SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 1998
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
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(Exact name of registrant as specified in its charter)
Illinois 0-19496 36-3426137
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(State or other) (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Organization
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
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(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
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<PAGE>
PALM DESERT TOWN CENTER
PALM DESERT, CALIFORNIA
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On December 29, 1998 (the
"Closing Date") Carlyle Real Estate Limited Partnership - XVI (the
"Partnership"), an Illinois limited partnership, along with Carlyle Real
Estate Limited Partnership - XVII ("Carlyle-XVII"), an Illinois limited
partnership affiliated with the Partnership (collectively, the "JMB Group")
sold their respective interests in the joint venture (the "Joint Venture")
that owns the Palm Desert Town Center (the "Property") located in Palm
Desert (Palm Springs), California. (A portion of the JMB Group's interests
in the Joint Venture was owned indirectly through Carlyle/Palm Desert,
Inc.) The sale was pursuant to an option agreement (the "Option
Agreement") entered into with the venture partner, TrizecHahn Centers,
Inc., (the "Buyer") effective January 1, 1998 and originally scheduled to
expire July 15, 1998 but extended first through August 14, 1998 pursuant to
a first amendment to the Option Agreement and then extended through
December 29, 1998 pursuant to a second amendment to the Option Agreement.
The Option Agreement gave the Buyer the right (but not the obligation) to
purchase all (but not less than all) of the JMB Groups' interest in the
joint venture by giving notice of its exercise of the option during the
term of the option. The Buyer exercised this option on December 29, 1998.
The Buyer is not affiliated with either the Partnership or Carlyle-XVII or
their General Partners, and the purchase price under the Option Agreement
was determined by arm's-length negotiation.
The sale price of the JMB Group's interest in the Joint Venture was
$4,000,000 (before selling costs of approximately $20,000) of which the
Partnership's share was $3,431,000. The Partnership's share of the sale
price was based upon the ratio of the Partnership's interest in the Joint
Venture to the aggregate interests of the JMB Group in the Joint Venture.
The Property was 84% occupied at the date of sale. The Property was
classified as held for sale as of July 1, 1997 and therefore has not been
subject to continued depreciation as of that date for financial reporting
purposes. The sale is expected to result in a gain to the Partnership in
1998 of approximately $2,000,000 for financial reporting purposes. In
addition, the Partnership expects to report a gain on sale of approximately
$4,000,000 for Federal income tax reporting purposes in 1998. The
Partnership has no liability for any representations, warranties or
covenants in connection with the sale of its interest in the Joint Venture.
<PAGE>
The Partnership Agreement provides that, subject to certain
conditions, the General Partners shall receive as a distribution of the
proceeds (net after expenses and liabilities and retained working capital)
from the sale or refinancing of a real property up to 3% of the selling
price, and that the remaining proceeds be distributed 85% to the holders
("Holders") of limited partnership interests (and assignee interests
therein) in the Partnership (the "Interests") and 15% to the General
Partners. However, prior to such distributions being made, the Holders of
Interests are entitled to receive 99% and the General Partners 1% of net
sale or refinancing proceeds until the Holders of Interests (i) have
received cumulative cash distributions from the Partnership's operations
which, when combined with net sale or refinancing proceeds previously
distributed, equal a 6% non-compound annual return on the Holders' of
Interests average capital investment for each year (their initial capital
investment as reduced by net sale or refinancing proceeds previously
distributed) commencing with the third fiscal quarter of 1987 and (ii) have
received cash distributions of net sale or refinancing proceeds in an
amount equal to the Holders' of Interests aggregate initial capital
investment in the Partnership. In addition, upon termination of the
Partnership, any prior distributions of sales proceeds to the General
Partners must be returned to the Partnership if, at such time, the Holders
of Interests had not previously received distributions equal to or
exceeding the return levels specified in (i) and (ii) above. As the
Holders of Interests will not receive the return levels in (i) and (ii)
above, no portion of the proceeds of this sale were distributed to the
General Partners.
ITEM 5. OTHER EVENTS. The Partnership reduced all of its assets to cash
or cash equivalents and thereby dissolved in accordance with the terms of
its Partnership Agreement. Pursuant to the Partnership Agreement, the
General Partners returned to the Partnership $141,766 of previously
received sales distributions. The Partnership made a final liquidating
cash distribution to its Holders of Interests in the aggregate amount of
$20,415,530.28 or $145.48 per Interest. In addition, the Partnership made
a final cash distribution out of net cash receipts (as defined) to its
General Partners and paid a management fee to its Corporate General Partner
in the aggregate amount of $1,236,950.49. The Partnership wound up its
affairs effective December 31, 1998.
