SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year
ended December 31, 1994 Commission file no. 000-19496
JMB INCOME PROPERTIES, LTD. - XIII
(Exact name of registrant as specified in its charter)
Illinois 36-3426137
(State of organization) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- -------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Park III of this Form 10-K or any
amendment to this Form 10-K
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. Not applicable.
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . . 5
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . 8
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . 8
PART II
Item 5. Market for the Partnership's Limited
Partnership Interests and Related
Security Holder Matters. . . . . . . . . . . . . . 8
Item 6. Selected Financial Data. . . . . . . . . . . . . . 9
Item 7. Management's Discussion and Analysis
of Financial Condition and
Results of Operations. . . . . . . . . . . . . . . 16
Item 8. Financial Statements and Supplementary Data. . . . 22
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . . . 62
PART III
Item 10. Directors and Executive Officers
of the Partnership . . . . . . . . . . . . . . . . 62
Item 11. Executive Compensation . . . . . . . . . . . . . . 65
Item 12. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . . . 66
Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . . . . 67
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . . . . 67
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 69
i
PART I
Item 1. Business
All references to "Notes" are to Notes to Consolidated Financial
Statements contained in this report.
The registrant, JMB Income Properties, Ltd. - XIII (the
"Partnership"), is a limited partnership formed in 1986 and currently
governed by the Revised Uniform Limited Partnership Act of the State of
Illinois to invest in income-producing properties, primarily existing
commercial real properties. On August 20, 1986, the Partnership commenced
an offering to the public of $100,000,000 (subject to increase by up to
$250,000,000) in Limited Partnership Interests (the "Interests") pursuant
to a Registration Statement on Form S-11 under the Securities Act of 1933
(Registration No. 33-4107). A total of 126,409 Interests (at an offering
price of $1,000 per Interest, before discounts) were sold to the public and
were issued to investors during 1987. The offering closed on April 14,
1987. No investor has made any additional capital contribution after such
date. The investors in the Partnership share in their portion of the
benefits of ownership of the Partnership's real property investments
according to the number of Interests held.
The Partnership is engaged solely in the business of the acquisition,
operation, and sale and disposition of equity real estate investments.
Such equity investments are held by fee title and/or through joint venture
partnership interests. The Partnership's real property investments are
located throughout the nation, and it has no real estate investments
located outside the United States. A presentation of information about
industry segments, geographic regions, raw materials or seasonality is not
applicable and would not be material to an understanding of the
Partnership's business taken as a whole. Pursuant to the Partnership
Agreement, the Partnership is required to terminate on or before October
31, 2036. Accordingly, the Partnership intends to hold its remaining
properties for investment purposes until such time as a sale or other
disposition appears to be advantageous. Unless otherwise described, the
Partnership expects to hold its properties for long-term investment where,
due to current market conditions, it is impossible to forecast the expected
holding period. At the sale of a particular property, the proceeds, if
any, are generally distributed or reinvested in existing properties rather
than invested in acquiring additional properties.
The Partnership has made the real property investments set forth in
the following table:
<TABLE>
<CAPTION>
SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1994,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (f) SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP
---------------------- ---------- -------- ---------------------- ---------------------
<S> <C> <C> <C> <C>
1. Mid Rivers Mall
St. Peters
(St. Louis),
Missouri . . . . . . 323,100 sq.ft. 12/12/86 1/30/92 Fee ownership of land and
g.l.a. improvements (through
joint venture partnerships)
(c)(d)
2. First Financial Plaza
Office Building
Encino
(Los Angeles),
California . . . . . 216,000 sq.ft. 5/20/87 8% Fee ownership of land and
n.r.a. improvements (through
joint venture partnerships)
(c)
3. Miami International
Mall
Miami, Florida . . . 967,300 sq.ft. 1/1/88 11% Fee ownership of land and
g.l.a. improvements (through
joint venture partnerships)
(c)
4. Rivertree Court
Shopping Center
Vernon Hills
(Chicago),
Illinois . . . . . . 297,000 sq.ft. 10/20/88 23% Fee ownership of land and
g.l.a. improvements (b)(e)
5. Fountain Valley
Industrial Park
Industrial Buildings
Fountain Valley
(Los Angeles),
California . . . . . 393,100 sq.ft. 11/1/88 16% Fee ownership of land and
b.a. improvements (b)(e)
SALE OR DISPOSITION
DATE OR IF OWNED
AT DECEMBER 31, 1994,
NAME, TYPE OF PROPERTY DATE OF ORIGINAL INVESTED
AND LOCATION (f) SIZE PURCHASE CAPITAL PERCENTAGE (a) TYPE OF OWNERSHIP
---------------------- ---------- -------- ---------------------- ---------------------
6. Cerritos Industrial
Park Industrial
Buildings
Cerritos
(Los Angeles),
California . . . . . 197,100 sq.ft. 11/1/88 7% Fee ownership of land and
b.a. improvements (b)
7. Adams/Wabash Self Park
Chicago, Illinois. . 671 spaces and 10/1/90 25% Fee ownership of land and
28,800 improvements (through
sq.ft. n.r.a. joint venture partnership)
(c)
<FN>
-----------------------
(a) The computation of this percentage for properties held at
December 31, 1994 does not include amounts invested from sources other than
the original net proceeds of the public offering as described above and in
Item 7.
(b) Reference is made to Note 4 and to Schedule III filed with this
annual report for the current outstanding principal balances and a
description of the long-term mortgage indebtedness secured by the
Partnership's real property investments.
(c) Reference is made to Note 3 filed with this annual report for a
description of the joint venture partnerships through which the Partnership
made this real property investment.
(d) This property was sold January 30, 1992. Reference is made to
Note 7 of Notes to Consolidated Financial Statements filed with this annual
report for a description of the sale of such real property investment.
(e) Reference is made to Item 6 - Selected Financial Data for
additional operating and lease expiration data concerning this investment
property.
(f) Reference is made to Item 8 - Schedule III filed with the
annual report for further information concerning real estate taxes and
depreciation.
</TABLE>
The Partnership's real property investments are subject to competition
from similar types of properties (including, in certain areas, properties
owned or advised by affiliates of the General Partners) in the vicinities
in which they are located. Such competition is generally for the retention
of existing tenants. Additionally, the Partnership is in competition for
new tenants in markets where significant vacancies are present. Reference
is made to Item 7 below for a discussion of competitive conditions and
future renovation and capital improvement plans of the Partnership and
certain of its significant investment properties. Approximate occupancy
levels for the properties are set forth in Item 2 below to which reference
is hereby made. The Partnership maintains the suitability and
competitiveness of its properties in its markets primarily on the basis of
effective rents, tenant allowances and service provided to tenants.
In the opinion of the Managing General Partner of the Partnership, all
of the investment properties held at December 31, 1994 are adequately
insured. Although there is earthquake insurance coverage for a portion of
the value of the Partnership's investment properties, the Managing General
Partner does not believe that such coverage for the entire replacement cost
of the investment properties is available on economic terms.
Reference is made to Note 8 for a schedule of minimum lease payments
to be received in each of the next five years, and in the aggregate
thereafter, under leases in effect at the Partnership's consolidated
properties as of December 31, 1994.
The Partnership has no employees.
The terms of transactions between the Partnership, the General
Partners and their affiliates are set forth in Item 11 below to which
reference is hereby made for a description of such terms and transactions.
Item 2. Properties
The Partnership owns directly or through joint venture partnerships
the properties or interests in the properties referred to under Item 1
above to which reference is hereby made for a description of said
properties.
The following is a listing of principal businesses or occupations
carried on in and approximate physical occupancy levels by quarter during
fiscal years 1994 and 1993 for the Partnership's investment properties
owned during 1994:
<TABLE>
<CAPTION>
1993 1994
------------------------------ ------------------------------
Principal At At At At At At At At
Business 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> <C>
1. First Financial
Plaza
Encino (Los
Angeles),
California . . . . . University/
Bank/Housing
Developer 85% 88% 84%(1) 85%(1) 84%(1) 91%(1) 89%(1) 89%(1)
2. Miami Interna-
tional Mall
Miami, Florida . . . Retail 94% 95% 97% 98% 98% 96% 97% 97%
3. Rivertree Court
Shopping Center
Vernon Hills
(Chicago),
Illinois . . . . . . Retail 98% 98% 98% 97% 88%(2) 89%(2) 98% 85%
4. Fountain Valley
Industrial Park
Fountain Valley
(Los Angeles),
California . . . . . Retail/Light
ing Systems
Manufacturer/
Nuts and Bolts
Distributor 69%(3) 63%(3) 85% 85% 85% 85% 91% 100%
5. Cerritos
Industrial Park
Cerritos
(Los Angeles),
California . . . . . Aircraft Parts
Manufacturer/
Spa Manufac-
turer/Tire
Distributor 93% 100% 100% 100% 100% 100% 100% 100%
6. Adams/Wabash
Self Park
Chicago,
Illinois . . . . . . Parking Garage * * * * * * * *
<FN>
--------------------
An asterisk indicates that the property is primarily a parking garage
and occupancy information is not applicable. However, the approximate
occupancy level for the retail portion of the structure as of December 31,
1994 is 51%
(1) The percentage represents physical occupancy. Mitsubishi
(8,109 square feet or 4% of the building) vacated its space in July 1993
prior to its lease expiration of January 1997 and continues to pay rent
pursuant to its lease obligation.
(2) The percentage represents physical occupancy. Filene's
Basement (26,555 square feet or 9% of the building) vacated its space in
January 1994, prior to its lease expiration of January 31, 2007 and
continued to pay rent pursuant to its lease obligation until the assignment
of its lease to Office Depot in April 1994. Office Depot reopened the
store August 26, 1994.
(3) The percentage represents physical occupancy. Newport
Corporation (102,054 square feet or 26% of the building) vacated its space
in March 1992, prior to its lease expiration of May 31, 1995 but remained
obligated on its lease obligations as more fully described in Item 7.
Reference is made to Item 6, Item 7 and Note 8 for further information
regarding property occupancy, competitive conditions and tenant leases at
the Partnership's investment properties.
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material pending legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of holders of Interests
during fiscal years 1994 and 1993.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1994, there were 9,253 record holders of Interests
of the Partnership. There is no public market for Interests, and it is not
anticipated that a public market for Interests will develop. Upon request,
the Managing General Partner may provide information relating to a
prospective transfer of Interests to an investor desiring to transfer his
Interests. The price to be paid for the Interests, as well as any other
economic aspects of the transaction, will be subject to negotiation by the
investor. There are certain conditions and restrictions on the transfer of
Interests, including, among other things, the requirement that the
substitution of a transferee of Interests as a Limited Partner of the
Partnership be subject to the written consent of the Managing General
Partner. The rights of a transferee of Interests who does not become a
substituted Limited Partner will be limited to the rights to receive his
share of profits or losses and cash distributions from the Partnership, and
such transferee will not be entitled to vote such Interests. No transfer
will be effective until the first day of the next succeeding calendar
quarter after the requisite transfer form satisfactory to the Managing
General Partner has been received by the Managing General Partner. The
transferee consequently will not be entitled to receive any cash
distributions or any allocable share of profits or losses for tax purposes
until such next succeeding calendar quarter. Profits or losses from
operations of the Partnership for a calendar year in which a transfer
occurs will be allocated between the transferor and the transferee based
upon the number of quarterly periods in which each was recognized as the
holder of the Interests, without regard to the results of the Partnership's
operations during particular quarterly periods and without regard to
whether cash distributions were made to the transferor or transferee.
Profits or losses arising from the sale or other disposition of Partnership
properties will be allocated to the recognized holder of the Interests as
of the last day of the quarter in which the Partnership recognized such
profits or losses. Cash distributions to a holder of Interests arising
from the sale or other disposition of Partnership properties will be
distributed to the recognized holder of the Interests as of the last day of
the quarterly period with respect to which such distribution is made.
Reference is made to Item 6 below for a discussion of cash distribu-
tions made to the Limited Partners.
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
YEARS ENDED DECEMBER 31, 1994, 1993, 1992, 1991 AND 1990
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1994 1993 1992 1991 1990
------------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Total income . . . . . . . . $ 11,984,676 12,292,002 11,140,476 10,134,959 10,337,178
============ ============ ============ ============ ===========
Operating earnings . . . . . $ 2,853,977 3,179,510 2,206,794 836,374 2,558,774
Partnership's share of
operations of uncon-
solidated ventures. . . . . (1,894,493) (157,847) (251,748) (469,751) 73,821
------------ ------------ ------------ ------------ ------------
Net operating
earnings . . . . . . . 959,484 3,021,663 1,955,046 366,623 2,632,595
Partnership's share of
gain on sale of
investment property
and gain on sale of
land from unconsolidated
venture. . . . . . . . . . 298,917 346,208 6,366,463 -- --
------------ ------------ ------------ ------------ ------------
Net earnings before
partnership's share of
extraordinary item from
unconsolidated venture . . 1,258,401 3,367,871 8,321,509 366,623 2,632,595
Partnership's share of
extraordinary item
from unconsolidated
venture. . . . . . . . . . (375,000) (521,183) -- -- --
------------ ------------ ------------ ------------ ------------
Net earnings . . . . . . . . $ 883,401 2,846,688 8,321,509 366,623 2,632,595
============ ============ ============ ============ ===========
1994 1993 1992 1991 1990
------------- ------------- ----------- ------------ ------------
Net earnings per
Interest (b):
Net operating earnings . . $ 7.29 22.95 14.85 2.78 19.99
Partnership's share of
gain on investment
property and share
of gain on sale of
land from unconsolidated
venture. . . . . . . . . 2.34 2.71 49.86 -- --
Partnership's share of
extraordinary item
from unconsolidated
venture. . . . . . . . . (2.85) (3.96) -- -- --
------------ ------------ ------------ ------------ ------------
Net earnings per
Interest . . . . . . . $ 6.78 21.70 64.71 2.78 19.99
============ ============ ============ ============ ===========
Total assets . . . . . . . . $109,171,952 113,581,933 115,959,504 119,093,611 123,698,536
Long-term debt . . . . . . . $ 26,436,573 26,700,000 15,700,000 26,700,000 26,700,000
Cash distributions
per Interest (c) . . . . . $ 41.00 40.00 85.00 43.50 54.00
============ ============ ============ ============ ===========
<FN>
-------------
(a) The above selected financial data should be read in conjunction
with the financial statements and the related notes appearing elsewhere in
this annual report.
(b) The net earnings per Interest is based upon the Interests
outstanding at the end of each period (126,414).
(c) Cash distributions to the Limited Partners since the inception of
the Partnership have not resulted in taxable income to such Limited
Partners and have therefore represented a return of capital. Each
partner's taxable income (loss) from the Partnership in each year is equal
to his allocable share of the taxable income (loss) of the Partnership,
without regard to the cash generated or distributed by the Partnership.
