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, 1997 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
<PAGE>
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. . . . . . . 13
PART II OTHER INFORMATION
Item 3. Defaults Upon Senior Securities. . . . . . . . . 15
Item 5. Other Information. . . . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 17
<PAGE>
<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, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 15,009,912 14,791,381
Interest, rents and other receivables, net of allowances for
doubtful accounts of approximately $911,518 and $939,124 at
March 31, 1997 and December 31, 1996, respectively . . . . . . . . 171,443 286,024
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . 55,464 132,414
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . 15,236,819 15,209,819
------------ ------------
Investment properties, at cost:
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . 60,152,439 60,103,528
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . 16,533,262 16,031,335
------------ ------------
Total investment properties, net of accumulated depreciation. 43,619,177 44,072,193
Investment in unconsolidated ventures, at equity. . . . . . . . . . . 2,087,840 1,962,277
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 563,906 567,296
Notes receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . 121,311 171,623
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . 2,608,463 2,535,978
------------ ------------
$ 64,237,516 64,519,186
============ ============
<PAGE>
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,
1997 1996
------------- ------------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ 417,984 405,690
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 832,965 735,053
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . -- 168,611
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . 413,884 414,854
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . 1,664,833 1,724,208
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . 54,518 66,518
Ground rent payable . . . . . . . . . . . . . . . . . . . . . . . . . 1,304,233 1,267,991
Investment in unconsolidated ventures, at equity. . . . . . . . . . . 11,729,732 11,341,551
Long-term debt, less current portion. . . . . . . . . . . . . . . . . 40,970,452 41,079,673
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . 55,723,768 55,479,941
Venture partners' subordinated equity in ventures . . . . . . . . . . 3,654,174 3,740,111
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . (3,393,591) (3,373,900)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (1,432,178) (1,432,178)
------------ ------------
(4,805,769) (4,786,078)
------------ ------------
Limited partners:
Capital contributions, net of offering
costs and purchase discounts. . . . . . . . . . . . . . . . . . 120,541,353 120,541,353
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . (60,317,310) (59,897,441)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (50,558,700) (50,558,700)
------------ ------------
9,665,343 10,085,212
------------ ------------
Total partners' capital accounts. . . . . . . . . . . . . . . 4,859,574 5,299,134
------------ ------------
$ 64,237,516 64,519,186
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,657,889 2,717,809
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171,913 234,113
----------- ----------
2,829,802 2,951,922
----------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . . . . . . . . . . . . . . . 1,242,629 1,253,647
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501,927 501,827
Property operating expenses . . . . . . . . . . . . . . . . . . . . . . . 1,133,918 1,269,194
Professional services . . . . . . . . . . . . . . . . . . . . . . . . . . 68,989 88,156
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . . 33,710 28,253
General and administrative. . . . . . . . . . . . . . . . . . . . . . . . 111,507 128,301
----------- ----------
3,092,680 3,269,378
----------- ----------
Operating earnings (loss) . . . . . . . . . . . . . . . . . . . . . (262,878) (317,456)
Partnership's share of earnings (loss)
from operations of unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (332,908) (3,585,295)
Venture partners' share of ventures'
operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,936 107,082
----------- ----------
Net operating earnings (loss) . . . . . . . . . . . . . . . . . . . (509,850) (3,795,669)
Gain on sale of Partnership's investments
in unconsolidated ventures. . . . . . . . . . . . . . . . . . . . . . . . 70,290 97,158
----------- ----------
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . $ (439,560) (3,698,511)
=========== ==========
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1997 1996
------------ -----------
Net earnings (loss) per limited
partnership interest:
Net operating earnings (loss). . . . . . . . . . . . . . . . . . $ (3.49) (25.96)
Gain on sale of Partnership's
investments in unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 .69
----------- ----------
$ (2.99) (25.27)
=========== ==========
Cash distributions per limited partnership. . . . . . . . . . . . . $ -- --
=========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (439,560) (3,698,511)
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501,927 501,827
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 33,710 28,253
Partnership's share of (earnings) loss from operations of
unconsolidated ventures, net of distributions . . . . . . . . . . . . 332,908 3,585,295
Venture partners' share of ventures' operations . . . . . . . . . . . . (85,936) (107,082)
Gain on sale of Partnership's investments in
unconsolidated ventures . . . . . . . . . . . . . . . . . . . . . . . (70,290) (97,158)
Changes in:
Interest, rents and other receivables . . . . . . . . . . . . . . . . . 114,581 17,258
Other prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . 76,950 59,606
Notes receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,312 20,336
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . (72,485) (52,098)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,912 261,251
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (168,611) --
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . (970) (1,512)
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . (12,000) 8,001
Ground rent payable . . . . . . . . . . . . . . . . . . . . . . . . . . 36,242 26,049
----------- -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . . . . . . . . . . . . . . 394,690 551,515
----------- -----------
Cash flows from investing activities:
Additions to investment properties. . . . . . . . . . . . . . . . . . . . (48,911) --
Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . (30,320) (17,209)
----------- -----------
Net cash provided by (used in) investing activities . . . . . . . . (79,231) (17,209)
----------- -----------
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996
------------ ------------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (96,928) (86,018)
----------- -----------
Net cash provided by (used in) financing activities . . . . . . . . (96,928) (86,018)
----------- -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . . 218,531 448,288
Cash and cash equivalents, beginning of the year. . . . . . . . . . 14,791,381 13,734,366
----------- -----------
Cash and cash equivalents, end of the period. . . . . . . . . . . . $15,009,912 14,182,654
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 1,243,598 1,255,159
=========== ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1996, which
are included in the Partnership's 1996 Annual Report on Form 10-K (File No.
