SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended March 31, 1995 Commission file number 0-16516
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(Exact Name of registrant as specified in its charter)
Illinois 36-3437938
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
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
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements. . . . . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 20
PART II OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 25
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 26
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
ASSETS
------
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . . . . $ 14,087,713 14,266,786
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . . . . 669,825 783,716
Interest, rents and other receivables. . . . . . . . . . . . . . . . . . . . . . 458,657 594,170
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,601 156,909
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,315,796 15,801,581
------------ ------------
Investment properties, at cost (note 2):
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,061,137 60,061,137
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . 12,520,038 12,018,826
------------ ------------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . 47,541,099 48,042,311
Investment in unconsolidated ventures,
at equity (notes 1, 2 and 5) . . . . . . . . . . . . . . . . . . . . . . . . . . 3,482,922 3,318,589
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451,043 434,303
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,282 247,850
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,870,480 1,779,451
------------ ------------
$ 68,901,622 69,624,085
============ ============
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
MARCH 31, DECEMBER 31,
1995 1994
------------ -----------
Current liabilities:
Current portion of long-term debt (notes 2(e) and 2(f)). . . . . . . . . . . . . $ 329,190 319,509
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523,030 391,070
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483,311 464,383
Amounts due to affiliates (note 4) . . . . . . . . . . . . . . . . . . . . . . . 38,985 65,984
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,118 21,119
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . 1,394,634 1,262,065
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,406 78,406
Ground rent payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935,242 889,727
Investment in unconsolidated ventures, at equity (notes 1, 2 and 4). . . . . . . . 5,067,265 5,669,281
Long-term debt, less current portion (notes 2(e) and 2(f)) . . . . . . . . . . . . 41,759,376 41,845,394
------------ ------------
Commitments and contingencies (notes 1, 2 and 4)
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,234,923 49,744,873
Venture partners' subordinated equity in ventures. . . . . . . . . . . . . . . . . 4,487,640 4,676,235
Partners' capital accounts (deficits) (note 1):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,125,104) (3,129,431)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . (1,325,546) (1,300,486)
------------ ------------
(4,430,650) (4,409,917)
------------ ------------
Limited partners:
Capital contributions, net of offering
costs and purchase discounts . . . . . . . . . . . . . . . . . . . . . . . . 120,541,353 120,541,353
Cumulative net losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (57,679,837) (58,238,035)
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . . . . . (43,251,807) (42,690,424)
------------ ------------
19,609,709 19,612,894
------------ ------------
Total partners' capital accounts (deficits). . . . . . . . . . . . . . . . 15,179,059 15,202,977
------------ ------------
$ 68,901,622 69,624,085
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,680,620 2,424,632
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243,317 240,629
----------- ----------
2,923,937 2,665,261
----------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,283,117 1,284,882
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501,212 501,579
Property operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,290,804 1,291,974
Professional services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,997 140,089
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 25,493 14,154
Management fees to corporate general partner (note 4). . . . . . . . . . . . . . . . 41,767 38,986
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,591 82,044
----------- ----------
3,383,981 3,353,708
----------- ----------
Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (460,044) (688,447)
Partnership's share of earnings (loss) from operations of unconsolidated
ventures (notes 1, 2 and 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,553 (2,636,565)
Venture partners' share of ventures' operations. . . . . . . . . . . . . . . . . . . . 301,220 282,613
----------- ----------
Net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (43,271) (3,042,399)
Gain on sale of Partnership's investment in unconsolidated
venture (note 3(a)). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605,796 --
----------- ----------
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 562,525 (3,042,399)
=========== ==========
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
1995 1994
------------ -----------
Net earnings (loss) per limited partnership interest (note 1):
Net operating loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (.30) (20.81)
Gain on sale of Partnership's investment
in unconsolidated venture . . . . . . . . . . . . . . . . . . . . . . . . 4.27 --
----------- ----------
$ 3.97 (20.81)
=========== ==========
Cash distributions per limited partnership
interest (note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.00 104.00
=========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(UNAUDITED)
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 562,525 (3,042,399)
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501,212 501,579
Amortization of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . 25,493 14,154
Partnership's share of earnings (loss) from operations of
unconsolidated ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115,553) 2,636,565
Venture partners' share of ventures' operations. . . . . . . . . . . . . . . . . . (301,220) (282,613)
Gain on sale of Partnership's investment in
unconsolidated venture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (605,796) --
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . 135,513 271,640
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,308 53,873
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,568 24,265
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (91,029) (52,221)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131,960 624,650
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,928 8,846
Amounts due to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,999) --
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,001) (64,764)
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (7,230)
Ground rent payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,515 26,111
----------- ----------
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . 344,424 712,456
----------- ----------
Cash flows from investing activities:
Net sales and maturities of short-term investments . . . . . . . . . . . . . . . . . 113,891 13,931,487
Partnership's distributions from unconsolidated ventures . . . . . . . . . . . . . . -- 189,654
Partnership's contributions to unconsolidated ventures . . . . . . . . . . . . . . . (45,000) --
Payment of deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,233) (56,469)
----------- ----------
Net cash provided by investing activities. . . . . . . . . . . . . . . . . . . 26,658 14,064,672
----------- ----------
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1995 1994
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . (76,337) (67,745)
Venture partners' distributions from venture . . . . . . . . . . . . . . . . . . . . (24,495) (24,495)
Venture partners' contributions to venture . . . . . . . . . . . . . . . . . . . . . 137,120 --
Distributions to limited partners. . . . . . . . . . . . . . . . . . . . . . . . . . (561,383) (14,596,174)
Distributions to general partners. . . . . . . . . . . . . . . . . . . . . . . . . . (25,060) (165,157)
----------- ----------
Net cash used in financing activities. . . . . . . . . . . . . . . . . . . . . (550,155) (14,853,571)
----------- ----------
Net decrease in cash and cash equivalents. . . . . . . . . . . . . . . . . . . (179,073) (76,443)
Cash and cash equivalents, beginning of the year . . . . . . . . . . . . . . . 14,266,786 286,137
----------- ----------
Cash and cash equivalents, end of the period . . . . . . . . . . . . . . . . . $14,087,713 209,694
=========== ==========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . . . . . . . . . . . $ 1,264,189 1,276,036
=========== ==========
Non-cash investing and financing activities. . . . . . . . . . . . . . . . . . . . . $ -- --
=========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995 AND 1994
(UNAUDITED)
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1994, which
are included in the Partnership's 1994 Annual Report on Form 10-K (File No.
0-16516) filed on March 25, 1995, as certain footnote disclosures which
would substantially duplicate those contained in such audited financial
statements have been omitted from this report.
(1) BASIS OF ACCOUNTING
The accompanying consolidated financial statements include the
accounts of the Partnership and its consolidated ventures, JMB/Warner
Center Associates ("JMB/Warner") (note 2(e)), JMB/Hahn PDTC Associates,
L.P. ("Palm Desert") (note 2(f)) and Carlyle-XVI Associates, L.P. (note
2(b)). The effect of all transactions between the Partnership and its
consolidated ventures has been eliminated. The Partnership, through
JMB/Warner, sold the Blue Cross Building in November 1993.
The equity method of accounting has been applied in the accompanying
consolidated financial statements with respect to the Partnership's
interests in JMB/Owings Mills Associates ("JMB/Owings"); 260 Franklin
Street Associates ("260 Franklin"); Villages Northeast Associates
("Villages Northeast"); JMB/NewPark Associates ("JMB/NewPark"); and its
indirect ownership of JMB/125 Broad Building Associates, L.P. ("JMB/125").
The Partnership, through JMB/Owings, sold its interest in Owings Mills Mall
in June 1993.
The Partnership records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to reflect the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the ventures as described
above. Such adjustments are not recorded on the records of the
Partnership. The effect of these items is summarized as follows for the
three months ended March 31:
1995 1994
----------------------- -------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------
Net earnings
(loss). . . . . . . . $562,525 (605,628) (3,042,399) (1,735,149)
Net earnings
(loss) per
limited
partnership
interest. . . . . . . $ 3.97 (4.12) (20.81) (11.82)
======== ========== ========== =========
The net earnings (loss) per limited partnership interest is based upon
the Interests outstanding at the end of each period. Deficit capital
accounts will result, through the duration of the Partnership, in the
recognition of net gain for financial reporting and income tax purposes.