</TABLE>
<TABLE>
SIGNIFICANT PROPERTY - SELECTED RENTAL AND OPERATING DATA AS OF DECEMBER 31, 1994
<CAPTION>
Property
--------
Fountain Valley
Industrial Park a) The GLA occupancy rate and average base rent per square foot as of December 31 for each
of the last five years were as follows:
GLA Avg. Base Rent Per
December 31, Occupancy Rate Square Foot (1)
------------ -------------- ------------------
<S> <C> <C> <C> <C>
1990 . . . . . . 100% 5.10
1991 . . . . . . 84% 5.47
1992 . . . . . . 74% 5.96
1993 . . . . . . 85% 5.31
1994 . . . . . . 100% 4.41
<FN>
(1) Average base rent per square foot is based on GLA occupied as of December 31
of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Fry's Electronics 77,028 $231,084 7/2005 7/2010
(Retail) 7/2015
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of
leases for the next ten years at the Fountain Valley Industrial Park:
Annualized Percent of
Number of Approx. Total Base Rent Total 1994
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1995 4 90,906 $502,400 29%
1996 2 38,580 199,200 11%
1997 4 78,970 383,200 22%
1998 2 45,026 168,700 10%
1999 1 11,700 70,200 4%
2000 -- -- -- --
2001 -- -- -- --
2002 -- -- -- --
2003 -- -- -- --
2004 2 49,770 259,800 15%
<FN>
(1) Excludes leases that expire in 1995 for which renewal leases or leases with
replacement tenants have been executed as of March 27, 1995.
</TABLE>
<TABLE>
<CAPTION>
Property
--------
Rivertree Court
Shopping Center a) The GLA occupancy rate and average base rent per square foot as of December 31 for
each of the last five years were as follows:
GLA Avg. Base Rent Per
December 31, Occupancy Rate Square Foot (1)
------------ -------------- ------------------
<S> <C> <C> <C> <C>
1990 . . . . . . 91% 11.30
1991 . . . . . . 83% 12.97
1992 . . . . . . 90% 11.28
1993 . . . . . . 97% 11.52
1994 . . . . . . 85% 12.86
<FN>
(1) Average base rent per square foot is based on GLA occupied as of December 31
of each year.
</TABLE>
<TABLE>
<CAPTION>
Base Rent Scheduled Lease Lease
b) Significant Tenants Square Feet Per Annum Expiration Date Renewal Option(s)
------------------- ----------- --------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Phar-Mor Inc. (2) 40,560 $294,100 2/2003 $8.25 psf through
(Drug Store) 3/2008
$8.75 psf through
3/2013
$9.25 psf through
3/2018
Cineplex Odeon 40,000 720,000 2/2008 $24.00 psf
(Cinema) through 2/2013
$26.00 psf
through 2/2018
</TABLE>
<TABLE>
<CAPTION>
c) The following table sets forth certain information with respect to the expiration of
leases for the next ten years at the Rivertree Court Shopping Center:
Annualized Percent of
Number of Approx. Total Base Rent Total 1994
Year Ending Expiring GLA of Expiring of Expiring Base Rent
December 31, Leases Leases (1) Leases Expiring
------------ --------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
1995 8 22,652 $374,900 12%
1996 10 22,627 350,400 11%
1997 2 3,331 52,600 2%
1998 8 58,104 586,400 18%
1999 8 16,765 263,600 8%
2000 1 4,942 69,200 2%
2001 1 15,140 126,400 4%
2002 2 7,024 93,000 3%
2003 1 40,560 294,100 9%
2004 1 25,031 244,100 8%
<FN>
(1) Excludes leases that expire in 1995 for which renewal leases or leases with
replacement tenants have been executed as of March 27, 1995.
(2) During the third quarter of 1992, Phar-Mor filed for protection under Chapter
XI of the United States Bankruptcy Code. The Phar-Mor store at the Rivertree Court Shopping Center continued to
operate and pay rent pursuant to its lease obligation until October 1994 when Phar-Mor closed its store and
subsequently assigned its lease to the TJX Companies, Inc. TJX Companies, parent company of TJ Maxx, is expected
to open its Home Goods store in April 1995.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On August 20, 1986, the Partnership commenced an offering to the
public of $100,000,000, subject to increase by up to $250,000,000, of
Interests pursuant to a Registration Statement on Form S-11 under the
Securities Act of 1933. On April 14, 1987, the offering was consummated
and a total of 126,409 Interests were issued to the public by the
Partnership from which the Partnership received gross proceeds of
$126,409,000. After deducting selling expenses and other offering costs,
the Partnership had approximately $113,741,000 with which to make
investments primarily in existing commercial real property, to pay legal
fees and other costs (including acquisition fees) related to such
investments and to satisfy working capital requirements. A portion of such
proceeds was utilized to acquire the properties described in Item 1 above.
At December 31, 1994, the Partnership and its consolidated venture had
cash and cash equivalents of approximately $5,011,000. Such funds and
short-term investments of approximately $9,215,000 are available for future
distributions to partners, working capital requirements, anticipated
releasing costs at the Cerritos Industrial Park, a possible retail
redevelopment at the Fountain Valley Industrial Park and to make additional
investments in the venture which owns the First Financial Plaza Office
Building as described in Note 3. As more fully described in Note 5,
distributions to the General Partners have been deferred in accordance with
the subordination requirements of the Partnership Agreement. The
Partnership and its consolidated venture have currently budgeted in 1995
approximately $1,165,000 for tenant improvements and other capital
expenditures. The Partnership's share of such items and its share of
similar items for its unconsolidated ventures in 1995 is currently budgeted
to be approximately $1,328,000. Actual amounts expended in 1995 may vary
depending on a number of factors including actual leasing activity, results
of property 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 Partnership's
investment properties and through the sale of such investments. In such
regard, reference is made to the Partnership's property specific
discussions below and also to the Partnership's disclosure of certain
property lease expirations in Item 6. Due to an increase in cash flow from
operations at certain of the Partnership's properties, the Partnership has
increased its quarterly cash flow distribution to partners effective with
the third quarter of 1994 from $10 per limited partnership interest
("Interest") to $11 per Interest. The Partnership's and its ventures'
mortgage obligations are all non-recourse. Therefore, the Partnership and
its ventures are not obligated to pay mortgage indebtedness unless the
related property produces sufficient net cash flow from operations or sale.
From 1995 through 1997, leases at the Cerritos Industrial Park
representing 95% of the rentable square footage are scheduled to expire,
not all of which are expected to renew. In February 1994, True Form
(42,750 s.f. or 22% of the building), filed for bankruptcy protection under
Chapter 11 of the United States Bankruptcy Code. It is unlikely that the
Partnership will fully collect the approximately $80,000 owed by True Form
as of the date of the bankruptcy filing. True Form's lease which
originally expired in June 1995, was converted to a month to month lease
after True From rejected the lease in bankruptcy. However, the tenant
remains in operation and is current with respect to their ongoing monthly
rental obligations as of the date of this report. The Partnership is
actively pursuing potential replacement tenants for this space.
The Fountain Valley Industrial Park currently operates in a sub-market
with industrial vacancy rates of approximately 11%. Fountain Valley is
currently 100% leased (including temporary tenants) and occupied. The
Partnership and the Newport Corporation, which vacated in March 1992 prior
to its 1995 lease expiration and continues to pay rent pursuant to its one
remaining lease obligation, entered into an agreement to terminate one of
Newport's leases for approximately 77,000 square feet (representing
approximately 20% of the leasable square footage at the property) in July
1993 for a $487,000 fee paid to the Partnership. The space was leased to
Fry's Electronics, an electronics retailer, for a twelve-year term
effective July 1993. International Tile vacated its approximate 36,000
square feet in August 1993 prior to its lease expiration in 1997. In
January 1994, International Tile filed for protection under Chapter XI of
the United States Bankruptcy Code. It is highly unlikely that the
Partnership will collect the approximate $90,000 owed by International
Tile. The space was leased to Circuit City service center effective June
1994. In 1995 and 1996, leases representing 21% and 13%, respectively, of
the leasable square footage at Fountain Valley are scheduled to expire, not
all of which are expected to be renewed. The Partnership is examining the
possible redevelopment of portions of the park to retail use as a result of
the City of Fountain Valley designating a redevelopment zone which includes
the property. The Partnership is commencing discussions with several large
national retail tenants who have expressed interest in the Fountain Valley
property.
Currently, as industrial leases at the Fountain Valley and Cerritos
Industrial Parks expire, lease renewals and new leases are likely be at
rental rates less than the rates on existing leases entered into prior to
1993. Although the previous decline in rental rates stabilized in 1994 and
vacancy rates have declined, the supply of industrial space continues to
cause significant competition for tenants, although there is generally a
decrease in time required to re-lease tenant space in these markets. In
addition, new leases continue to require expenditures for lease commissions
and tenant improvements prior to tenant occupancy. This previous decline
in rental rates, and the costs incurred upon releasing will result in a
decrease in cash flow from operations from these properties over the near
term. The Partnership is also evaluating the competitive positioning of
these properties in the market in which they operate. Fountain Valley
incurred minimal damage and Cerritos incurred no damage as a result of the
earthquake in southern California on January 17, 1994.
In February 1994, the Partnership extended and increased the first
mortgage loan in the principal amount to $11,200,000, which is secured by
the Fountain Valley and Cerritos Industrial Parks. The extended loan bears
interest at a rate of 7.32% per annum, provides for monthly payments of
principal and interest based on a twenty-year amortization period and
matures March 1, 2001. After payment of costs and fees related to the re-
financing, there were no distributable proceeds from the loan extension.
As of December 31, 1994, the Partnership has made an aggregate
investment of approximately $24,994,000 relating to a maximum total
commitment of $25,750,000 to an existing partnership (Adams/Wabash) that
constructed a parking garage and retail space structure known as the
Adams/Wabash Self Park as described in Note 3(e). The Partnership is not
required to increase this original aggregate investment. Pursuant to the
Adams/Wabash Partnership Agreement, the Partnership's interest in the
venture increased from 49.9% to 74.9% effective October 1, 1993.
The Rivertree Court Shopping Center operates in a market which is
experiencing significant growth in the commercial and residential sectors.
The growth in the area is expected to continue in the next several years.
In August 1994, Office Depot reopened the approximately 26,000 square foot
store previously occupied by Filene's Basement which had closed in January
1994. Under the terms of the assignment of the Filene's lease, Office
Depot has continued to pay rent on the space pursuant to the terms of the
lease. In August 1992, Phar-Mor (which occupied approximately 14% of the
center) filed for protection under Chapter 11 of the United States
Bankruptcy Code. The Phar-Mor store continued to operate and pay rent
under its lease obligation until it closed the store in October 1994, Phar-
Mor assigned its lease in bankruptcy to TJX Companies, parent company of TJ
Maxx, which is expected to open its Home Goods Store in April 1995. Under
the terms of the assignment of the Phar-Mor lease, TJX has continued to pay
rent on the space pursuant to the terms of the lease. In conjunction with
the assignment, the Partnership received approximately $125,000 of pre-
petition indebtedness owed by Phar-Mor.
On January 30, 1992, the Partnership, through JMB/Mid Rivers Mall
Associates, sold its interest in the Mid Rivers Mall located in St. Peters,
Missouri to the unaffiliated joint venture partner. The Partnership
received in connection with the sale, after all fees, expenses and joint
venture partner's participation, a net amount of cash of $13,250,000. See
Note 7 for a further description of this transaction.
West Dade joint venture, which owns the Miami International Mall, sold
a 3.9 acre outparcel of land at the Miami International Mall in June 1993
for a net purchase price of approximately $1,560,000, after certain selling
costs, of which the Partnership's share was approximately $390,000. For
financial reporting purposes, West Dade recognized a gain in 1993 of
approximately $1,385,000, of which the Partnership's share is approximately
$346,000. For income tax purposes, West Dade recognized a gain in 1993 of
approximately $325,000, of which the Partnership's share is a loss of
approximately $37,000.
West Dade sold an additional 4 acre outparcel of land in December 1994
for a net sales price of approximately $1,466,000 after certain selling
costs, of which the Partnership's share was approximately $367,000. For
financial reporting purposes, West Dade has recognized a gain in 1994 of
approximately $1,195,000, of which the Partnership's share is approximately
$299,000. For income tax purposes, West Dade has recognized a gain in 1994
of approximately $985,000, of which the Partnership's share is a gain of
approximately $274,000.
During the third quarter of 1992, the Miami International Mall
experienced storm damage caused by Hurricane Andrew. All repairs necessary
to continue operations and replacement of the landscaping have been
completed and West Dade was fully reimbursed (subject to deductibles) in
1994 by insurance proceeds for such repairs.
In December 1993, West Dade obtained a new mortgage loan in the
principal amount of $47,500,000 replacing the existing first mortgage loan
at the property. The new mortgage loan bears interest at 6.91% per annum
and matures December 21, 2003. The loan provides for monthly interest-only
payments for years one through three and monthly principal and interest
payments based on a twenty-year amortization period for years four through
ten. The non-recourse loan is secured by a first mortgage on the Miami
International Mall. After payment of costs and fees related to the
refinancing, there were no distributable proceeds from the new loan.
At December 31, 1994, the First Financial Plaza office building is
approximately 89% occupied. In July 1993, Mitsubishi vacated its
approximate 8,100 square feet prior to its lease expiration of January 1997
and continues to pay rent pursuant to its lease obligation. Including the
Mitsubishi lease, the building is 93% leased as of the date of this report.
The Los Angeles office market in general and the Encino submarket in
particular remain extremely competitive resulting in higher rental
concessions granted to tenants. The previous decline in rental rates
appears to have stabilized in 1994. Furthermore, due to the continued
recession in southern California and concerns regarding certain tenants'
ability to perform under their current leases, the venture has granted rent
deferrals and other forms of rent relief to several tenants, including
First Financial Housing, an affiliate of the unaffiliated venture partner,
which is likely to have an adverse effect on venture cash flows in the near
term.
As previously reported, the First Financial office building appeared
to have experienced only minor cosmetic damage as a result of the January
17, 1994 Northridge earthquake in southern California. On February 22,
1995, the City Council of the city of Los Angeles passed an ordinance
requiring certain buildings (identified by building type and location) to
perform additional testing on the welded steel mount connections to
determine if the earthquake had weakened such joint weldings and to repair
such joint weldings if weakness is detected. This property qualified for
the additional testing under the ordinance, and therefore, the Partnership
had retained a structural engineer to perform the additional testing.
Results of the initial testing by the structural engineer indicate that
some of the building's joint weldings have suffered damage which, in
accordance with the recently enacted ordinance, must be repaired. The
Partnership's structural engineer has informed the Partnership that the
damage detected does not pose a life safety risk for the building's
tenants. While a complete determination of the requirements to comply with
such ordinance is not as yet completed, it is currently estimated that the
cost of such repairs, which has been reflected in the accompanying
consolidated financial statements as an extraordinary item from
unconsolidated venture, will be approximately $1,000,000 (of which the
Partnership's share is approximately $375,000).