0-16516) dated on March 21, 1997, as certain footnote disclosures which
would substantially duplicate those contained in such audited financial
statements have been omitted from this report. Capitalized terms used but
not defined in this quarterly report have the same meaning as in the
Partnership's 1996 Annual Report on Form 10-K.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Certain amounts in the 1996 consolidated financial statements have
been reclassified to conform with the 1997 presentation.
The Partnership adopted 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" as required in the first
quarter of 1996. The Partnership's policy is to consider a property to be
held for sale or disposition when the Partnership has committed to a plan
to sell or dispose of such property and active marketing activity has
commenced or is expected to commence in the near term or the Partnership
has concluded that it may dispose of the property by no longer funding
operating deficits or debt service requirements of the property thus
allowing the lender to realize upon its security. In accordance with SFAS
121, any properties identified as "held for sale or disposition" are no
longer depreciated.
The accompanying consolidated financial statements include $0 and
$72,069, respectively, of the Partnership's share of total property
operations of $0 and $240,230 for unconsolidated properties for the three
months ended March 31, 1997 and 1996, respectively, which are held for sale
or disposition or have been sold or disposed of during the past two years.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees and certain of its officers, and for
other direct expenses relating to the administration of the Partnership and
the operation of the Partnership's investments. Fees, commissions and
other expenses required to be paid by the Partnership (or its consolidated
venture) to the General Partners and their affiliates as of March 31, 1997
and for the three months ended March 31, 1997 and 1996 were as follows:
<PAGE>
Unpaid at
March 31,
1997 1996 1997
------- ------ -------------
Management fees to
Corporate General
Partner. . . . . . . . . . . $ -- 24,631 --
Insurance commissions . . . . -- -- --
Reimbursement (at cost)
for out-of-pocket
salary and salary-related
expenses related to the
on-site personnel and for
other costs for the
Partnership and its
investment properties. . . . 10,619 11,117 10,619
------- ------ ------
$10,619 35,748 10,619
======= ====== ======
An affiliate of the General Partners guaranteed payment to the
unaffiliated third party property manager for the property management and
leasing fees relating to the 260 Franklin property. Beginning in January
1996, the unaffiliated property manager is being paid management and
leasing fees by the property. As of March 31, 1997, $1,510,132 of
management and leasing fees payable to the affiliate of the General
Partners (as a result of the escrowing of certain 1995 and prior management
and leasing fees payable to an affiliate of the General Partner and its
payment guarantees to the unaffiliated property manager) were unpaid, of
which the Partnership's share is $453,040.
260 FRANKLIN
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 re-leasing have been substantially below the rates
which were received under the previous leases for the same space. The
property is currently expected to operate at a deficit for 1997 and for
several years thereafter.
