SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended September 30, 1995 Commission file #000-19496
JMB INCOME PROPERTIES, LTD. - XIII
(Exact name of registrant as specified in its charter)
Illinois 36-3426137
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements. . . . . . . . . . . . 3
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . . . . . 16
PART II OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . 21
Item 6. Exhibits and Reports on Form 8-K. . . . . . 22
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 1) . . . . . . . . . . . . . $ 9,545,735 5,011,101
Short-term investments (note 1). . . . . . . . . . . . . . . 5,285,823 9,214,950
Interest, rents and other receivables (net of allowance
for doubtful accounts of $29,047 in 1995 and
$113,018 in 1994). . . . . . . . . . . . . . . . . . . . . 571,632 830,693
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . 109,270 65,928
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . 211,555 99,877
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . 15,724,015 15,222,549
Investment properties, at cost:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,336,622 23,566,702
Buildings and improvements . . . . . . . . . . . . . . . . . 69,446,953 75,093,333
------------ ------------
90,783,575 98,660,035
Less accumulated depreciation. . . . . . . . . . . . . . . . 15,981,631 14,115,282
------------ ------------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . 74,801,944 84,544,753
Investment in unconsolidated ventures,
at equity (notes 3(b), 3(c) and 7) . . . . . . . . . . . . . 6,420,469 7,072,275
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 642,174 894,654
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 1,597,443 1,437,721
------------ ------------
$ 99,186,045 109,171,952
============ ============
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- -----------
Current liabilities:
Current portion of long-term debt (note 4) . . . . . . . . . $ 287,540 272,721
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 352,979 202,356
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 197,154 198,382
Accrued real estate taxes. . . . . . . . . . . . . . . . . . 1,324,254 1,231,227
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . 2,161,927 1,904,686
Tenant security deposits . . . . . . . . . . . . . . . . . . . 336,222 340,213
Long-term debt, less current portion . . . . . . . . . . . . . 26,220,360 26,436,573
------------ ------------
Commitments and contingencies (notes 1, 3 and 5)
Total liabilities. . . . . . . . . . . . . . . . . . . 28,718,509 28,681,472
------------ ------------
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net earnings. . . . . . . . . . . . . . . . . 399,079 626,763
Cumulative cash distributions. . . . . . . . . . . . . . (1,350,827) (1,233,777)
------------ ------------
(931,748) (587,014)
------------ ------------
Limited partners (126,414 interests):
Capital contributions, net of offering costs . . . . . . 113,741,315 113,741,315
Cumulative net earnings. . . . . . . . . . . . . . . . . 14,836,649 20,301,059
Cumulative cash distributions. . . . . . . . . . . . . . (57,178,680) (52,964,880)
------------ ------------
71,399,284 81,077,494
------------ ------------
Total partners' capital accounts (deficits). . . . . . 70,467,536 80,490,480
------------ ------------
$ 99,186,045 109,171,952
============ ============
<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
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------------------------------------------
1995 1994 1995 1994
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . $ 2,961,759 3,129,147 8,297,044 8,611,360
Interest income. . . . . . . . . . . . . 225,281 152,836 643,636 364,075
----------- ---------- ---------- ----------
3,187,040 3,281,983 8,940,680 8,975,435
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest. . . . . . . 591,880 596,722 1,779,390 1,802,145
Depreciation . . . . . . . . . . . . . . 621,979 622,175 1,866,349 1,866,523
Property operating expenses. . . . . . . 911,169 975,236 2,581,084 2,686,343
Professional services. . . . . . . . . . 5,301 2,060 142,717 135,183
Amortization of deferred
expenses . . . . . . . . . . . . . . . 51,338 54,639 154,017 153,581
General and administrative . . . . . . . 140,078 49,400 277,087 160,240
Provision for value impairment
(Note 2) . . . . . . . . . . . . . . . 8,200,000 -- 8,200,000 --
----------- ---------- ---------- ----------
10,521,745 2,300,232 15,000,644 6,804,015
----------- ---------- ---------- ----------
Operating earnings (loss). . . . . (7,334,705) 981,751 (6,059,964) 2,171,420
Partnership's share of operations
from unconsolidated ventures
(notes 3(b), 3(c) and 7) . . . . . . . . 101,684 142,478 367,870 365,800
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . $(7,233,021) 1,124,229 (5,692,094) 2,537,220
=========== ========== ========== ==========
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------------------------------------------------
1995 1994 1995 1994
