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
June 30, 1997 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
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements. . . . . . . . . . . . 3
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . . . . . 13
PART II OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K. . . . . . 16
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . $ 8,691,157 3,743,541
Interest, rents and other receivables (net of allowance
for doubtful accounts of $278,748 in 1997 and
$48,604 in 1996) . . . . . . . . . . . . . . . . . . . . . 923,194 1,232,970
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . -- 71,674
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . 146,549 144,050
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . 9,760,900 5,192,235
Investment properties held for sale or disposition . . . . . . 64,049,716 72,718,307
------------ -----------
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 679,577 732,036
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 1,435,138 1,455,105
------------ -----------
$ 75,925,331 80,097,683
============ ===========
<PAGE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
JUNE 30, DECEMBER 31,
1997 1996
------------- -----------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . $ 193,187 313,664
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 270,844 300,262
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 169,483 194,950
Accrued real estate taxes. . . . . . . . . . . . . . . . . . 1,179,555 1,201,572
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . 611,530 444,575
Purchase option deposits . . . . . . . . . . . . . . . . . . 150,000 --
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . 2,574,599 2,455,023
Tenant security deposits . . . . . . . . . . . . . . . . . . . 267,749 314,124
Long-term debt, less current portion . . . . . . . . . . . . . 21,778,482 25,482,974
------------ -----------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . 24,620,830 28,252,121
------------ -----------
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net earnings (losses) . . . . . . . . . . . . 728,837 721,969
Cumulative cash distributions. . . . . . . . . . . . . . (1,687,789) (1,631,037)
------------ -----------
(938,952) (889,068)
------------ -----------
Limited partners (126,414 interests):
Capital contributions, net of offering costs . . . . . . 113,741,315 113,741,315
Cumulative net earnings (losses) . . . . . . . . . . . . 32,455,799 30,903,922
Cumulative cash distributions. . . . . . . . . . . . . . (93,953,661) (91,910,607)
------------ -----------
52,243,453 52,734,630
------------ -----------
Total partners' capital accounts (deficits). . . . . . 51,304,501 51,845,562
------------ -----------
$ 75,925,331 80,097,683
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------------- ------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . $ 2,500,802 2,755,186 5,496,832 5,468,111
Interest income. . . . . . . . . . . . . 67,451 280,662 110,015 448,664
----------- ---------- ---------- ----------
2,568,253 3,035,848 5,606,847 5,916,775
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest. . . . . . . 543,760 587,607 1,127,682 1,177,334
Depreciation . . . . . . . . . . . . . . -- 575,288 -- 1,149,498
Property operating expenses. . . . . . . 909,084 1,014,911 1,805,700 1,807,172
Professional services. . . . . . . . . . 38,359 45,221 134,122 117,872
Amortization of deferred expenses. . . . 83,315 43,549 89,270 87,099
General and administrative . . . . . . . 110,337 126,945 240,729 260,967
Provision for value impairment . . . . . 2,500,000 -- 2,500,000 --
----------- ---------- ---------- ----------
4,184,855 2,393,521 5,897,503 4,599,942
----------- ---------- ---------- ----------
Operating earnings (loss). . . . . (1,616,602) 642,327 (290,656) 1,316,833
Partnership's share of operations
from unconsolidated ventures . . . . . . -- 13,369 -- 126,694
----------- ---------- ---------- ----------
Net operating earnings (loss). . . (1,616,602) 655,696 (290,656) 1,443,527
Gain on sale of interest in
unconsolidated venture and of
investment properties. . . . . . . . . . 1,759,856 9,603,454 1,759,856 9,603,454
----------- ---------- ---------- ----------
<PAGE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- ------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
Net earnings (loss)
before extraordinary item. . . . 143,254 10,259,150 1,469,200 11,046,981
Extraordinary item . . . . . . . . . . . . 89,545 -- 89,545 --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . $ 232,799 10,259,150 1,558,745 11,046,981
=========== ========== ========== ==========
Net earnings (loss) per
limited partnership
interest:
Net operating earnings . . . . . $ (12.28) 4.98 (2.21) 10.96
Gain on sale of interest
in unconsolidated venture
and investment properties. . . 13.78 75.21 13.78 75.21
Extraordinary item . . . . . . . .70 -- .70 --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . $ 2.20 80.19 12.27 86.17
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest . . . . . . . . . . . . $ 16.00 90.00 16.00 101.00
=========== ========== ========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . $ 1,558,745 11,046,981
Items not requiring cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . -- 1,149,498
Amortization of deferred expenses. . . . . . . . . . . . . . . 89,270 87,099
Partnership's share of operations of unconsolidated
ventures, net of distributions . . . . . . . . . . . . . . . -- 28,044
Partnership's gain on sale of interest in
