FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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, 1998
or
[ ] 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 0-14194
VMS NATIONAL PROPERTIES JOINT VENTURE
(Exact name of registrant as specified in its charter)
Illinois 36-3311347
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P. O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
(864) 239-1000
(Registrant's telephone number, including area code)
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
COMBINED BALANCE SHEETS
(in thousands)
March 31, December 31,
1998 1997
(Unaudited) (Note)
Assets:
Cash and cash equivalents $ 1,125 $ 2,510
Receivables and deposits 2,205 1,872
Restricted escrows 2,195 86
Other assets 266 478
Investment properties:
Land 13,404 13,404
Buildings and personal property 130,879 130,603
Less accumulated depreciation (76,626) (75,411)
67,657 68,596
$ 73,448 $ 73,542
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 288 $ 369
Tenant security deposit liabilities 1,112 1,105
Accrued property taxes 780 605
Other liabilities 662 994
Accrued interest 1,079 --
Mortgage notes payable 139,171 139,449
Notes payable 34,426 33,455
Deferred gain on extinguishment of debt 42,225 42,225
Partners' Deficit (146,295) (144,660)
$ 73,448 $ 73,542
Note: The balance sheet at December 31, 1997, has been derived from the
audited financial statements at that date but does not include all
the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See Accompanying Notes to Combined Financial Statements
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
(Unaudited)
(in thousands, except per interest data)
Three Months Ended
March 31,
1998 1997
Revenues:
Rental income $ 6,458 $ 5,987
Other income 286 230
Casualty gain 223 --
Total revenues 6,967 6,217
Expenses:
Operating 2,426 2,211
General and administrative 198 229
Depreciation 1,391 1,331
Interest 4,099 4,130
Property taxes 414 417
Loss on disposal of property 77 --
Total expenses 8,605 8,318
Net loss $(1,638) $(2,101)
Net loss allocated to general partners (2%) $ (33) $ (42)
Net loss allocated to limited partners (98%) (1,605) (2,059)
$(1,638) $(2,101)
Net loss per limited partnership interest:
Portfolio I (644 interests issued and outstanding) $(1,761) $(2,262)
Portfolio II (267 and 268 interests issued and
outstanding in 1998 and 1997, respectively) $(1,764) $(2,248)
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 STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
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, 1997 $(3,347) $ (97,932) $ (511) $ (98,443) $(101,790)
Collections of subscription
notes -- -- 2 2 2
Net loss for the three months
ended March 31, 1998 (23) (1,134) -- (1,134) (1,157)
Partner's deficit at
March 31, 1998 $(3,370) $ (99,066) $ (509) $ (99,575) $(102,945)
</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, 1997 $(1,401) $ (41,134) $ (335) $ (41,469) $ (42,870)
Collections of subscription
notes -- -- 1 1 1
Net loss for the three months
ended March 31, 1998 (10) (471) -- (471) $ (481)
Partner's deficit at
March 31, 1998 $(1,411) $ (41,605) $ (334) $ (41,939) $ (43,350)
Combined total $(4,781) $(140,671) $ (843) $(141,514) $(146,295)
<FN>
See Accompanying Notes to Combined Financial Statements
</FN>
</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
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1998 1997
Cash flows from operating activities:
Net loss $ (1,638) $ (2,101)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 1,391 1,331
Amortization of discounts and loan costs 971 883
Loss on disposal of property 77 --
Casualty gain (223) --
Change in accounts:
Receivables and deposits (29) (1,028)
Other assets 212 223
Accounts payable (81) (96)
Tenant security deposit liabilities 7 --
Accrued property taxes 175 218
Accrued interest 1,079 1,008
Other liabilities (636) (42)
Net cash provided by operating activities 1,305 396
Cash flows from investing activities:
Property improvements and replacements (307) (271)
Net deposits to restricted escrows (2,109) (5)
Net cash used in investing activities (2,416) (276)
Cash flows from financing activities:
Payments on mortgage loans payable (277) (77)
Payments received on subscription notes 3 4
Net cash used in financing activities (274) (73)
Net (decrease) increase in cash and cash equivalents (1,385) 47
Cash and cash equivalents at beginning of period 2,510 1,788
Cash and cash equivalents at end of period $ 1,125 $ 1,835
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,050 $ 2,233
Supplemental disclosure of non-cash activity:
At March 31, 1998, in connection with a fire at Pathfinder Village Apartments,
investment properties, receivables and deposits, and other liabilities were
adjusted $223,000 $304,000 and $304,000, respectively, for non-cash activity.