----------- ---------- ----------- ----------
Net earnings (loss) per
limited partnership
interest (note 1). . . . . . . . $ (54.93) 8.54 (43.23) 19.27
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest (note 1). . . . . . . . $ 11.00 10.00 33.00 30.00
=========== ========== ========== ==========
<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
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
<CAPTION>
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . $(5,692,094) 2,537,220
Items not requiring cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 1,866,349 1,866,523
Amortization of deferred expenses. . . . . . . . . . . . . . . 154,017 153,581
Partnership's share of operations of unconsolidated
ventures, net of distributions . . . . . . . . . . . . . . . 653,381 779,200
Provision for value impairment . . . . . . . . . . . . . . . . 8,200,000 --
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . 259,061 190,822
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . (43,342) (40,409)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . (159,722) (168,552)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 150,623 (58,934)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . (1,228) (13,391)
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . -- 23,003
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . 93,027 101,728
Tenant security deposits . . . . . . . . . . . . . . . . . . . (3,991) (27,553)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . (111,678) (284,506)
------------ -----------
Net cash provided by operating activities. . . . . . . . 5,364,403 5,058,732
------------ -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of short-term
investments. . . . . . . . . . . . . . . . . . . . . . . . . . 3,929,127 (1,319,730)
Additions to investment properties . . . . . . . . . . . . . . . (203,300) (86,618)
Partnership's contributions to unconsolidated ventures . . . . . (1,575) (31,930)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (21,777) (200,497)
------------ -----------
Net cash provided by (used in) investing activities. . . 3,702,475 (1,638,775)
------------ -----------
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1995 1994
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . (201,394) (125,974)
Distributions to limited partners. . . . . . . . . . . . . . . . (4,213,800) (3,830,727)
Distributions to general partners. . . . . . . . . . . . . . . . (117,050) (106,409)
------------ -----------
Net cash used in financing activities. . . . . . . . . . (4,532,244) (4,063,110)
------------ -----------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . 4,534,634 (643,153)
Cash and cash equivalents, beginning of year . . . . . . 5,011,101 1,301,466
------------ -----------
Cash and cash equivalents, end of period . . . . . . . .$ 9,545,735 658,313
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . .$ 1,780,618 1,815,536
============ ===========
Non-cash investing and financing activities:
Refinancing of long-term debt (note 4):
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
SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1994
which are included in the Partnership's 1994 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
(1) BASIS OF ACCOUNTING
The accompanying consolidated financial statements include the
accounts of the Partnership and 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 First Financial Associates ("First Financial") and
JMB/Miami International Associates ("JMB/Miami"). Accordingly, the
accompanying financial statements do not include the accounts of 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 consolidated 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 nine
months ended September 30:
1995 1994
----------------------- -------------------------
GAAP BASIS TAX BASIS GAAP BASIS TAX BASIS
---------- --------- ---------- ---------
Net earnings
(loss). . . . .$(5,692,094) 2,706,921 2,537,220 2,490,281
Net earnings
(loss) per
limited
partnership
interest. . . .$ (43.23) 20.55 19.27 18.92
=========== ========= ========= =========
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.
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 ($8,418,014 and $5,024,751 at September 30, 1995 and December 31,
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
1994, 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.
As more fully discussed in note 2, due to the uncertainty of the
Partnership's ability to recover the net carrying values of the Fountain
Valley Industrial Park and Cerritos Industrial Park investment properties
through future operations and sale, given the expected holding period not
being in excess of 1999, as of September 30, 1995, the Partnership
recorded, as a matter of prudent accounting practice, a provision for value
impairment of such investments of $4,200,000 and $4,000,000, respectively.
Such provisions were recorded to reduce the net carrying value of the
investment properties to their estimated recoverable values.
