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
Form 10-Q
[Mark One]
[X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1997
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 registrant as issuer as specified in its charter)
Illinois 36-3311347
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
630 Dundee Road, Suite 220
Northbrook, Illinois 60062
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (847) 714-9600
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
VMS NATIONAL RESIDENTIAL PORTFOLIO I
VMS NATIONAL RESIDENTIAL PORTFOLIO II
(Illinois limited partnerships)
VMS NATIONAL PROPERTIES (an Illinois partnership) AND SUBPARTNERSHIPS
COMBINED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31
1997 1996
(Unaudited) (Note)
<S> <C> <C>
Assets
Cash and cash equivalents:
Unrestricted $ 1,835 $ 1,788
Restricted-tenant security deposits 1,082 1,082
Accounts receivable 179 151
Escrows and other reserves 2,512 1,507
Other assets 187 411
Investment properties:
Land 13,404 13,404
Buildings and personal property 128,727 128,455
142,131 141,859
Less accumulated depreciation (71,351) (70,019)
70,780 71,840
Total assets $ 76,575 $ 76,779
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 206 $ 302
Tenant security deposits 1,080 1,080
Accrued interest 12,956 11,948
Accrued taxes 710 492
Other liabilities 339 381
Mortgage loans payable 119,167 119,229
Notes payable 34,703 33,837
Advances from affiliates of general partner 753 753
Deferred gain on extinguishment of debt 54,053 54,053
Partners' Deficit (147,392) (145,296)
Total liabilities and partners' deficit $ 76,575 $ 76,779
Note: The balance sheet at December 31, 1996, has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
<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)
Three Months Ended
March 31,
1997 1996
Revenues:
Rental income $ 6,033 $ 6,281
Other income 230 272
Total revenues 6,263 6,553
Expenses:
Operating 1,747 1,994
General and administrative 229 268
Maintenance 510 688
Depreciation 1,331 1,435
Interest 4,130 4,549
Property taxes 417 519
Total expenses 8,364 9,453
Loss on disposal of property -- (17)
Net loss $ (2,101) $ (2,917)
Net loss allocated to general partners $ (42) $ (58)
Net loss allocated to limited partners (2,059) (2,859)
$ (2,101) $ (2,917)
Net loss per limited
partnership interest:
Portfolio I (644 interests) $ (2,262) $ (3,136)
Portfolio II (268 interests) (2,248) (3,132)
See Accompanying Notes to Combined Financial Statements
c) 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)
<TABLE>
<CAPTION>
VMS National Residential Portfolio I
Limited Partners
Generals Accumulated Subscription Total Total
Partners Deficit Notes
<S> <C> <C> <C> <C> <C>
Partners' deficit at December 31, 1996 $ (3,356) $ (98,353) $ (534) $ (98,887) $ (102,243)
Collections of subscription notes -- -- 3 3 3
Net loss for the three months ended
March 31, 1997 (30) (1,456) -- (1,456) (1,486)
Partner's deficit at March 31, 1997 $ (3,386) $ (99,809) $ (531) $(100,340) $ (103,726)
</TABLE>
<TABLE>
<CAPTION>
VMS National Residential Portfolio II
Limited Partners
General Accumulated Subscription
Partners Deficit Notes Total Total
<S> <C> <C> <C> <C> <C>
Partners' deficit at December 31, 1996 $ (1,404) $ (41,307) $ (342) $ (41,649) $ (43,053)
Collections of subscription notes -- -- 2 2 2
Net loss for the three months ended
March 31, 1997 (12) (603) -- (603) (615)
Partner's deficit at March 31, 1997 $ (1,416) $ (41,910) $ (340) $ (42,250) $ (43,666)
Combined total $ (4,802) $(141,719) $ (871) $(142,590) $ (147,392)
<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,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (2,101) $ (2,917)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 1,331 1,435
Amortization of discounts and loan costs 883 804
Loss on disposal of property -- 17
Change in accounts:
Escrows and other reserves (1,005) (263)
Accounts receivable (28) 31
Restricted tenant security deposits -- (2)
Other assets 223 13
Accounts payable (96) (17)
Accrued taxes 218 72
Accrued interest 1,008 1,387
Tenant security deposit liabilities -- 3
Other liabilities (42) 12
Net cash provided by operating activities 391 575
Cash flows from investing activities:
Property improvements and replacements (271) (395)
Net cash used in investing activities (271) (395)
Cash flows from financing activities:
Payments on mortgage loans payable (77) (75)
Payments received on subscription notes 4 45
Net cash used in financing activities (73) (30)
Net increase in cash and cash equivalents 47 150
Cash and cash equivalents at beginning of period 1,788 1,984
Cash and cash equivalents at end of period $ 1,835 $ 2,134
Supplemental disclosure of cash flow information:
Cash paid for interest $ 21,233 $ 2,337
<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 and has a partners' deficit
of $147 million at March 31, 1997. Continued operating losses 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., ("Insignia"). 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.
