their ability to make repayment if deemed
necessary, no adjustment has been made to the Venture's combined financial
statements concerning this matter.
Two of the non-retained HUD projects were involved in similar discussions with
HUD relating to approximately $1,855,000 of inappropriate disbursements. These
matters were settled during 1994 with no effect on the Venture.
Note 8 - Mortgage Notes Payable
On October 28, 1995, the FDIC sold all of the debt it held related to the
retained properties to BlackRock Capital Finance, L.P. The debt amounts and
terms were not modified.
Note 9 - Subsequent Event
The Partnership sold two of the retained properties, Carlisle Square Apartments
and Bellevue Towers Apartments, on April 19, 1996, and April 30, 1996,
respectively. Net proceeds received from the sales of Carlisle Square and
Bellevue Towers after payments of property liabilities and other costs related
to the sales were approximately $794,000 and $577,000, respectively. The net
effect of these transactions to the Venture is not significant.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
The Venture's unrestricted cash at March 31, 1996, of $2,134,000 increased
$150,000 from December 31, 1995. This increase was attributable to net cash
provided by operating activities of $575,000, offset by net cash used in
investing and financing activities of $395,000 and $30,000, respectively.
The decrease in net cash provided by operating activities for the three months
ended March 31, 1996, compared to the corresponding period of 1995 was primarily
due to increased deposits to escrows and other reserves and earlier payment of
taxes during the first quarter of 1996.
Net cash used in investing activities decreased for the three months ended March
31, 1996, as a result of fewer property improvements after the depletion of the
capital reserve escrow established at the time of Reorganization.
Net cash used in financing activities decreased for the quarter ended March 31,
1996, compared to the quarter ended March 31, 1995, primarily due to increased
receipts of subscription notes.
At December 31, 1992, the Venture had approximately $15,433,000 in excess
limited partner contributions. Permitted uses of these excess limited partner
contributions during 1993 were limited to 1) the funding of monthly Bankruptcy
Court approved professional fees; 2) establishing a reserve of $5,960,000 to
fund capital improvements on the retained complexes; 3) repayments of
approximately $5,980,000 on various prepetition claims including notes payable,
real estate taxes and amounts due trade creditors; 4) payments of $1,006,000 to
the Managing General Partner for reimbursement of cash advances and asset
management services; and 5) payments to the FDIC and ContiTrade for
reimbursement of administrative costs incurred in connection with the bankruptcy
case (see "Note 4" of the Notes to Combined Financial Statements). The
Venture's Plan of Reorganization, which became effective on September 30, 1993,
also restricts the permitted uses of the excess limited partner cash balances on
hand at March 31, 1996.
Total net capital contribution and interest amounts due from limited partners of
Portfolio I and Portfolio II at March 31, 1996, approximated $1,059,000. A
settlement agreement was entered into on March 28, 1991, by the Plaintiff class
counsel on behalf of the class of limited partners in approximately 100 non-
publicly traded VMS sponsored limited partnerships including VMS National
Residential Portfolio I and II, VMS National Properties Joint Venture, and VMS
Realty Partners and its affiliates and certain other defendants. The Settlement
Agreement provided the settling Limited Partners with an option to refinance
their defaulted subscription note principal and interest payments. Of the total
number of limited partner units in Portfolio I and Portfolio II, only 10 limited
partner units in Portfolio I and 5.67 limited partner units in Portfolio II
opted out of the Settlement Agreement, and accordingly were ineligible to elect
this refinancing option. Approximately 65% of the total capital and accrued
interest amounts due from limited partners of Portfolio I and Portfolio II
represented amounts due from limited partners who elected the refinancing
option. All amounts remaining due from the limited partners are considered past
due and their outstanding amount bears interest at the 18% default rate.