The mortgage note is secured by the First Financial Plaza office
building scheduled to mature in November 1995. Although the venture has
had preliminary discussions with the lender regarding an extension of this
loan, there can be no assurance that such an extension or any alternative
financing for all or substantially all of the mortgage loan can be obtained
at maturity. The venture is also examining a possible sale of the property
should a refinancing not take place. There can be no assurance that a sale
of the property will occur. Based upon such uncertainty, Encino joint
venture may not be able to recover the net carrying value of the investment
property through future operations or sale. Accordingly, the Encino
venture, as a matter of prudent accounting practice, has made a provision
for value impairment of approximately $6,475,000, (of which approximately
$2,428,000 is allocated to the Partnership), all of which is allocable to
First Financial joint venture. Such provision was recorded at December 31,
1994 to reduce the net carrying value of the property based upon an
estimated sales price should the Encino Venture be unable to extend or
refinance the mortgage loan at maturity.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the
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 interest or goals that
are inconsistent with those of the Partnership.
Though the economy has recently shown signs of improvement and
financing is generally becoming more available for certain types of higher-
quality properties in healthy markets, real estate lenders are typically
requiring a lower loan-to-value ratio for mortgage financing than in the
past. This has made it difficult for owners to refinance real estate
assets at their current debt levels unless the value of the underlying
property has appreciated significantly. As a consequence, and due to the
weakness of some of the local real estate markets in which the
Partnership's properties operate, the Partnership is taking steps to
preserve its working capital.
RESULTS OF OPERATIONS
The aggregate net increase in cash for the year ended December 31,
1994 as compared to the year ended December 31, 1993 is due primarily to
distributions from JMB/Miami joint venture in 1994. The distributions are
the result of increased distributions from operations and proceeds from the
land outparcel sale from the Miami International Mall in 1994.
The decrease in interest, rents and other receivables as of December
31, 1994 as compared to December 31, 1993 is primarily due to the timing of
tenant collections at the Rivertree Court Shopping Center.
The increase in escrow deposits as of December 31, 1994 as compared to
December 31, 1993 is primarily due to the requirements of the mortgage loan
refinancing for the Fountain Valley and Cerritos Industrial Parks (see Note
4(b)).
The increase in accrued rents receivable as of December 31, 1994 as
compared to December 31, 1993 is primarily due to the straight-lining of
rent related to the 1993 commencement of the Fry's Electronics lease at the
Fountain Valley Industrial Park.
The decrease in investment in unconsolidated ventures as of December
31, 1994 as compared to December 31, 1994 is primarily due to the provision
for value impairment of approximately $6,475,000 recorded at First
Financial (see Note 3(c)) and the receipt of distributions from the West
Dade venture in 1994 related to the sale proceeds from the sale of the land
outparcel.
The increase in deferred expenses as of December 31, 1994 as compared
to December 31, 1993 and the related amortization expense for the year
ended December 31, 1994 as compared to the year ended December 31, 1993 is
primarily due to the capitalization and amortization of the lease
commissions at the Fountain Valley Industrial Park.
The increase in current portion of long-term debt and related decrease
in long-term debt at December 31, 1994 as compared to December 31, 1993 and
the corresponding decrease in mortgage and other interest in 1994 as
compared to 1993 and 1992 is due to the terms of the refinancing of the
loan secured by the Fountain Valley and Cerritos Industrial Parks (see Note
4(b)).
The decrease in rental income for the year ended December 31, 1994 as
compared to the year ended December 31, 1993 is primarily due to the
$487,000 fee received for the termination of one of the Newport Corporation
leases at the Fountain Valley Industrial Park in July 1993.
The increase in rental income for the year ended December 31, 1993 as
compared to the year ended December 31, 1992 is primarily due to higher
average occupancy levels at the Adams/Wabash Self Park, the Rivertree Court
Shopping Center, and the Fountain Valley and Cerritos Industrial Parks.
The increase in rental income is also due to the $487,000 termination fee
received for the termination of one of the Newport Corporation lease
obligations at the Fountain Valley Industrial Park in July 1993. In
addition, parking revenue at the Adams/Wabash Self Park increased due to
two monthly parking contracts which were executed during October 1992 and
to increased activity from the Palmer House Hotel parking contract.
The increase in interest income for the year ended December 31, 1994
as compared to the year ended December 31, 1993 and decrease in interest
income for the year ended December 31, 1993 as compared to the year ended
December 31, 1992 is due primarily to the Partnership having lower average
invested balances in U.S. Government obligations in 1993.
The increase in the amount of loss from Partnership's share of
operations of unconsolidated ventures for the year ended December 31, 1994
as compared to the year ended December 31, 1993 is primarily due to the
provision for value impairment recorded at First Financial of approximately
$6,475,000 (see Note 3(c)). The decrease in the amount of loss from
Partnership's share of operations of unconsolidated ventures for the year
ended December 31, 1993 as compared to the year ended December 31, 1992 is
primarily due to the sale of the Partnership's interest in the Mid Rivers
Mall in 1992 (Note 7).
The Partnership's share of gain on sale of investment property and
gain on sale of land from unconsolidated venture for the year ended
December 31, 1994 and 1993 is due to the sales of outparcels of land at the
Miami International Mall in June 1993 and December 1994 (see Note 3(d)).
The Partnership's share of gain on sale of investment property and
gain on sale of land from unconsolidated venture for the year ended
December 31, 1992 is due to the gain recognized in connection with the sale
of the Partnership's interest in the Mid Rivers Mall in January 1992.
The extraordinary item from unconsolidated venture for the year ended
December 31, 1993 is primarily due to a prepayment penalty paid to the
first mortgage lender as a result of the loan refinancing at the Miami
International Mall in December 1993 (see Note 3(d)).
The extraordinary item from unconsolidated venture for the year ended
December 31, 1994 is due to the Partnership recognizing its share of
earthquake repair costs at First Financial office building, as discussed
above.
INFLATION
Due to the decrease in the level of inflation in recent years,
inflation generally has not had a material effect on rental income or
property operating expenses.
To the extent that inflation in future periods does have an adverse
impact on property operating expenses, the effect will generally be offset
by amounts recovered from tenants as many of the long-term leases at the
Partnership's commercial properties have escalation clauses covering
increases in the cost of operating and maintaining the properties as well
as real estate taxes. Therefore, there should be little effect on
operating earnings if the properties remain substantially occupied. In
addition, substantially all of the leases at the Partnership's shopping
center investment property contain provisions which entitle the Partnership
to participate in gross receipts of tenants above fixed minimum amounts.
Future inflation may also cause capital appreciation of the
Partnership's investment properties over a period of time to the extent
that rental rates and replacement costs of properties increase.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
INDEX
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1994 and 1993
Consolidated Statements of Operations, years ended December 31, 1994, 1993
and 1992
Consolidated Statements of Partners' Capital Accounts (Deficits),
years ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows, years ended December 31, 1994,
1993 and 1992
Notes to Consolidated Financial Statements
SCHEDULE
--------
Consolidated Real Estate and Accumulated Depreciation III
SCHEDULES NOT FILED:
All schedules other than the one indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the consolidated financial statements or related notes.
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
INDEX
Independent Auditors' Report
Combined Balance Sheets, December 31, 1994 and 1993
Combined Statements of Operations, years ended December 31, 1994, 1993
and 1992
Combined Statements of Partners' Capital Accounts,
years ended December 31, 1994, 1993 and 1992
Combined Statements of Cash Flows, years ended December 31, 1994,
1993 and 1992
Notes to Combined Financial Statements
SCHEDULE
--------
Combined Real Estate and Accumulated Depreciation III
SCHEDULES NOT FILED:
All schedules other than the one indicated in the index have been
omitted as the required information is inapplicable or the information is
presented in the combined financial statements or related notes.
INDEPENDENT AUDITORS' REPORT
The Partners
JMB INCOME PROPERTIES, LTD. - XIII:
We have audited the consolidated financial statements of JMB Income
Properties, Ltd. - XIII (a limited partnership) and consolidated venture as
listed in the accompanying index. In connection with our audits of the
consolidated financial statements, we also have audited the financial
statement schedule as listed in the accompanying index. These consolidated
financial statements and financial statement schedule are the
responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
JMB Income Properties, Ltd. - XIII and consolidated venture at December 31,
1994 and 1993, and the results of their operations and their cash flows for
each of the years in the three-year period ended December 31, 1994, in
conformity with generally accepted accounting principles. Also in our
opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth
therein.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 27, 1995
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
ASSETS
------
<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . . $ 5,011,101 1,301,466
Short-term investments (note 1). . . . . . . . . . . . . . . . . . . . . . 9,214,950 11,520,463
Interest, rents and other receivables. . . . . . . . . . . . . . . . . . . 830,693 1,039,884
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,928 67,608
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,877 --
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . 15,222,549 13,929,421
Investment properties, at cost (notes 2, 4 and 8) - Schedule III:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,566,702 23,566,702
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . . . 75,093,333 74,953,712
------------ -----------
98,660,035 98,520,414
Less: accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . 14,115,282 11,626,188
------------ -----------
Total investment properties,
net of accumulated depreciation . . . . . . . . . . . . . . . . . 84,544,753 86,894,226
Investments in unconsolidated ventures,
at equity (notes 3 and 10) . . . . . . . . . . . . . . . . . . . . . . . . 7,072,275 10,779,381
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 894,654 805,423
Accrued rents receivable (note 1). . . . . . . . . . . . . . . . . . . . . . 1,437,721 1,173,482
------------ -----------
$109,171,952 113,581,933
============ ===========
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
----------------------------------------------------
1994 1993
------------ -----------
Current liabilities:
Current portion of long-term debt (note 4) . . . . . . . . . . . . . . . . $ 272,721 --
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202,356 215,713
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198,382 212,168
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . 1,231,227 1,155,752
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . 1,904,686 1,583,633
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 340,213 310,468
Long-term debt (note 4). . . . . . . . . . . . . . . . . . . . . . . . . . . 26,436,573 26,700,000
------------ -----------
Commitments and contingencies (notes 3, 4 and 8)
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 28,681,472 28,594,101
------------ -----------
Partners' capital accounts (deficits) (notes 1 and 5):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net earnings. . . . . . . . . . . . . . . . . . . . . . . 626,763 600,395
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . (1,233,777) (1,088,351)
------------ -----------
(587,014) (467,956)
------------ -----------
Limited partners (126,414 interests):
Capital contributions, net of offering costs . . . . . . . . . . . . 113,741,315 113,741,315
Cumulative net earnings . . . . . . . . . . . . . . . . . . . . . . 20,301,059 19,444,026
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . (52,964,880) (47,729,553)
------------ -----------
81,077,494 85,455,788
------------ -----------
Total partners' capital accounts . . . . . . . . . . . . . . . . . . 80,490,480 84,987,832
------------ -----------
$109,171,952 113,581,933
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . $11,453,067 11,897,992 10,490,689
Interest income. . . . . . . . . . . . . . . . . . . . 531,609 394,010 649,787
----------- ----------- -----------
11,984,676 12,292,002 11,140,476
----------- ----------- -----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . 2,397,689 2,546,010 2,546,010
Depreciation . . . . . . . . . . . . . . . . . . . . . 2,489,094 2,476,913 2,454,001
Property operating expenses. . . . . . . . . . . . . . 3,596,944 3,529,702 3,263,607
Professional services. . . . . . . . . . . . . . . . . 196,630 192,239 268,480
Amortization of deferred expenses. . . . . . . . . . . 205,219 175,953 150,274
General and administrative . . . . . . . . . . . . . . 245,123 191,675 251,310
----------- ----------- -----------
9,130,699 9,112,492 8,933,682
----------- ----------- -----------
Operating earnings . . . . . . . . . . . . . . . 2,853,977 3,179,510 2,206,794
Partnership's share of operations of uncon-
solidated ventures (note 3). . . . . . . . . . . . . . (1,894,493) (157,847) (251,748)
----------- ----------- -----------
Net operating earnings . . . . . . . . . . . . . 959,484 3,021,663 1,955,046
Partnership's share of gain on sale of
investment property and gain on sale of
land from unconsolidated venture
(notes 3(d) and 7) . . . . . . . . . . . . . . . . . . 298,917 346,208 6,366,463
----------- ----------- -----------
Net earnings before Partnership's share
of extraordinary item from uncon-
solidated venture. . . . . . . . . . . . . . . 1,258,401 3,367,871 8,321,509
Partnership's share of extraordinary item from
unconsolidated venture (notes 3(c) and 3(d)) . . . . . (375,000) (521,183) --
----------- ----------- -----------
Net earnings . . . . . . . . . . . . . . . . . . $ 883,401 2,846,688 8,321,509
=========== =========== ===========
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1994 1993 1992
------------ ------------ ------------
Net earnings per limited partnership interest (note 1):
Net operating earnings . . . . . . . . . . . . . . . . $ 7.29 22.95 14.85
Partnership's share of gain on sale of
investment property and gain on sale of
land from unconsolidated venture . . . . . . . . . . 2.34 2.71 49.86
Partnership's share of extraordinary item
from unconsolidated venture. . . . . . . . . . . . . (2.85) (3.96) --
----------- ----------- -----------
Net earnings . . . . . . . . . . . . . . . . . . $ 6.78 21.70 64.71
=========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (126,414 INTERESTS)
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET OF
CONTRI- NET CASH OFFERING NET CASH
BUTIONS EARNINGS DISTRIBUTIONS TOTAL COSTS EARNINGS DISTRIBUTIONS TOTAL
-------- ---------- ------------- -------- ----------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
(deficit)
at Decem-
ber 31,
1991. . . . . . 20,000 355,048 (804,593) (429,545) 113,741,315 8,521,176 (31,768,190) 90,494,301
Net earnings . . -- 141,866 -- 141,866 -- 8,179,643 -- 8,179,643
Cash distri-
butions
($85.00 per
Interest) . . . -- -- (141,879) (141,879) -- -- (10,853,727) (10,853,727)
-------- -------- ---------- -------- ----------- ---------- ----------- ----------
Balance
(deficit)
at Decem-
ber 31,
1992. . . . . . 20,000 496,914 (946,472) (429,558) 113,741,315 16,700,819 (42,621,917) 87,820,217
Net earnings . . -- 103,481 -- 103,481 -- 2,743,207 -- 2,743,207
Cash distri-
butions
($40.00 per
Interest) . . . -- -- (141,879) (141,879) -- -- (5,107,636) (5,107,636)
-------- -------- ---------- -------- ----------- ---------- ----------- ----------
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED
GENERAL PARTNERS LIMITED PARTNERS (126,414 INTERESTS)
-------------------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET OF
CONTRI- NET CASH OFFERING NET CASH
BUTIONS EARNINGS DISTRIBUTIONS TOTAL COSTS EARNINGS DISTRIBUTIONS TOTAL
-------- ---------- ------------- -------- ----------- ---------- ------------- ----------
Balance
(deficit)
at Decem-
ber 31,
1993. . . . . . 20,000 600,395 (1,088,351) (467,956) 113,741,315 19,444,026 (47,729,553) 85,455,788