unconsolidated venture . . . . . . . . . . . . . . . . . . . -- (9,603,454)
Partnership's gain on sale of investment property. . . . . . . (1,759,856) --
Extraordinary item . . . . . . . . . . . . . . . . . . . . . . (89,545) --
Provision for value impairment . . . . . . . . . . . . . . . . 2,500,000 --
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . 309,776 44,107
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 71,674 42,364
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 19,967 3,818
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . (29,418) 117,664
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . (25,467) (873)
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . 166,955 (68,644)
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . (22,017) 26,326
Tenant security deposits . . . . . . . . . . . . . . . . . . . (46,375) (8,183)
Purchase option deposits . . . . . . . . . . . . . . . . . . . 150,000 --
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . (2,499) 70,547
----------- -----------
Net cash provided by (used in) operating activities. . . 2,891,210 2,935,294
----------- -----------
Cash flows from investing activities:
Cash sales proceeds from sale of investment properties,
net of selling expenses. . . . . . . . . . . . . . . . . . . . 4,510,198 13,417,303
Additions to investment properties, net. . . . . . . . . . . . . (82,247) (196,155)
Partnership's distributions from unconsolidated ventures . . . . -- 606,479
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (84,770) (79,258)
----------- -----------
Net cash provided by (used in) investing activities. . . 4,343,181 13,748,369
----------- -----------
<PAGE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996
----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . (186,969) (143,135)
Distributions to limited partners. . . . . . . . . . . . . . . . (2,043,054) (12,896,782)
Distributions to general partners. . . . . . . . . . . . . . . . (56,752) (180,895)
----------- -----------
Net cash provided by (used in) financing activities. . . (2,286,775) (13,220,812)
----------- -----------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . 4,947,616 3,462,851
Cash and cash equivalents, beginning of year . . . . . . 3,743,541 13,599,171
----------- -----------
Cash and cash equivalents, end of period . . . . . . . . $ 8,691,157 17,062,022
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . $ 1,153,149 1,178,207
=========== ===========
Non-cash investing and financing activities:
Total sales proceeds from sale of investment property:
Total sales proceeds, net of selling expenses. . . . .$ 8,237,743 --
Prepayment premium . . . . . . . . . . . . . . . . . . (89,545) --
Payoff of mortgage loans . . . . . . . . . . . . . . . (3,638,000) --
----------- -----------
Cash proceeds from sale of investment properties . . $4,510,198 --
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
JMB INCOME PROPERTIES, LTD. - XIII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1996
which are included in the Partnership's 1996 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.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. The Partnership's policy is to consider a property to be
held for sale or disposition when the Partnership has committed to a plan
to sell such property and active marketing activity has commenced or is
expected to commence in the near term. In accordance with SFAS 121, any
properties identified as "held for sale or disposition" are no longer
depreciated. As of December 31, 1996, the Partnership committed to a plan
to sell all of its remaining investment properties. Accordingly, these
properties have been classified as held for sale or disposition in the
accompanying consolidated financial statements. The results of operations,
net of venture partners' share, for such properties were $17,811 and
$1,260,229, respectively, for the six months ended June 30, 1997 and 1996.
In addition, the accompanying consolidated financial statements include $0
and $126,694, respectively, of the Partnership's share of total property
operations of $0 and $200,693 for the six months ended June 30, 1997 and
1996, respectively, for unconsolidated properties held for sale or
disposition or sold or disposed of during the past two years.
During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. As the Partnership's
capital structure only has general and limited partnership interests, the
Partnership does not expect any significant impact on its consolidated
financial statements upon adoption of these standards when required at the
end of 1997.
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 June 30, 1997 and for the six months ended June 30,
1997 and 1996 were as follows:
<PAGE>
Unpaid at
June 30,
1997 1996 1997
------- ------ -------------
Property management and
leasing fees. . . . . . . $ 68,606 44,431 --
Insurance commissions. . . 8,094 9,620 --
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 . . 34,923 74,722 33,612
-------- ------- ------
$111,623 128,773 33,612
======== ======= ======
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's consolidated venture
for the six months ended June 30, 1997 were approximately $75,517, all of
which was paid at June 30, 1997. Effective November 1, 1996, an affiliate
of the General Partners assumed the management of the retail portion of the
Adams/Wabash Self Park for an annual fee equal to 5% of the gross revenue
of the retail portion of the property, the same terms as the previous
unaffiliated manager.