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 in and of itself 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 VMS Realty Investment, Ltd, the Managing General
Partner, 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, 1997, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 1997. 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, 1996.
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").
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 seventeen
retained properties were sold during the second quarter of 1996. All of the
non-retained properties had been foreclosed upon as of December 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 totaling $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 $42,060,000 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. Accordingly, the fee was reduced upon the disposition
of Bellevue and Carlisle Square in 1996. 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,
1997. The legal proceedings which the Venture is included 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
provide 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 - HUD CONTINGENCIES
The Venture, VMS Realty Management, Inc. and HUD entered into a Settlement
Agreement dated December 9, 1996, related to the appropriateness of certain
Crosswood Park and Venetian Bridges Grand Canal I disbursements totaling
approximately $603,000 and $133,000, respectively, made during the years
1987 through 1991. This audit also included five other HUD projects managed by
VMS Realty Management, Inc. which were not owned by the Venture. The Settlement
Agreement provided an aggregate payment of $550,000 to the Federal government,
$102,000 of which was paid from available funds of Venetian Bridges Grand Canal
I and the remainder of the settlement payment of $448,000 were paid by entities
other than the Venture and its subpartnerships.
NOTE 7 - SALE OF PROPERTY
The Partnership sold two of the retained properties, Carlisle Square Apartments
and Bellevue Towers Apartments, to an unaffiliated party on April 19, 1996, and
April 30, 1996, respectively. The properties sold had a net book value of
$2,247,000 for Carlisle Square Apartments and $1,541,000 for Bellevue Towers
Apartments. The Partnership received net proceeds from the sales of Carlisle
Square and Bellevue Towers after payments of costs related to the sales of
approximately $2,291,000 and $1,556,000, respectively. The total gains on the
sale of Carlisle Square and Bellevue Towers were $44,000 and $15,000,
respectively, and are included in other income in the accompanying combined
statements of operations. The gain has been allocated to the partners in
accordance with the Limited Partnership Agreement. Of the combined proceeds,
$2,356,000 was used to pay down the mortgage note payable and $1,488,000, was
used to repay advances from affiliates of the General Partner.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
The Venture's unrestricted cash and cash equivalents at March 31, 1997, of
$1,835,000 increased $47,000 from December 31, 1996. This increase was
attributable to net cash provided by operating activities of $391,000, offset by
net cash used in investing and financing activities of $271,000 and $73,000,
respectively.
The decrease in net cash provided by operating activities for the three months
ended March 31, 1997, compared to the corresponding period of 1996 was primarily
due to the disposition of the remaining non-retained properties and sale of the
Bellevue Towers and Carlisle Square properties during the second quarter of
1996. Additionally, payments of accrued expenses and deposits to escrows and
other reserves increased during the first quarter of 1997 due to the timing of
tax payments.
Net cash used in investing activities decreased for the three months ended March
31, 1997, as a result of fewer property improvements and replacements.
Net cash used in financing activities increased for the quarter ended March 31,
1997, compared to the quarter ended March 31, 1996, primarily due to decreased
collections 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, 1997.