Certain amounts in the 1994 consolidated financial statements have
been reclassified to conform to the 1995 presentation.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement.
Partnership distributions from unconsolidated ventures are considered cash
flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings. In addition, the Partnership records
amounts held in U.S. Government obligations at cost, which approximates
market. For the purposes of these statements, the Partnership's policy is
to consider all such amounts held with original maturities of three months
or less ($13,621,566 and $14,137,500 held at March 31, 1995 and December
31, 1994, respectively) as cash equivalents with any remaining (generally
with original maturities of one year or less) amounts reflected as short-
term investments being held to maturity.
During March 1995, Statement of Financial Accounting Standards No. 121
("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" was issued. SFAS 121, when effective,
will require that the Partnership record an impairment loss on its long-
lived assets (primarily its consolidated investments in land, buildings and
improvements) whenever their carrying value cannot be fully recovered
through estimated undiscounted future cash flows from operations and sale.
The amount of the impairment loss to be recognized would be the difference
between the long-lived asset's carrying value and the asset's estimated
fair value less costs to sell.
The amount of any impairment loss recognized by the Partnership under
its current accounting policy has been limited to the excess, if any, of
the property's carrying value over the outstanding balance of the
property's non-recourse indebtedness. An impairment loss under SFAS 121
would be determined without regard to the nature or the balance of such
non-recourse indebtedness. Upon the disposition of a property for which an
impairment loss has been recognized under SFAS 121, the Partnership would
recognize, at a minimum, a net gain for financial reporting purposes to the
extent of any excess of the then outstanding balance of the property's non-
recourse indebtedness over the then carrying value of the property,
including the effect of any reduction for impairment loss under SFAS 121.
The Partnership expects to adopt SFAS 121 no later than the first
quarter of 1996. Although the Partnership has not currently assessed the
full impact of adopting SFAS 121, the amount of any such required
impairment loss could be materially higher than the amounts that have been
recorded in the past or may be recorded in 1995 under the Partnership's
current impairment policy. In addition, upon the disposition of an
impaired property, the Partnership would generally recognize more net gain
for financial reporting purposes under SFAS 121 than it would have under
the Partnership's current impairment policy, without regard to the amount,
if any, of cash proceeds received by the Partnership in connection with the
disposition. Although implementation of this new accounting statement
could significantly impact the Partnership's reported earnings, there would
be no impact on cash flows. Further, any such impairment loss would not be
recognized for Federal income tax purposes.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(2) VENTURE AGREEMENTS
(a) General
The Partnership at March 31, 1995 is party to five joint venture
agreements (JMB/Owings, JMB/125, 260 Franklin, Villages Northeast and
JMB/NewPark) directly or indirectly with Carlyle Real Estate Limited
Partnership - XV ("Carlyle-XV") (and for JMB/125, Carlyle Advisors, Inc.)
and one joint venture agreement (Palm Desert) with Carlyle Real Estate
Limited Partnership-XVII ("Carlyle-XVII"). Carlyle-XV and Carlyle-XVII are
each sponsored by the Corporate General Partner. In addition, the
Partnership was a party to a joint venture agreement with Carlyle-XVII for
JMB/Warner, which sold its interest in its property in November 1993 and
terminated. The terms of the affiliated joint venture agreements provide,
in general, that the benefits and obligations of ownership, including tax
effects, net cash receipts and net sale and refinancing proceeds and
capital contribution obligations are allocated or distributed, as the case
may be, between the Partnership and the affiliated partner in proportion to
their respective capital contributions to the affiliated venture. Under
certain circumstances, either pursuant to the venture agreements or due to
the Partnership's obligations as general partner, the Partnership may be
required to make additional cash contributions to the ventures.
The Partnership at March 31, 1995 owns interests through the above
ventures in three apartment complexes, one office building and two shopping
centers. In 1993, the Partnership, through JMB/Owings, sold its interest
in Owings Mills Shopping Center and, through JMB/Warner, sold the Blue
Cross Building. In 1994, the Partnership through its indirect ownership of
JMB/125 assigned its interest in the 125 Broad Street Building (note 3(b)).
There are certain risks associated with Partnership's investments made
through joint ventures, including the possibility that Partnership's joint
venture partners in an investment might become unable or unwilling to
fulfill their financial or other obligations, or that such joint venture
partners may have economic or business interests or goals that are
inconsistent with those of the Partnership.
(b) JMB/125
In November 1994, the Partnership through its indirect ownership of
JMB/125 assigned its interest in the 125 Broad Street Building (note 3(b)).
In December 1985, the Partnership, through the JMB/125 joint venture
partnership, acquired an interest in an existing joint venture partnership
("125 Broad") which owns a 40-story office building, together with a
leasehold interest in the underlying land, located at 125 Broad Street in
New York, New York. In addition to JMB/125, the other partners (the "O&Y
partners") of 125 Broad included O&Y 25 Realty Company L.P., Olympia & York
Broad Street Holding Company L.P. (USA) and certain other affiliates of
Olympia & York Developments, Ltd. ("O&Y").
JMB/125 is a joint venture between Carlyle-XVI Associates, L.P. (in
which the Partnership holds a 99% limited partnership interest), Carlyle-XV
Associates, L.P. and Carlyle Advisors, Inc. The terms of the JMB/125
venture agreement generally provide that JMB/125's share of 125 Broad's
annual cash flow and sale or refinancing proceeds will be distributed or
allocated to the Partnership in proportion to its (indirect) approximate
40% share of capital contributions to JMB/125. In April 1993, JMB/125,
originally a general partnership, was converted to a limited partnership,
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
and the Partnership's interest in JMB/125, which previously has been held
directly, was converted to a limited partnership interest and was
contributed to Carlyle-XVI Associates, L.P. in exchange for a limited
partnership interest in Carlyle-XVI Associates, L.P. As a result of these
transactions, the Partnership currently holds, indirectly through Carlyle-
XVI Associates, L.P., an approximate 40% limited partnership interest in
JMB/125. The general partner in each of JMB/125 and Carlyle-XVI
Associates, L.P. is an affiliate of the Partnership. For financial
reporting purposes, profits and losses of JMB/125 are generally allocated
40% to the Partnership.
JMB/125 acquired an approximately 48.25% interest in 125 Broad for a
purchase price of $16,000,000, subject to a first mortgage loan of
$260,000,000 and a note payable to an affiliate of the joint venture
partners in the amount of $17,410,516 originally due September 30, 1989.
In June 1987, the note payable was consolidated with the first mortgage
loan forming a single consolidated note in the principal amount of
$277,410,516. The consolidated note bore interest at a rate of 10-1/8% per
annum payable in semi-annual interest only payments and was to mature on
December 27, 1995. JMB/125 also contributed $14,055,500 to 125 Broad to be
used for working capital purposes and to pay an affiliate of O&Y for its
assumption of JMB/125's share of the obligations incurred by 125 Broad
under the "takeover space" agreement described below. In addition, JMB/125
contributed $24,222,042, plus interest thereon of approximately $1,089,992,
on June 30, 1986 for working capital purposes. Thus, JMB/125's original
cash investment (exclusive of acquisition costs) was $55,367,534, of which
the Partnership's share was approximately $22,147,000.
The land underlying the office building was subject to a ground lease
which has a term through June 2067 and provided for annual rental payments
of $1,075,000. The terms of the ground lease granted 125 Broad a right of
first refusal to acquire the fee interest in the land in the event of any
proposed sale of the land during the term of the lease and an option to
purchase the fee interest in the land for $15,000,000 at 10-year intervals.