See Accompanying Notes to Combined Financial Statements
VMS NATIONAL RESIDENTIAL PORTFOLIO I
VMS NATIONAL RESIDENTIAL PORTFOLIO II
(Illinois Limited Partnerships)
VMS NATIONAL PROPERTIES (an Illinois partnership) AND SUBPARTNERS
NOTES TO COMBINED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited combined financial statements of VMS National
Properties Joint Venture (the "Venture") 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 MAERIL, Inc. ("MAERIL" or 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, 1998, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998. For further information, refer
to the combined financial statements and footnotes thereto included in the
Venture's annual report on Form 10-K for the fiscal year ended December 31,
1997.
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
NOTE B - PETITION FOR RELIEF UNDER CHAPTER 11 AND PLAN OF REORGANIZATION
On February 22, 1991, the 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 the Venture (entities included in the filing herein after 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 Portfolio I and 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 Plan was confirmed by the Bankruptcy Court in March 1993 and
became effective on September 30, 1993 (the "Effective Date"). During 1997, the
Plan was modified in order to allow the Venture to refinance the debt
encumbering it's properties. The bankruptcy plan was closed by the Bankruptcy
Court on April 29, 1998.
The Primary aspects of the Venture's 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 consisted 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 were 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 had a first
mortgage lien insured by HUD and two of the retained properties which had 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 with
a maturity 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 payments due thereafter on the FDIC value, as defined in "c"
below.
All of the senior-lien debt was refinanced on December 29, 1997.
(c) As it pertained 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 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 accrued 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 a HUD Regulatory Agreement made 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.
On December 29, 1997, all of the junior mortgages were refinanced.
(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 (the "VMS/Stout Venture") was formed pursuant to
an agreement dated August 18, 1984, which was amended and restated on October 4,
1984. VMS Realty Partners has a 50% interest and affiliates of the Seller (as
defined below) have a 50% interest in the VMS/Stout Venture. The VMS/Stout
Venture, the J.D. Stout Company ("Stout") and certain affiliates of Stout
entered into a contract of sale dated August 18, 1984, which was amended on
October 4, 1984. The contract provided for the sale by Stout and other owners
(collectively the "Seller") of the 51 residential apartment complexes to the
VMS/Stout Venture. The VMS/Stout Venture assigned its interest as purchaser to
the Venture. During 1987, Stout assigned its interest in the VMS/Stout Joint
Venture to ContiTrade Service Corporation ("ContiTrade"). On November 17, 1993,
VMS Realty Partners assigned its interest in the VMS/Stout Joint Venture to the
Partners Liquidating Trust. The VMS/Stout Joint Venture was granted an allowed
claim in the amount of $49,535,000 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 of repayments on the old notes, the ContiTrade Note provides for 5%
non-compounding interest on the outstanding principal balance calculated daily
on the basis of a 360 day year. The ContiTrade Note was secured by a Deed of
Trust, Assignment of Rents and Security Agreement on each of the Venture's
retained properties, and provided ContiTrade with other approval rights as to
the ongoing operations of the Venture's retained properties. The ContiTrade
Note, which was scheduled to mature January 15, 2000, was paid off on December
29, 1997.
(f) The Venture entered into a Revised Restructured Amended and Restated Asset
Management Agreement (the "Revised Asset Management Agreement") with Insignia
Financial Group, Inc. ("Insignia"). Effective October 1, 1993, Insignia took
over the asset management of the Venture's retained properties and partnership
functions for the Venture. 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 amounts 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 funding 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 of 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 fees and reimbursements may be paid from available
partnership cash sources. Additionally, the asset management 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.
The asset management agreement was again revised on December 30, 1997.
Effective January 1, 1998, the agreement provided for an annual service fee of
$300,000 to be paidto Insignia in monthly installments. In addition Insignia
will receive reimbursement of a fixed amount of $100,000 per year for out-of-
pocket costs incurred in connection with its services.