During March 1995, Statement of Financial Accounting Standards No. 121
("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" was issued. SFAS 121, when effective,
will require that the Partnership record an impairment loss on its long-
lived assets to be held and used whenever their carrying value cannot be
fully recovered through estimated undiscounted future cash flows from
operations and sale. The amount of the impairment loss to be recognized
would be the difference between the long-lived asset's carrying value and
the asset's estimated fair value. Any long-lived assets identified "to be
disposed of" would no longer be depreciated, but adjustments for impairment
loss would be made in each period as necessary to report these assets at
the lower of historical cost and fair value less costs to sell. In certain
situations, such estimated fair value could be less than the existing non-
recourse debt which is secured by the property.
The amount of any impairment loss recognized by the Partnership under
its current accounting policy has been limited to the excess, if any, of
the property's carrying value over the outstanding balance of the
property's non-recourse indebtedness. An impairment loss under SFAS 121
would be determined without regard to the nature or the balance of such
non-recourse indebtedness. Upon the disposition of a property for which an
impairment loss has been recognized under SFAS 121, the Partnership would
recognize, at a minimum, a net gain for financial reporting purposes to the
extent of any excess of the then outstanding balance of the property's non-
recourse indebtedness over the then carrying value of the property,
including the effect of any reduction for impairment loss under SFAS 121.
The Partnership expects to adopt SFAS 121 no later than the first
quarter of 1996. Although the Partnership has not finalized its assessment
of the full impact of adopting SFAS 121, it is not anticipated that any
significant additional provisions for value impairment would be required
for the properties owned by the Partnership and its consolidated ventures,
or by the Partnership's unconsolidated ventures in the first period of
implementation of SFAS 121. Nevertheless, upon the disposition of an
impaired property, the Partnership would generally recognize more net gain
for financial reporting purposes under SFAS 121 than it would have under
the Partnership's current impairment policy, without regard to the amount,
if any, of cash proceeds received by the Partnership in connection with the
disposition. Although implementation of this new accounting statement
could significantly impact the Partnership's reported earnings, there would
be no impact on cash flows. Further, any such impairment loss would not be
recognized for Federal income tax purposes.
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(2) INVESTMENT PROPERTIES
The Partnership has acquired, either directly or through joint
ventures (note 3), three shopping centers, two multi-tenant industrial
properties, an office complex and a parking/retail structure. All of the
properties owned at September 30, 1995 were operating.
Currently, as industrial leases at the Fountain Valley and Cerritos
Industrial Parks expire, lease renewals and new leases are likely to 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. As pre-1993 leases
expire, the expected 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. Therefore, due to the uncertainty of the
Partnership's ability to recover the net carrying values of the Fountain
Valley Industrial Park and Cerritos Industrial Park investment properties
through future operations and sale, given the expected holding period not
being in excess of 1999, as of September 30, 1995, the Partnership
recorded, as a matter of prudent accounting practice, a provision for value
impairment of such investments of $4,200,000 and $4,000,000, respectively.
Such provisions were recorded to reduce the net carrying value of the
investment properties to their estimated recoverable values.
(3) VENTURE AGREEMENTS
(a) General
The Partnership at September 30, 1995 is a party to three operating
joint venture agreements. Pursuant to such agreements, the Partnership has
made capital contributions of approximately $56,821,000 through September
30, 1995. 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.
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) First Financial
On May 20, 1987, the Partnership, through First Financial, a joint
venture with another partnership sponsored by the General Partner of the
Partnership, acquired an interest in a general partnership ("Encino") with
an affiliate of the developer ("Encino Venture Partner"). Encino 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. First Financial does not anticipate further
increasing its initial cash investment in Encino.
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The first mortgage loan on the property matured November 1, 1995.
Effective November 1, 1995, Encino and the existing lender have amended and
restated the existing mortgage loan. The new principal balance of the
amended note at November 1, 1995 is $24,970,148. This amount is comprised
of the current outstanding principal portion of $28,970,148 on the original
$30,000,000 note less the required $4,000,000 principal paydown by Encino,
all of which was advanced by First Financial, of which the Partnership's
share is $1,500,000. The amended loan has an interest rate of 8.67% and a
term of two years resulting in a maturity date of November 1, 1997. The
new monthly installments of principal and interest, based on a 23 year
amortization, will be $209,077.