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
$5,682,000 at June 30, 1997. All amounts deferred or currently payable do
not bear interest. The Partnership does not expect that the subordination
requirements of the Partnership agreement will be satisfied over the
expected remaining term of the Partnership to permit payment of the
majority of these amounts. Additionally, the General Partners waived their
right to receive the allocation of sale proceeds, which otherwise would
have been deferred per the subordination requirements of the Partnership
agreement, from the sale of the Partnership's interest in the Miami
International Mall and the First Financial Plaza in 1996 and from the sales
of the two parcels of the Fountain Valley Industrial Park investment
property in 1996 and 1997 and the Cerritos Industrial Park in 1997.
CERRITOS INDUSTRIAL PARK
On May 29, 1997, the Partnership sold the land and related
improvements known as the Cerritos Industrial Park to an unaffiliated
third-party for $7,500,000 (before selling expenses of approximately
$258,000). After repayment of the mortgage loan securing the property in
the amount of $3,168,000, and the payment of the prepayment premium of
approximately $78,700 (which was included as an extraordinary item in the
Partnership's 1997 consolidated financial statements), the Partnership
realized net sale proceeds of approximately $4,070,000. The sale of the
property resulted in an approximate $1,395,000 gain on sale to the
Partnership in 1997 for financial reporting purposes. The Partnership
expects to recognize a loss of approximately $2,230,000 for Federal income
tax purposes in 1997. The property was 100% occupied at the date of sale.
The property was classified as held for sale or disposition as of October
1, 1996 and therefore has not been subject to continued depreciation as of
that date for financial reporting purposes.
<PAGE>
FOUNTAIN VALLEY INDUSTRIAL PARK
During the quarter, occupancy of this industrial park increased to
100%. The Partnership in 1997 leased vacant space of 22,826 square feet
and has renewed 39,060 square feet, re-leased 30,250 square feet and has
sold 22,202 square feet of the 154,968 square feet of space under tenant
leases originally scheduled to expire in 1997 and 1998 (39% of the park's
original square footage of 393,092 square feet). The Partnership is
actively pursuing the renewal or re-leasing of the remaining tenant spaces
which are scheduled to expire in 1997 and 1998 representing approximately
63,456 square feet (17% of the park's revised square footage of 370,890
square feet). The strong Orange County (Los Angeles) industrial market
continues to put upward pressure on tenant demand and consequently, market
rents. As a result, the Partnership has been able to convert several
buildings which had been previously leased to tenants on a temporary basis
to permanent leases at significantly higher rents then the tenants were
paying previously.
On May 1, 1997, the Partnership sold a 12,702 square foot building and
related land parcel within the park to the current tenant for a sales price
of $970,000. As a result of this sale, the lender required a $470,000
prepayment of the outstanding mortgage and a prepayment premium of
approximately $11,000 (which was included as an extraordinary item in the
Partnership's 1997 consolidated financial statements). The net sale
proceeds to the Partnership were approximately $430,000 after payment of
closing costs and the prepayment premium to the lender. The sale of the
building and related land parcel resulted in an approximately $364,000 gain
on sale to the Partnership for financial reporting purposes in 1997. The
Partnership expects to recognize a gain of approximately $250,000 for
Federal income tax purposes in 1997. The Partnership is currently
marketing the remainder of the industrial park for sale.
Effective June 1, 1997, the Partnership's 7.32% mortgage note,
originally secured by both the Fountain Valley Industrial Park and the
Cerritos Industrial Park investment properties, was modified in principle
due to the property sales described above resulting in prepayment of
principal on the mortgage note. The mortgage note is no longer
collateralized by the Cerritos Industrial Park or the two parcels of land
and their related buildings that were a part of the Fountain Valley
Industrial Park that have been sold. Due to the sales of the above
properties, including an outparcel sold at the Fountain Valley Industrial
Park in 1996, the Partnership was required to prepay principal of
approximately $3,988,000 on the outstanding mortgage note. As a result
thereof, the lender agreed to recast the $88,998 monthly loan installments
of principal and interest downward to $53,823. The loan is currently
solely collateralized by the remainder of the Fountain Valley Industrial
Park owned by the Partnership.