NOTE C - TRANSACTIONS WITH AFFILIATED PARTIES
The Venture has no employees and is dependent on the Managing General Partner
and its affiliates for the management and administration of all partnership
activities. Effective December 12, 1997, MAERIL, a wholly-owned subsidiary of
MAE GP Corporation ("MAE GP") and an affiliate of Insignia, became the Managing
General Partner of VMS National Residential Portfolio I and VMS National
Residential Portfolio II (the "Partnerships"), replacing VMSRIL. Effective
February 25, 1998, MAERIL became a wholly-owned subsidiary of Insignia
Properties Trust ("IPT"), which is an affiliate of Insignia.
Effective January 1, 1998, the Venture and Insignia agreed to amend the Asset
Management Agreement to reduce the annual service fee to $300,000 per year, and
to reduce the annual out of pocket cost reimbursements to $100,000.
The following transactions have occurred between the Venture and affiliates of
the Managing General Partner during the three months ended March 31, 1998 (in
thousands):
Property management fees (included in operating expenses) $281
Service fees and reimbursement for services of affiliates
(included in general and administrative and operating expenses) 125
On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is anticipated to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. If the closing occurs, AIMCO will then control the General
Partner of the Venture.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Average occupancy rates for the three months ended March 31, 1998 and 1997, for
the Partnership's properties are as follows:
Average Occupancy
Property 1998 1997
Buena Vista Apartments
Pasadena, CA 99% 98%
Casa de Monterey
Norwalk, CA 93% 98%
Crosswood Park
Citrus Heights, CA 97% 95%
Mt. View Apartments
San Dimas, CA 96% 98%
Pathfinder
Fremont, CA 92% 97%
Scotchollow
San Mateo, CA 93% 99%
The Bluffs
Milwaukie, OR 97% 93%
Vista Village Apartments
El Paso, TX 92% 90%
Chapelle Le Grande
Merrillville, IN 94% 99%
North Park Apartments
Evansville, IN 96% 95%
Shadowood Apartments
Monroe, LA 94% 91%
The Towers of Westchester Park
College Park, MD 95% 94%
Terrace Gardens
Omaha, NE 99% 92%
Watergate Apartments
Little Rock, AR 94% 93%
Forest Ridge Apartments
Flagstaff, AZ 93% 81%
The Managing General Partner attributes the occupancy fluctuations at the
properties to the following: a decrease at Casa de Monterey due to rental rate
increases and evictions of slow paying tenants; decrease at Pathfinder due to a
fire which caused repairs to be made to one entire building during the quarter;
decrease at Scotchollow due to rental rate increases, and lower interest rates
enticing first time homebuyers; increase at The Bluffs due to limited rental
increases; decrease at Chapelle Le Grande due to rental rate increases and home
purchases in the area; increase at Shadowood Apartments due to improved market
conditions; increase at Terrace Gardens due to increased curb appeal resulting
from the completion of a siding replacement project; and an increase at Forest
Ridge Apartments due to effective marketing and management. Despite the
occupancy decreases at Pathfinder and Scotchollow, rental income increased at
these properties as a result of rate increases.
The Venture realized a net loss of approximately $1,638,000 for the three months
ended March 31, 1998, compared to a net loss of approximately $2,101,000 for the
corresponding period of 1997. The decrease in net loss is primarily
attributable to increased rental revenue of approximately $471,000 due to
increased rental rates at most of the Venture's properties. Other income also
increased primarily due to an increase in lease cancellation fees at Scotchollow
Apartments due to early move outs of tenants purchasing homes. Additionally,
the Venture recorded a casualty gain which resulted from the accrual of
insurance proceeds received subsequent to March 31, 1998, in connection with a
fire at Pathfinder Village. Partially offsetting the increase in rental
revenue, other income, and the casualty gain was an increase in operating
expense. Operating expenses increased primarily due to increased utilities at
Casa De Monterrey, Pathfinder, Forest Ridge and Buena Vista. In addition, the
Venture recorded a loss on disposal of property for the three months ended March
31, 1998. This loss resulted from the write-off of roofs that were not fully
depreciated at the time of roof replacement projects at Chapelle Le Grande and
Mountain View Apartments.
Included in operating expense for the three months ended March 31, 1998, is
approximately $67,000 in major repairs and maintenance comprised primarily of
exterior building repairs and exterior painting. Included in operating expense
for the three months ended March 31, 1997, is approximately $57,000 in major
repairs and maintenance comprised primarily of exterior building improvements
and landscaping.
As part of the ongoing business plan of the Venture, the Managing 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
expense. As part of this plan, the Managing General Partner attempts to protect
the Venture 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 Managing General partner will be able to sustain such a plan.