Due to the uncertainty of Encino's ability to recover the net carrying
value of the First Financial office building investment property through
future operations and sale during the estimated holding period, Encino
recorded, as a matter of prudent accounting practice, a provision for value
impairment of such investment of approximately $6,475,000, all of which is
allocable to First Financial. The Partnership's share of such provision to
First Financial is approximately $2,428,000. Such provision was recorded
at December 31, 1994 to reduce the net carrying value of the investment
property to its then estimated recoverable value.
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 testing on the welded
steel moment 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 testing under the ordinance, and therefore,
Encino retained a structural engineer to perform the testing. Results of
the testing by the structural engineer indicated that some of the
building's joint weldings suffered damage which, in accordance with the
ordinance, were required to be repaired. Encino's structural engineer
informed Encino that the damage detected did not pose a life safety risk
for the building's tenants. All testing and repairs necessary to comply
with such ordinance have been completed as of October 1995. The current
estimated total cost of such testing and repairs is approximately $900,000
(of which the Partnership's share is approximately $337,500).
All of Encino's operating profits and losses before depreciation have
been allocated to First Financial in 1995 and 1994.
(c) JMB/Miami
The Partnership acquired a 50% ownership interest in JMB/Miami which
owns a 50% general partnership interest in West Dade County Associates
("West Dade") which owns the Miami International Mall in Miami, Florida (as
more fully described in Note 3(d) of Notes to Financial Statements in the
Partnership's 1994 Annual Report). The terms of the 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. Under
certain circumstances, either pursuant to the venture agreement or due to
the Partnership's obligations as a general partner, the Partnership may be
required to make additional cash contributions to the venture.
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The shopping center is managed by an affiliate of the Miami Venture
Partner. The manager is paid an annual fee equal to 4-1/2% of the net
operating income of the shopping center.
(d) 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
structure (the "Project") in Chicago, Illinois. The Project contains 671
parking spaces and approximately 28,800 square feet of leasable retail
area. The Partnership has funded approximately $24,994,000 of its total
cash commitment and does not anticipate further increasing its cash
investment.
The Partnership owns a 74.9% interest in the Adams/Wabash Limited
Partnership. 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.
Any distributable cash flow in excess of the Partnership's preferred return
will be distributed to the partners in accordance with their respective
ownership percentage interests in 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. The Partnership is expected to
receive slightly less than its preferred return for 1995. The garage
manager is currently negotiating with the Palmer House Hotel to renew its
exclusive parking agreement which expires December 31, 1995.
(4) LONG-TERM DEBT REFINANCING
In February 1994, the Partnership extended and increased the first
mortgage loan, which is secured by the Fountain Valley and Cerritos
Industrial Parks, to the principal amount of $11,200,000 with a maturity of
March 1, 2001. After payment of costs and fees related to the refinancing,
there were no distributable proceeds from the loan extension. 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
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,
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
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 the sum of (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 $4,052,000 of disbursable cash and approximately
$618,000 of sale proceeds have been deferred by the General Partners.
(6) TRANSACTIONS WITH AFFILIATES
Certain of the Partnership's properties are managed by affiliates of
the General Partners. In December 1994, one of the affiliate 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 Park investment properties
after the sale on the same terms that existed prior to the sale.
Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of September
30, 1995 and for the nine months ended September 30, 1995 and 1994 are as
follows:
Unpaid at
September 30,
1995 1994 1995
------- ------- -------------
Property management
fees. . . . . . . . . . . $80,182 158,828 8,382
Insurance commissions. . . 9,986 -- --
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . . 6,330 2,284 4,628
------- ------- ------
$96,498 161,112 13,010
======= ======= ======
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 nine months
ended September 30, 1995 were approximately $80,182, of which $8,382 has
not 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.
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
The Managing General Partner and its affiliates are entitled to
reimbursement for salaries and direct expenses of officers and employees of
the Managing General Partner and its affiliates relating to the
administration of the Partnership and the operation of Partnership's
investment properties. The amount of such salaries and direct expenses
aggregated $189,121 and $128,794 for the nine months ended September 30,
1995 and the twelve months ended December 31, 1994, respectively, all of
which has been paid as of September 30, 1995.