Total net capital contribution and interest amounts due from limited partners of
Portfolio I and Portfolio II at March 31, 1997, approximated $1,004,000. 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 are expected to occur. The Managing General Partner
is not obligated, and does not intend, to fund any 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. 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 $2,101,000 for the three months ended
March 31, 1997, compared to a net loss of $2,917,000 for the three months ended
March 31, 1996. The decrease in net loss for the three months ended March 31,
1997, resulted from a decrease in total expenses for the period, partially
offset by a reduction in total revenues.
The decrease in revenues and total expenses for the first quarter of 1997
resulted from the timing of the foreclosures of two non-retained properties
during the second quarter of 1996. Additionally, two of the retained properties
were sold during the second quarter of 1996. General and administrative
expenses decreased for the three months ended March 31, 1997, compared to the
corresponding period of 1996 due to the above mentioned sales and foreclosures
during the second quarter of 1996. Maintenance expenses also decreased due to
interior building repairs, contract cleaning and yards and grounds primarily at
Scotchollow, Mountain View, Crosswood Park and Vista Village being performed in
1996. Included in maintenance expense is approximately $57,000 of major repairs
and maintenance comprised of major landscaping and construction services for the
quarter ended March 31, 1997. The loss on disposal of assets for the three
months ended March 31, 1996 resulted from roof replacements at Buena Vista
Apartments.
Average occupancy rates for the three months ended March 31, 1997 and 1996, for
the Partnership's properties are as follows:
Average Occupancy
Property 1997 1996
Buena Vista Apartments
Pasadena, CA 98% 97%
Casa de Monterey
Norwalk, CA 98% 94%
Crosswood Park
Citrus Heights, CA 95% 95%
Mt. View Apartments
San Dimas, CA 98% 97%
Pathfinder
Fremont, CA 97% 94%
Scotchollow
San Mateo, CA 99% 99%
The Bluffs
Milwaukie, OR 93% 96%
Vista Village Apartments
El Paso, TX 90% 83%
Chapelle Le Grande
Merrillville, IN 99% 99%
North Park Apartments
Evansville, IN 95% 98%
Shadowood Apartments
Monroe, LA 91% 96%
The Towers of Westchester Park
College Park, MD 94% 96%
Terrace Gardens
Omaha, NE 92% 98%
Watergate Apartments
Little Rock, AR 93% 93%
Forest Ridge Apartments
Flagstaff, AZ 81% 90%
The Managing General Partner attributes the occupancy fluctuations at the
properties to the following: increase at Casa DeMonterey to an improved leasing
staff; increase at Pathfinder to increased traffic and a more appealing property
due to significant property improvements; decrease at The Bluffs to companies in
the area reducing their work force resulting in tenants being forced to move to
more prosperous areas or cheaper housing; increase at Vista Village to increased
marketing with concentration on leasing and better incentives for tenants;
decrease at North Park to changing market conditions and increased home
purchases in the area; decrease at Shadowood to decreased enrollment at local
college and decreased growth in the area; decrease at Terrace Gardens to less
intensive marketing efforts in the past months; and decrease at Forest Ridge to
new properties being built in the area.
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, 1996.
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, 1996.
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, 1997.
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 15, 1997 By: /s/ Joel A. Stone
Joel A. Stone
President
Date: May 15, 1997 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 15, 1997 By: /s/ Joel A. Stone
Joel A. Stone
President
Date: May 15, 1997 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 1997 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-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,835
<SECURITIES> 0
<RECEIVABLES> 179
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 142,131
<DEPRECIATION> 71,351
<TOTAL-ASSETS> 76,575
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 119,167
0
0
<COMMON> 0
<OTHER-SE> (147,392)
<TOTAL-LIABILITY-AND-EQUITY> 76,575
<SALES> 0
<TOTAL-REVENUES> 6,263
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,364
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,130
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,101)
<EPS-PRIMARY> (2,255)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