At March 31, 1998, the Venture had cash and cash equivalents of approximately
$1,125,000 compared to approximately $1,835,000 at March 31, 1997. The net
decrease in cash and cash equivalents for the three months ended March 31, 1998,
was approximately $1,385,000 compared to a net increase of approximately $47,000
for the corresponding period in 1997. Net cash provided by operating activities
increased during the three months ended March 31, 1998, primarily due to a
decrease in net loss, as discussed above, and a decrease in net cash used in
receivables and deposits resulting from a decrease in tax and insurance escrows
and operating reserves. Net cash used in investing activities increased, due to
an increase in deposits to restricted escrows as required by the December 1997
refinancing. Net cash used in financing activities increased due to an increase
in principal payments made on the mortgage notes.
On December 29, 1997, the Venture refinanced the mortgages encumbering all of
its remaining 15 properties. The refinancing resulted in each property being
encumbered by new senior and junior loans. The senior loans each have an
interest rate of 8.5% per annum and require monthly payments of principal and
interest based on a 25 year amortization period. Balloon payments of
approximately $91,352,000 will be due at maturity. The junior loans, which
totaled approximately $29,449,000, each have an interest rate of 10.84% per
annum and require monthly payments based on excess monthly cash flow, as
defined, for each property. All of the loans mature on January 1, 2008, and the
senior loans include prepayment penalties if paid prior to January 1, 2007. The
senior loans retained similar terms regarding note face amounts and agreed
valuation amounts. These new senior loans are recorded at the agreed valuation
amount of $110,000,000, which is less than the $152,225,000 face amount of the
senior loans. If the Venture defaults on the new mortgage notes payable or is
unable to pay the outstanding agreed valuation amounts upon maturity, then the
note face amounts become due. Accordingly, the Partnership deferred recognition
of a gain of $42,225,000, which is the difference between the refinanced note
face amounts and the agreed valuation amounts. All the loans are cross-
collateralized, but they are not cross-defaulted. At March 31, 1998, the
outstanding balance of the senior and junior notes was approximately
$109,773,000 and $29,396,000, respectively.
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. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
No cash distributions were made by either of the Partnerships during the three
months ended March 31, 1998, or during the three months ended March 31, 1997.
Future cash distributions are subject to the order of distributions stipulated
by the Venture's Plan of Reorganization. The source of future cash
distributions is dependent upon cash generated by the Venture's properties and
the cash generated through the sale or refinancing of those properties. No
distributions are anticipated in 1998.
Year 2000
The Venture is dependent upon the Managing General Partner and Insignia for
management and administrative services. Insignia has completed an assessment
and will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter (the "Year 2000 Issue"). The project is estimated to be completed not
later than December 31, 1998, which is prior to any anticipated impact on its
operating systems. The Managing General Partner believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems. However, if such modifications and conversions are not made, or are not
completed timely, the Year 2000 Issue could have a material impact on the
operations of the Venture.
Other
Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Venture to be materially different from any future
results, performance, or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements speak only as of the date
of this quarterly report. The Venture expressly disclaims any obligation or
undertaking to release publicly any updates of revisions to any forward-looking
statements contained herein to reflect any change in the Venture's expectations
with regard thereto or any change in events, conditions or circumstances on
which any such statement is based.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K: None filed during the quarter ended March 31, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VMS NATIONAL PROPERTIES JOINT VENTURE
(Registrant)
VMS National Residential Portfolio I
By: MAERIL, Inc.
Managing General Partner
Date: May 14, 1998 By: /s/Carroll D. Vinson
Carroll D. Vinson
President and Director
Date: May 14, 1998 By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Vice President and Chief
Accounting Officer
VMS National Residential Portfolio II
By: MAERIL, Inc.
Managing General Partner
Date: May 14, 1998 By: /s/Carroll D. Vinson
Carroll D. Vinson
President and Director
Date: May 14, 1998 By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Vice President and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
VMS National Properties Joint Venture 1998 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-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,125
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 144,283
<DEPRECIATION> 76,626
<TOTAL-ASSETS> 73,448
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 139,171
0
0
<COMMON> 0
<OTHER-SE> (146,295)
<TOTAL-LIABILITY-AND-EQUITY> 73,448
<SALES> 0
<TOTAL-REVENUES> 6,967
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,605
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,099
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,638)
<EPS-PRIMARY> (1,762)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
