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, 1996 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 . . . . . . . . . 13
PART II OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . 16
Item 6. Exhibits and Reports on Form 8-K. . . . . . 18
<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, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . $ 9,535,950 13,599,171
Interest, rents and other receivables (net of allowance
for doubtful accounts of $289,561 in 1996 and
$38,235 in 1995) . . . . . . . . . . . . . . . . . . . . . 1,228,172 1,121,270
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . 125,728 68,901
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . 111,358 102,680
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . 11,001,208 14,892,022
Investment properties, at cost:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,300,842 21,300,842
Buildings and improvements . . . . . . . . . . . . . . . . . 69,505,112 69,439,819
------------ -----------
90,805,954 90,740,661
Less accumulated depreciation. . . . . . . . . . . . . . . . 18,046,819 16,583,348
------------ -----------
Total investment properties, net of
accumulated depreciation . . . . . . . . . . . . . . 72,759,135 74,157,313
Investment in unconsolidated ventures, at equity . . . . . . . -- 8,026,013
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 682,346 741,184
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 1,507,999 1,666,682
------------ -----------
$ 85,950,688 99,483,214
============ ===========
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . $ 307,993 291,589
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 136,945 197,765
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 195,407 196,729
Accrued real estate taxes. . . . . . . . . . . . . . . . . . 985,416 1,171,341
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . 502,954 612,082
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . 2,128,715 2,469,506
Tenant security deposits . . . . . . . . . . . . . . . . . . . 312,839 328,622
Investment in unconsolidated ventures, at equity . . . . . . . 27,307 --
Long-term debt, less current portion . . . . . . . . . . . . . 25,913,549 26,146,638
------------ -----------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . 28,382,410 28,944,766
------------ -----------
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net earnings (losses) . . . . . . . . . . . . 669,520 459,660
Cumulative cash distributions. . . . . . . . . . . . . . (1,570,739) (1,389,844)
------------ -----------
(881,219) (910,184)
------------ -----------
Limited partners (126,414 interests):
Capital contributions, net of offering costs . . . . . . 113,741,315 113,741,315
Cumulative net earnings (losses) . . . . . . . . . . . . 29,461,714 16,290,597
Cumulative cash distributions. . . . . . . . . . . . . . (84,753,532) (58,583,280)
------------ -----------
58,449,497 71,448,632
------------ -----------
Total partners' capital accounts (deficits). . . . . . 57,568,278 70,538,448
------------ -----------
$ 85,950,688 99,483,214
============ ===========
<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, 1996 AND 1995
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------------------------------------------
1996 1995 1996 1995
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . $ 2,999,877 2,961,759 8,467,988 8,297,044
Interest income. . . . . . . . . . . . . 168,474 225,281 617,138 643,636
----------- ---------- ---------- ----------
3,168,351 3,187,040 9,085,126 8,940,680
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest. . . . . . . 586,672 591,880 1,764,006 1,779,390
Depreciation . . . . . . . . . . . . . . 313,973 621,979 1,463,471 1,866,349
Property operating expenses. . . . . . . 1,182,167 911,169 2,989,339 2,581,084
Professional services. . . . . . . . . . 37,136 5,301 155,008 142,717
Amortization of deferred expenses. . . . 63,264 51,338 150,363 154,017
General and administrative . . . . . . . 72,797 140,078 333,764 277,087
Provision for value impairment . . . . . -- 8,200,000 -- 8,200,000
----------- ---------- ---------- ----------
2,256,009 10,521,745 6,855,951 15,000,644
----------- ---------- ---------- ----------
Operating earnings (loss). . . . . 912,342 (7,334,705) 2,229,175 (6,059,964)
Partnership's share of operations
from unconsolidated ventures . . . . . . 179,129 101,684 305,823 367,870
----------- ---------- ---------- ----------
Net operating earnings (loss). . . 1,091,471 (7,233,021) 2,534,998 (5,692,094)
Partnership's share of gain on
sale of investment property of
unconsolidated ventures . . . . . . . . . 1,242,525 -- 10,845,979 --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . $ 2,333,996 (7,233,021) 13,380,977 (5,692,094)
=========== ========== ========== ==========
Net earnings (loss) per
limited partnership
interest:
Net operating earnings . . . . . $ 8.29 (54.93) 19.25 (43.23)
Partnership's share of gain on
sale of investment property
of unconsolidated ventures. . . 9.73 -- 84.94 --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . $ 18.02 (54.93) 104.19 (43.23)