<PAGE>
In connection with its winding up, the Partnership entered into an
agreement (the "Winding Up Agreement") with JMB Realty Corporation, the
Corporate General Partner, pursuant to which the Corporate General Partner
generally assumed the obligation to pay or otherwise discharge expenses and
liabilities of the Partnership not otherwise paid, discharged or provided
for by the Partnership, including contingent liabilities of the Partnership
that may arise after its winding up. In consideration of such assumption,
the Partnership paid the Corporate General Partner approximately $8,000 in
cash and transferred to the Corporate General Partner the Partnership's
contingent rights, if any, to indemnification or reimbursement, including
coverage and benefits under contracts of insurance, and certain other
rights to receive or collect amounts, if any, that may be payable to the
Partnership.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. Not Applicable.
(b) Pro Forma Financial Information - Narrative.
As a result of the sale of the Partnership's interest in the
Joint Venture, beyond the date of sale there will be no further rental
income, interest income, mortgage interest, depreciation, property
operating expenses, amortization of deferred expenses, and venture
partners' share of venture' operations recorded for the Property in the
consolidated financial statements of the Partnership, which for the
Partnership's most recent fiscal year (the year ended December 31, 1997)
were $10,693,118, $74,327, $4,952,355, $1,004,061, $4,625,425, $152,704,
and $(11,735), respectively. Rental income, interest income, mortgage
interest, property operating expenses, amortization of deferred expenses,
and venture partners' share of venture' operations recorded for the
Property were $7,712,345, $144,866, $3,680,510, $2,978,492, $115,811, and
$(386,077), respectively, for the nine months ended September 30, 1998.
Also, as a result of the sale of the Partnership's interest in the Joint
Venture, there are no further assets and liabilities related to the
Property, which at September 30, 1998 consisted of cash and cash
equivalents of approximately $2,395,000; investment property held for sale
or disposition of approximately $43,172,000; deferred expenses of
approximately $526,000, notes receivable of approximately $101,000; accrued
rents receivable of approximately $2,698,000; long-term debt (less current
portion) of approximately $40,242,000; current liabilities of approximately
$2,157,000; security deposits of approximately $55,000; and ground rent
payable of approximately $1,349,000.
<PAGE>
(c) Exhibits.
10.1 Second Amendment to Palm Desert Option Agreement by the
Partnership and Carlyle-XVII relating to the unaffiliated venture partner's
option to purchase the Partnership and Carlyle-XVII's interests in the
joint venture dated December 28, 1998.
10.2 Winding Up Agreement dated as of December 29, 1998, by
and between the Partnership and JMB Realty Corporation.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Carlyle Real Estate Limited Partnership-XVI
By: JMB Realty Corporation
Corporate General Partner
By: /s/ GAILEN J. HULL
_______________________________
Gailen J. Hull
Senior Vice President
Dated: January 13, 1999
EXHIBIT 10.1
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SECOND AMENDMENT TO
PALM DESERT OPTION AGREEMENT
&
SECOND AMENDMENT TO
PALM DESERT AGREEMENT FOR PURCHASE AND SALE OF
PARTNERSHIP INTERESTS
THIS SECOND AMENDMENT TO PALM DESERT OPTION AGREEMENT & SECOND
AMENDMENT TO PALM DESERT AGREEMENT FOR PURCHASE AND SALE OF PARTNERSHIP
INTERESTS ("Amendment"), is made and entered into as of the 28th day of
December, 1998, by the following parties, hereinafter referred to as the
"JMB Group" or "Seller":
CARLYLE/PALM DESERT, INC., an Illinois corporation ("Managing
Partner")
CARLYLE REAL ESTATE LIMITED PARTNERSHIP XVI, an Illinois limited
partnership ("Carlyle A"); and
CARLYLE REAL ESTATE LIMITED PARTNERSHIP XVII, an Illinois limited
partnership ("Carlyle B");
and also by the following parties hereinafter referred to as the
"TrizecHahn Group" or "Buyer"
HAHN/PALM DESERT, INC., a California corporation ("Co-Partner"); and
TRIZECHAHN CENTERS INC., a California corporation, formerly known as
ERNEST W. HAHN, INC., a California corporation ("TrizecHahnco").