The partnership agreement of 125 Broad, as amended, provided that the
O&Y partners were obligated to make advances to pay operating deficits
incurred by 125 Broad from the earlier of 1991 or the achievement of a 95%
occupancy rate of the office building through 1995. In addition, from
closing through 1995, the O&Y partners were required to make capital
contributions to 125 Broad for the cost of tenant improvements and leasing
expenses up to certain specified amounts and to make advances to 125 Broad
to the extent such costs exceed such specified amounts and such costs are
not paid for by the working capital provided by JMB/125 or the cash flow of
125 Broad. The amount of all costs for such tenant improvements and
leasing expenses over the specified amounts and the advances for operating
deficits from the earlier of the achievement of a 95% occupancy rate of the
office building or 1991 were treated by 125 Broad as non-recourse loans
bearing interest, payable monthly, at the floating prime rate of an
institutional lender. Due to a major tenant vacating in 1991 and the O&Y
affiliates' default under the "takeover space" agreement, the property
operated at a deficit in 1994 and was expected to operate at a deficit for
the next several years. Such deficits were required to be funded by
additional loans from the O&Y partners, although as discussed below the O&Y
partners were in default of such funding obligation since June 1992. The
outstanding principal balance and any accrued and unpaid interest on such
loans were to be payable from 125 Broad's annual cash flow or net sale or
refinancing proceeds, as described below. Any unpaid principal of such
loans and any accrued and unpaid interest thereon were to be due and
payable on December 31, 2000. JMB/125 and the O&Y partners were obligated
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
to make capital contributions, in proportion to their respective interests
in 125 Broad, in amounts sufficient to enable 125 Broad to pay any excess
expenditures not covered by the capital contributions or advances of the
O&Y partners described above.
The 125 Broad partnership agreement also provided that beginning in
1991, annual cash flow, if any, was distributable first to JMB/125 and to
the O&Y partners in certain proportions up to certain specified amounts.
Next, the O&Y partners were entitled to repayment of principal and any
accrued but unpaid interest on the loans for certain tenant improvements,
leasing expenses and operating deficits described above, and remaining
annual cash flow, if any, was distributable approximately 48.25% to JMB/125
and approximately 51.75% to the O&Y partners. In general, operating
profits or losses were allocable approximately 48.25% to JMB/125 and
approximately 51.75% to the O&Y partners, except for certain specified
items of profits or losses which were allocable to JMB/125 or the O&Y
partners.
The 125 Broad partnership agreement further provided that, in general,
upon sale or refinancing of the property, net sale or refinancing proceeds
(after repayment of the outstanding principal balance and any accrued and
unpaid interest on any loans from the O&Y partners described above) were
distributable approximately 48.25% to JMB/125 and approximately 51.75% to
the O&Y partners.
As a result of the assignment by JMB/125 of its interest in 125 Broad
to an affiliate of the O&Y partners and the release of JMB/125 of claims
related to 125 Broad, JMB/125 was relieved of any obligation to contribute
any additional amounts to 125 Broad, including any amount of its deficit
capital account to 125 Broad. Reference is made to note 3(b) for a
discussion of JMB/125's assignment of interest in 125 Broad.
In October 1993, 125 Broad entered into an agreement with Salomon
Brothers, Inc. to terminate its lease covering approximately 231,000 square
feet (17% of the building) at the property on December 31, 1993 rather than
its scheduled termination in January 1997. In consideration for the early
termination of the lease, Salomon Brothers, Inc. paid 125 Broad
approximately $26,500,000, plus interest thereon of approximately $200,000,
which 125 Broad in turn paid its lender to reduce amounts outstanding under
the mortgage loan. In addition, Salomon Brothers, Inc. paid JMB/125
$1,000,000 in consideration of JMB/125's consent to the lease termination.
Due to the O&Y partners' previous failure to advance necessary funds
to 125 Broad as required under the joint venture agreement, 125 Broad in
June 1992 defaulted on its mortgage loan by failing to pay approximately
$4,722,000 of the semi-annual interest payment due on the loan. As a
result of this default, the loan agreement provided for a default interest
rate of 13-1/8% per annum on the unpaid principal amount. In addition,
during 1992 affiliates of O&Y defaulted on a "takeover space" agreement
with Johnson & Higgins, Inc. ("J&H"), one of the major tenants at the 125
Broad Street Building, whereby such affiliates of O&Y agreed to assume
certain lease obligations of J&H at another office building in
consideration of J&H's leasing space in the 125 Broad Street Building. As
a result of this default, J&H offset rent payable to 125 Broad for its
lease at the 125 Broad Street Building in the amount of approximately
$43,500,000 through the date of the assignment, and it was expected that
J&H would continue to offset amounts due under its lease corresponding to
amounts by which the affiliates of O&Y were in default under the "takeover
space" agreement. As a result of the O&Y affiliates' default under the
"takeover space" agreement and the continuing defaults of the O&Y partners
to advance funds to cover operating deficits, as of the date of the
assignment by JMB/125 of its interest in 125 Broad, the arrearage under the
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
mortgage loan had increased to approximately $69,447,000. As discussed
above, approximately $26,700,000 was remitted to the lender in October 1993
in connection with the early termination of the Salomon Brothers lease, and
was applied towards mortgage principal for financial reporting purposes.
Due to their obligations relating to the "takeover space" agreement, the
affiliates of O&Y were obligated for the payment of the rent receivable
associated with the J&H lease at the 125 Broad Street Building. Based on
the continuing defaults of the O&Y partners, 125 Broad provided loss
reserves for the entire $43,500,000 of rent offset by J&H, and also
reserved approximately $32,600,000 in 1992 of accrued rents receivable
relating to such J&H lease, since the ultimate collectability of such
amounts depended upon the O&Y partners' and the O&Y affiliates' performance
of their obligations. The Partnership's share of such losses was
approximately $888,000 for the three months ended March 31, 1994 and is
included in the Partnership's share of loss from operations of
unconsolidated venture.
The office building was being managed pursuant to a long-term
agreement with an affiliate of the O&Y partners. Under the terms of the
management agreement, the manager was obligated to manage the office
building, collect all receipts from operations and to the extent available
from such receipts pay all expenses of the office building. The manager
was entitled to receive a management fee equal to 1% of gross receipts of
the property.
(c) 260 Franklin
In May 1986, the Partnership, through the 260 Franklin joint venture
partnership, acquired an interest in an office building in Boston,
Massachusetts known as the 260 Franklin Street Building.
The property is currently subject to a first mortgage loan in the
original principal amount of $75,000,000. 260 Franklin's original cash
investment (exclusive of acquisition costs) was approximately $35,000,000
of which the Partnership's share was approximately $10,500,000.
260 Franklin reached an agreement with the lender to modify the terms
of the long-term mortgage note secured by the 260 Franklin Street Building
in December 1991. Beginning May 1991, the modified mortgage note provides
for monthly payments of interest only based upon the then outstanding
balance at a rate of 6% per annum through January 1992 and 8% per annum
thereafter. Upon the scheduled or accelerated maturity, or prepayment of
the mortgage loan, 260 Franklin shall be obligated to pay an amount
sufficient to provide the lender with an 11% per annum yield on the
mortgage note from January 1, 1991 through the date of maturity or
prepayment. In addition, upon maturity (scheduled for January 1996) or
prepayment, 260 Franklin is obligated to pay to the lender a residual
interest amount equal to 60% of the highest amount, if any, of (i) net
sales proceeds, (ii) net refinancing proceeds, or (iii) net appraisal
value, as defined. No amounts have been required to be accrued for such
contingent payments. 260 Franklin is required to (i) escrow excess cash
flow from operations (computed without a deduction for property management
fees and leasing commissions to an affiliate), beginning in 1991, to cover
future cash flow deficits, (ii) make an initial contribution to the escrow
account of $250,000, of which the Partnership's share was $75,000, and
(iii) make annual escrow contributions, through January 1995, of $150,000,
of which the Partnership's share is $45,000. The escrow account
($5,510,598 at March 31, 1995 including accrued interest) is to be used to
cover the cost of capital and tenant improvements and lease inducements
($1,154,305 used as of March 31, 1995) as defined, with the balance, if
any, of such escrowed funds available at the scheduled or accelerated
maturity to be used for the payment of principal and interest due to the
lender as described above.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(d) JMB/NewPark
In December 1986, the Partnership, through the JMB/NewPark joint
venture partnership, acquired an interest in an existing joint venture
partnership ("NewPark Associates") with the developer which owns an
interest in an existing enclosed regional shopping center in Newark,
California known as NewPark Mall.
JMB/NewPark acquired its 50% interest in NewPark Associates for a
purchase price of $32,500,000 paid in cash at closing, subject to an
existing first mortgage loan of approximately $23,556,000, and certain
loans from the joint venture partner of approximately $6,300,000.