The Managing General Partner of the Partnership has determined to use
independent third parties to perform certain administrative services
beginning in the fourth quarter of 1995. Use of such third parties is not
expected to have a material effect on the operations of the Partnership.
(7) UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
The summary income statement information for the First Financial and
JMB/Miami ventures for the nine months ended September 30, 1995 and 1994 is
as follows:
1995 1994
----------- ----------
Total income . . . . . . . $14,029,464 13,911,102
=========== ==========
Operating earnings . . . . $ 2,009,491 1,674,088
=========== ==========
Net earnings . . . . . . . $ 2,009,491 1,674,088
=========== ==========
Net earnings to
Partnership . . . . . . . $ 367,870 365,800
=========== ==========
(8) ADJUSTMENTS
In the opinion of the Managing General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of September 30,
1995 and for the three and nine months ended September 30, 1995 and 1994.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
All references to "Notes" are to Notes to Financial Statements
contained in this report.
At September 30, 1995, the Partnership and its consolidated venture
had cash and cash equivalents of approximately $9,546,000. Such funds and
short-term investments of approximately $5,286,000 are available for future
distributions to partners, working capital requirements and to make
additional investments in the venture which owns the First Financial Plaza
Office Building, including the partial paydown of principal in connection
with the extension of the mortgage loan, as described below and in Note
3(b). 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 $289,000
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 $709,000.
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. Due to an increase in cash flow from operations at
certain of the Partnership's properties, the Partnership 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. Starting in November 1995, in an effort to reduce
partnership operating expenses, the Partnership has elected to make semi-
annual, rather than quarterly, distributions of operating cash flow of $22
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 75% of the rentable square footage are scheduled to expire,
not all of which are expected to renew. In February 1994, True Form
(42,750 square feet or 22% of the gross leasable area), 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. The Partnership entered into a new lease with True Form's
successor in bankruptcy, TFI Acquisition, Inc., in May, 1995.
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. In 1995
and 1996, leases representing 23% and 10%, 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 the park to retail use (including the possible use of
Partnership funds and/or alternative financing sources) as a result of the
City of Fountain Valley designating a redevelopment zone which includes the
property. The Partnership has commenced discussions with several large
national retail tenants who have expressed interest in the Fountain Valley
property. Recently, the Partnership entered into a non-binding letter of
intent with a national retailer to take a significant portion of the space
at the property, approximately 110,000 square feet of space at the
property, should the redevelopment take place. The letter of intent is
subject to numerous contingencies and may not result in a binding contract.
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. As pre-1993 leases
expire, the expected 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. Therefore, due to the uncertainty of the
Partnership's ability to recover the net carrying values of the Fountain
Valley Industrial Park and Cerritos Industrial Park investment properties
through future operations and sale, given the expected holding period not
being in excess of 1999, as of September 30, 1995, the Partnership
recorded, as a matter of prudent accounting practice, a provision for value
impairment of such investments of $4,200,000 and $4,000,000, respectively.
Such provisions were recorded to reduce the net carrying value of the
investment properties to their estimated recoverable values.
In February 1994, the Partnership extended to March 1, 2001 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.
After payment of costs and fees related to the re-financing, there were no
distributable proceeds from the loan extension.
The Rivertree Court Shopping Center operates in a market which
continues to experience 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 in October 1994. Phar-Mor assigned its lease in bankruptcy to Home
Goods, which opened in April 1995. Under the terms of the assignment of
the Phar-Mor lease, Home Goods continues 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.
The Adams/Wabash garage manager is currently negotiating with the
Palmer House Hotel to renew its exclusive parking agreement which expires
December 31, 1995.
West Dade joint venture, which owns the Miami International Mall, sold
a 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.
At September 30, 1995, the First Financial Plaza office building is
approximately 88% 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 92% leased as of the date of this report.
The Los Angeles office market in general and the Encino submarket in
particular continue to show signs of strengthening as vacancy rates
decrease and rental rates stabilize.
The first mortgage loan on the property matured November 1, 1995.