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest . . . . . . . . . . . . $ 105.00 11.00 206.00 33.00
=========== ========== ========== ==========
<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, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . $13,380,977 (5,692,094)
Items not requiring cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 1,463,471 1,866,349
Amortization of deferred expenses. . . . . . . . . . . . . . . 150,363 154,017
Partnership's share of operations of unconsolidated
ventures, net of distributions . . . . . . . . . . . . . . . 271,619 653,381
Partnership's share of gain on sale of
investment property of unconsolidated ventures . . . . . . . (10,845,979) --
Provision for value impairment . . . . . . . . . . . . . . . . -- 8,200,000
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . (106,902) 259,061
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . (56,827) (43,342)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 158,683 (159,722)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . (60,820) 150,623
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . (1,322) (1,228)
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . (109,128) --
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . (185,925) 93,027
Tenant security deposits . . . . . . . . . . . . . . . . . . . (15,783) (3,991)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . (8,678) (111,678)
----------- -----------
Net cash provided by (used in) operating activities. . . 4,033,749 5,364,403
----------- -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of short-term
investments. . . . . . . . . . . . . . . . . . . . . . . . . . -- 3,929,127
Cash sales proceeds from sale of interest in unconsolidated
venture, net of selling expenses . . . . . . . . . . . . . . . 18,289,470 --
Additions to investment properties, net. . . . . . . . . . . . . (65,293) (203,300)
Partnership's distributions from unconsolidated ventures . . . . 340,210 --
Partnership's contributions to unconsolidated ventures . . . . . (2,000) (1,575)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (91,525) (21,777)
----------- -----------
Net cash provided by (used in) investing activities. . . 18,470,862 3,702,475
----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . (216,685) (201,394)
Distributions to limited partners. . . . . . . . . . . . . . . . (26,170,252) (4,213,800)
Distributions to general partners. . . . . . . . . . . . . . . . (180,895) (117,050)
----------- -----------
Net cash provided by (used in) financing activities. . . (26,567,832) (4,532,244)
----------- -----------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . (4,063,221) 4,534,634
Cash and cash equivalents, beginning of year . . . . . . 13,599,171 5,011,101
----------- -----------
Cash and cash equivalents, end of period . . . . . . . . $ 9,535,950 9,545,735
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . $ 1,765,328 1,780,618
=========== ===========
Non-cash investing and financing activities. . . . . . . . . . . $ -- --
=========== ===========
<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, 1996 AND 1995
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1995
which are included in the Partnership's 1995 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Certain amounts in the 1995 consolidated financial statements have
been reclassified to conform with the 1996 presentation.
Statement of Financial Accounting Standards No. 121 was adopted by the
Partnership on January 1, 1996.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Managing General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of September 30, 1996 and for the nine months ended
September 30, 1996 and 1995 were as follows:
Unpaid at
September 30,
1996 1995 1996
-------- ------ -------------
Property management and
leasing fees. . . . . . . $ 70,608 80,182 --
Insurance commissions. . . 10,028 9,986 --
Reimbursement (at cost)
for out-of-pocket
salary and salary
related expenses
related to the on-site
and other costs for the
Partnership and its
investment properties . . 110,188 191,405 97,314
-------- ------- ------
$190,824 281,573 97,314
======== ======= ======
During 1994, certain officers and directors of the Managing 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, 1996 were approximately $106,000, all of which was paid
at September 30, 1996.
In accordance with the subordination requirements of the Partnership
Agreement, 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
$5,331,000 at September 30, 1996. All amounts deferred or currently
payable do not bear interest.
FIRST FINANCIAL
On September 11, 1996, the joint venture sold the First Financial
office building to an unaffiliated third-party for a sale price of
$37,900,000 (before selling expenses and prorations). The joint venture
received approximately $13,000,000 of net sale proceeds at closing (which
reflected the assumption by the buyer of the mortgage loan with a current
balance of approximately $24,700,000), substantially all of which was
allocable to JMB/First Financial pursuant to the Encino Venture agreement.