Net earnings . . -- 26,368 -- 26,368 -- 857,033 -- 857,033
Cash distri-
butions
($41.00 per
Interest) . . . -- -- (145,426) (145,426) -- -- (5,235,327) (5,235,327)
------- -------- ---------- -------- ----------- ---------- ----------- ----------
Balance
(deficit)
at Decem-
ber 31,
1994. . . . . . $20,000 626,763 (1,233,777) (587,014) 113,741,315 20,301,059 (52,964,880) 81,077,494
======= ======== ========== ======== =========== ========== =========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings . . . . . . . . . . . . . . . . . . . . . $ 883,401 2,846,688 8,321,509
Items not requiring (providing) cash or
cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . 2,489,094 2,476,913 2,454,001
Amortization of deferred expenses. . . . . . . . . . 205,219 175,953 150,274
Partnership's share of operations of
unconsolidated ventures. . . . . . . . . . . . . . 1,894,493 157,847 251,748
Partnership's share of gain on sale of
investment property and gain on sale
of land from unconsolidated venture. . . . . . . . (298,917) (346,208) (6,366,463)
Partnership's share of extraordinary item
from unconsolidated venture. . . . . . . . . . . . 375,000 521,183 --
Changes in:
Interest, rents and other receivables. . . . . . . . 209,191 (323,863) 222,377
Prepaid expenses . . . . . . . . . . . . . . . . . . 1,680 (5,197) 8,135
Escrow deposits. . . . . . . . . . . . . . . . . . . 30,592 -- --
Accrued rents receivable . . . . . . . . . . . . . . (264,239) (190,041) (134,248)
Accounts payable . . . . . . . . . . . . . . . . . . (13,357) 35,760 (105,657)
Accrued interest . . . . . . . . . . . . . . . . . . (13,786) -- --
Accrued real estate taxes. . . . . . . . . . . . . . 75,475 46,799 (74,663)
Tenant security deposits . . . . . . . . . . . . . . 29,745 (57,303) 34,480
----------- ----------- -----------
Net cash provided
by operating activities. . . . . . . . . . . . 5,603,591 5,338,531 4,761,493
----------- ----------- -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of
short-term investments . . . . . . . . . . . . . . . 2,305,513 (1,822,734) (4,545,928)
Additions to investment properties . . . . . . . . . . (139,621) (725,372) (961,888)
Partnership's distributions from unconsolidated
ventures and proceeds from sale of
investment property. . . . . . . . . . . . . . . . . 1,800,625 782,450 14,101,640
Partnership's contributions to uncon-
solidated ventures . . . . . . . . . . . . . . . . . (64,095) (54,231) (218,357)
Payment of deferred expenses . . . . . . . . . . . . . (224,919) (396,157) (229,024)
----------- ----------- -----------
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1994 1993 1992
----------- ----------- -----------
Net cash provided by (used in)
investing activities . . . . . . . . . . . . . 3,677,503 (2,216,044) 8,146,443
----------- ----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . (190,706) -- --
Distributions to limited partners. . . . . . . . . . . (5,235,327) (5,107,636) (10,853,727)
Distributions to general partners. . . . . . . . . . . (145,426) (141,879) (141,879)
----------- ----------- -----------
Net cash used in financing activities. . . . . . (5,571,459) (5,249,515) (10,995,606)
----------- ----------- -----------
Net increase (decrease) in cash
and cash equivalents . . . . . . . . . . . . . 3,709,635 (2,127,028) 1,912,330
Cash and cash equivalents,
beginning of year. . . . . . . . . . . . . . . 1,301,466 3,428,494 1,516,164
----------- ----------- -----------
Cash and cash equivalents,
end of year. . . . . . . . . . . . . . . . . . $ 5,011,101 1,301,466 3,428,494
=========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . $ 2,411,475 2,546,010 2,546,010
=========== =========== ===========
Non-cash investing and financing activities:
Refinancing of long-term debt (note 4(b)):
Proceeds of new debt . . . . . . . . . . . . . . . $11,200,000 -- --
Retirement of old debt . . . . . . . . . . . . . . (11,000,000) -- --
Deferred mortgage costs. . . . . . . . . . . . . . (69,531) -- --
Funding of escrow. . . . . . . . . . . . . . . . . (130,469) -- --
----------- ----------- -----------
Net proceeds from refinancing of
long-term debt . . . . . . . . . . . . . . . $ -- -- --
=========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(1) BASIS OF ACCOUNTING
The accompanying consolidated financial statements include the
accounts of the Partnership and one of its ventures, Adams/Wabash Limited
Partnership ("Adams/Wabash"). The effect of all transactions between the
Partnership and Adams/Wabash have been eliminated in the consolidated
financial statements. The equity method of accounting has been applied in
the accompanying financial statements with respect to the Partnership's
interests in JMB/Mid Rivers Associates ("JMB/Rivers") (see note 7), JMB
First Financial Associates ("First Financial") and JMB/Miami International
Associates ("JMB/Miami"). Accordingly, the accompanying financial
statements do not include the accounts of JMB/Rivers, First Financial and
JMB/Miami.
The Partnership's records are maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying financial statements have been prepared from such records
after making appropriate adjustments where applicable to reflect the
Partnership's accounts in accordance with generally accepted accounting
principles ("GAAP"). Such adjustments are not recorded on the records of
the Partnership.
The net effect of these items is summarized as follows for the years
ended December 31, 1994 and 1993:
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
1994 1993
------------------------------ ------------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . $109,171,952 120,931,976 113,581,933 123,643,503
Partners' capital accounts
(deficits) (note 5):
General partners . . . . . . . . . . (587,014) (653,578) (467,956) (891,359)
Limited partners . . . . . . . . . . 81,077,494 93,517,694 85,455,788 96,127,046
Net earnings (note 5):
General partners . . . . . . . . . . 26,368 383,206 103,481 80,469
Limited partners . . . . . . . . . . 857,033 2,625,975 2,743,207 1,903,674
Net earnings per Interest. . . . . . . 6.78 20.77 21.70 15.06
=========== =========== =========== ============
</TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The net earnings (loss) per limited partnership interest is based upon
the limited partnership interests outstanding at the end of the period
(126,414). Deficit capital accounts will result, through the duration of
the Partnership, in net gain for financial reporting and income tax
purposes.
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 its unconsolidated ventures are considered
cash flow from operating activities only to the extent of the Partnership's
cumulative share of net earnings. 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
($5,024,751 and $0 at December 31, 1994 and 1993, respectively) as cash
equivalents with any remaining amounts (generally with original maturities
of one year or less) reflected as short-term investments being held to
maturity.
Deferred expenses consist primarily of deferred organization costs
which are amortized over a 60-month period and deferred lease commissions
and loan fees which are amortized over their respective terms using the
straight-line method.
Although certain leases of the Partnership provide for tenant
occupancy during periods for which no rent is due and/or increases in
minimum lease payments over the term of the lease, the Partnership accrues
rental income for the full period of occupancy on a straight-line basis.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that of the Partners rather than the
Partnership. However, in certain instances, the Partnership has been
required under applicable law to remit directly to the tax authorities
amounts representing withholding from distributions paid to Partners.
(2) INVESTMENT PROPERTIES
The Partnership has acquired, either directly or through joint
ventures (note 3), three shopping centers, two multi-tenant industrial
buildings, an office complex and a parking/retail structure. In January
1992, the Partnership's interest in the Mid Rivers Mall was sold (note 7).
All of the properties owned at December 31, 1994 were operating. The cost
of the investment properties represents the total cost to the Partnership
plus miscellaneous acquisition costs.
Depreciation on the properties has been provided over the estimated
useful lives of the various components as follows:
YEARS
-----
Building and improvements -- straight-line. . . . 30
Personal property -- straight-line. . . . . . . . 5
==
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Maintenance and repairs are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated
over their estimated useful lives. Provisions for value impairment are
recorded with respect to the investment properties whenever the estimated
future cash flows from a property's operations and projected sale are less
than the property's net carrying value.
Certain investment properties are pledged as security for the long-
term debt, for which there is no recourse to the Partnership (note 4).
(3) VENTURE AGREEMENTS
(a) General
The Partnership at December 31, 1994 is a party to three operating
joint venture agreements. In addition, the Partnership through a joint
venture (JMB/Rivers) sold its interest in the Mid Rivers Mall on January
30, 1992 (note 7). Pursuant to such agreements, the Partnership has made
capital contributions of approximately $56,821,000 through December 31,
1994. In general, the joint venture partners, who are either the sellers
(or their affiliates) of the property investments being acquired, or
parties which have contributed an interest in the property being developed,
or were subsequently admitted to the ventures, make no cash contributions
to the ventures, but their retention of an interest in the property,
through the joint venture, is taken into account in determining the
purchase price of the Partnership's interest, which is determined by arm's-
length negotiations. 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 has acquired, through the above ventures, one office
building, two regional shopping malls and one parking/retail structure.
The joint venture partners (who were primarily responsible for constructing
the properties) contributed any excess of cost over the aggregate amount
available from Partnership contributions and financing and, to the extent
such funds exceeded the aggregate costs, were to retain such excesses. Two
of the venture properties operating as of December 31, 1994 have been
financed under various long-term debt arrangements as described in notes
(c) and (d) below.
There are certain risks associated with the Partnership's investments
made through joint ventures including the possibility that the
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/Rivers
In December 1986, the Partnership and JMB Income Properties, Ltd. -
XII, (a partnership sponsored by an affiliate of the Managing General
Partner) ("JMB-XII"), formed JMB/Rivers, which entered into a joint venture
("Mid Rivers") with an affiliate of the developer ("Venture Partner") and
acquired an interest in an enclosed regional shopping center then under
construction in St. Peters, Missouri, known as Mid Rivers Mall. Under the
terms of the venture agreement, JMB/Rivers contributed approximately
$39,400,000, of which the Partnership's share was approximately
$19,700,000. During January 1992, JMB/Rivers sold its interest in Mid
Rivers Mall (see note 7).
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The ultimate ownership percentages for JMB/Rivers and Venture Partner
were established as 80% and 20%, respectively. Operating profits and
losses were generally allocated in proportion to and to the extent of
distributions as described above and, to the extent profits and losses
exceeded such distributions, to the Partners in accordance with their
respective ownership percentages. The terms of the JMB/Rivers agreement
generally provided that the Partnership was allocated or distributed, as
the case may be, profits and losses, cash flow from operations and sale or
refinancing proceeds in the ratio of its respective capital contributions
to JMB/Rivers.
The shopping center was managed by an affiliate of the Venture Partner
for a fee calculated as 4% of gross receipts of the property through the
date of the sale.
(c) First Financial
On May 20, 1987, the Partnership, through First Financial, a joint
venture with JMB-XII, acquired an interest in a general partnership
("Encino") with an affiliate of the developer ("Venture Partner") which
owns an office building in Encino (Los Angeles), California. First
Financial was obligated to make an initial investment in the aggregate
amount of $49,850,000 of which approximately $49,812,000 of such
contributions have been made to Encino. The Partnership's share of the
remaining amount, approximately $14,000, will be contributed when the
Venture Partner complies with certain requirements.
In November 1987, First Financial caused Encino to obtain a third
party first mortgage loan in the amount of $30,000,000. The proceeds of
such loan were distributed to First Financial to reduce its contribution
and to the Venture Partner who subsequently repaid a $15,500,000 loan from
First Financial. Thus, the total cash investment of First Financial for
its interest in the office building, after consideration of the funding of
the $30,000,000 permanent financing, is approximately $20,000,000, of which
the Partnership's share is approximately $7,500,000. The outstanding
principal balance of the third party first mortgage loan as of December 31,
1994 is $29,161,144. The third party first mortgage loan matures in
November, 1995. First Financial, on Encino's behalf, is currently
discussing the terms of a possible extension or renegotiation of the
mortgage loan with the existing lender upon such maturity. There can be no
assurance that a satisfactory arrangement for the extension or refinancing
of all or substantially all of the loan can be reached with this or any
other lender. Based upon such uncertainty, Encino may not be able to
recover the net carrying value of the investment property through future
operations or sale. Accordingly, the Encino venture, as a matter of
prudent accounting practice, has made a provision for value impairment of
approximately $6,475,000, (approximately $2,428,000 is allocable to the
Partnership), all of which is allocable to First Financial. Such provision
was recorded at December 31, 1994 to reduce the net carrying value of the
property based upon an estimated sales price should the Encino venture be
unable to extend or refinance the mortgage loan at maturity.
As previously reported, the First Financial office building appeared
to have experienced only minor cosmetic damage as a result of the January
17, 1994 Northridge earthquake in southern California. On February 22,
1995, the City Council of the city of Los Angeles passed an ordinance
requiring certain buildings (identified by building type and location) to
perform additional testing on the welded steel mount connections to
determine if the earthquake had weakened such joint weldings and to repair
such joint weldings if weakness is detected. This property qualified for
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
the additional testing under the ordinance, and therefore, the Partnership
had retained a structural engineer to perform the additional testing.
Results of the initial testing by the structural engineer indicate that
some of the building's joint weldings have suffered damage which, in
accordance with the recently enacted ordinance, must be repaired. The
Partnership's structural engineer has informed the Partnership that the
damage detected does not pose a life safety risk for the building's
tenants. While a complete determination of the requirements to comply with
such ordinance is not as yet completed, it is currently estimated that the
cost of such repairs, which has been reflected in the accompanying
consolidated financial statements as an extraordinary item from
unconsolidated venture, will be approximately $1,000,000 (of which the
Partnership's share is approximately $375,000).
The Encino partnership agreement generally provides that First
Financial is entitled to receive (after any participating amounts due to
Pepperdine University pursuant to its tenant lease) from cash flow from
operations (as defined) an annual cumulative preferred return equal to
9.05% through April 30, 1995 (and 8.9% thereafter) of its capital contri-
butions. Any remaining cash flow is to be split equally between First
Financial and the Venture Partner. Pepperdine University, under its tenant
lease, is entitled to an amount based on 6.6% of the Venture Partner's
share of the office building's net operating profit and net sale profit (as
defined).
All of Encino's operating profits and losses before depreciation have
been allocated to First Financial in 1994, 1993 and 1992.
The Encino partnership agreement also generally provides that net sale
proceeds and net refinancing proceeds (as defined), after any amounts due
to Pepperdine University pursuant to its tenant lease, are to be
distributed: first, to First Financial in an amount equal to the
deficiency, if any, in its cumulative preferred return as described above;
next, to First Financial in the amount of its capital contributions; next,
to the Venture Partner in an amount equal to $600,000; any remaining
proceeds are to be split equally between First Financial and the Venture
Partner.
The terms of the First Financial partnership agreement provide that
annual cash flow, net sale or refinancing proceeds, and tax items will be
distributed or allocated, as the case may be, to the Partnership in
proportion to its 37.5% share of capital contributions.