RECITALS
A. Seller and Buyer have entered into that certain PALM DESERT
OPTION AGREEMENT, made and entered into on March 11, 1998, effective as of
January 1, 1998, as amended by that certain FIRST AMENDMENT TO PALM DESERT
OPTION AGREEMENT & FIRST AMENDMENT TO PALM DESERT AGREEMENT FOR PURCHASE
AND SALE OF PARTNERSHIP INTERESTS, dated as of July 15, 1998 (the "First
Amendment"), (as so amended, the "Option Agreement"). Unless otherwise
defined herein, each capitalized term used herein shall have the meaning
ascribed thereto in the Option Agreement.
B. Seller and Buyer have also entered into that certain PALM
DESERT AGREEMENT FOR PURCHASE AND SALE OF PARTNERSHIP INTERESTS, made and
entered into on March 11, 1998, effective as of January 1, 1998, as amended
by the First Amendment (as so amended, the "Purchase Agreement").
<PAGE>
C. Buyer and Seller desire to amend the Option Agreement to extend
the "term of this Option" (as defined in Section 1.2 of the Option
Agreement) to December 29, 1998, among other things, on the terms and
subject to the conditions set forth below.
D. Buyer and Seller desire to amend the Purchase Agreement to
redefine the "Purchase Price" (as such term is defined in the Purchase
Agreement), among other things, on the terms and subject to the conditions
set forth below.
NOW, THEREFORE, in consideration of the foregoing premises, the
mutual covenants and conditions contained herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Seller and Buyer amend the Option Agreement and the Purchase
Agreement, respectively, as follows:
AGREEMENT
1. OPTION AGREEMENT AMENDMENTS. The Parties hereby amend the
Option Agreement as follows:
1.1 TERM. In the first sentence in Section 1.2 of the Option
agreement (as amended by the First Amendment), change the words "August 14,
1998" to "December 29, 1998."
1.2 OPTION CONSIDERATION. Section 1.3 of the Option
Agreement is hereby replaced with the following:
1.3 OPTION CONSIDERATION. Each of Buyer and Seller
acknowledges that Buyer has already paid to Seller (i) Four Hundred Ninety-
Eight Thousand Two Hundred Twenty-Four dollars and Sixty-Five Cents
($498,224.65) in consideration for this Option and all extensions hereto
which has been allocated among the parties constituting Seller in
proportion to their respective Seller's Partnership Interests, and (ii)
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged (the "Option Consideration"). Each of Buyer and
Seller agrees that the Option Consideration has been fully earned by
Seller, has been paid in full by Buyer and no part of the Option
Consideration and no further Option Consideration shall be due and owing
from Buyer to Seller upon exercise or termination of this Option.
2. PURCHASE AGREEMENT AMENDMENTS. The Parties hereby amend the
Purchase Agreement as follows:
2.1 SCHEDULED CLOSING DATE
2.1.1 In Section 1.8, delete the following final
sentence: "(The Scheduled Closing Date is fifteen (15) days after exercise
of the Option by Buyer, or if that day falls on a Saturday, Sunday or legal
holiday, the first regular business day thereafter.)"
<PAGE>
2.1.2 In Section 1.28, delete the definition of
Scheduled Closing Date and replace it with the following: "Scheduled
Closing Date: December 29, 1998."
2.2 OPTION CREDIT AMOUNT. Delete the entirety of Section 1.21A (as
amended in the First Amendment).
2.3 PURCHASE PRICE.
2.3.1 In the first sentence of Section 2.3.1, replace the
phrase "Seven Million Dollars ($7,000,000)" with the phrase "Four Million
Dollars ($4,000,000)."
2.3.2 Delete the following at the end of Section 2.3.1 (as
amended in the First Amendment):
Notwithstanding anything in the foregoing to the contrary, if
Buyer exercises the Option pursuant to Section 3.1 of the Option Agreement,
the Option Credit Amount shall be credited to Buyer and applied against the
Purchase Price at the closing of the transactions contemplated by this
Purchase Agreement.
2.3.3 In Sections 1.8, 2.2.2, 5.2.1 and 7.2 (as amended in the
First Amendment), replace the phrase "Purchase Price (as adjusted by the
Option Credit Amount)" with the phrase "Purchase Price."
3. OTHER TERMS UNMODIFIED. Except as otherwise expressly set
forth herein, all terms and conditions of the Option Agreement and the
Purchase Agreement, respectively as ratified.
4. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, provided each of the parties hereto executes at least one
counterpart; each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
Amendment. This letter may be executed in facsimile form (and shall be
promptly followed by a hard copy counterpart original).
[ SIGNATURES ON NEXT PAGE ]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of
the date first written above.