The long-term mortgage loan in the original principal amount of
approximately $75,000,000 matured January 1, 1996. 260 Franklin, as of
such date, began submitting the net operating cash flow of the property to
the lender while seeking an extension or refinancing of the loan. The
joint venture reached an agreement with the lender for an extension of the
mortgage loan through January 1, 1997. In addition to substantially the
same terms as were in effect prior to such extension, the agreement
requires that the property submit net operating cash flow of the property
to the lender. The joint venture has reached an agreement in principle to
extend the mortgage loan through January 1, 1998. However, there can be no
assurance that the joint venture will be able to finalize such an extension
of the loan. If 260 Franklin is unable to extend the mortgage loan to the
property, the Partnership may decide not to commit any significant
additional funds. This may result in 260 Franklin and the Partnership no
longer having an ownership interest in the property. In such event, 260
Franklin and the Partnership would recognize a net gain for financial
reporting and Federal income tax purposes with no distributable proceeds.
260 Franklin recorded a provision for value impairment of $11,145,446
(of which the Partnership's share is approximately $3,343,634) as of
January 1, 1996, to reflect the then estimated fair value of the property
based upon the use of an appropriate capitalization rate applied to the
property's net operating income.
<PAGE>
PALM DESERT TOWN CENTER
Occupancy at the portion of the shopping center in which the
Partnership owns an interest decreased to 88% at March 31, 1997 from 89% at
December 31, 1996. Sales at the center have been negatively impacted
during the last several quarters by new competition in the center's trade
area. The increased competition has resulted in lower effective rents upon
re-leasing of space. The center will continue to be subject to increased
competition from new developments that are expected to be opening in the
vicinity in the near future. In addition, the property's operations have
been affected by tenant bankruptcies during the past year. The property is
operating at an approximately break-even level.
The land underlying the shopping center is owned by the lender under
the first mortgage loan. Palm Desert leases the land by assignment of an
existing ground lease which provides for minimum annual rental payments of
$900,000, as well as for additional rental payments for each calendar year
equal to 50% of the amount by which certain of the ground lessee's gross
receipts from the shopping center exceed $6,738,256. Total ground rent
expense for the three months ended March 31, 1997 and 1996 was $323,257 and
$331,583, respectively.
The joint venture continues to consider a possible expansion of the
mall and restructuring of the ground lease and loan. In the event that the
joint venture decides to proceed, the Partnership would utilize a portion
of its available funds to pay for its share of costs.
NEWPARK MALL
As a result of the acquisition by Federated Department Stores of the
company which owns the Emporium Capwell store at NewPark Mall, Federated,
which also owns the Macy's store at NewPark, approached the NewPark joint
venture regarding a sale of the Emporium building. Simultaneously with its
negotiations to acquire the Emporium Capwell building, the NewPark joint
venture negotiated to sell the building to a national retail store owner.
The transactions closed on April 22, 1997 and the joint venture received
net proceeds of approximately $2,000,000, of which the Partnership's share
was approximately $100,000. The Partnership is expected to recognize an
insignificant gain for financial reporting and Federal income tax purposes
in 1997 with no distributable proceeds.
The NewPark joint venture, in accordance with SFAS 121, recorded a
provision for value impairment at June 30, 1996 in the amount of $8,600,000
of which the Partnership's share is $430,000. Such provision was recorded
to reduce the venture's carrying value of the investment property to its
then estimated fair market value based upon an analysis of the discounted
estimated future cash flows over the projected holding period.
UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
Summary income statement information for 260 Franklin for the three
months ended March 31, 1997 and 1996 is as follows:
1997 1996
----------- ----------
Total income . . . . . . . . . $2,440,134 2,609,569
Expenses applicable to
operating loss . . . . . . . 3,734,073 15,071,693
----------- ----------
Operating loss . . . . . . . . $ 1,293,939 12,462,124
=========== ==========
Partnership's share of loss. . $ 388,182 3,738,637
=========== ==========
<PAGE>
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments and adjustments to
reflect the treatment given certain transactions in the Partnership's 1996
Annual Report) necessary for a fair presentation have been made to the
accompanying figures as of March 31, 1997 and for the three months ended
March 31, 1997 and 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investment properties. Capitalized terms used in this report and not
otherwise defined have the same meaning as in the Partnership's 1996 Annual
Report on Form 10-K.
During the first quarter of 1997, some of the Holders of Interests in
the Partnership received from an unaffiliated third party an unsolicited
offer to purchase up to 4.9% of the outstanding Interests in the
Partnership at $105 per Interest. Such offer closed in March 1997. The
board of directors of JMB Realty Corporation ("JMB"), the Corporate General
Partner of the Partnership, has established a special committee (the
"Special Committee") consisting of certain directors of JMB to deal with
all matters relating to tender offers for Interests in the Partnership,
including any and all responses to such tender offers. With respect to the
offer at $105 per Interest, the Special Committee, on behalf of the
Partnership, recommended against acceptance of this offer on the basis
that, among other things, the offer price was inadequate. It is possible
that other offers for Interests may be made in the future, although there
is no assurance that any such offer will be made, the terms of any such
offer or whether any such offer will be consummated, amended or withdrawn.