The office building is managed by an affiliate of the Venture Partner
for a fee based upon a percentage of rental receipts (as defined) of the
property.
(d) JMB/Miami
On January 26, 1988, the Partnership, through JMB/Miami, a general
partnership with JMB/Miami Investors L.P., a partnership sponsored by an
affiliate of the General Partners of the Partnership, acquired an interest
in an existing partnership ("West Dade" in which JMB/Miami is a general
partner), with an affiliate of the developer (the "Venture Partner"), which
owns an enclosed regional shopping center in Miami, Florida known as Miami
International Mall. During February 1989, IDS/JMB Balanced Income Growth,
Ltd., a partnership sponsored by an affiliate of the General Partners of
the Partnership made a capital contribution to JMB/Miami to acquire an
interest therein. During October 1993, JMB/Miami Investors L.P.
transferred its interest in JMB/Miami to Urban Shopping Centers, L.P., a
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
partnership controlled by Urban Shopping Centers, Inc. (a public
corporation organized by an affiliate of the General Partners of the
Partnership). The Partnership's investment in JMB/Miami is $10,402,500.
The terms of JMB/Miami partnership agreement provide that annual cash flow,
net sale or refinancing proceeds, and tax items will be distributed or
allocated, as the case may be, to the Partnership in proportion to its 50%
share of capital contributions.
JMB/Miami has invested $17,678,694 for a 50% interest in West Dade and
$1,126,306 as a contribution for initial working capital requirements of
West Dade. The West Dade venture agreement provides that JMB/Miami and the
Venture Partner generally are each entitled to receive 50% of profits and
losses, net cash flow and net sale or refinancing proceeds of West Dade and
are each obligated to advance 50% of any additional funds required under
the terms of the West Dade venture agreement.
In December 1993, West Dade obtained a new mortgage loan in the
principal amount of $47,500,000 replacing the existing first mortgage loan
at the property. The new mortgage loan bears interest at 6.91% per annum
and matures December 21, 2003. The loan provides for monthly interest-only
payments for years one through three and monthly principal and interest
payments based on a twenty-year amortization period for years four through
ten. The non-recourse loan is secured by a first mortgage on the Miami
International Mall. After payment of costs and fees related to the
refinancing, there were no distributable proceeds from the new loan.
In conjunction with the refinancing in December 1993, West Dade
incurred a prepayment penalty on the early retirement of the original loan
in the amount $2,015,357, of which the Partnership's share is $503,839. In
addition, West Dade had written off costs associated with the original loan
in the amount of $69,374, of which the Partnership's share is $17,344.
During the third quarter of 1992, the property experienced storm
damage caused by Hurricane Andrew. All repairs necessary to continue
operations and replacement of the landscaping have been completed. West
Dade was fully reimbursed (subject to deductibles) in 1994 by insurance
proceeds for such repairs.
West Dade sold a 3.9 acre outparcel of land at Miami International
Mall in June 1993 for a net sale price of approximately $1,560,000 after
certain selling costs, of which the Partnership's share was approximately
$390,000. For financial reporting purposes, West Dade recognized a gain in
1993 of approximately $1,385,000, of which the Partnership's share was
approximately $346,000. For income tax purposes, West Dade recognized a
gain in 1993 of approximately $325,000, of which the Partnership's share
was a loss of approximately $37,000.
West Dade sold a 4 acre outparcel of land at Miami International Mall
in December 1994 for a net sales price of approximately $1,466,000 after
certain selling costs, of which the Partnership's share was approximately
$367,000. For financial reporting purposes, West Dade has recognized a
gain in 1994 of approximately $1,195,000, of which the Partnership's share
is approximately $299,000. For income tax purposes, West Dade has
recognized a gain in 1994 of approximately $985,000, of which the
Partnership's share is a gain of approximately $274,000.
The shopping center is managed by an affiliate of the Venture Partner.
The manager is paid an annual fee equal to 4-1/2% of the net operating
income of the shopping center.
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(e) Adams/Wabash
On April 19, 1988, an affiliate of the Partnership entered into a
forward commitment on behalf of the Partnership to make a total cash
investment to a maximum of $25,750,000 in the Adams/Wabash Limited
Partnership ("Adams/Wabash"), which constructed a parking garage and retail
space structure (the "Project") in Chicago, Illinois. The Project contains
671 parking spaces and approximately 28,800 square feet of rentable retail
area. The Partnership has funded approximately $24,994,000 of its total
cash commitment and does not anticipate further increasing its cash
investment.
Upon acquisition, the Partnership was admitted to an existing
partnership with a 49.9% ownership interest, which increased to 74.9%
effective October 1, 1993 pursuant to the terms of the Adams/Wabash
Partnership Agreement. The Managing General Partner of the Partnership has
a .1% interest with the remaining 25% held by the developers. The
Partnership is entitled to a cumulative annual preferred return, payable
from operating cash flow, of 10% of its capital contributions to the
existing partnership. Payment of the preferred return was guaranteed by
one of the joint venture partners through September 30, 1992, except to the
extent the Partnership was required to make contributions under the joint
venture agreement. Any distributable cash flow in excess of the
Partnership's preferred return will be distributed in accordance with the
ownership interests of Adams/Wabash. The Partnership also has a preferred
position with respect to distributions of sales and financing proceeds.
Items of profit and loss are, in general, allocated in accordance with
distributions of cash flow. Accordingly, for financial reporting purposes,
for the years ended December 31, 1994, 1993 and 1992, the Partnership was
allocated 100% of the operating profits of Adams/Wabash. As of December
31, 1994, the Partnership has received its preferred return.
(4) LONG-TERM DEBT
(a) Long-term debt consisted of the following at December 31, 1994
and 1993:
1994 1993
----------- -----------
10.03% mortgage note; secured by
the Rivertree Court Shopping
Center located in Vernon Hills
(Chicago), Illinois; payable
monthly, interest only; due
January 1, 1999 . . . . . . . . . . . $15,700,000 15,700,000
8.83% mortgage note; secured by
the Fountain Valley and Cerritos
Industrial Parks located in
Fountain Valley and Cerritos,
(Los Angeles) California,
respectively; payable monthly,
interest only; originally due
November 1, 1993 but not called
by the lender until it was
replaced in February, 1994 by
the loan described below. . . . . . . -- 11,000,000
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
1994 1993
----------- -----------
7.32% mortgage note; secured
by the Fountain Valley and
Cerritos Industrial Parks
located in Fountain Valley
and Cerritos (Los Angeles),
California, respectively;
payable in monthly install-
ments of principal and
interest of $88,998, remaining
principal balance of
approximately $9,008,000 plus
accrued interest due on
March 1, 2001 . . . . . . . . . . . . 11,009,294 --
----------- ----------
Total debt . . . . . . . . . . . . 26,709,294 26,700,000
Less current portion of
long-term debt. . . . . . . . . . 272,721 --
----------- ----------
Total long-term debt . . . . . . . $26,436,573 26,700,000
=========== ==========
Five year maturities of long-term debt are summarized as follows:
1995 . . . . . . . . . $271,067
1996 . . . . . . . . . 291,589
1997 . . . . . . . . . 313,664
1998 . . . . . . . . . 337,410
1999 . . . . . . . . . 362,955
========
(b) Long-Term Debt Refinancing
In February 1994, the Partnership extended and increased the Fountain
Valley and Cerritos Industrial Parks first mortgage loan to the principal
amount of $11,200,000, which is secured. After payment of costs and fees
related to the refinancing, there were no distributable proceeds from the
loan extension. Prior to the extension, the Partnership had entered into a
forbearance agreement with the lender providing, among other things, that
the lender agreed not to exercise its rights and remedies under the
original loan documents from November 2, 1993, the original maturity date,
until January 31, 1994. The Partnership continued to pay interest only at
an annual rate of 8.83% on the original $11,000,000 principal balance
through the effective date of the refinancing.
(5) PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits or
losses of the Partnership from operations generally are allocated 96% to
the Limited Partners and 4% to the General Partners. Profits or losses for
Federal income tax purposes from the sale or refinancing of properties
generally will be allocated 99% to the Limited Partners and 1% to the
General Partners. However, net profits from the sale of properties will be
additionally allocated to the General Partners (i) to the extent that cash
distributions to the General Partners of sale proceeds from such sale ex-
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
ceed the aforesaid 1% of such profits and (ii) in order to reduce deficits,
if any, in the General Partners' capital accounts to a level consistent
with the gain anticipated to be realized from the sale of additional
properties.
The General Partners have made capital contributions to the
Partnership aggregating $20,000. The General Partners are not required to
make any additional capital contributions except under certain limited
circumstances upon dissolution and termination of the Partnership.
Disbursable cash from operations, as defined in the Partnership Agreement,
will be distributed 90% to the Limited Partners and 10% to the General
Partners, subject to certain limitations. Sale or refinancing proceeds
will be distributed 100% to the Limited Partners until the Limited Partners
have received their contributed capital plus a stipulated return thereon.
The General Partners will then receive 100% of the sale or refinancing
proceeds until they receive amounts equal to (i) the cumulative deferral of
their 10% distribution of disbursable cash and (ii) 2% of the selling
prices of all properties which have been sold, subject to certain
limitations. Any remaining sale or refinancing proceeds will then be
distributed 85% to the Limited Partners and 15% to the General Partners.
Accordingly, approximately $3,701,000 of disbursable cash and approximately
$618,000 of sale proceeds from the sale of the Mid Rivers Mall have been
deferred by the General Partners (note 7).
(6) MANAGEMENT AGREEMENTS - OTHER THAN VENTURES
Certain of the Partnership's properties are managed by affiliates of
the General Partners or their assignees for fees computed as a percentage
of certain rents received by the properties. In December 1994, one of the
affiliated property managers 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 such affiliated property manager's assets is acting as the
property manager of the Fountain Valley and Cerritos Industrial Parks after
the sale on the same terms that existed prior to the sale.
(7) SALE OF MID RIVERS MALL
On January 30, 1992, the Partnership, through JMB/Rivers, sold its
interest in the Mid Rivers Mall located in St. Peters, Missouri to the
unaffiliated joint venture partner. The sale price of the interest was
$26,500,000 (before closing costs and prorations) plus the outstanding
balance of the mortgages of which JMB/Rivers' share was $35,318,171. The
Partnership received in connection with the sale, after all fees, expenses
and joint venture partner's participation, a net amount of cash of
$13,250,000. For financial reporting purposes, JMB/Rivers had recognized a
gain of approximately $12,022,000 in 1992, of which the Partnership's share
was approximately $6,366,000.
(8) LEASES
As Property Lessor
The Partnership and its consolidated venture's principal assets are
two multi-tenant industrial building complexes, a shopping center and a
parking/retail structure. The Partnership has determined that all leases
relating to these properties are properly classified as operating leases;
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
therefore, rental income is reported when earned and the cost of the
properties, excluding the cost of the land, is depreciated over their
estimated useful lives. Leases with tenants range in term from one to
twenty years and provide for fixed minimum rent and partial reimbursement
of operating costs. In addition, leases with shopping center tenants
provide for additional rent based upon percentages of tenants' sales
volumes. With respect to the Partnership's shopping center investments, a
substantial portion of the ability of retail tenants to honor their leases
is dependent upon the retail economic sector.
Cost and accumulated depreciation of the leased assets are summarized
as follows at December 31, 1994:
Industrial Building Complexes:
Cost. . . . . . . . . . . . . . . . . . . . . . . $37,080,801
Accumulated depreciation. . . . . . . . . . . . . (5,476,097)
-----------
31,604,704
-----------
Shopping Center:
Cost. . . . . . . . . . . . . . . . . . . . . . . 39,188,672
Accumulated depreciation. . . . . . . . . . . . . (6,474,846)
-----------
32,713,826
-----------
Parking/Retail Structure:
Cost. . . . . . . . . . . . . . . . . . . . . . . 22,390,562
Accumulated depreciation. . . . . . . . . . . . . (2,164,339)
-----------
20,226,223
-----------
$84,544,753
===========
Minimum lease payments, including amounts representing executory costs
(e.g. taxes, maintenance, insurance) and any related profit, to be received
in the future under the operating leases are as follows:
1995. . . . . . . . . . . . . . . . . . . . . . . . $ 6,327,243
1996. . . . . . . . . . . . . . . . . . . . . . . . 5,639,014
1997. . . . . . . . . . . . . . . . . . . . . . . . 4,971,637
1998. . . . . . . . . . . . . . . . . . . . . . . . 4,083,864
1999. . . . . . . . . . . . . . . . . . . . . . . . 3,602,205
Thereafter. . . . . . . . . . . . . . . . . . . . . 16,291,143
-----------
Total. . . . . . . . . . . . . . . . . . . . . $40,915,106
===========
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(9) TRANSACTIONS WITH AFFILIATES
Reimbursable expenses required to be paid by the Partnership to affiliates of the General Partners
as of December 31, 1994 and for the years ended December 31, 1994, 1993 and 1992, are as follows:
<CAPTION>
UNPAID AT
DECEMBER 31,
1994 1993 1992 1994
-------- -------- -------- --------------
<S> <C> <C> <C> <C>
Property management fees (note 6). . . . . $212,212 231,529 202,585 6,661
Insurance commissions. . . . . . . . . . . 8,393 10,861 9,960 --
Reimbursement (at cost) for
out-of-pocket expenses . . . . . . . . . 12,151 11,206 11,394 --
Reimbursement (at cost) for
out-of-pocket salary related
expenses relating to on-site
and other costs for the
Partnership and its investment
properties . . . . . . . . . . . . . . . 116,376 78,408 73,081 --
-------- ------- ------- -----
$349,132 332,004 297,020 6,661
======== ======= ======= =====
</TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
During 1994, certain officers and directors of the Corporate General
Partner acquired interests in a company which provides certain property
management services to certain of the properties owned by the Partnership.
The fees earned by such company from the Partnership for the year ended
1994 were approximately $159,624, all of which have been paid.
In accordance with the subordination requirements of the Partnership
Agreement (note 5), the General Partners have deferred payment of certain
of their distributions of net cash flow and sale proceeds from the
Partnership. All amounts deferred or currently payable do not bear
interest.