On December 31, 1992, NewPark Associates refinanced the shopping
center with an institutional lender. The new mortgage note payable in the
principal amount of $50,620,219 is due on November 1, 1995. Monthly
payments of interest only of $369,106 were due through November 30, 1993.
Commencing on December 1, 1993 through October 30, 1995, principal and
interest are due in monthly payments of $416,351 with a final balloon
payment due November 1, 1995. Interest on the note payable accrues at
8.75% per annum. The joint venture has an option to extend the term of the
mortgage note payable to November 1, 2000 upon payment of a $250,000 option
fee and satisfaction of certain conditions (which the Partnership currently
expects the joint venture to be able to satisfy if required) as specified
in the mortgage note. The joint venture has commenced discussions with the
lender regarding an extension of the loan, however, there can be no
assurance that the joint venture will be able to obtain such an extension.
A portion of the proceeds from the note payable were used to pay the
outstanding balance, including accrued interest, under the previous
mortgage note payable and the notes payable to the unaffiliated joint
venture partner.
(e) JMB/Warner
In December 1987, the Partnership acquired through JMB/Warner an
interest in an existing five-structure office complex in Woodland Hills
(Los Angeles), California known as the Blue Cross Building. On November 2,
1993, JMB/Warner sold the Blue Cross Building to an unaffiliated purchaser
for a sales price of $76,909,292, of which the Partnership's share was
$57,061,733. The sales price consisted of $23,300,000 (before costs of
sale) paid in cash at closing and the assumption by the purchaser of the
existing mortgage note having an unpaid amount of $53,609,292. The
Partnership's share of net cash proceeds (before costs of sale and after
consideration of the prorations) was approximately $17,833,000. In 1994,
the Partnership distributed $1,078,168 to the affiliated venture partner,
Carlyle-XVII.
(f) Palm Desert
In December 1988, the Partnership, Carlyle-XVII and an affiliate of
the seller acquired, through Palm Desert, an interest in an existing,
enclosed regional shopping center known as Palm Desert Town Center in Palm
Desert, California and a leasehold interest in the underlying land.
The Partnership and Carlyle-XVII acquired their interests in Palm
Desert, subject to a first mortgage loan with an outstanding principal
balance of approximately $43,500,000, for an initial aggregate contribution
of approximately $17,400,000, all of which was paid in cash at closing, of
which the Partnership's share was approximately $14,925,000. The
Partnership's and Carlyle-XVII's initial aggregate contributions were used
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
to make the distribution to the joint venture partner as described below
and to pay a portion of the closing costs. Except for amounts to be
contributed to Palm Desert to pay certain closing costs, the joint venture
partner was not required to make any capital contributions to Palm Desert
at closing. However, in consideration of a distribution from Palm Desert
at closing, the joint venture partner was obligated to make periodic
contributions to Palm Desert to retire the $13,752,746 purchase price
obligation of Palm Desert to the seller of the shopping center, of which
the final $4,826,906 was paid in January 1993. In addition, the joint
venture partner has made and was obligated to make contributions to Palm
Desert through December 1994 to pay any operating deficits and to pay a
portion of the returns to the Partnership and Carlyle-XVII. Amounts
required to pay the cost of tenant improvements and allowances and other
capital expenditures, as well as any operating deficits of Palm Desert
after December 1994, have been and are expected to be contributed in the
future to Palm Desert 25% by the joint venture partner and 75% by the
Partnership and Carlyle-XVII in the aggregate. Reference is made to Note
3(h) of Notes to Consolidated Financial Statements contained in the
Partnership's 1994 Report on Form 10-K for further information concerning
the joint venture agreement.
The shopping center is being managed pursuant to a long-term agreement
with an affiliate of the joint venture partner. The manager is paid a fee
equal to 3% of the base and percentage rents collected under tenant leases,
increasing to 4% of the base and percentage rents for those years that the
Partnership and Carlyle-XVII have received their current cash return and
all of their cumulative preferred return for current and previous periods.
In addition, under the terms of the management agreement, the manager or an
affiliate will be entitled to receive compensation for leasing services.
(g) Villages Northeast
The Villages Northeast joint venture, through a joint venture with an
affiliate of the developer, refinanced in 1992 the first mortgage loan
secured by the Dunwoody Crossing (Phase II) Apartments located in Atlanta,
Georgia.
The new lender required the establishment of an escrow account for
real estate taxes to be deposited on a monthly basis through maturity on
November 1, 1997.
The first mortgage loan in the principal amount of approximately
$20,525,000 at September 30, 1994, secured by the Dunwoody Crossing Phase I
and III Apartments was scheduled to mature in October 1994. The joint
venture owning the property negotiated an extension of the mortgage loan
until December 15, 1994 and then reached an agreement with the existing
lender for a new loan, which requires monthly payments of principal and
interest (8.65% per annum) of $171,737 beginning February 15, 1995 and
continuing through November 15, 1997, when the remaining balance will be
payable.
An affiliate of the General Partners managed the property until
December 1994 for a fee equal to 5% of the gross revenues of the complexes.
The property is currently being managed by the purchaser of the affiliate's
assets on the same terms.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(3) SALE OF INVESTMENT PROPERTIES
(a) JMB/Owings
On June 30, 1993, JMB/Owings sold its partnership interest in Owings
Mills Limited Partnership ("OMLP"), which owns an allocated portion of the
land, building and related improvements of the Owings Mills Mall located in
Owings Mills, Maryland. The purchaser, O.M. Investment II Limited
Partnership, is an affiliate of the JMB/Owing's joint venture partner in
OMLP.
The sale price of the interest in OMLP was $9,416,000, all of which
was received in the form of a promissory note. In addition, the
Partnership and Carlyle-XV were relieved of their allocated portion of the
debt secured by the property. The promissory note (which is secured by a
guaranty from an affiliate of the purchaser and of the JMB/Owing's joint
venture partner in OMLP) bears interest at a rate of 7% per annum unless a
certain specified event occurs, in which event the rate would increase to
8% per annum for the remainder of the term of the note. The promissory
note requires principal and interest payments of approximately $109,000 per
month with the remaining principal balance of approximately $5,500,000 due
and payable on June 30, 1998. The monthly installment of principal and
interest would be adjusted for the increase in the interest rate if
applicable. Early prepayment of the promissory note may be required under
certain circumstances (as defined), including the sale or further
encumbrance of Owings Mills Mall.
The net cash proceeds and gain from sale of the interest in OMLP is
allocated 50% to the Partnership and 50% to Carlyle-XV in accordance to the
JMB/Owings partnership agreement.
For financial reporting purposes, JMB/Owings recognized, on the date
of sale, gain of $5,254,855, of which the Partnership's share is
$2,627,427, attributable to JMB/Owings being relieved of its obligations
under the OMLP's partnership agreement pursuant to the terms of the sale
agreement. The Partnership had adopted the cost recovery method until such
time as the purchaser's initial investment was sufficient in order to
recognize gain under Statement of Financial Accounting Standards No. 66
("SFAS #66"). At December 31, 1994, the total deferred gain of JMB/Owings,
including principal and interest payments of $1,858,572 received through
December 31, 1994, was $10,305,210, of which the Partnership's share was
$5,152,655. As JMB/Owings collected a sufficient amount of the purchaser's
initial investment in accordance with SFAS #66 at March 31, 1995,
JMB/Owings recognized $1,211,592 of deferred gain and $1,084,291 of
interest income in the three months ended March 31, 1995, of which the
Partnership's share is $605,796 and $542,145, respectively.