RIVERTREE COURT SHOPPING CENTER
On July 17, 1997, the Partnership sold the land and related
improvements known as the Rivertree Court Shopping Center to an
unaffiliated third-party for $31,175,000 (before selling expenses of
approximately $550,000). The Partnership received approximately
$14,925,000 of net sales proceeds at closing (which reflected the
assumption by the buyer of the mortgage loan which had a current balance of
approximately $15,700,000 and the payment of closing costs). Based upon
the proposed sale price, as a matter of prudent accounting practice, the
Partnership recognized a provision for value impairment of $2,500,000 for
the three months ended June 30, 1997. Accordingly, the sale will not
result in a significant gain or loss to the Partnership for financial
reporting purposes. The property was classified as held for sale or
disposition as of July 1, 1996 and therefore has not been subject to
continued depreciation as of that date for financial reporting purposes.
In addition, the Partnership expects to report a loss on sale of
approximately $900,000 for Federal Income tax reporting purposes in 1997.
The property was 96% occupied at the date of sale.
<PAGE>
ADAMS/WABASH
On April 30, 1997, the Adams/Wabash joint venture entered into a
letter of intent giving an unaffiliated third party buyer the option to
purchase the property. In June 1997 an option agreement was entered into
between the joint venture and the prospective buyer granting the buyer the
option to purchase the property at the option price by July 15, 1997, with
provisions for extending the closing date to August 15 or September 15,
1997 upon payment to the venture of an extension fee. In accordance with
the agreement, the buyer paid an option fee of $2,000,000 into an escrow
account held by an escrow holder. A portion of the option fee, $150,000,
was released to the joint venture concurrent with the execution of the
agreement, $50,000 was released to the joint venture on July 1, 1997 and
the remainder, together with interest, was released to the joint venture on
July 15, 1997. At closing, the option fee will be applied against the
purchase price. In addition, the buyer exercised its right to extend the
closing date to August 15, 1997 by delivering to the joint venture an
extension fee of $100,000 on July 8, 1997. If the sale is consummated on
its proposed terms, the Partnership will recognize a gain for both
financial reporting and Federal income tax purposes.
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 June 30, 1997
and for the three and six months ended June 30, 1997 and 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying consolidated
financial statements for additional information concerning certain of the
Partnership's investments.
During mid-1996, some of the Limited Partners in the Partnership
received unsolicited tender offers to purchase up to 4.9% of the Interests
in the Partnership from unaffiliated third parties with offers ranging
between $270 and $350 per Interest. The Partnership recommended against
acceptance of these offers on the basis that, among other things, the offer
price was inadequate. These offers have expired.
It is possible that other offers for Interests may be made by
unaffiliated third parties in the future, although 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.
In November 1996, an unaffiliated third party made an unsolicited
tender offer for up to 4.9% of the Interests in the Partnership at $400 per
Interest. The Special Committee was neutral in its recommendation to
accept or reject such offer. The offer expired in December 1996.
In 1997, additional unaffiliated third parties made unsolicited tender
offers for up to 4.9% of the Interests in the Partnership with offers
ranging between $265 and $340 per Interest. The Special Committee
recommended against acceptance of these offers, all of which have expired.
As of the date of this report, the Partnership is aware that 5.10% of the
Interests of the Partnership have been purchased by all such unaffiliated
third parties either pursuant to such tender offers or through negotiated
purchases.
At June 30, 1997, the Partnership and its consolidated venture had
cash and cash equivalents of approximately $8,691,000. Such funds are
available for distributions to partners and for working capital
requirements including tenant and capital improvements.
In May 1997, the Partnership made a semi-annual distribution of cash
generated from operations of $16 per Interest ($8 per Interest for each of
the first and second quarter). The Partnership anticipates reductions in
both it's operating cash flow and future distributions to partners as the
Partnership's remaining investment properties are sold.
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, perhaps in the
1997-1998 time frame, barring unforeseen economic developments.
<PAGE>
RESULTS OF OPERATIONS
Significant variances between the periods reflected in the
accompanying consolidated balance sheets are the result of the sales of the
Cerritos Industrial Park and the sales of the two land parcels and related
buildings at Fountain Valley Industrial Park in December 1996 and May 1997.
The increase in cash and cash equivalents at June 30, 1997 as compared
to December 31, 1996 is primarily due to receipt of the temporary
investment of approximately $4,500,000 of sales proceeds.
The decrease in interest, rents and other receivables and the increase
in unearned rents at June 30, 1997 as compared to December 31, 1996 is
primarily due to the timing of sales tax rebates due from the city of
Fountain Valley and corresponding issuance of rent credits to Fry's
Electronics, a major tenant at the Fountain Valley Industrial Park.