(10) INVESTMENT IN UNCONSOLIDATED VENTURES
Summary combined financial information for First Financial and
JMB/Miami (note 3) as of and for the years ended December 31, 1994 and 1993
is as follows:
1994 1993
------------ ------------
Current assets . . . . . . . . . . . . . . . $ 3,016,687 3,258,675
Other current liabilities. . . . . . . . . . (30,825,996) (1,327,641)
------------ ------------
Working capital. . . . . . . . . . . . . (27,809,309) 1,931,034
Investment property, net . . . . . . . . . . 80,107,668 87,047,195
Other assets, net. . . . . . . . . . . . . . 3,169,855 3,506,596
Long-term debt . . . . . . . . . . . . . . . (47,500,000) (76,322,278)
Other liabilities. . . . . . . . . . . . . . (258,643) (240,365)
Venture partners' equity . . . . . . . . . . (637,296) (5,142,801)
------------ ------------
Partnership's capital. . . . . . . . . . $ 7,072,275 10,779,381
============ ============
Represented by:
Invested capital . . . . . . . . . . . . . $ 32,099,273 32,035,179
Cumulative distributions . . . . . . . . . (28,733,659) (26,933,034)
Cumulative earnings. . . . . . . . . . . . 3,706,661 5,677,236
------------ ------------
$ 7,072,275 10,779,381
============ ============
Total income . . . . . . . . . . . . . . . . $ 18,725,264 18,281,016
============ ============
Operating expenses . . . . . . . . . . . . . $ 22,776,897 18,541,224
============ ============
Operating loss . . . . . . . . . . . . . . . $ (4,051,633) (260,208)
============ ============
Gain on sale of land and property. . . . . . $ 1,195,670 1,384,831
============ ============
Extraordinary item . . . . . . . . . . . . . $ (1,000,000) (2,083,900)
============ ============
Net income (loss). . . . . . . . . . . . . . $ (3,855,963) (959,277)
============ ============
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
Total income, operating expenses and net income of the above-mentioned
ventures for the year ended December 31, 1992 were $18,104,319, $19,014,371
and $11,112,287, respectively.
(11) SUBSEQUENT EVENT
Distributions
In February 1995, the Partnership paid a distribution of $1,390,554
($11.00 per interest) to the Limited Partners, $14,046 to the Special
Limited Partner and $39,017 to the General Partners.
<TABLE>
SCHEDULE III
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1994
<CAPTION>
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
PARTNERSHIP (A) ACQUISITION AT CLOSE OF PERIOD (B)
----------------------- ----------------------- --------------------------------------
BUILDINGS BUILDINGS BUILDINGS
ENCUM- AND AND AND
BRANCE LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS TOTAL (C)
------ -------- ------------ ------- ------------ -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Industrial
Complexes:
Fountain Valley
Industrial
Park and
Cerritos
Industrial
Park. . . . . . $11,009,294 9,111,020 25,783,707 -- 2,186,074 9,111,020 27,969,781 37,080,801
Shopping Center:
Rivertree
Court Shopping
Center. . . . . 15,700,000 7,893,178 30,830,231 -- 465,263 7,893,178 31,295,494 39,188,672
Parking/Retail:
Adams/Wabash
Self Park . . . -- 6,530,093 14,547,233 32,411 1,280,825 6,562,504 15,828,058 22,390,562
----------- ---------- ---------- -------- --------- ---------- ---------- ----------
Total. . . . $26,709,294 23,534,291 71,161,171 32,411 3,932,162 23,566,702 75,093,333 98,660,035
=========== ========== ========== ======== ========= ========== ========== ==========
</TABLE>
<TABLE>
SCHEDULE III - CONTINUED
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1994
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1994
ACCUMULATED DATE OF DATE OPERATIONS REAL ESTATE
DEPRECIATION(D) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Industrial Complexes:
Fountain Valley
Industrial Park
and Cerritos
Industrial Park . . . . . . . . . . . $ 5,476,097 1967-1970 11/1/88 5-30 years 335,913
Shopping Center:
Rivertree Court
Shopping Center . . . . . . . . . . . 6,474,846 1988 10/20/88 5-30 years 632,900
Parking/Retail:
Adams/Wabash
Self Park . . . . . . . . . . . . . . 2,164,339 1989-1990 10/1/90 30 years 589,061
----------- ---------
Total. . . . . . . . . . . . . . . $14,115,282 1,557,874
=========== =========
<FN>
------------------
(A) The initial cost to the Partnership represents the original purchase price of the properties, including
amounts incurred subsequent to acquisition which were contemplated at the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1994 for Federal income tax purposes was
$98,310,819.
</TABLE>
<TABLE>
SCHEDULE III - CONTINUED
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1994
(C) Reconciliation of real estate owned:
<CAPTION>
1994 1993 1992
------------ ------------ -----------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . . . . . $98,520,414 97,795,042 97,147,324
Additions during period. . . . . . . . . . . . . . . 139,621 725,372 647,718
----------- ----------- -----------
Balance at end of period . . . . . . . . . . . . . . $98,660,035 98,520,414 97,795,042
=========== =========== ===========
(D) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . . . . . $11,626,188 9,149,275 6,695,274
Depreciation expense . . . . . . . . . . . . . . . . 2,489,094 2,476,913 2,454,001
----------- ----------- -----------
Balance at end of period . . . . . . . . . . . . . . $14,115,282 11,626,188 9,149,275
=========== =========== ===========
</TABLE>
INDEPENDENT AUDITORS' REPORT
The Partners
JMB INCOME PROPERTIES, LTD.-XIII:
We have audited the combined financial statements of the
Unconsolidated Ventures of JMB Income Properties, Ltd. - XIII (note 1) as
listed in the accompanying index. In connection with our audits of the
combined financial statements, we also have audited the financial statement
schedule as listed in the accompanying index. These combined financial
statements and financial statement schedule are the responsibility of the
General Partners of the Partnership. Our responsibility is to express an
opinion on these combined financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by the General Partners of the
Partnership, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position
of the Unconsolidated Ventures of JMB Income Properties, Ltd. - XIII as of
December 31, 1994 and 1993, and the combined results of their operations
and their cash flows for each of the years in the three-year period ended
December 31, 1994, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule,
when considered in relation to the basic combined financial statements
taken as a whole, presents fairly, in all material respects, the
information set forth therein.
KPMG PEAT MARWICK LLP
Chicago, Illinois
March 27, 1995
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
COMBINED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
ASSETS
------
<CAPTION>
1994 1993
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . . . . . . . $ 674,188 385,291
Rents and other receivables. . . . . . . . . . . . . . . . . . . . . . . 2,232,802 2,759,739
Notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,098 74,622
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,599 39,023
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . 3,016,687 3,258,675
------------ -----------
Investment properties, at cost (notes 1 and 2) -- Schedule III:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,373,976 8,023,193
Buildings and improvements . . . . . . . . . . . . . . . . . . . . . . 97,297,013 101,243,322
------------ -----------
104,670,989 109,266,515
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . 24,563,321 22,219,320
------------ -----------
Total investment properties,
net of accumulated depreciation. . . . . . . . . . . . . . . . 80,107,668 87,047,195
------------ -----------
Deferred expenses (note 1) . . . . . . . . . . . . . . . . . . . . . . . . 1,974,587 2,193,963
Accrued rents receivable (note 1). . . . . . . . . . . . . . . . . . . . . 1,195,268 1,312,633
------------ -----------
$ 86,294,210 93,812,466
============ ===========
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
COMBINED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
1994 1993
------------ ------------
Current liabilities:
Current portion of long-term debt (note 4) . . . . . . . . . . . . . . . $ 29,161,145 572,571
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,482,504 656,153
Accrued interest payable (note 4). . . . . . . . . . . . . . . . . . . . 182,347 98,917
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . . . . . . 30,825,996 1,327,641
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . 258,643 240,365
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,500,000 76,322,278
------------ -----------
Commitments and contingencies (notes 3 and 4)
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . 78,584,639 77,890,284
------------ -----------
Partners' capital accounts (note 2):
JMB Income-XIII:
Capital contributions. . . . . . . . . . . . . . . . . . . . . . . . . 32,099,273 32,035,179
Cumulative net earnings (loss) . . . . . . . . . . . . . . . . . . . . 3,706,661 5,677,236
Cumulative cash distributions. . . . . . . . . . . . . . . . . . . . . (28,733,659) (26,933,034)
------------ -----------
7,072,275 10,779,381
------------ -----------
Venture partners' capital accounts . . . . . . . . . . . . . . . . . . 637,296 5,142,801
------------ -----------
Total partners' capital accounts . . . . . . . . . . . . . . . . 7,709,571 15,922,182
------------ -----------
$ 86,294,210 93,812,466
============ ===========
<FN>
See accompanying notes to combined financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
COMBINED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . $18,657,758 18,224,961 17,342,977
Interest income. . . . . . . . . . . . . . . . . . . . 67,506 56,055 38,667
----------- ------------ ------------
18,725,264 18,281,016 17,381,644
----------- ------------ ------------
Expenses:
Mortgage and other interest (note 2) . . . . . . . . . 6,167,404 8,635,449 8,720,285
Depreciation . . . . . . . . . . . . . . . . . . . . . 2,604,693 2,585,203 2,571,607
Property operating expenses. . . . . . . . . . . . . . 6,506,477 6,324,208 5,887,493
Amortization of deferred expenses. . . . . . . . . . . 1,023,185 996,364 1,124,773
Provision for value impairment (notes 1 and 2) . . . . 6,475,138 -- --
----------- ------------ ------------
22,776,897 18,541,224 18,304,158
----------- ------------ ------------
Net operating loss . . . . . . . . . . . . . . (4,051,633) (260,208) (922,514)
Gain on sale of land parcels . . . . . . . . . . . . . . 1,195,670 1,384,831 --
----------- ------------ ------------
Net earnings (loss) before
extraordinary item (note 2). . . . . . . . . (2,855,963) 1,124,623 (922,514)
Extraordinary item . . . . . . . . . . . . . . . . . . . (1,000,000) (2,083,900) --
----------- ------------ ------------
Net loss . . . . . . . . . . . . . . . . . . . $(3,855,963) (959,277) (922,514)
=========== ============ ============
<FN>
See accompanying notes to combined financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
COMBINED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
VENTURE
JMB-XIII PARTNERS
----------- -----------
<S> <C> <C>
Balance at December 31, 1991 . . . . . . . $12,412,192 9,153,175
Cash contributions . . . . . . . . . . . . 39,607 152,982
Cash distributions . . . . . . . . . . . . (366,161) (860,935)
Net loss . . . . . . . . . . . . . . . . . (245,216) (677,298)
----------- -----------
Balance at December 31, 1992 . . . . . . . 11,840,422 7,767,924
Cash contributions . . . . . . . . . . . . 54,231 186,281
Cash distributions . . . . . . . . . . . . (782,450) (2,184,950)
Net loss . . . . . . . . . . . . . . . . . (332,822) (626,454)
----------- -----------
Balance at December 31, 1993 . . . . . . . 10,779,381 5,142,801
Cash contributions . . . . . . . . . . . . 64,094 229,552
Cash distributions . . . . . . . . . . . . (1,800,625) (5,351,875)
Net loss . . . . . . . . . . . . . . . . . (1,970,575) (1,885,388)
Write-off of venture partner's deficit
capital account (note 2) . . . . . . . . -- 2,502,206
----------- -----------
Balance at December 31, 1994 . . . . . . . $ 7,072,275 637,296
=========== ===========
<FN>
See accompanying notes to combined financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
COMBINED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<CAPTION>
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . $(3,855,963) (959,277) (922,514)
Items not providing cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . 2,604,693 2,585,203 2,571,607
Amortization of deferred expenses. . . . . . . . . . 1,023,185 996,364 1,124,773
Total gain on sale of investment property. . . . . . (1,195,670) (1,384,831) --
Extraordinary item . . . . . . . . . . . . . . . . . 1,000,000 2,083,900 --
Provision for value impairment . . . . . . . . . . . 6,475,138 -- --
Changes in:
Rents and other receivables. . . . . . . . . . . . . 526,937 (1,160,089) (627,186)
Prepaid expenses . . . . . . . . . . . . . . . . . . (13,576) 334 1,718
Escrow deposits. . . . . . . . . . . . . . . . . . . -- 40,806 --
Accrued rents receivable . . . . . . . . . . . . . . 117,365 94,589 (333,941)
Accounts payable . . . . . . . . . . . . . . . . . . (173,649) (350,948) 417,088
Accrued interest . . . . . . . . . . . . . . . . . . 83,430 98,917 --
Tenant security deposits . . . . . . . . . . . . . . 18,278 28,115 (24,049)
------------ ----------- -----------
Net cash provided by
operating activities . . . . . . . . . . . . 6,610,168 2,073,083 2,207,496
------------ ----------- -----------
Cash flows from investing activities:
Cash sale proceeds from sale of investment
property, net of selling expenses. . . . . . . . . . 1,465,301 1,558,844 --
Reductions of investment properties. . . . . . . . . . 129,569 87,622 133,315
Payment of deferred expenses . . . . . . . . . . . . . (841,108) (886,772) (808,759)
Notes receivable . . . . . . . . . . . . . . . . . . . 17,524 17,930 (92,552)
------------ ----------- -----------
Net cash provided by (used in)
investing activities . . . . . . . . . . . . 771,286 777,624 (767,996)
------------ ----------- -----------
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
COMBINED STATEMENTS OF CASH FLOWS - CONTINUED
1994 1993 1992
----------- ----------- -----------
Cash flows from financing activities:
Net proceeds from refinancing long-term debt . . . . . -- 45,484,643 --
Principal payments on long-term debt . . . . . . . . . (233,704) (45,156,110) (345,048)
Payment of deferred expenses . . . . . . . . . . . . . -- (336,641) --
Contributions to ventures. . . . . . . . . . . . . . . 293,647 240,512 192,590
Distributions to partners. . . . . . . . . . . . . . . (7,152,500) (2,967,400) (1,227,096)
------------ ----------- -----------
Net cash used in financing activities. . . . . (7,092,557) (2,734,996) (1,379,554)
------------ ----------- -----------
Net increase in cash
and cash equivalents . . . . . . . . . . . . $ 288,897 115,711 59,946
============ =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . $ 6,083,974 8,536,532 8,720,285
============ =========== ===========
Non-cash investing and financing activities. . . . . . $ -- -- --
============ =========== ===========
<FN>
See accompanying notes to combined financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
Unconsolidated Ventures
NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 AND 1992
(1) BASIS OF ACCOUNTING
The accompanying combined financial statements have been prepared for
the purpose of complying with Rule 3.09 of Regulation S-X of the Securities
and Exchange Commission. They include the accounts of the unconsolidated
ventures in which JMB Income Properties, Ltd. - XIII ("JMB Income-XIII")
owns a direct interest. The entities ("Combined Ventures") included in the
combined financial statements are as follows:
DATE
ACQUIRED
--------
1. JMB Encino Partnership "Encino" (a) 5/20/87
2. West Dade County Associates
"West Dade" (b) 1/1/88
(a) The Partnership owns an indirect ownership interest in this
unconsolidated venture through First Financial Associates ("First
Financial"), an unconsolidated joint venture.
(b) The Partnership owns an indirect ownership interest in this
unconsolidated venture through JMB/Miami Investors, L.P. ("JMB/Miami"), an
unconsolidated joint venture.
For purposes of preparing the combined financial statements, the
effect of all transactions between Encino and First Financial, and West
Dade and JMB/Miami has been eliminated.
Statement of Financial Accounting Standards No. 95 requires the
Combined Ventures 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 classification specified in the pronouncement.