The sale resulted in approximately $2,845,000 of gain for financial
reporting purposes in 1996, of which approximately $1,239,000 was allocated
to the Partnership.
The First Financial office building was classified as held for sale as
of April 1, 1996 and therefore has not been subject to continued
depreciation. The accompanying consolidated financial statements include
the Partnership's share of operations of unconsolidated ventures which
include approximately $138,000 and $(54,000) of operations of such property
for the nine months ended September 30, 1996 and 1995, respectively. The
property had a net carrying value of approximately $33,604,000 at December
31, 1995.
In order to finalize the two-year loan extension of the property's
mortgage loan in November 1995, the Partnership and its affiliated partner
loaned in late 1995 $4.0 million (approximately $1.5 millon by the
Partnership) to the joint venture to fund the required principal payment.
A capital call had been made on the unaffiliated joint venture partner for
its share of the total required amount; however, the unaffiliated joint
venture partner indicated that it would not fund its required share. The
Partnership and its affiliated partner reached an agreement with the
unaffiliated partner to modify the joint venture agreement. In April 1996,
the unaffiliated partner became a limited partner as a result of this
modification.
JMB/MIAMI
The Partnership was a general partner in JMB/Miami International
Associates ("JMB/Miami"), which owned a 50% partnership interest in West
Dade County Associates ("West Dade") with an affiliate of the developer,
the Venture Partner. West Dade owns an interest in the Miami International
Mall. The other partners of JMB/Miami were IDS/JMB Balanced Income Growth,
Ltd. ("IDS/JMB") and Urban Shopping Centers, L.P. ("Urban"), both of which
are affiliates of the Partnership. On April 8, 1996, effective March 31,
1996, JMB/Miami was voluntarily dissolved by agreement of its partners and
its 50% ownership interest in West Dade and related assets were distributed
to its partners based on their respective ownership percentages.
Accordingly, the Partnership acquired a direct 25% ownership interest in
West Dade. The Partnership then sold its entire 25% interest in West Dade
as described below.
On April 8, 1996, the Venture Partner in West Dade purchased 29.812%
(i.e., a 7.453% interest) of the Partnership's interest in West Dade for
$4,005,624 (paid in cash at closing), subject to proration. The Venture
Partner also assumed a proportionate share of the Partnership's obligations
and liabilities of West Dade from and after March 31, 1996, the effective
date of the transaction. The Venture Partner is not affiliated with the
Partnership or its General Partners, and the terms of the sale were
determined by arm's-length negotiations.
Concurrently, Urban exercised its right of first refusal and purchased
the other 70.188% of the Partnership's interest (i.e., a 17.547% interest)
in West Dade for $9,431,107 (paid in cash at closing), subject to
proration. Urban also assumed a proportionate share of the Partnership's
share of obligations and liabilities of West Dade from and after the
effective date of the transaction. The price of the interest sold to Urban
was in proportion to that sold to the Venture Partner, and the other terms
of the sale with Urban were based on those applicable to the sale with the
Venture Partner. In addition, West Dade agreed to indemnify the
Partnership generally from and against claims and liabilities incurred by
the Partnership in connection with West Dade or its property after the
effective date of the transaction. The Partnership recognized an
approximate $9,607,000 gain for financial reporting purposes and expects to
recognize a gain for Federal income tax purposes in 1996. The Partnership
made a cash distribution of $105 per Interest from the sales proceeds in
August 1996.
CERRITOS INDUSTRIAL PARK
From 1997 through 1998, leases at the Cerritos Industrial Park
representing 68% of the rentable square footage are scheduled to expire,
not all of which are expected to renew. Although the Partnership had begun
marketing the property for sale, there can be no assurance that a sale
transaction can be finalized in the near term.