At March 31, 1997, the Partnership and its consolidated venture had
cash and cash equivalents of approximately $15,010,000. Such cash and cash
equivalents are available for distributions to partners, capital
improvements and working capital requirements, including the Partnership's
share of the costs for a possible expansion of the mall and restructuring
of the ground lease and loan at Palm Desert Town Center. Anticipated
operating deficits at the 260 Franklin Street office building are expected
to be paid out of the unconsolidated joint venture's restricted reserve
account. The Partnership and its consolidated venture have currently
budgeted in 1997 approximately $489,000 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 $645,000.
In 1997, in an effort to reduce Partnership operating expenses, the
Partnership elected to make an annual, rather than semi-annual distribution
of operating cash flow in May. The annual distribution of operating cash
flow has also been reduced to $2 per Interest from the previous level of
$6.50 per Interest as a result of reduced levels of operating cash flows by
the Partnership resulting from the sale in May 1996 of the Dunwoody
Crossing Apartments, as well as previous sales of the Partnership's
investment properties. The joint ventures in New Park Mall and Palm Desert
Town Center are currently not distributing cash flow to the Partnership or
the other venture partners as both properties are reviewing redevelopment
scenarios which could require substantial capital investments. Future
distributions from sales or property operations will depend upon a
combination of operating cash flow from the remaining investment properties
and the longer term capital requirements of the Partnership.
Palm Desert Town Center
The Partnership received (through a joint venture with an affiliate)
its specified cash return relating to Palm Desert Town Center, which was
being funded in part by the unaffiliated venture partner through December
31, 1994 pursuant to the terms of the applicable joint venture agreement.
Since the unaffiliated venture partner's funding obligation expired at the
end of 1994, the Partnership's share of cash is dependent upon the
operations of the property. Occupancy at the portion of the shopping
center in which the Partnership owns an interest decreased to 88% at March
31, 1997, from 89% at December 31, 1996. Sales at the center have been
negatively impacted during the last several quarters by new competition in
<PAGE>
the center's trade area. The increased competition has resulted in lower
effective rents upon re-leasing of space. The center will continue to be
subject to increased competition from new developments that are expected to
be opening in the vicinity in the near future. In addition, the property's
operations have been affected by tenant bankruptcies during the past year.
The property is operating at an approximately break-even level.
The joint venture continues to consider a possible expansion of the
mall and restructuring of the ground lease and loan. In the event that the
joint venture decides to proceed, the Partnership expects that it would
utilize a portion of its available funds to pay for its share of costs.
After reviewing the remaining properties and the marketplaces in which
they operate, the General Partners of the Partnership expect to be able to
conduct an orderly liquidation of its remaining investment portfolio as
quickly as practicable. As a result, the affairs of the Partnership are
expected to be wound up no later than December 31, 1999 (sooner if the
properties are sold in the near term), barring unforeseen economic
developments. The Partnership's goal of capital appreciation will not be
achieved. Moreover, although the Partnership expects to distribute sale
proceeds from the disposition of Palm Desert Town Center and NewPark Mall,
aggregate distributions of sale or refinancing proceeds received by Holders
of Interests over the entire term of the Partnership are expected to be
significantly less than one-half of their original investment. In
connection with sales or other dispositions (including transfers of title
to a lender) of 260 Franklin Street, the Holders of Interests will be
allocated substantial gain for Federal income tax purposes regardless of
whether any proceeds are distributable from such sales or other
dispositions.
RESULTS OF OPERATIONS
The decrease in interest, rents and other receivables at March 31,
1997 as compared to December 31, 1996 is primarily due to the timing of
collection of certain revenues at Palm Desert Town Center.
The decrease in prepaid expenses at March 31, 1997 as compared to
December 31, 1996 is primarily due to the timing of payment of insurance
premiums at Palm Desert Town Center.
The increase in accounts payable at March 31, 1997 as compared to
December 31, 1996 is primarily due to the timing of payment of operating
expenses at Palm Desert Town Center.
The unearned rents at December 31, 1996 is due to the prepayment of
rents at Palm Desert Town Center.