(b) JMB/125
On November 15, 1994, effective as of October 31, 1994, JMB/125 and
certain affiliates of O&Y reached an agreement to settle their disputes
regarding 125 Broad and its property. Under the terms of the agreement,
JMB/125 assigned its interest in 125 Broad to an affiliate of O&Y and
released the O&Y partners from any claims related to 125 Broad. In return,
JMB/125 received an unsecured promissory note in the principal amount of $5
million bearing simple interest at 4.5% per annum with all principal and
accrued interest due at maturity in October 1999, subject to mandatory
prepayments of principal and interest or acceleration of the maturity date
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
under certain circumstances. As of December 31, 1994, the note has been
fully reserved for by JMB/125. In addition, JMB/125 received a release
from any claims of certain O&Y affiliates and will generally be indemnified
against any liability as a general partner of 125 Broad. JMB/125 was also
relieved of any obligation to contribute cash to 125 Broad in the amount of
its deficit capital account balance. Affiliates of O&Y subsequently filed
a prearranged bankruptcy plan for reorganization of 125 Broad under Chapter
11 of the Bankruptcy Code in order to facilitate 125 Broad's transfer of
the office building to the mortgage lender in satisfaction of the mortgage
indebtedness and other claims. In January 1995, the plan for
reorganization was approved by the bankruptcy court and was consummated,
and the bankruptcy case was concluded. As a result of the assignment of
its interest, JMB/125 no longer has an ownership interest in the office
building and recognized in 1994 gains of $53,412,105 and $49,616,240 for
financial reporting and Federal income tax purposes, respectively. The
Partnership's share of such gains is $20,162,696 and $17,786,455 for
financial reporting and Federal income tax purposes, respectively, although
no sales proceeds have been received or are expected to be received.
(4) TRANSACTIONS WITH AFFILIATES
Certain of the Partnership's properties have been managed by an
affiliate of the General Partners for fees computed as a percentage of
certain rents received by the properties. In December 1994, the affiliated
property manager sold substantially all of its assets and assigned its
interest in its management contracts to an unaffiliated third party. In
addition, certain of the management personnel of the property manager
became management personnel of the purchaser and its affiliates. The
successor to the affiliated property manager's assets is acting as the
property manager of Dunwoody Crossing Apartments (Phases I, II and III) and
260 Franklin Office Building after the sale on the same terms that existed
prior to the sale.
Fees, commissions and other expenses required to be paid by the
Partnership (or its consolidated ventures) to the General Partners and
their affiliates as of March 31, 1995 and for the three months ended March
31, 1995 and 1994 are as follows:
Unpaid at
March 31,
1995 1994 1995
------- ------ -------------
Management fees to
Corporate General
Partner . . . . . . . . . . . . . $41,767 38,986 38,985
Reimbursement (at cost)
for out-of-pocket
expenses and salaries
and salary related
expenses. . . . . . . . . . . . . 22,313 18,510 --
------- ------ ------
$64,080 57,496 38,985
======= ====== ======
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
The Corporate General Partner and its affiliates are entitled to
reimbursement for salaries (and salary related expenses) and direct
expenses of their officers and employees and direct expenses of the
Corporate General Partner and its affiliates while directly engaged in the
administration of the Partnership and operation of its properties. Such
costs relating to the administration of the Partnership were $21,416 and
$134,843 for the three months ended March 31, 1995 and for the twelve
months ended December 31, 1994, respectively, all of which were paid as of
March 31, 1995.
The General Partners deferred their share of net cash flow of the
Partnership due to them over a five-year period ending December 1992, to
the receipt by the Holders of Interests of a 5% per annum cumulative non-
compounded return on their Current Capital Accounts (as defined) for such
five-year period. These deferred amounts consisted of the Corporate
General Partner's management fees and the General Partners' distributive
share of net cash flow. In July 1994, the Partnership paid the cumulative
combined amount of such deferred distributions and management fees which
aggregated $889,519 and $1,482,537, respectively, to the General Partners.
All amounts deferred did not bear interest and were paid in full.
(5) UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
Summary income statement information for JMB/125 (for the three months
ended March 31, 1995 (note 3(b)) and 260 Franklin for the three months
ended March 31, 1995 and 1994 is as follows:
1995 1994
----------- ----------
Total income . . . . . . . . . . . . . . . . $ 2,907,906 11,472,085
Expenses applicable to operating loss. . . . 4,144,034 24,295,630
----------- ----------
Operating loss . . . . . . . . . . . . . . . $ 1,236,128 12,823,545
=========== ==========
Partnership's share of loss. . . . . . . . . $ 370,838 2,565,996
=========== ==========
(6) ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of March 31,
1995 and for the three months ended March 31, 1995 and 1994.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
All references to "Notes" are to Notes to Consolidated Financial
Statements contained in this report.
At March 31, 1995, the Partnership and its consolidated ventures had
cash and cash equivalents of approximately $14,808,000. Such funds and
short-term investments of approximately $670,000 are available for
distributions to partners, capital improvements and working capital
requirements. Anticipated operating deficits at the 260 Franklin office
building are expected to be paid out of the unconsolidated joint venture's
restricted reserve account. The Partnership and its consolidated ventures
have currently budgeted in 1995 approximately $620,000 for tenant
improvements and other capital expenditures. The Partnership's share of
such items, including its share of such items for its unconsolidated
ventures, is currently budgeted to be approximately $747,000. Actual
amounts expended may vary depending on a number of factors including actual
leasing activity, results of operations, liquidity considerations and other
market conditions over the course of the year. The source of capital for
such items and for both short-term and long-term future liquidity and
distributions is expected to be through cash generated by the investment
properties, and from the sale and refinancing of such properties. In such
regard, reference is made to the Partnership's property specific
discussions below. Because the cash flow from the Blue Cross Building,
which was sold in November 1993, was a significant portion of the
Partnership's total operating cash flow, beginning in 1994, Partnership
distributions to partners from operations were reduced.
The Partnership's and its ventures' mortgage obligations are separate
non-recourse loans secured by the investment properties individually and
are not obligations of the entire investment portfolio. For any particular
investment property that is incurring deficits or for which the existing
financing has matured, the Partnership or its ventures may seek a
modification or refinancing of the existing indebtedness and, in the
absence of a satisfactory debt modification, may decide, in light of the
then existing and expected future market conditions for such investment
property, not to commit additional funds to such investment property. This
would result in the Partnership no longer having an ownership interest in
such property and generally would result in gain for financial reporting
and Federal income tax purposes to the Partnership with no corresponding
distributable proceeds.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the
Partnership's joint venture partner(s) in an investment might become unable
or unwilling to fulfill its (their) financial or other obligations, or that
such joint venture partner(s) may have economic or business interests or
goals that are inconsistent with those of the Partnership.
The first mortgage loan secured by the Dunwoody Crossing Phase I and
III Apartments was scheduled to mature in October 1994. The joint venture
owning the property negotiated an extension of the mortgage loan until
December 15, 1994. The joint venture then reached an agreement with the
existing lender for a new loan, which requires monthly payments of
principal and interest (8.65% per annum) of $171,737 beginning February 15,
1995 and continuing through November 15, 1997, when the remaining balance
will be payable.
The mortgage note secured by NewPark Mall matures November 1, 1995.
The mortgage can be extended until November 1, 2000 upon payment of a
$250,000 option fee and satisfaction of certain conditions (which the
Partnership currently expects the joint venture to be able to satisfy if
required). The joint venture has commenced discussions with the existing
lender regarding an extension of the loan. However, there can be no
assurance that the joint venture will be able to obtain such an extension.
Reference is made to Note 2(d).
In November 1994, JMB/125 and certain affiliates of Olympia & York
Developments, Ltd. ("O&Y") reached an agreement to settle their dispute
regarding 125 Broad and its property. Under the terms of the agreement,
JMB/125 assigned its interest in 125 Broad to an affiliate of O&Y and
released its venture partners (the "O&Y partners") from any claims related
to 125 Broad. In return, JMB/125 received an unsecured promissory note in
the principal amount of $5 million bearing simple interest at 4.5% per
annum with all principal and accrued interest due at maturity in October
1999, subject to mandatory prepayments of principal and interest or
acceleration of the maturity date under certain circumstances. In
addition, JMB/125 received a release from any claims of certain O&Y
affiliates and will generally be indemnified against any liability as a
general partner of 125 Broad. JMB/125 was also relieved of any obligation
to contribute cash to 125 Broad in the amount of its deficit capital
account balance. Affiliates of O&Y subsequently filed a pre-arranged
bankruptcy plan for reorganization of 125 Broad under Chapter 11 of the
Bankruptcy Code in order to facilitate 125 Broad's transfer of the office
building to the mortgage lender in satisfaction of the mortgage debt and
other claims. In January 1995, the plan for reorganization was approved by
the bankruptcy court and was consummated, and the bankruptcy case was
concluded.