A cash payment of $24,550,000 was paid into a settlement fund for the benefit of
the settling class members of all settling limited partnerships on behalf of VMS
and the other settling defendants. VMS National Residential Portfolio I and II
and VMS National Properties Joint Venture was not obligated to fund any portion
of this cash settlement. The settling class members in VMS National Residential
Portfolio I and II were collectively allocated approximately $3,000,000 of the
net settlement proceeds paid on behalf of the VMS Settling Defendants and
Prudential-Bache Settling Defendants.
Continued operating losses and insufficient cash flows to meet all obligations
of certain of the Venture's properties are expected to occur. The Managing
General Partner is not obligated, and does not intend, to fund any such
operating and cash flow deficits. However, the Venture's ability to continue as
a going concern and to meet its obligations as they come due is solely dependent
upon its ability to generate adequate cash flow from maintaining profitable
operations on the retained properties or securing an infusion of
capital. Management is involved in negotiations which would replace VMSRIL as
the managing general partner and has entered into an agreement with Insignia
which contemplates that VMSRIL will withdraw as general partner and be replaced
by an entity in which Insignia owns an interest. This change in ownership is
subject to the approval of various parties, including, among others, HUD, the
FDIC and ContiTrade. The Managing General Partner believes that they will be
successful in obtaining a replacement general partner and that the Venture will
be able to continue operations as a going concern on that basis. However, the
ultimate resolution of these financial difficulties and uncertainties cannot be
determined at this time.
Results of Operations
The Partnership realized a net loss of $2,917,000 for the three months ended
March 31, 1996, compared to a net loss of $4,257,000 for the three months ended
March 31, 1995. The reduction in net loss for the three months ended March 31,
1996, resulted from a decrease in total expenses for the period, partially
offset by a reduction in total revenues.
The decrease in rental and other income for the first quarter of 1996 was
primarily attributable to the foreclosures of five properties during 1995
compounded by a decrease in clubhouse rentals and lease cancellation fees at
several of the properties.
The decrease in operating, maintenance, depreciation, interest, and property tax
expenses for the three months ended March 31, 1996, were directly related to the
foreclosures noted above. Otherwise, operations remained comparable for the
three months ended March 31, 1996 and 1995.
The loss on disposal of assets for the three months ended March 31, 1996 and
1995, resulted from roof replacements at one and three properties, respectively.
Average occupancy rates for the three months ended March 31, 1996 and 1995, for
the retained properties are as follows:
Average Occupancy
Property 1996 1995
Buena Vista Apartments
Pasadena, CA 97% 93%
Casa de Monterey
Norwalk, CA 94% 93%
Crosswood Park
Citrus Heights, CA 95% 95%
Mt. View Apartments
San Dimas, CA 97% 90%
Pathfinder
Fremont, CA 94% 88%
Scotchollow
San Mateo, CA 99% 99%
The Bluffs
Milwaukie, OR 96% 97%
Bellevue Towers
Memphis, Tn 93% 96%
Vista Village Apartments
El Paso, TX 83% 77%
Average Occupancy
1996 1995
Chapelle Le Grande
Merrillville, IN 99% 92%
North Park Apartments
Evansville, IN 98% 96%
Shadowood Apartments
Monroe, LA 96% 92%
The Towers of Westchester Park
College Park, MD 96% 99%
Terrace Gardens
Omaha, NE 98% 94%
Carlisle Square
Albuquerque, NM 98% 97%
Watergate Apartments
Little Rock, AR 93% 94%
Forest Ridge Apartments
Flagstaff, AZ 90% 95%
The Managing General Partner attributes the occupancy fluctuations at the
properties to the following: increase in occupancy at Buena Vista to unit
upgrades and property improvements; increase in occupancy at Mt. View to
property and area improvements and improved leasing staff; increase at
Pathfinder to increased traffic and a more appealing property due to significant
property improvements; increase at Vista Village to increased marketing with
concentration on leasing and a new staff improving operations; increase at
Chapelle Le Grande to good location advantages and client satisfaction which has
resulted in verbal recommendations by current residents to potential prospects;
increase at Shadowood to a local business bringing in two hundred additional
people to the area requiring housing; increase at Terrace Gardens to interior
and exterior remodeling improving the appearance of the apartments; and decrease
at Forest Ridge Apartments to not being able to retain college students, their
primary tenants.