FOUNTAIN VALLEY INDUSTRIAL PARK
Fountain Valley is currently 94% leased and occupied (including
temporary tenants). From the remainder of 1996 through 1998, leases at the
Fountain Valley Industrial Park representing 39% of the leasable square
footage are scheduled to expire, not all of which are expected to be
renewed. The Partnership had been examining the economic benefits,
including the use of Partnership funds, of a partial redevelopment of the
property to retail uses, with the support of the City of Fountain Valley.
However, the City of Fountain Valley is not currently able to give its
approval to such a partial retail conversion due to other city projects
currently underway.
RIVERTREE COURT SHOPPING CENTER
The Rivertree Court Shopping Center operates in a market which
continues to experience significant growth in the commercial and
residential sectors.
In January 1996, HomeGoods vacated its approximate 40,000 square feet
of space in the center. Primarily as a result thereof, the occupancy of
the center declined from 99% to 84% during the first quarter. The
HomeGoods lease was assigned to Best Buy Company, Inc. ("Best Buy"), an
existing tenant of approximately 25,000 square feet at the center. On
August 2, 1996, Best Buy relocated to the former HomeGoods space (expanded
to approximately 44,000 square feet) and the Partnership allowed Best Buy
to terminate its former lease upon vacating its former space. The
Partnership has entered into a lease with PetsMart to lease Best Buy's
former space with a projected occupancy of the fourth quarter of 1996.
During September 1996, the Partnership entered into a letter of intent
to sell the property in late 1996 for a sale price of $32,500,000. The
closing is subject to documentation and certain other closing conditions
and there can be no assurance that the sale will be finalized on any terms.
If the sale were to be finalized on the proposed terms, the Partnership
would expect to recognize a nominal gain for both financial reporting and
Federal income tax purposes in 1996. Accordingly, the property was
classified as held for sale or disposition at July 1, 1996, and therefore,
has not been subject to continued depreciation. The accompanying
consolidated financial statements include approximately $3,324,000 and
$3,058,000 of revenues and $2,636,000 and $2,809,000 of operating expenses
with respect to the property for the nine months ended September 30, 1996
and 1995. The property had a net carrying value of $31,400,000 at
September 30, 1996 and $31,870,000 at December 31, 1995, respectively.
ADAMS/WABASH
The Palmer House Hotel did not renew its exclusive parking agreement
with the Adams/Wabash Self Park upon its expiration in December 1995. This
has had a negative impact on the property's operating cash flow and is
projected to reduce the preferred return payable to the Partnership by
approximately $350,000 for 1996. This impact should be partially mitigated
in future years as the property continues to increase transient parking
volume to replace revenues previously generated by the Palmer House
contract. Effective November 1, 1996, an affiliate of the General Partner
assumed responsibility for the management of Adams/Wabash Self Park on
substantially the same terms.
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,
1996 and for the three and nine months ended September 30, 1996 and 1995.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying consolidated
financial statements for additional information concerning certain of the
Partnership's investments.
During the second quarter some of the Limited Partners in the
Partnership received from an unaffiliated third party an unsolicited tender
offer to purchase up to 5,835 Interests in the Partnership at $350 per
Interest. During the third quarter, another unsolicited tender offer, with
an unspecified expiration date, was received by certain Limited Partners to
purchase an unspecified number of Interests at $270 per Interest. The
Partnership recommended against acceptance of these offers on the basis
that, among other things, the offer price was inadequate. In June the
first such offer expired. As of November 1996, approximately 1,268
Interests were purchased by such unaffiliated third parties pursuant to
such offers. In addition, the Partnership has, from time to time, received
inquires from other third parties that may consider making offers for
Interests, including requests for the list of Limited Partners in the
Partnership. These inquiries are generally preliminary in nature. There
is no assurance that any other third party will commence an offer for
Interests, the terms of any such offer or whether any such offer, if made,
will be consummated, amended or withdrawn. The board of directors of JMB
Realty Corporation ("JMB") the managing general partner of the Partnership,
has established a special committee (the "Special Committee") consisting of
certain directors of JMB to deal with all matters relating to tender offers
for Interests in the Partnership, including any and all responses to such
tender offers. The Special Committee has retained independent counsel to
advise it in connection with any potential tender offers for Interests and
has retained Lehman Brothers Inc. as financial advisor to assist the
Special Committee in evaluating and responding to any additional potential
tender offers for Interests.