Vacancy rates in the downtown Manhattan office market have increased
significantly over the last few years. As vacancy rates rise, competition
for tenants increases, which results in lower effective rental rates. The
increased vacancy rate in the downtown Manhattan office market has resulted
primarily from layoffs, cutbacks and consolidations by many of the
financial service companies which, along with related businesses, dominate
this submarket. The Partnership believed that these adverse market
conditions and the negative impact on effective rental rates would continue
over the next several years. The depressed market in downtown Manhattan
had significantly affected the 125 Broad Street Building as the occupancy
had decreased to 66%, partially as a result of a major tenant vacating
395,000 square feet (30% of the building) at the expiration of its lease
during 1991. Additionally, in October 1993, 125 Broad entered into an
agreement with Salomon Brothers, Inc. to terminate its lease covering
approximately 231,000 square feet (17% of the building) at the property on
December 31, 1993 rather than its scheduled termination in January 1997.
It was expected that the property would be adversely affected by lower than
originally expected effective rental rates to be achieved upon re-leasing
of the space. The low effective rental rates coupled with the lower
occupancy during the re-leasing period were expected to result in the
property operating at a significant deficit in 1995 and for the next
several years. The O&Y partners were obligated to fund (in the form of
interest-bearing loans) operating deficits and costs of lease-up and
capital improvements through the end of 1995. However, the O&Y partners
were in default in respect to certain of their funding obligations, and it
appeared unlikely that the O&Y partners would fulfill their obligations to
125 Broad and JMB/125. Based on the facts discussed above and as described
more fully in Note 2(b), 125 Broad recorded a provision for value
impairment as of December 31, 1991 to reduce the net book value of the 125
Broad Street Building to the then outstanding balance of the related non-
recourse financing and O&Y partner loans due to the uncertainty of the
joint venture's ability to recover the net carrying value of the investment
property through future operations or sale.
The O&Y partners failed to advance necessary funds to 125 Broad as
required under the joint venture agreement, and as a result, 125 Broad in
June 1992 defaulted on its mortgage loan. In addition, during 1992
affiliates of O&Y defaulted on a "takeover space" agreement with Johnson &
Higgins, Inc. ("J&H"), one of the major tenants at the 125 Broad Street
Building, whereby such affiliates of O&Y had agreed to assume certain lease
obligations of J&H at another office building in consideration of J&H's
leasing space in the 125 Broad Street Building. As a result of this
default, J&H offset rent payable to 125 Broad for its lease at the 125
Broad Street Building and it was expected that J&H would continue to offset
amounts due under its lease corresponding to amounts by which the
affiliates of O&Y were in default under the "takeover space" agreement.
Due to their obligations relating to the "takeover space" agreement, the
affiliates of O&Y were obligated for the payment of the rent receivable
associated with the J&H lease at the 125 Broad Street Building. Based on
the continuing defaults of the O&Y partners, 125 Broad reserved the entire
$43,500,000 of rent offset by J&H, and also reserved approximately
$32,600,000 of accrued rents receivable relating to such J&H lease in 1992,
since the ultimate collectability of such amounts depended upon the O&Y
partners' and the O&Y affiliates' performance of their obligations. The
Partnership's share of such losses was approximately $888,000 for the three
months ended March 31, 1994 and is included in the Partnership's share of
loss from operations of unconsolidated ventures.
The office market in the Financial District of Boston remains
competitive due to new office building developments and layoffs, cutbacks
and consolidations by financial service companies. The effective rental
rates achieved upon releasing have been substantially below the rates which
were received under the previous leases for the same space. In December
1991, the affiliated joint venture reached an agreement with the lender to
modify the long-term mortgage note secured by 260 Franklin Street Building.
The property is currently expected to operate at a deficit for 1995 and for
several years thereafter. The loan modification required that 260 Franklin
establish an escrow account for excess cash flow from the property's
operations (computed without a deduction for property management fees and
lease commissions to an affiliate) to be used to cover the cost of capital
and tenant improvements and lease inducements (as defined), which are the
primary components of the anticipated operating deficits noted above, with
the balance, if any, of such escrowed funds available at the scheduled or
accelerated maturity to be used for the payment of principal and interest
due to the lender. Beginning January 1, 1992, 260 Franklin began escrowing
the payment of property management fees and lease commissions owed to an
affiliate of the Corporate General Partner pursuant to the terms of the
debt modification. The Partnership's share of such fees and lease
commissions is approximately $323,000 at March 31, 1995. In 1995, the
leases of tenants occupying approximately 107,000 square feet
(approximately 31% of the property) at the 260 Franklin Street Building
expire. It is anticipated that there would be significant cost related to
releasing this space. In addition, the long-term mortgage loan matures
January 1, 1996. If 260 Franklin is unable to refinance or extend the
mortgage loan, the Partnership may decide not to commit any significant
additional funds. This may result in the Partnership no longer having an
ownership interest in the property. This would result in the Partnership
recognizing a gain for financial reporting and Federal income tax purposes
with no distributable proceeds.
On November 2, 1993, the Partnership through JMB/Warner Center
Associates sold the Blue Cross Building to an unaffiliated buyer for a sale
price of $76,909,292, of which the Partnership's share was $57,061,733.
The sales price consisted of $23,300,000 (before costs of sale) paid in
cash at closing and the assumption by the purchaser of the existing
mortgage note having an unpaid amount of $53,609,292. Reference is made to
Note 2(e). In February 1994, the Partnership made cash distributions to
its Limited Partners that included $100 per Interest from proceeds received
in connection with the sale of the Blue Cross Building.
The Partnership received (through a joint venture with an affiliate)
its specified cash return relating to Palm Desert Town Center, which was
being funded by the unaffiliated venture partner through December 31, 1994
pursuant to the terms of the applicable joint venture agreement. Since the
preferred return period has expired as discussed above, the Partnership's
share of cash flow will be subject to the operations of the property and
may be significantly lower than the return received in previous years. In
addition, the Partnership is receiving cash distributions from operations
of the Dunwoody Crossings Apartments and NewPark Mall.
In June 1993, JMB/Owings sold its interest in the Owings Mills
Shopping Center for $9,416,000 represented by a purchase price note.
Reference is made to Note 3(a).
In January 1992, the prior parent organization of Macy's at NewPark
Mall and Bullock's and Bullock's Mens at Palm Desert Town Center had filed
for protection under Chapter 11 of the United States Bankruptcy Code. In
December 1994, Macy's, Bullock's and Bullock's Mens were acquired by
Federated Department Stores and were removed from protection under Chapter
11 of the United States Bankruptcy Code and the stores continue to operate
at the centers.
While the real estate markets are recuperating, highly competitive
market conditions continue to exist in most locations. The Partnership's
philosophy and approach has been to aggressively and creatively manage the
Partnership's real estate assets to attract and retain tenants. Net
effective rents to the landlord from renewal tenants are much more
favorable than lease terms which can be negotiated with new tenants.
However, the Partnership's capital resources must also be preserved and
allocated in such a manner as to maximize the total value of the portfolio.
As a result of the real estate market conditions discussed above, the
Partnership continues to conserve its working capital. All expenditures
are carefully analyzed and certain capital projects are deferred when
appropriate. The Partnership has also sought or is seeking additional loan
modifications where appropriate. By conserving working capital, the
Partnership will be in a better position to meet the future needs of its
properties since outside sources of capital may be limited.
As previously reported, due to these factors, it is likely that the
Partnership will hold certain of its investment properties longer than
originally anticipated in an effort to maximize the return to the Limited
Partners. Although the Partnership expects to distribute sale proceeds
from the disposition of the Partnership's remaining assets, without a
dramatic improvement in market conditions, Limited Partners will receive
significantly less than their original investment.
The General Partners had deferred through December 31, 1992, their
receipt of partnership management fees and distributions of net cash
generated from operations. The cumulative amount of such deferrals at June
30, 1994 was $2,372,056. Such amount did not bear interest and was paid in
full in July 1994. Beginning in 1993, the General Partners are receiving
partnership management fees and distributions of net cash generated from
operations. Reference is made to Note 4.
RESULTS OF OPERATIONS
The decrease in interest, rents and other receivables at March 31,
1995 as compared to December 31, 1994 is primarily due to the collection in
1995 of tenant expense reimbursements related to 1994 at Palm Desert Town
Center.
The decrease in prepaid expenses at March 31, 1995 as compared to
December 31, 1994 is primarily due to the timing of payment of insurance
premiums at Palm Desert Town Center.