Effective November 1, 1995, Encino and the existing lender have amended and
restated the existing mortgage loan. The new principal balance of the
amended note at November 1, 1995 is $24,970,148. This amount is comprised
of the current outstanding principal portion of $28,970,148 on the original
$30,000,000 note less the required $4,000,000 principal paydown by Encino,
all of which was advanced by First Financial, of which the Partnership's
share is $1,500,000. The amended loan has an interest rate of 8.67% and a
term of two years resulting in a maturity date of November 1, 1997. The
new monthly installments of principal and interest, based on a 23 year
amortization, will be $209,077.
Due to the uncertainty of Encino's ability to recover the net carrying
value of the First Financial office building investment property through
future operations and sale during the estimated holding period, Encino
recorded, as a matter of prudent accounting practice, a provision for value
impairment of such investment of approximately $6,475,000, all of which is
allocable to First Financial. The Partnership's share of such provision to
First Financial is approximately $2,428,000. Such provision was recorded
at December 31, 1994 to reduce the net carrying value of the investment
property to its then estimated recoverable value.
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 testing on the welded
steel moment 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 testing under the ordinance, and therefore,
Encino retained a structural engineer to perform the testing. Results of
the testing by the structural engineer indicated that some of the
building's joint weldings suffered damage which, in accordance with the
ordinance, were required to be repaired. Encino's structural engineer
informed Encino that the damage detected did not pose a life safety risk
for the building's tenants. All testing and repairs necessary to comply
with such ordinance have been completed as of October 1995. The current
estimated total cost of such testing and repairs is approximately $900,000
(of which the Partnership's share is approximately $337,500).
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.
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. The cumulative amount of such deferred distributions are
approximately $4,670,000 at September 30, 1995. All amounts deferred or
currently payable do not bear interest.
While the real estate markets are recuperating, highly competitive
market conditions continue to exist in most locations. The Partnership's
approach has been to aggressively and creatively manage the Partnership's
real estate assets to attract and retain tenants. Net effective rents to
the landlord from renewal tenants are generally more favorable than lease
terms which can be negotiated with new tenants. However, the Partnership's
capital resources must also be preserved and allocated in such a manner as
to maximize the total value of the portfolio. As a result of the real
estate market conditions discussed above, the Partnership continues to
conserve its working capital. All expenditures are carefully analyzed and
certain capital projects are deferred when appropriate. The Partnership
will also seek additional loan modifications where appropriate. By
conserving working capital, the Partnership will be in a better position to
meet the future needs of its properties since outside sources of capital
may be limited.
Due to these factors, the Partnership has held its remaining
investment properties longer than originally anticipated in an effort to
maximize the return to the Limited Partners. After reviewing the remaining
properties and their competitive marketplace, the General Partners of the
Partnership expect to be able to liquidate the remaining assets as quickly
as practicable. Therefore, the affairs of the Partnership are expected to
be wound up no later than 1999 (sooner if the properties are sold in the
nearer term), bearing unforeseen economic developments.
RESULTS OF OPERATIONS
The increase in cash and cash equivalents and the decrease in short-
term investments at September 30, 1995 as compared to December 31, 1994 is
primarily due to approximately $8,418,000 of the Partnership's U.S.
Government obligations being classified as cash equivalents at September
30, 1995 whereas approximately $5,025,000 of such U.S. Government
obligations were classified as cash equivalents at December 31, 1994.
Reference is made to Note 1.
The decrease in interest, rents and other receivables, at September
30, 1995 as compared to December 31, 1994, is primarily due to the timing
of rental collections at certain of the Partnership's investment
properties.
The increase in prepaid expenses at September 30, 1995 as compared to
December 31, 1994 is primarily due to the timing of payment of insurance
premiums at certain of the Partnership's investment properties.
The increase in escrow deposits and the corresponding increase in
accrued real estate taxes at September 30, 1995 as compared to December 31,
1994 is primarily due to the timing of payment of real estate taxes from
escrow at the Fountain Valley and Cerritos Industrial Parks.
The decrease in land, buildings and improvements and deferred expenses
at September 30, 1995 as compared to December 31, 1994 is primarily due to
the provision for value impairment recorded at September 30, 1995 for both
the Fountain Valley and Cerritos Industrial Park investment properties.
Reference is made to Note 2.