At September 30, 1996, the Partnership and its consolidated venture
had cash and cash equivalents of approximately $9,536,000. Such funds are
available for distributions to partners and for working capital
requirements including tenant and capital improvements.
In 1996, in an effort to reduce Partnership operating expenses, the
Partnership elected to make semi-annual, rather than quarterly,
distributions of operating cash flow in May and November. In November, the
Partnership expects to make a semi-annual distribution of cash generated
from operations of $17 per Interest ($9 per Interest for the third quarter
and $8 per Interest for the fourth quarter). The net reduction in
distributions from prior distribution levels was necessary primarily due to
reductions in operating cash flow resulting from the sale of the
Partnership's interest in the Miami International Mall and the First
Financial Plaza office building. In addition, the Partnership anticipates
reductions in operating cash flow due to the re-leasing programs required
at certain of the Partnership's remaining investment properties over the
next few years.
A special distribution of $70 per Interest was made in May 1996
consisting of $20 of previously undistributed cash generated from
operations and $50 of previously undistributed sales proceeds. In August
1996, a distribution of $105 per Interest was made representing sales
proceeds from the sale of the Partnership's interest in Miami International
Mall. In addition, the Partnership anticipates making a distribution of
sale proceeds of $38 per Interest from the sale of First Financial in
November 1996. Previously, these sums had been reserved to fund the costs
associated with the possible redevelopment of portions of the Fountain
Valley Industrial Park to retail use. However, the Partnership did not
receive municipal approval for the redevelopment program and, therefore, is
distributing the funds no longer required for the project. Future cash
distributions from sales or property operations will depend upon a
combination of operating cash flow from the remaining investment properties
and the expected future capital requirements of the Partnership.
After reviewing the remaining properties and the marketplaces in which
they operate, the General Partners of the Partnership expect to be able to
conduct an orderly liquidation of its remaining investment portfolio as
quickly as practicable. Therefore, the affairs of the Partnership are
expected to be wound up no later than December 31, 1999 (sooner if the
properties are sold in the nearer term), barring unforeseen economic
developments.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents at September 30, 1996 as
compared to December 31, 1995 is primarily due to the special distribution
to the Limited Partners of $70 per Interest in May 1996 partially offset by
the temporary investment of sales proceeds received from the sale of the
First Financial Plaza office building investment property as discussed
above.
The decrease in investment in unconsolidated ventures at September 30,
1996 as compared to December 31, 1995 is primarily due to the April 1996
sale of the Partnership's interest in the Miami International Mall
investment property and September 1996 sale of the First Financial Plaza
office building investment property.
The decrease in unearned rents at September 30, 1996 as compared to
December 31, 1995 is primarily due to the timing of rental receipts at the
Rivertree Court Shopping Center investment property.
The decrease in interest income for the three and nine months ended
September 30, 1996 as compared to the three and nine months ended September
30, 1995 is primarily due to the decrease in the Partnership's average
invested balance in U.S. Government obligations at September 30, 1996 as
compared to September 30, 1995.
The decrease in depreciation for the three and nine months ended
September 30, 1996 as compared to the three and nine months ended September
30, 1995 is primarily due to the Rivertree Court Shopping Center investment
property being classified as held for sale or disposition at July 1, 1996,
and therefore, not being subject to continued depreciation.
The increase in property operating expenses for the three and nine
months ended September 30, 1996 as compared to the three and nine months
ended September 30, 1995 is primarily due to an increase in real estate tax
expense at the Partnership's Rivertree Court Shopping Center investment
property. The increase is also due to the expensing of approximately
$190,000 of accumulated costs (previously included in buildings and
improvements in the accompanying consolidated financial statements) related
to the potential redevelopment project, which is no longer viable, to
partially convert the Fountain Valley Industrial Park investment property
to retail uses.
The increase in general and administrative expenses for the nine
months ended September 30, 1996 as compared to the nine months ended
September 30, 1995 is primarily due to an increase in state income tax
expense and an increase in reimbursable costs for the Partnership.