The increase in accounts payable at March 31, 1995 as compared to
December 31, 1994 is primarily due to the timing of payment of operating
expenses at Palm Desert Town Center.
The increase in rental income for the three months ended March 31,
1995 as compared to the three months ended March 31, 1994 is primarily due
to tenant recoveries at Palm Desert Town Center.
The increase in amortization of deferred expenses for the three months
ending March 31, 1995 as compared to the three months ending March 31, 1994
is primarily due to increased amortization of capitalized leasing costs at
Palm Desert Town Center.
The increase in Partnership's share of earnings from operations of
unconsolidated ventures for the three months ending March 31, 1995 as
compared to the three months ending March 31, 1994 is due to the assignment
of the Partnership's interest in the 125 Broad Street Building in November
1994. (Reference is made to Note 3(b)). The increase is also due to the
recognition of interest income on the sale of the Partnership's interest in
Owings Mills. (Reference is made to Note 3(a)).
The gain on sale of Partnership's investment in unconsolidated venture
for the three months ended March 31, 1995 is due to the recognition of gain
on sale of the Partnership's interest in Owings Mills in accordance with
Statement of Financial Accounting Standards No. 66. (Reference is made to
Note 3(a)).
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties:
<CAPTION>
1994 1995
------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 125 Broad Street Building
New York, New York. . . . . . . . 54% 54% 54% N/A N/A
2. 260 Franklin Street Building
Boston, Massachusetts . . . . . . 99% 99% 99% 99% 99%
3. Dunwoody Crossing
(Phase I, II, and III)
Apartments
DeKalb County (Atlanta),
Georgia . . . . . . . . . . . . . 91% 93% 91% 88% 93%
4. NewPark Mall
Newark (Alameda County),
California. . . . . . . . . . . . 80% 80% 80% 81% 80%
5. Palm Desert Town Center
Palm Desert (Palm Springs),
California. . . . . . . . . . . . 97% 95% 96% 97% 97%
<FN>
- ------------------
An "N/A" indicates that the property was not owned by the Partnership at the end of the quarter.
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4-A. The Amended and Restated Agreement of Limited Partnership and
the Assignment Agreement set forth as Exhibit B to the Prospectus, copies
of which are hereby incorporated by reference to Exhibit 3 and Exhibit 4-A
to the Partnership's report for December 31, 1992 on Form 10-K (File No. 0-
16516) dated March 19, 1993.
4-B. Documents relating to the loan modification of the mortgage loan
secured by the 260 Franklin Street Building is hereby incorporated by
reference to Exhibit 4-B to the Partnership's report for December 31, 1991
on Form 10-K (File No. 0-16516) dated March 27, 1992.
10-A. Escrow Deposit Agreement is hereby incorporated by reference to
Exhibit 10.1 to the Partnership's Amendment No. 1 to Form S-11 (File No.
33-3567) Registration Statement dated May 14, 1986.
10-B. Acquisition documents relating to the purchase of an interest in
the 260 Franklin Street Building, Boston, Massachusetts, are hereby
incorporated herein by reference to Exhibit 10.4 to the Partnership's
Amendment No. 2 to Form S-11 (File No. 33-3567) dated July 25, 1986.
10-C. Additional acquisition documents relating to the purchase of an
interest in the 260 Franklin Street Building, Boston, Massachusetts, are
hereby incorporated herein by reference to Exhibit 10.4.1 to the
Partnership's Post-Effective Amendment No. 1 to Form S-11 (File No. 33-
3567) dated September 30, 1986.
10-D. Acquisition documents relating to the purchase by the
Partnership of an interest in the Post Crest Apartments, Post Terrace
Apartments, and Post Crossing Apartments in DeKalb County (Atlanta),
Georgia, are hereby incorporated herein by reference to Exhibit 10.5 to the
Partnership's Post-Effective Amendment No. 2 to Form S-11 (File No. 33-
3567) dated September 30, 1986.
10-E. Acquisition documents relating to the purchase by the
Partnership of an interest in NewPark Mall in Newark (Alameda County),
California, are hereby incorporated herein by reference to Exhibit 10.6 to
the Partnership's Post-Effective Amendment No. 2 to Form S-11 (File No. 33-
3567) dated December 30, 1986.
10-F. Acquisition documents relating to the acquisition by the
Partnership of an interest in the Palm Desert Town Center in Palm Desert,
California, dated December 23, 1988 are hereby incorporated by reference to
Exhibit 1 to the Partnership's Form 8-K (File No. 0-16516) dated January 6,
1989.
10-G. Sale document and exhibits thereto relating to the Partnership's
contract of sale of the Blue Cross Building in Woodland Hills, California
is hereby incorporated by reference to Exhibit 10-N to the Partnership's
Form 10-Q for September 30, 1993 (File No. 0-16516) dated November 11,
1993.
10-H. Takeover Agreement relating to the Johnson & Higgins space at
the 125 Broad Building is hereby incorporated by reference to the
Partnership's Form 10-Q for March 31, 1994 (File No. 0-16516) dated May 11,
1994.
10-I. First Amendment to Loan Documents relating to the mortgage loan
secured by Dunwoody Crossing Apartments (Phases I and III) is hereby
incorporated by reference to the Partnership's Form 10-Q for September 30,
1994 (File No. 0-16516) dated November 10, 1994.
10-J. Documents relating to the modification of the mortgage loan
secured by Dunwoody Crossing Apartments (Phases I and III) are hereby
incorporated by reference to the Partnership's Form 10-K for December 31,
1994 (File No. 0-16516) dated March 27, 1995.
10-K. Documents relating to the assignment of JMB/125's interest in
125 Broad Street Company are hereby incorporated by reference to the
Partnership's Form 10-K for December 31, 1994 (File No. 0-16516) dated
March 27, 1995.
10-L. Modification to Reserve Escrow Agreement relating to the 260
Franklin Street Building is filed herewith.
27. Financial Data Schedule
(b) The following reports on Form 8-K were filed since the beginning of
the last quarter of the period covered by this report.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
BY: JMB Realty Corporation
(Corporate General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: May 11, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: May 11, 1995
MODIFICATION TO RESERVE ESCROW AGREEMENT
----------------------------------------
THIS AGREEMENT made and entered into as of the first day of
January, 1994, by and between NORMAN S. GELLER, THOMAS M. BENNETT, JEFFREY
GLUSKIN and NEIL G. BLUM, BRIAN K. ELLISON and JULIA C. PARKS, as Trustees
of 260 FRANKLIN STREET ASSOCIATES TRUST under a Declaration of Trust dated
May 16, 1986, duly recorded with the Suffolk County Registry District of
the Land Court as Document No.405198, as amended in accordance with the
Certificate of Trustee as to Appointment of Additional Trustees and First
Amendment to Declaration of Trust establishing 260 Franklin Street
Associates Trust, dated September 12, 1986, duly recorded with Suffolk
County Registry of Deeds as Instrument No. 374 of September 26, 1986 and
filed with the Suffolk County Registry District of the Land Court as
Document No. 411174 and as further amended by Certificate of Trustee as to
removal of certain Trustees and appointment of Additional Trustees dated
July 23, 1990, duly recorded with the Suffolk County Registry of Deeds in
Book 16416, Page 342 and Document No. 467674, with appointment of six
Trustees registered as Document No. 467675 through 467680, with the Suffolk
County Registry District of the Land Court, as further amended in
accordance with a Certificate of Trustee as to Removal of Certain Trustees
and Appointment of Additional Trustees, dated May 20, 1992, duly recorded
with Suffolk County Registry of Deeds as Document No. 487549, having a
mailing address c/o JMB Realty Corporation, 900 North Michigan Avenue,
Chicago, Illinois 60611 (hereinafter called "Borrower")' TEACHERS INSURANCE
AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation having a mailing
address of 730 Third Avenue, New York, New York 10017 ("Lender"); and The
BOSTON MORTGAGE COMPANY, INC. a corporation, whose address is 25 Mall Road,
Burlington, Massachussets 01803-0918 (hereinafter called "Escrow Agent").