The decrease in investment in unconsolidated ventures at September 30,
1995 as compared to December 31, 1994 is primarily due to the receipt by
the Partnership of distributions from West Dade.
The increase in accounts payable, at September 30, 1995 as compared to
December 31, 1994, is primarily due to the timing of payment of operating
expenses at certain of the Partnership's properties.
The decrease in rental income for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
30, 1994 is due to lower effective tenant rents upon renewal at certain of
the Partnership's investment properties, as discussed above. The decrease
in rental income for the three months ended September 30, 1995 was
partially offset by an increase in seasonal parking income at the
Adams/Wabash investment property.
The increase in interest income for the three and nine months ended
September 30, 1995 as compared to the three and nine months ended September
30, 1994 is due to the increase in the Partnership's average balance in
U.S. Government obligations and higher rates earned in 1995.
The increases in general and administrative expenses for the three and
nine months ended September 30, 1995 as compared to the three and nine
months ended September 30, 1994 are attributable primarily to an increase
in reimbursable costs to affiliates of the General Partner in 1995 and the
recognition of certain additional prior year reimbursable costs to such
affiliates. Reference is made to Note 6.
The provision for value impairment for the three and nine months ended
September 30, 1995 is due to the provision for value impairment recorded at
September 30, 1995 for both the Fountain Valley and Cerritos Industrial
Park investment properties. Reference is made to Note 2.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate physical occupancy levels by quarter for the Partnership's
investment properties.
<CAPTION>
1994 1995
-------------------------------------------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. First Financial Plaza
Encino (Los Angeles),
California . . . . . . . 84%(1) 91%(1) 89%(1) 89%(1) 89%(1) 86%(1) 88%(1)
2. Miami International Mall
Miami, Florida . . . . . 98% 96% 97% 93% 89% 91% 90%
3. Rivertree Court
Shopping Center
Vernon Hills (Chicago),
Illinois . . . . . . . . 88%(2) 89%(2) 98% 85%(3) 85%(3) 96% 95%
4. Fountain Valley
Industrial Park
Fountain Valley
(Los Angeles),
California . . . . . . . 85% 85% 91% 100% 92% 92% 100%
5. Cerritos Industrial Park
Cerritos (Los Angeles),
California . . . . . . . 100% 100% 100% 100% 100% 100% 100%
6. Adams/Wabash Self Park
Chicago, Illinois. . . . * * * * * * *
<FN>
- ---------------
An asterisk indicates that the property is a parking garage and occupancy information is not applicable.
However, the approximate occupancy level for the retail portion of the structure as of June 30, 1995 is 45%.
(1) The percentage represents physical occupancy. Mitsubishi (8,109 square feet) 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) 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. Phar-Mor (40,560 square feet) vacated its space in
October 1994. However, its lease has been assigned to Home Goods, Inc. which opened its store April 27, 1995.
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
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 report for December 31, 1992 on Form 10-K (File No.
000-19496) 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 is hereby incorporated 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 25, 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 (File No. 000-19496) 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 (File No. 000-19496) 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 (File No. 000-19496) dated October 15, 1990.
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 report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XIII
BY: JMB Realty Corporation
(Managing General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date:November 9, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date:November 9, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1995 AND 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 9,545,735
<SECURITIES> 5,285,823
<RECEIVABLES> 892,457
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,724,015
<PP&E> 90,783,575
<DEPRECIATION> 15,981,631
<TOTAL-ASSETS> 99,186,045
<CURRENT-LIABILITIES> 2,161,927
<BONDS> 26,220,360
<COMMON> 0
0
0
<OTHER-SE> 70,467,536
<TOTAL-LIABILITY-AND-EQUITY> 99,186,045
<SALES> 8,297,044
<TOTAL-REVENUES> 8,940,680
<CGS> 0
<TOTAL-COSTS> 4,601,450
<OTHER-EXPENSES> 419,804
<LOSS-PROVISION> 8,200,000
<INTEREST-EXPENSE> 1,779,390
<INCOME-PRETAX> (6,059,964)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,692,094)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,692,094)
<EPS-PRIMARY> (43.23)
<EPS-DILUTED> (43.23)
</TABLE>