Combined Ventures record amounts held in U.S. Government obligations at
cost, which approximates market. For the purposes of these statements, the
Combined Ventures' policy is to consider any such amounts held with
original maturities of three months or less (none and none at December 31,
1994 and 1993, respectively) as cash equivalents with any remaining amounts
(generally with original maturities of one year or less) reflected as
short-term investments being held to maturity.
The records of Combined Ventures are maintained on the accrual basis
of accounting as adjusted for federal income tax reporting purposes. The
accompanying combined financial statements have been prepared from such
records after making appropriate adjustments to present the Combined
Ventures' accounts in accordance with generally accepted accounting
principles. Such adjustments are not recorded on the records of the
Combined Ventures.
Deferred expenses are comprised of deferred leasing costs and loan
costs which are amortized using the straight-line method over the terms of
the related leases and loans.
Depreciation on the investment properties has been provided over the
estimated useful lives of 5 to 30 years using the straight-line method.
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
NOTES TO COMBINED FINANCIAL STATEMENTS - CONTINUED
Maintenance and repair expenses are charged to operations as incurred.
Significant betterments and improvements are capitalized and depreciated
over their estimated useful lives. Provisions for value impairment are
recorded with respect to the investment properties whenever the estimated
future cash flows from a property's operations and projected sale are less
than the property's net carrying value.
The Encino venture, as a matter of prudent accounting practice, has
made a provision for value impairment of approximately $6,475,000,
(approximately $2,428,000 is allocated to the Partnership) all of which is
allocable to First Financial joint venture. Such provision was recorded at
December 31, 1994 to reduce the net carrying value of the property based
upon an estimated sales price should the Encino Venture be unable to extend
or refinance the mortgage loan at maturity.
The investment properties are pledged as security for the long-term
debt, for which there is no recourse to the Partnership, as described in
note 4.
Although certain leases of the Partnership provide for tenant
occupancy during periods for which no rent is due and/or increases in
minimum lease payments over the term of the lease, the Partnership accrues
prorated rental income for the full period of occupancy on a straight-line
basis.
No provision for state or Federal income taxes has been made as the
liability for such taxes is that of the Partners rather than the
Partnership. However, in certain instances, the Partnership has been
required under applicable law to remit directly to the tax authorities
amounts representing withholding from distributions paid to partners.
(2) VENTURE AGREEMENTS
A description of the venture agreements is contained in Note 3 of
Notes to Consolidated Financial Statements of JMB Income-XIII for the year
ended December 31, 1994. Such note is incorporated herein by reference.
(3) LEASES
As Property Lessor
At December 31, 1994, the properties in the combined group consisted
of one shopping center and one office building. The ventures have
determined that all leases relating to the properties are properly
classified as operating leases; therefore, rental income is reported when
earned and the cost of each of the properties, excluding cost of land, is
depreciated over the estimated useful lives. Leases with commercial
tenants range in term from one to fifteen years and provide for fixed
minimum rent and partial to full reimbursement of operating costs.
Minimum lease payments including amounts representing executory costs
(e.g., taxes, maintenance, insurance), and any related profit to be
received in the future under the above operating leases are as follows:
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
NOTES TO COMBINED FINANCIAL STATEMENTS - CONCLUDED
1995 . . . . . . . $ 9,990,220
1996 . . . . . . . 9,270,971
1997 . . . . . . . 7,221,924
1998 . . . . . . . 6,493,585
1999 . . . . . . . 5,413,335
Thereafter . . . . 16,278,361
-----------
$54,668,396
===========
Additional rent based upon percentages of tenants' sales volumes
included in rental income aggregated $531,579, $901,434 and $707,978 for
the years ended December 31, 1994, 1993 and 1992, respectively.
(4) LONG-TERM DEBT
Long-term debt consist of the following at December 31, 1994 and 1993:
1994 1993
----------- -----------
9-7/8% mortgage note, secured by the
First Financial Plaza Office
Building; payable in monthly
installments of principal and
interest of $260,505 through
November 1995 when the remaining
balance is due and payable. . . . . . $29,161,145 29,394,849
6.91% mortgage note, secured by
the Miami International Mall
(West Dade); payable in monthly
installments of interest only
through January 1997 and there-
after monthly installments
principal and interest of
$313,153 through December 2003
when the remaining balance is
due and payable . . . . . . . . . . . 47,500,000 47,500,000
----------- -----------
Total debt . . . . . . . . . . . . 76,661,145 76,894,849
Less current portion of
long-term debt . . . . . . . . . 29,161,145 572,571
----------- -----------
Total long-term debt . . . . . . . $47,500,000 76,322,278
=========== ===========
Five year maturities of long-term debt are summarized as follows:
1995 . . . . . . . . . $29,161,145
1996 . . . . . . . . . --
1997 . . . . . . . . . 490,939
1998 . . . . . . . . . 525,958
1999 . . . . . . . . . 563,475
===========
<TABLE>
SCHEDULE III
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1994
<CAPTION>
COSTS
CAPITALIZED
INITIAL COST TO SUBSEQUENT TO GROSS AMOUNT AT WHICH CARRIED
UNCONSOLIDATED VENTURES (A) TO ACQUISITION AT END OF PERIOD (B)
--------------------------- -------------- ------------------------------------------
LAND AND BUILDINGS BUILDINGS LAND AND BUILDINGS
LEASEHOLD AND AND LEASEHOLD AND
ENCUMBRANCE INTEREST IMPROVEMENTS IMPROVEMENTS INTEREST IMPROVEMENTS TOTAL (C)
----------- ----------- ------------ -------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
OFFICE
BUILDING:
Encino,
California. . $29,161,145 7,696,474 38,089,122 (1,748,752) 7,047,258 36,989,586 44,036,844
SHOPPING
CENTER:
Miami,
Florida . . . 47,500,000 326,718 63,556,557 (3,249,130) 326,718 60,307,427 60,634,145
----------- ---------- ----------- ---------- ---------- ----------- -----------
Total. . . $76,661,145 8,023,192 101,645,679 (4,997,882) 7,373,976 97,297,013 104,670,989
=========== ========== =========== ========== ========== =========== ===========
</TABLE>
<TABLE>
SCHEDULE III - CONTINUED
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1994
<CAPTION>
LIFE ON WHICH
DEPRECIATION
IN LATEST
STATEMENT OF 1994
ACCUMULATED DATE OF DATE OPERATION REAL ESTATE
DEPRECIATION(D) CONSTRUCTION ACQUIRED IS COMPUTED TAXES
---------------- ------------ ---------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Encino, California. . . . $ 9,693,722 1986 5-20-87 5-30 years $ 485,665
Miami, Florida. . . . . . 14,869,599 1986 1-1-88 5-30 years 1,726,836
----------- ----------
Total. . . . . . . . . $24,563,321 2,212,501
=========== ==========
<FN>
-------------------
Notes:
(A) The initial cost to the Unconsolidated Venture or Underlying Ventures represents the original
purchase price of the properties, including amounts incurred subsequent to acquisition which were contemplated at
the time the property was acquired.
(B) The aggregate cost of real estate owned at December 31, 1994 for federal income tax purposes was
$97,655,495.
(C) In 1994, the Encino and First Financial joint ventures recorded a provision for value impairment
totaling $6,475,138.
</TABLE>
<TABLE>
SCHEDULE III - CONTINUED
JMB INCOME PROPERTIES, LTD. - XIII
UNCONSOLIDATED VENTURES
COMBINED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1994
(D) Reconciliation of real estate owned at December 31, 1994, 1993 and 1992:
<CAPTION>
1994 1993 1992
------------ ----------- -----------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . . . $109,266,515 109,535,556 109,668,871
Reductions during period . . . . . . . . . . . . (129,569) (95,028) (133,315)
Sale and disposal during period. . . . . . . . . (270,495) (174,013) --
Provision for value impairment . . . . . . . . . (4,195,462) -- --
------------ ------------ ------------
Balance at end of period . . . . . . . . . . . . $104,670,989 109,266,515 109,535,556
============ ============ ============
(E) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . . . $ 22,219,320 19,641,524 17,069,917
Depreciation expense . . . . . . . . . . . . . . 2,604,693 2,585,203 2,571,607
Reductions during the year . . . . . . . . . . . (864) (7,407) --
Sale and disposal during period. . . . . . . . . -- -- --
Provision for value impairment . . . . . . . . . (259,828) -- --
------------ ------------ ------------
Balance at end of period . . . . . . . . . . . . $ 24,563,321 22,219,320 19,641,524
============ ============ ============
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There were no changes of, or disagreements with, accountants during
fiscal years 1994 and 1993.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Managing General Partner of the Partnership is JMB Realty
Corporation ("JMB"), a Delaware Corporation. JMB has responsibility for
all aspects of the Partnership's operations, subject to the requirement
that purchases and sales of real property must be approved by the Associate
General Partner of the Partnership, Income Associates-XIII, L.P. an
Illinois limited partnership with JMB as the sole general partner. The
Associate General Partner shall be directed by a majority in interest of
its limited partners (who are generally officers, directors and affiliates
of JMB or its affiliates) as to whether to provide its approval of any sale
of real property (or any interest therein) of the Partnership. The
Partnership is subject to certain conflicts of interest arising out of its
relationships with the General Partners and their affiliates as well as the
fact that the General Partners and their affiliates are engaged in a range
of real estate activities. Certain services have been and may in the
future be provided to the Partnership or its investment properties by
affiliates of the General Partners, including property management services
and insurance brokerage services. In general, such services are to be
provided on terms no less favorable to the Partnership than could be
obtained from independent third parties and are otherwise subject to
conditions and restrictions contained in the Partnership Agreement. The
Partnership Agreement permits the General Partners and their affiliates to
provide services to, and otherwise deal and do business with, persons who
may be engaged in transactions with the Partnership, and permits the
Partnership to borrow from, purchase goods and services from, and otherwise
to do business with, persons doing business with the General Partners or
their affiliates. The General Partners and their affiliates may be in
competition with the Partnership under certain circumstances, including, in
certain geographical markets, for tenants for properties and/or for the
sale of properties. Because the timing and amount of cash distributions
and profits and losses of the Partnership may be affected by various
determinations by the General Partners under the Partnership Agreement,
including whether and when to sell or refinance a property, the
establishment and maintenance of reasonable reserves, the timing of
expenditures and the allocation of certain tax items under the Partnership
Agreement, the General Partners may have a conflict of interest with
respect to such determinations.
The names, positions held and length of service therein of each
director and executive officer and certain officers of the Managing General
Partner of the Partnership are as follows:
SERVED IN
NAME OFFICE OFFICE SINCE
---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Neil G. Bluhm President 5/03/71
Director 5/03/71
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
SERVED IN
NAME OFFICE OFFICE SINCE
---- ------ ------------
H. Rigel Barber Chief Executive Officer 8/01/93
Executive Vice President 1/02/87
Glenn E. Emig Executive Vice President 1/01/93
Chief Operating Officer 1/01/95
Jeffrey R. Rosenthal Managing Director-Corporate 4/22/91
Chief Financial Officer 8/01/93
Douglas H. Cameron Executive Vice President 1/01/95
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Ira J. Schulman Executive Vice President 6/01/88
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve a one-year
term until the annual meeting of the Managing General Partner to be held on
June 7, 1995. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Managing General Partner to be held on June 7,
1995. There are no arrangements or understandings between or among any of
said directors or officers and any other person pursuant to which any
director or officer was elected as such.
JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX
("Carlyle-IX"), Carlyle Real Estate Limited Partnership-X ("Carlyle-X"),
Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"), Carlyle Real
Estate Limited Partnership-XII ("Carlyle-XII"), Carlyle Real Estate Limited
Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate Limited
Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV
("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI ("Carlyle-
XVI"), Carlyle Real Estate Limited Partnership-XVII ("Carlyle-XVII"), JMB
Mortgage Partners, Ltd. ("Mortgage Partners"), JMB Mortgage Partners,
Ltd.-II ("Mortgage Partners-II"), JMB Mortgage Partners, Ltd.-III
("Mortgage Partners-III"), JMB Mortgage Partners, Ltd.-IV ("Mortgage
Partners-IV"), Carlyle Income Plus, Ltd. ("Carlyle Income Plus") and
Carlyle Income Plus, Ltd.-II ("Carlyle Income Plus-II") and the managing
general partner of JMB Income Properties, Ltd.-IV ("JMB Income-IV"), JMB
Income Properties, Ltd.-V ("JMB Income-V"), JMB Income Properties, Ltd.-VI
("JMB Income-VI"), JMB Income Properties, Ltd.-VII ("JMB Income-VII"), JMB
Income Properties, Ltd.-VIII ("JMB Income-VIII"), JMB Income Properties,
Ltd.-IX ("JMB Income-IX"), JMB Income Properties, Ltd.-X ("JMB Income-X"),
JMB Income Properties, Ltd.-XI ("JMB Income-XI") and JMB Income Properties,
Ltd.-XII ("JMB Income-XII"). Most of the foregoing directors and officers
are also officers and/or directors of various affiliated companies of JMB
including Arvida/JMB Managers, Inc. (the general partner of Arvida/JMB
Partners, L.P. ("Arvida")), Arvida/JMB Managers-II, Inc. (the general
partner of Arvida/JMB Partners, L.P.-II ("Arvida-II") and Income Growth
Managers, Inc. (the corporate general partner of IDS/JMB Balanced Income
Growth, Ltd. ("IDS/BIG")). Most of such directors and officers are also
partners of certain partnerships which are associate general partners in
the following real estate limited partnerships: Carlyle-VII, Carlyle-IX,
Carlyle-X, Carlyle-XI, Carlyle-XII, Carlyle-XIII, Carlyle-XIV, Carlyle-XV,
Carlyle-XVI, Carlyle-XVII, JMB Income-VI, JMB Income-VII, JMB Income-VIII,
JMB Income-IX, JMB Income-X, JMB Income-XI, JMB Income-XII, Mortgage
Partners, Mortgage Partners-II, Mortgage Partners-III, Mortgage
Partners-IV, Carlyle Income Plus, Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each such
director and officer of the Managing General Partner of the Partnership in
addition to that described above is as follows:
Judd D. Malkin (age 57) is an individual general partner of JMB
Income-IV and JMB Income-V. Mr. Malkin has been associated with JMB since
October, 1969. Mr. Malkin is a director of Urban Shopping Centers, Inc.,
an affiliate of JMB that is a real estate investment trust in the business
of owning, managing and developing shopping centers, and is a director of
Catellus Development Corporation, a major diversified real estate
development company. He is a Certified Public Accountant.
Neil G. Bluhm (age 57) is an individual general partner of JMB
Income-IV and JMB Income-V. Mr. Bluhm has been associated with JMB since
August, 1970. Mr. Bluhm is a director of Urban Shopping Centers, Inc., an
affiliate of JMB that is a real estate investment trust in the business of
owning, managing and developing shopping centers. He is a member of the
Bar of the State of Illinois and a Certified Public Accountant.