The decrease in Partnership's share of operations from unconsolidated
ventures and increase in gain on sale of investment property of
unconsolidated venture for the nine months ended September 30, 1996 as
compared to the nine months ended September 30, 1995 is primarily due to
the sale of the Partnership's interest in the Miami International Mall
effective March 31, 1996 and the sale of the First Financial Plaza office
building effective September 11, 1996.
The provision for value impairment for the three and nine months ended
September 30, 1995 is due to the provision for value impairments recorded
at September 30, 1995 for both the Fountain Valley and Cerritos Industrial
Park investment properties 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 then estimated recoverable values.
<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>
1995 1996
-------------------------------------------------------------------
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 . . . . . . . 89% 86% 88% 89% 82% 84% N/A
2. Miami International Mall
Miami, Florida . . . . . 89% 91% 90% 94% 94% N/A N/A
3. Rivertree Court
Shopping Center
Vernon Hills (Chicago),
Illinois (1) . . . . . . 85% 96% 95% 99% 84% 83% 89%
4. Fountain Valley
Industrial Park
Fountain Valley
(Los Angeles),
California . . . . . . . 92% 92% 100% 88% 93% 100% 94%
5. Cerritos Industrial Park
Cerritos (Los Angeles),
California . . . . . . . 100% 100% 100% 100% 100% 100% 100%
6. Adams/Wabash Self Park
Chicago, Illinois. . . . * * * * * * *
<FN>
- ---------------
An "N/A" indicates that the property was sold and not owned by the Partnership at the end of the quarter.
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 September 30,
1996 is 48%.
(1) The Rivertree Court Shopping Center is 97% leased as of September 30, 1996. In December 1995, the
HomeGoods Store lease (40,560 square feet or 14% of the property) was assigned to Best Buy Company, Inc., which
opened August 2, 1996, as more further described in the Notes to Consolidated Financial Statements included in
this report.
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 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 to Exhibit 3-A to the Partnership's report for December
31, 1992 on Form 10-K (File No. 000-19496) 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 report for December 31, 1992
on Form 10-K (File No. 000-19496) dated March 18, 1993.
3-C. Acknowledgement of rights and duties of the General
Partners of the Partnership between AGPP Associates, L.P. (a successor
Associated General Partner of the Partnership) and JMB Realty Corporation
as of December 31, 1995 is hereby incorporated herein by reference to the
Partnership's report for June 30, 1996 on Form 10-Q (File No. 000-19496)
dated August 9, 1996.
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.
4-C. Copy of modification document relating to the mortgage
loan secured by the First Financial Plaza Office Building in Encino,
California is hereby incorporated by reference to Exhibit 4-C to the
Partnership's Report for December 31, 1995 on Form 10-K (File No. 000-
19496) dated March 25, 1996.
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.
10-D. Sale documents relating to the sale by the Partnership of
an interest in the Miami International Mall in Miami, Florida are hereby
incorporated by reference to the Partnership's report for April 8, 1996 on
Form 8-K (File No. 0-19496) dated April 23, 1996.
10-E. Purchase Agreement and amendments thereto dated August 9,
1996 relating to the sale of First Financial Plaza by JMB Encino
Partnership, L.P. are filed herewith.
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 have been 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 8, 1996
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 8, 1996
<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, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 9,535,950
<SECURITIES> 0
<RECEIVABLES> 1,465,258
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,001,208
<PP&E> 90,805,954
<DEPRECIATION> 18,046,819
<TOTAL-ASSETS> 85,950,688
<CURRENT-LIABILITIES> 2,128,715
<BONDS> 25,913,549
<COMMON> 0
0
0
<OTHER-SE> 57,568,278
<TOTAL-LIABILITY-AND-EQUITY>85,950,688
<SALES> 8,467,988
<TOTAL-REVENUES> 9,085,126
<CGS> 0
<TOTAL-COSTS> 4,603,173
<OTHER-EXPENSES> 488,772
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,764,006
<INCOME-PRETAX> 2,229,175
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,534,998
<DISCONTINUED> 10,845,979
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,380,977
<EPS-PRIMARY> 104.19
<EPS-DILUTED> 104.19
</TABLE>