Recent Developments - VMS Realty Partners and Affiliates
There have been no material developments or changes from the Recent
Developments-VMS Realty Partners and Affiliates disclosed in "Part I, Item 1" of
the Venture's report on form 10-K for the year ended December 31, 1995.
ITEM 3. LEGAL PROCEEDINGS
As disclosed in the prior reports on Form 10-Q or Form 10-K ("Prior
Public Filings"), the Joint Venture including the Joint Venturers, VMS Realty
Investment L.T.D. -General Partner of the Joint Venturers, Subpartnerships, VMS
Realty Partners, now known as VMS Realty Partners, L.P., certain officers and
directors of VMS Realty Partners, now known as VMS Realty Partners, L.P. and
certain other affiliates of the Venture are parties to certain pending legal
proceedings which are summarized below (other than litigation matters covered by
insurance policies). The adverse outcome of certain of the legal proceedings
disclosed in this Report and the Prior Public Filings could have a materially
adverse effect on the present and future operations of the Joint Venture.
Summarized below are certain developments in legal proceedings filed
against VMS Realty Partners, now known as VMS Realty Partners, L.P. and its
affiliates which were disclosed in the Prior Public Filings and certain pending
legal proceedings not previously reported that have been filed against VMS
Realty Partners, now known as VMS Realty Partners, L.P. and its affiliates. The
inclusion in this Report of any legal proceeding or developments in any legal
proceeding is not intended as a representation by the Joint Venture that such
particular proceeding is material. For those actions summarized below in which
the plaintiffs are seeking damages, the amount of damages being sought is an
amount to be proven at trial unless otherwise specified. There can be no
assurance as to the outcome of any of the legal proceedings summarized in this
Report or in Prior Public Filings.
A. VMS Limited Partnership Litigation
i) There are no new developments or changes from "Item 3.A." of the
Partnership's report on Form 10-K for the year ended December 31, 1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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:
None filed during the quarter ended March 31, 1996.
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.
VMS NATIONAL PROPERTIES JOINT VENTURE
(Registrant)
By: VMS National Residential Portfolio I
By: VMS Realty Investment, Ltd.
Managing General Partner
By: JAS Realty Corporation
Date: May 13, 1996 By: /s/ Joel A. Stone
Joel A. Stone
President
Date: May 13, 1996 By: /s/ Thomas A. Gatti
Thomas A. Gatti
Senior Vice-President and Principal
Accounting Officer
VMS National Residential Portfolio II
By: VMS Realty Investment, Ltd.
Managing General Partner
By: JAS Corporation
Date: May 13, 1996 By: /s/ Joel A. Stone
Joel A. Stone
President
Date: May 13, 1996 By: /s/ Thomas A. Gatti
Thomas A. Gatti
Senior Vice-President and Principal
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from VMS National
Properties Joint Venture 1996 First Quarter 10-Q and is qualified in its
entirety by reference to such 10-Q filing.
</LEGEND>
<CIK> 0000789089
<NAME> VMS NATIONAL PROPERTIES JOINT VENTURE
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,134
<SECURITIES> 0
<RECEIVABLES> 209
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 155,750
<DEPRECIATION> 73,585
<TOTAL-ASSETS> 87,751
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 159,457
0
0
<COMMON> 0
<OTHER-SE> 150,085
<TOTAL-LIABILITY-AND-EQUITY> 87,751
<SALES> 0
<TOTAL-REVENUES> 6,553
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,453
<LOSS-PROVISION> 17
<INTEREST-EXPENSE> 4,549
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,917)
<EPS-PRIMARY> (3,135)<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
<FN>
<F2> Amount not in thousands.
</FN>
</TABLE>