W I T N E S S E T H:
--------------------
WHEREAS, Borrower, Lender and Escrow Agent are parties to that
certain Reserve Escrow Agreement dated January 1, 1991 which agreement was
entered into as consideration for Lender agreeing to the terms of that
certain Second Mortgage Modification and Consolidation Agreement of even
date therewith recorded with the Suffolk County Registry of Deeds as
Instrument No. 308 and filed with the Suffolk County Registry District of
the Land Court as Document No. 482106;
WHEREAS, Borrower has requested that Lender agree to modify the
terms under which Available Cash flow is required to remain in the Reserve
Account. All capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in either the Reserve Escrow Agreement or the
Second Mortgage Modification and Consolidation Agreement; and
WHEREAS, Lender is willing to accede to Borrower's request
solely upon the terms set forth in this Agreement;
NOW, THEREFORE, IN CONSIDERATION OF THE MORTGAGED PREMISES, the
parties hereto do hereby covenant and agree as follows:
1. Notwithstanding the requirement that Available Cash Flow
be deposited quarterly under the Reserve Escrow Agreement, Available Cash
flow shall be actually determined on a calendar year basis and to the
extent Escrow Agent determines that the amount ("Excess Deposits")
deposited quarterly as Available Cash Flow would not have been deposited if
calculations under the Reserve Escrow Agreement had been made on an annual
basis, Escrow Agent shall remit such Excess Deposit to Borrower. In making
such determinations, the following provisions shall control:
a. Only quarterly deposits made for a particular
calendar year on account of Available Cash Flow shall be used for making
such determination and in no event can money deposited in the Reserve
Account for a preceding calendar year be used for determining any
remittance due Borrower pursuant to this Agreement in a subsequent year.
2
b. Escrow Agent shall determine whether there have
been any Excess Deposits based upon analyzing and reconciling the certified
quarterly statements submitted to Lender pursuant to Paragraph 9(a) of the
Second Mortgage Modification and Consolidation Agreement.
c. In the event that a quarterly statement submitted
for a subsequent quarter shows that some of all of the Available Cash Flow
deposited for the previous quarters of such calendar year would not have
been deposited if calculations of Available Cash Flow had been determined
for all such quarterly periods (e.g., for a nine month period instead of
being determined quarterly), Escrow Agent shall remit the amount so
determined to be such Excess Deposit to the Borrower following such
determination.
d. To the extent any annual financial or
reconciliation statement or audit shall show that on an annual basis
Borrower would not have been entitled to a refund (i.e., no Excess Deposit
did in fact occur), Borrower shall within five (5) days of demand,
redeposit into the Reserve Account the amount of any money paid Borrower by
Escrow Agent as an Excess Deposit together with interest at the applicable
fixed interest rate set forth in the Note and any failure to make such
payment within five (5) days of demand shall constitute a default under the
Second Mortgage Modification and Consolidation Agreement, at Lender's
option, affording Lender with all rights and remedies as provided in the
Second Mortgage Modification and Consolidation Agreement respecting
Mortgagor defaults.
3
2. Except as herein contained, all the provisions of the
Reserve Escrow Agreement and Second Mortgage Modification and Consolidation
Agreement shall continue to remain unchanged and in full force and effect
and Borrower, Lender and Escrow Agent hereby ratify and reaffirm all of
such provisions, agree to comply with each and everyone of such provisions,
and Borrower confirms that it has no defense or offset to its liability to
pay the Consolidated Indebtedness with fixed and residual interest and the
yield maintenance amount due Lender in accordance with the terms of the
Second Mortgage Modification and Consolidation Agreement.
3. Borrower represents and warrants that it has full power
and authority to execute this Agreement for the uses and purposes herein
contained.
4. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
The party or parties executing this Agreement for and on behalf
of Borrower are doing so in their capacity of Trustee and not as
individuals. As such, any liability for breaching any of the Borrower's
obligations hereunder shall be limited to the Premises, trust assets and,
the moneys deposited in escrow under this Agreement.
Without limitation on the foregoing, but in addition thereto,
neither Borrower nor any Trustee, advisor or any other entity shall be
personally liable in any manner or to any extent under or in connection
with this Agreement or any other agreement or instrument entered into in
connection herewith; provided, however, that the foregoing shall not affect
or impair any obligations under a certain Indemnity and Payment Agreement
of even date herewith given by Carlyle Real Estate Limited Partnership-XV
and Carlyle Real Estate Limited Partnership-XVI to Lender.
4
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
- ------------------------ ------------------------------
Witness not personally but solely as
Trustee of 260 Franklin Street
Associates Trust as aforesaid
for self and co-trustees
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By:
- ----------------------- -------------------------
THE BOSTON MORTGAGE COMPANY, INC
ATTEST:
By:
- ----------------------- -------------------------
Name: Name: Harold C. McKenna
Title: Title: Chairman
[SEAL]
ATTACHED TO AND FORMING PART OF THAT CERTAIN MODIFICATION TO RESERVE ESCROW
AGREEMENT DATED AS OF JANUARY 1, 1994.
5
The undersigned, as parties to that certain Indemnity and
Payment Agreement dated January 1, 1991, hereby consent to the execution by
the Borrower of this Modification to Reserve Escrow Agreement and do hereby
covenant and agree that their respective obligations under such Indemnity
and Payment Agreement are and will be unaffected by Borrower's execution of
this Agreement and that such Indemnity and Payment Agreement will cover
Borrower's obligations hereunder.
CARLYLE REAL ESTATE LIMITED CARLYLE REAL ESTATE LIMITED
PARTNERSHIP-XV PARTNERSHIP-XVI,
an Illinois Limited an Illinois Limited
Partnership Partnership
By its sole Managing By its sole Managing
General Partner General Partner
JMB Realty Corporation, a JMB Realty Corporation,
Delaware Corporation a Delaware Corporation
By: By:
--------------------- -------------------
(Corporate Seal) (Corporate Seal)
6
ACKNOWLEDGMENT
-------------
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK ) , 1995
On this day of , 1995, before me appeared
to me personally known, ----------------------------,
who, being by me dully sworn, did say that she is the
of Teachers Insurance and Annuity ---------------------
Association of America and that the seal affixed to the foregoing
instrument is the corporate seal of said corporation, and that said
instrument was signed and sealed in behalf of said corporation by authority
of its Board of Trustees, and said acknowledged
said instrument to be the free ------------------- act and deed of said
corporation,
-----------------------
Notary Public
My commission expires:
7
ACKNOWLEDGEMENT
---------------
STATE OF ILLINOIS )
) SS:
COUNTY OF COOK )
On this day of Janaury, 1995
-------
Then personally appeared the above named
and acknowledged the foregoing as free -------------------
- ---- act and deed, before me,
---------------------
Notary Public
My commission expires:
8
ACKNOWLEDGEMENT
--------------
STATE OF ILLINOIS )
) SS:
COUNTY OF COOK ) , 1995
On this day of , 1995, before me
appeared to me personally -------------------------,
known, who, being by me dull sworn, did say that they are the
of JMB Realty Corporation, the managing ---------------------,
general partner of Carlyle Real Estate Limited Partnership XV and Carlyle
Real Estate Limited Partnership XVI (collectively the "Limited
Partnerships") and that the seal affixed to the foregoing instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed in behalf of said corporation and Limited Partnerships by authority
of its Board of Directors, and said acknowledged said
- -------------------- instrument to be the free act and deed of said
corporation and Limited Partnerships.
----------------------
Notary Public
My commission expires:
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED
IN SUCH REPORT.
</LEGEND>
<CIK> 0000789950
<NAME> CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> $14,087,713
<SECURITIES> 669,825
<RECEIVABLES> 558,258
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,315,796
<PP&E> 60,061,137
<DEPRECIATION> 12,520,038
<TOTAL-ASSETS> 68,901,622
<CURRENT-LIABILITIES> 1,394,634
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 15,179,059
<TOTAL-LIABILITY-AND-EQUITY> 68,901,622
<SALES> 2,680,620
<TOTAL-REVENUES> 2,923,937
<CGS> 0
<TOTAL-COSTS> 1,817,509
<OTHER-EXPENSES> 283,355
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,283,117
<INCOME-PRETAX> (460,044)
<INCOME-TAX> 0
<INCOME-CONTINUING> (43,271)
<DISCONTINUED> 605,796
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 562,525
<EPS-PRIMARY> 3.97
<EPS-DILUTED> 0
</TABLE>