The decrease in property operating expenses for the three months ended
March 31, 1997 as compared to the three months ended March 31, 1996 is
primarily due to an increase in the allowance for doubtful accounts at
March 31, 1996 and a decrease in the allowance for doubtful accounts at
March 31, 1997.
The decrease in Partnership's share of loss from operations of
unconsolidated ventures for the three months ended March 31, 1997 as
compared to the three months ended March 31, 1996 is due to the
Partnership's share of 260 Franklin's provision for value impairment
recorded January 1, 1996 at the 260 Franklin venture.
<PAGE>
PART II. OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The mortgage loan in the current amount of approximately $89,000,000
(including accrued interest) secured by 260 Franklin Street matured on
January 1, 1997. 260 Franklin continues to submit the net cash flow of the
property, in accordance with the loan modification and extension agreement
through January 1, 1997, to the lender (Teachers Insurance and Annuity
Association of America) while seeking an extension or refinancing of the
loan. As of March 31, 1997, 260 Franklin is current with respect to the
accrued interest based on the loan modification and extension agreement
through January 1, 1997. Reference is made to the subsection entitled "260
Franklin" in notes to Consolidated Financial Statements filed with this
report for additional discussion of the mortgage loan secured by the 260
Franklin Street Building, which discussion is hereby incorporated by
reference.
<PAGE>
<TABLE>
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties owned during 1997:
<CAPTION>
1996 1997
-------------------------------------- -------------------------------
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. 260 Franklin Street Building
Boston, Massachusetts. . . . 96% 95% 96% 96% 96%
2. NewPark Mall
Newark (Alameda County),
California . . . . . . . . . 79% 79% 77% 78% 75%
3. Palm Desert Town Center
Palm Desert (Palm Springs),
California . . . . . . . . . 91% 92% 88% 89% 88%
</TABLE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3-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.
3-B. Acknowledgement of rights and duties of the General Partners of
the Partnership between ABPP Associates, L.P. (a successor Associated
General Partner of the Partnership) and JMB Realty Corporation as of
December 31, 1995 dated November 18, 1996 are hereby incorporated by
reference to the Partnership's Report for September 30, 1996 on Form 10-Q
(File No. 0-16516).
4-A. 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.
4-B. Documents dated December 19,1995 relating to the Promissory Note
secured by NewPark Mall are hereby incorporated by reference to the
Partnership's Report for December 31, 1995 on Form 10-K (File No. 0-16516)
dated March 25, 1996.
4-C. Documents relating to the third mortgage modification and
extension agreement secured by the 260 Franklin Street Building
dated December 4, 1996 are hereby incorporated by reference to the
Partnership's Report for December 31, 1996 on Form 10-K (File No. 0-16516)
dated March 21, 1997.
10-A. 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-B. 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-C. 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-D. 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-E. Modification to Reserve Escrow Agreement relating to the 260
Franklin Street Building is hereby incorporated by reference to the
Partnership's Report for March 31, 1995 on Form 10-Q (File No. 0-16516)
dated May 11, 1995.
<PAGE>
10-F. Modification Reserve Escrow Agreement relating to the 260
Franklin Street Building dated December 4, 1996 are hereby incorporated by
reference to the Partnership's Report for December 31, 1996 on Form 10-K
(File No. 0-16516) dated March 21, 1997.
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed during the quarter covered
by this report.
<PAGE>
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 9, 1997
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 9, 1997
<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, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 15,009,912
<SECURITIES> 0
<RECEIVABLES> 226,907
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,236,819
<PP&E> 60,152,439
<DEPRECIATION> 16,533,262
<TOTAL-ASSETS> 64,237,516
<CURRENT-LIABILITIES> 1,664,833
<BONDS> 40,970,452
<COMMON> 0
0
0
<OTHER-SE> 4,859,574
<TOTAL-LIABILITY-AND-EQUITY>64,237,516
<SALES> 2,657,889
<TOTAL-REVENUES> 2,829,802
<CGS> 0
<TOTAL-COSTS> 1,669,555
<OTHER-EXPENSES> 180,496
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,242,629
<INCOME-PRETAX> (262,878)
<INCOME-TAX> 0
<INCOME-CONTINUING> (509,850)
<DISCONTINUED> 70,290
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (439,560)
<EPS-PRIMARY> 2.99
<EPS-DILUTED> 2.99
</TABLE>