SELLER:
CARLYLE/PALM DESERT, INC.,
an Illinois corporation
By: /s/ GLENN E. EMIG
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Name: Glenn E. Emig
Title:
CARLYLE REAL ESTATE LIMITED
PARTNERSHIP - XVI,
an Illinois corporation
By: /s/ GLENN E. EMIG
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Name: Glenn E. Emig
Title:
CARLYLE REAL ESTATE LIMITED
PARTNERSHIP - XVII,
an Illinois limited partnership
By: /s/ GLENN E. EMIG
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Name: Glenn E. Emig
Title:
[ SIGNATURES CONTINUED ON NEXT PAGE ]
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BUYER:
HAHN/PALM DESERT, INC.,
a California corporation
By: /s/ WENDY M. GOODY
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Name: Wendy M. Goody
Title: Senior Vice President
and Chief Financial
Officer
By: /s/ PAUL C. CHRISTMAN, JR.
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Name: Paul C. Christman, Jr.
Title: Director of Finance
TRIZECHAHN CENTERS INC.,
a California corporation
By: /s/ WENDY M. GOODY
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Name: Wendy M. Goody
Title: Senior Vice President
and Chief Financial
Officer
By: /s/ PAUL C. CHRISTMAN, JR.
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Name: Paul C. Christman, Jr.
Title: Director of Finance
EXHIBIT 10.2
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WINDING UP AGREEMENT
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THIS AGREEMENT is made effective as of December __, 1998 by and
between CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XVI, an Illinois limited
partnership (the "Partnership"), and JMB REALTY CORPORATION, a Delaware
corporation ("JMB"). Capitalized terms used herein but not defined have
the same meanings as in the Partnership's Amended and Restated Agreement of
Limited Partnership (as amended to date, the "Partnership Agreement").
WITNESSETH:
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WHEREAS,on or before the Winding Up Date (as hereinafter defined) the
Partnership will have reduced all of the assets of the Partnership to cash
or cash equivalents and will have thereby dissolved in accordance with
Section 17.2 of the Partnership Agreement; and
WHEREAS, the Partnership desires to complete the winding up of its
business and affairs effective as of December 31, 1998 (the "Winding Up
Date"); and
WHEREAS, there are or may be certain known, and there may be certain
other unknown, costs, expenses, obligations or liabilities incurred by or
on behalf of, or claims, demands, assessments or charges against, the
Partnership (collectively, the "Liabilities") that will not have been paid,
discharged, extinguished or otherwise provided for on or before the Winding
Up Date; and
WHEREAS, the Partnership desires to be relieved of the Liabilities on
the terms and conditions set forth herein in order to complete the winding
up of its business and affairs on the Winding Up Date; and
WHEREAS, JMB is the Corporate General Partner of the Partnership and
is willing to assume the obligation to pay, extinguish or otherwise
discharge the Liabilities on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. JMB hereby assumes the obligation to pay, extinguish or
otherwise discharge, and agrees to indemnify, defend and hold harmless the
Partnership and each of its other partners from, each of the Liabilities,
whether known or unknown, suspected or unsuspected, fixed or contingent,
foreseen or unforeseen, that has not been paid, discharged, extinguished or
otherwise provided for on or before the Winding Up Date; provided, however
that in no event shall the Liabilities be deemed to include any obligation
or liability of the Partnership (i) for any distribution of cash or other
property or asset of any kind that was, is or may be distributable
(including, without limitation, a return of any capital contribution) to
any partner of the Partnership (or his assignee) in his capacity as such or
(ii) for which the obligation or liability of, or recourse against, the
Partnership was or is, by law, contract or otherwise, limited to an asset
or assets of the Partnership.
<PAGE>
2. In consideration of JMB's assumption of the obligation to pay,
extinguish or otherwise discharge the Liabilities as provided in this
Agreement, the Partnership (i) agrees to pay JMB on or before the Winding
Up Date the amount of $8,015.88 and (ii) hereby transfers and assigns to
JMB all of the Partnership's right, title to and interest in, and all of
the Partnership's rights to own, receive, collect and/or enforce the
payment, reimbursement or transfer of, any and all monies or other property
or assets of any kind (and any claims therein or thereto), including,
without limitation, the coverage and benefits by, and proceeds receivable
from, all contracts of insurance maintained by or on behalf of the
Partnership, to the maximum extent provided therein or under applicable
law, that remain, or that become or otherwise would or may be, payable,
transferable or reimbursable to the Partnership, on or after the Winding Up
Date (other than such rights with respect to any monies of the Partnership
that remain on the Winding Up Date and that are required to pay or
discharge checks or drafts issued by the Partnership on or before the
Winding Up Date). JMB shall have no right of indemnification or
contribution from any of the other partners of the Partnership in their
capacity as such as a result of payments or claims made with respect to the
Liabilities, whether or not such payments or claims in the aggregate are in
excess of the amount of money or the value of other property or assets paid
or transferred to or received or collected by JMB pursuant to the terms of
this Agreement.