Burton E. Glazov (age 56) has been associated with JMB since June,
1971 and served as an Executive Vice President of JMB until December of
1990. He is a member of the Bar of the State of Illinois and a Certified
Public Accountant.
Stuart C. Nathan (age 53) has been associated with JMB since July,
1972. Mr. Nathan is also a director of Sportmart Inc., a retailer of
sporting goods. He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 61) (President and Director of JMB Insurance Agency,
Inc.) has been associated with JMB since December, 1972.
John G. Schreiber (age 48) has been associated with JMB since
December, 1970 and served as an Executive Vice President of JMB until
December 1990. Mr. Schreiber is President of Schreiber Investments, Inc.,
a company which is engaged in the real estate investing business. He is
also a senior advisor and partner of Blackstone Real Estate Partners, an
affiliate of the Blackstone Group, L.P. Since 1994, Mr. Schreiber has also
served as a Trustee of Amli Residential Property Trust, a publicly-traded
real estate investment trust that invests in multi-family properties. Mr.
Schreiber is a director of Urban Shopping Centers, Inc. an affiliate of JMB
that is a real estate investment trust in the business of owning, managing
and developing shopping centers. He is also a director of a number of
investment companies advised or managed by T. Rowe Price Associates and its
affiliates. He holds a Masters degree in Business Administration from
Harvard University Graduate School of Business.
H. Rigel Barber (age 45) has been associated with JMB since March,
1982. He holds a J.D. degree from the Northwestern Law School and is a
member of the Bar of the State of Illinois.
Glenn E. Emig (age 47) has been associated with JMB since December,
1979. Prior to becoming Executive Vice President of JMB in 1993, Mr. Emig
was Executive Vice President and Treasurer of JMB Institutional Realty
Corporation. He holds a Masters Degree in Business Administration from the
Harvard University Graduate School of Business and is a Certified Public
Accountant.
Jeffrey R. Rosenthal (age 43) has been associated with JMB since
December, 1987. He is a Certified Public Accountant.
Douglas H. Cameron (age 45) is Executive Vice President of JMB and has
been associated with JMB since April, 1977. Prior to becoming Executive
Vice President of JMB in 1995, Mr. Cameron was Managing Director of Capital
Markets-Property Sales from June, 1990. He holds a Masters degree in
Business Administration from the University of Southern California.
Gary Nickele (age 42) has been associated with JMB since February,
1984. He holds a J.D. degree from the University of Michigan Law School
and is a member of the Bar of the State of Illinois.
Ira J. Schulman (age 43) has been associated with JMB since February,
1983. He holds a Masters degree in Business Administration from the
University of Pittsburgh.
Gailen J. Hull (age 46) has been associated with JMB since March,
1982. He holds a Masters degree in Business Administration from Northern
Illinois University and is a Certified Public Accountant.
Howard Kogen (age 59) has been associated with JMB since March, 1973.
He is a Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The officers and director of the Managing General Partner receive no
current or proposed direct remuneration in such capacities. Pursuant to
the Partnership Agreement, the General Partners of the Partnership are
entitled to receive a share of cash distributions, when and as cash
distributions are made to the Investors, and a share of profits or losses.
Reference is also made to Notes 5 and 9 for a description of such
transactions, distributions and allocations. In 1994, 1993 and 1992, the
General Partners received cash distributions in the amount of $145,426,
$141,879 and $141,879, respectively. As of December 31, 1994, the General
Partners have deferred payment of distributions in the aggregate amount of
approximately $4,319,000.
The General Partners of the Partnership may be reimbursed for their
direct expenses relating to the offering, the administration of the
Partnership and the operation of the Partnership's real property
investments. In 1994, an affiliate of the General Partners was due
reimbursement for such out-of-pocket expenses in the amount of $12,151, all
of which was paid at December 31, 1994.
The General Partners may be reimbursed for salaries and direct
expenses of officers and employees of the Managing General Partner and its
affiliates while directly engaged in the administration of the Partnership
and the operation of the Partnership's real property investments. In 1994,
the Managing General Partner was due reimbursement for such expenses in the
amount of $116,376, all of which was paid as of December 31, 1994.
Affiliates of the General Partners provided property management
services for the Fountain Valley and Cerritos Industrial Parks and the
Rivertree Court Shopping Center during 1994. In 1994, such affiliates
earned aggregate property management fees amounting to $212,212, of which
$6,661 was unpaid as of December 31, 1994.
JMB Insurance Agency, Inc., an affiliate of the Managing General
Partner of the Partnership, earned and received insurance brokerage
commissions in 1994 aggregating $8,393 in connection with the providing of
insurance coverage for certain of the real property investments of the
Partnership. Such commissions are at rates set by insurance companies for
the classes of coverage provided.
The Partnership is permitted to engage in various transactions
involving affiliates of the Managing General Partner of the Partnership.
The relationship of the Managing General Partner (and its directors and
officers) to its affiliates is set forth in Item 10 above and Exhibit 21
hereto.
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No person or group is known by the Partnership to own beneficially more than 5% of the outstanding
Interests of the Partnership.
(b) The Managing General Partner and its officers and directors own the following Interests of the
Partnership:
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
-------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership
Interests Gary Nickele 5 Interests (1) Less than 1%
indirectly
Limited Partnership
Interests Managing General Partner 5 Interests (1) Less than 1%
and its officers and indirectly
directors as a group
<FN>
(1) Includes 5 Interests owned by an affiliated corporation as to which Gary Nickele has sole investment and
voting power.
All of the outstanding shares of the Managing General Partner of the Partnership are owned by an affiliate of
its officers and directors as set forth above in Item 10.
(c) There exists no arrangement, known to the Partnership, the operation of which may at a subsequent date
result in a change in control of the Partnership.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the General
Partners, the executive officers and directors of the Managing General Partner and persons who own more than ten
percent of the Interests to file an initial report of ownership or changes in ownership of Interests on Form 3, 4
or 5 with the Securities and Exchange Commission (the "SEC"). Such persons are also required by SEC rules to
furnish the Partnership with copies of all Section 16(a) forms they file. Timely filing of an initial report of
ownership on Form 3 or Form 5 was not made on behalf of Glenn Emig.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with
the Managing General Partner, affiliates or their management other than
those described in Items 10 and 11 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial Statements filed
with this annual report).
(2) Exhibits.
3-A. The Prospectus of the Partnership dated August 20, 1986
as supplemented October 31, 1986 and January 26, 1987 as filed with the
Commission pursuant to Rules 424(b) and 424(c) is hereby incorporated
herein by reference. Copies of pages 8-19, 64-70, A-7 to A-16, A-34 to A-
35 of the Prospectus are hereby incorporated by reference to Exhibit 3-A to
the Partnership's Form 10-K dated March 18, 1993.
3-B. Amended and Restated Agreement of Limited Partnership set
forth as Exhibit A to the Prospectus, which is hereby incorporated by
reference to Exhibit 3-B to the Partnership's From 10-K dated March 18,
1993.
4-A. Copy of documents relating to the mortgage loan secured
by the Rivertree Court Shopping Center, Vernon Hills (Chicago), Illinois
dated December 30, 1988 is hereby incorporated by reference to Exhibit 4-A
to the Partnership's Form 10-K dated March 18, 1993.
4-B. Copy of documents relating to the mortgage loan secured
by a first mortgage on West Dade's interest in Miami International Mall,
Miami, Florida dated December 21, 1993 incorporated herein by reference to
Exhibit 4-B to the Partnership's Report for December 31, 1993 on Form 10-K
(File No. 000-19496) dated March 24, 1994.
10-A. Acquisition documents relating to the purchase by the
Partnership of Rivertree Court Shopping Center in Vernon Hills (Chicago),
Illinois, are hereby incorporated by reference to Exhibit 1 to the
Partnership's Form 8-K dated November 4, 1988.
10-B. Acquisition documents relating to the purchase by the
Partnership of Fountain Valley Industrial Buildings in Fountain Valley,
California and Cerritos Industrial Buildings in Cerritos, California, are
hereby incorporated by reference to Exhibits 1 and 2 to the Partnership's
Form 8-K dated November 15, 1988.
10-C. Acquisition documents relating to the acquisition by the
Partnership of an interest in the Adams/Wabash Parking Garage in Chicago,
Illinois are hereby incorporated by reference to Exhibit 3 to the
Partnership's Form 8-K dated October 15, 1990.
10-D. Sale documents and exhibits thereto relating to the sale
of the Partnership's interest in Mid Rivers Mall in St. Peters (St. Louis),
Missouri are hereby incorporated by reference to the Partnership's Report
on Form 8-K dated February 18, 1992.
21. List of Subsidiaries.
24. Powers of Attorney
27. Financial Data Schedule
Although certain long-term debt instruments of the Registrant have been
excluded from Exhibit 4 above, pursuant to Rule (b)(4)(iii), the
Registrants commits to provide copies of such agreements to the Securities
and Exchange Commission upon request.
(b) No reports on Form 8-K were required to be filed during the last
quarter of the period covered by this annual report.
No annual report or proxy material for the fiscal year 1994 has been
sent to the Partners of the Partnership. An annual report will be sent to
the Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Act of 1934, the Partnership has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XIII
By: JMB Realty Corporation
Managing General Partner
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 27, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: JMB Realty Corporation
Managing General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and Director
Date: March 27, 1995
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 27, 1995
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 27, 1995
GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 27, 1995
JEFFREY R. ROSENTHAL*
By: Jeffrey R. Rosenthal, Chief Financial Officer
Principal Financial Officer
Date: March 27, 1995
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 27, 1995
A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 27, 1995
STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date: March 27, 1995
*By: GAILEN J. HULL, Pursuant to a Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 27, 1995
JMB INCOME PROPERTIES, LTD. - XIII
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------ ----
3-A. Pages 8-19, 64-70, A-7 to A-16,
A-34 to A-35 of the Prospectus
of the Partnership dated August 20,
1986, as supplemented on October 31,
1986, and January 26, 1987 Yes
3-B. Amended and Restated Agreement of
Limited Partnership Yes
4-A. Mortgage loan agreement related to
the Rivertree Court Shopping Center Yes
4-B. Mortgage loan agreement related to
West Dade Yes
10-A. Acquisition documents relating to
the Rivertree Court Shopping Center Yes
10-B. Acquisition documents relating to
the Fountain Valley Industrial
Buildings and Cerritos Industrial
Buildings Yes
10-C. Acquisition documents relating to
the Adams/Wabash Parking Garage Yes
10-D. Sale documents relating to the
Mid Rivers Mall Yes
21. List of Subsidiaries No
24. Powers of Attorney No
27. Financial Data Schedule No
EXHIBIT 21
LIST OF SUBSIDIARIES
The Partnership is a general partner in JMB First Financial
Associates, an Illinois general partnership. JMB First Financial
Associates is a general partner in JMB Encino Partnership, a
California general partnership, which holds title to the First
Financial Plaza.
The Partnership is a general partner in JMB/Miami
International Associates, an Illinois general partnership.
JMB/Miami International Associates is a general partner in West
Dade County Associates, a Florida general partnership which holds
title to the Miami International Mall.
The Partnership is a limited partner in Adams/Wabash Limited
Partnership, an Illinois limited partnership. Adams/Wabash
Limited Partnership holds title to the Adams/Wabash Self Park.
Reference is made to Note 3 of the Notes to Financial
Statements filed with this annual report for a summary
description of the terms of such partnership agreements. The
Partnership's interest in the foregoing joint venture
partnerships and the results of their operations are included in
the Financial Statements of the Partnership filed with this
annual report.
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the corporate general partner of JMB
INCOME PROPERTIES, LTD. - XIII, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name
and on behalf of the undersigned officer or directors a Report on Form 10-K
of said partnership for the fiscal year ended December 31, 1994, and any
and all amendments thereto, hereby ratifying and confirming all that said
attorneys and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 31st day of January, 1995.
JUDD D. MALKIN
-----------------------
Judd D. Malkin Chairman and Director
NEIL G. BLUHM
-----------------------
Neil G. Bluhm President and Director
H. RIGEL BARBER
-----------------------
H. Rigel Barber Chief Executive Officer
JEFFREY R. ROSENTHAL
-----------------------
Jeffrey R. Rosenthal Chief Financial Officer
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer and
directors, a Report on Form 10-K of said partnership for the fiscal year
ended December 31, 1994, and any and all amendments thereto, the 31st day
of January, 1995.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and
directors of JMB Realty Corporation, the corporate general partner of JMB
INCOME PROPERTIES, LTD. - XIII, do hereby nominate, constitute and appoint
GARY NICKELE, GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and
agents of the undersigned with full power of authority to sign in the name
and on behalf of the undersigned officer or directors a Report on Form 10-K
of said partnership for the fiscal year ended December 31, 1994, and any
and all amendments thereto, hereby ratifying and confirming all that said
attorneys and agents and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 31st day of January, 1995.
STUART C. NATHAN
-----------------------
Stuart C. Nathan Executive Vice President,
Director of General Partner
A. LEE SACKS
-----------------------
A. Lee Sacks Director of General Partner
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer and
directors, a Report on Form 10-K of said partnership for the fiscal year
ended December 31, 1994, and any and all amendments thereto, the 31st day
of January, 1995.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer of JMB
Realty Corporation, the corporate general partner of JMB INCOME PROPERTIES,
LTD. - XIII, does hereby nominate, constitute and appoint GARY NICKELE,
GAILEN J. HULL, DENNIS M. QUINN or any of them, attorneys and agents of the
undersigned with full power of authority to sign in the name and on behalf
of the undersigned officer, a Report on Form 10-K of said partnership for
the fiscal year ended December 31, 1994, and any and all amendments
thereto, hereby ratifying and confirming all that said attorneys and agents
and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 20th day of February, 1995.
GLENN E. EMIG
-----------------------
Glenn E. Emig Chief Operating Officer
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officer, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1994,
and any and all amendments thereto, the 20th day of February, 1995.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1994 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<CIK> 0000790603
<NAME> JMB INCOME PROPERTIES, LTD. - XIII
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 5,011,101
<SECURITIES> 9,214,950
<RECEIVABLES> 830,693
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,222,549
<PP&E> 98,660,035
<DEPRECIATION> 14,115,282
<TOTAL-ASSETS> 109,171,952
<CURRENT-LIABILITIES> 1,904,686
<BONDS> 26,436,573
<COMMON> 0
0
0
<OTHER-SE> 80,490,480
<TOTAL-LIABILITY-AND-EQUITY> 109,171,952
<SALES> 11,453,067
<TOTAL-REVENUES> 531,609
<CGS> 0
<TOTAL-COSTS> 6,291,257
<OTHER-EXPENSES> 441,753
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,397,689
<INCOME-PRETAX> 2,853,977
<INCOME-TAX> 0
<INCOME-CONTINUING> 959,484
<DISCONTINUED> 298,917
<EXTRAORDINARY> (375,000)
<CHANGES> 0
<NET-INCOME> 883,401
<EPS-PRIMARY> 6.78
<EPS-DILUTED> 0
</TABLE>