3. Notwithstanding anything to the contrary in this Agreement, JMB
shall be entitled to the benefit of any and all rights of indemnification,
contribution, offset and any other right of recourse to or claim against
any third party (other than any right of indemnification or contribution
with respect to the Liabilities by or from a partner of the Partnership in
his capacity as such but including any other recourse to or claim against a
person who is or was a partner of the Partnership in any other capacity)
that the Partnership has, may have or otherwise could have or assert at any
time, whether in connection with, relating to or arising from any of the
Liabilities or otherwise, and the Partnership hereby assigns and transfers
to JMB all of its right, title to and interest in each and every such right
or claim.
4. The Partnership hereby makes, constitutes and appoints JMB,
with full power of substitution, the Partnership's true and lawful
attorney-in-fact for the Partnership and in its name, place and stead to
make, execute, acknowledge, swear to, deliver, record, file and/or perform
any agreements, instruments or other documents, and to take any and all
other actions on behalf of the Partnership, whether on or after the Winding
Up Date, that may be considered necessary or desirable by JMB to carry out
fully the provisions of this Agreement, including without limitation, to
execute and deliver on behalf of the Partnership any document evidencing,
acknowledging or fulfilling the assignment and transfer by the Partnership
to JMB of any rights or claims referred to in Section 2 or 3 of this
Agreement and to collect, sue for or recover any monies or other property
or assets, to compromise or settle any claims and to endorse any checks or
other instruments on behalf of the Partnership. Pursuant to such power of
attorney, the Partnership hereby authorizes JMB to take any and all actions
on behalf of the Partnership as JMB may consider necessary or desirable in
connection with any of the foregoing to the same extent as the Partnership
could or might do if personally present, and the Partnership hereby
approves and confirms all such actions on its behalf. The power of
attorney hereby granted is coupled with an interest, is irrevocable and, to
the extent allowed by applicable law, shall survive the dissolution,
winding up and termination of the Partnership.
5. Except as otherwise expressly provided in this Agreement,
nothing contained herein shall prevent, limit or qualify in any way the
rights, powers and authority JMB otherwise has or may exercise in its
capacity as the Corporate General Partner of the Partnership.
<PAGE>
6. This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective successors and
assigns. This Agreement and the rights and obligations of the parties
hereto shall survive the dissolution, winding up and termination of the
Partnership.
7. If any one or more of the provisions of this Agreement is for
any reason held to be invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not impair or affect the validity and enforceability
of the other provisions hereof, and this Agreement shall be construed as
though each such invalid, illegal or unenforceable provision were not
contained herein.
8. Any reference in this Agreement to the singular shall also be
deemed to include the plural, and vice versa, unless the context otherwise
requires.
9. This Agreement and the rights and obligations of the parties
hereto shall be interpreted, construed and enforced in accordance with the
internal laws of the State of Illinois.
10. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first written above.
JMB REALTY CORPORATION
By:__________________________________
Its:__________________________________
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XVI
By: JMB Realty Corporation
Corporate General Partner
By:_____________________________
Its:______________________________
By: ABPP Associates, L.P.
Associate General Partner
By: JMB Realty Corporation
General Partner
By:_____________________________
Its:______________________________
State of Illinois )
) SS:
County of Cook )
Before me, the undersigned, a Notary Public in and for said County
and State, on this day personally appeared
________________________________, ___________________________________ of
JMB REALTY CORPORATION ("JMB"), a Delaware corporation that is the
Corporate General Partner of Carlyle Real Estate Limited Partnership-XVI
(the "Partnership"), an Illinois limited partnership, and the sole general
partner of ABPP Associates, L.P., an Illinois limited partnership that is
the Associate General Partner of the Partnership; and
____________________________, ____________________________ of JMB, who are
known to me to be the persons whose names are subscribed to the foregoing
instrument, and acknowledged to me that they executed the same in the
capacities and for the purposes and consideration therein expressed.
Given under my hand and seal of office this ______ day of December,
1998.
___________________________________
Notary Public
My commission expires:
____________________________