The decrease in prepaid expenses at June 30, 1997 as compared to
December 31, 1996 is primarily due to the timing of payment of insurance
premiums at certain of the Partnership's investment properties.
The payments under the option agreement reported at June 30, 1997
represents the portion of the option fee released to the Partnership's
consolidated venture in accordance with the option agreement with the
signing of the purchase option agreement relating to the proposed sale of
the Adams/Wabash parking garage.
The decrease in interest income for the three and six months ended
June 30, 1997 as compared to the three and six months ended June 30, 1996
is primarily due to the decrease in the Partnership's average invested
balance in U.S. Government obligations during 1997 as compared to 1996.
The decrease in depreciation for the three and six months ended June
30, 1997 as compared to the three and six months ended June 30, 1996 is
primarily due to the classification of all investment properties as
properties held for sale, and therefore, not being subject to continued
depreciation.
The $2,500,000 provision for value impairment reported for the three
and six months ended June 30, 1997 was recorded, as a matter of prudent
accounting practice, based upon the sale price obtained when the Rivertree
Court Shopping Center investment property was sold July 17, 1997.
Accordingly, the sale will not result in a significant gain or loss to the
Partnership for financial reporting purposes.
The decrease in Partnership's share of operations from unconsolidated
ventures for the three and six months ended June 30, 1997 as compared to
the three and six months ended June 30, 1996 is due to the sale of the
Partnership's interest in the Miami International Mall in April 1996 and
the sale of the First Financial Plaza office building in September 1996.
The gain on sale of investment properties reported for the three and
six months ended June 30, 1997 is due to the sale of the Cerritos
Industrial Park investment property on May 29, 1997. In addition, the
Partnership recognized a gain on sale of a land parcel and related building
at the Fountain Valley Industrial Park investment property in May 1, 1997.
The extraordinary item reported for the three and six months ended
June 30, 1997 represents the prepayment premiums on the early termination
of debt in conjunction with the sales of the Partnership's investments in
1997.
<PAGE>
<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 owned during 1997.
<CAPTION>
1996 1997
-------------------------------------------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Rivertree Court
Shopping Center
Vernon Hills (Chicago),
Illinois (a) . . . . . . 84% 83% 89% 90% 96% 96%
2. Fountain Valley
Industrial Park
Fountain Valley
(Los Angeles),
California (b) . . . . . 93% 100% 94% 94% 94% 100%
3. Cerritos Industrial Park
Cerritos (Los Angeles),
California . . . . . . . 100% 100% 100% 100% 100% N/A
4. Adams/Wabash Self Park
Chicago, Illinois. . . . * * * * * *
<FN>
- ---------------
An asterisk indicates that the property is primarily a parking garage and occupancy information is not
applicable. However, the approximate occupancy level for the retail portion of the structure as of June 30, 1997
is 39%.
(a) This property was sold on July 17, 1997 as more fully described in the Notes.
(b) On December 31, 1996, a parcel of land and a related building (9,500 square feet) were sold decreasing
Fountain Valley Industrial Park's total building area from 393,092 square feet to 383,592 square feet. On May 29,
1997, another parcel of land and a related building (12,702 square feet) were sold decreasing total building area
to 370,890 square feet. Occupancy percentages for 1997 reflect such revised available square footage.
An "N/A" indicates that the property was not owned by the Partnership at the end of the quarter.
</TABLE>
<PAGE>
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.
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 Registrant
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - XIII
BY: JMB Realty Corporation
(Managing General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date:August 8, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date:August 8, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 8,691,157
<SECURITIES> 0
<RECEIVABLES> 1,069,743
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,760,900
<PP&E> 64,049,716
<DEPRECIATION> 0
<TOTAL-ASSETS> 75,925,331
<CURRENT-LIABILITIES> 2,574,599
<BONDS> 21,778,482
<COMMON> 0
0
0
<OTHER-SE> 51,304,501
<TOTAL-LIABILITY-AND-EQUITY>75,925,331
<SALES> 5,496,832
<TOTAL-REVENUES> 5,606,847
<CGS> 0
<TOTAL-COSTS> 1,894,970
<OTHER-EXPENSES> 374,851
<LOSS-PROVISION> 2,500,000
<INTEREST-EXPENSE> 1,127,682
<INCOME-PRETAX> (290,656)
<INCOME-TAX> 0
<INCOME-CONTINUING> (290,656)
<DISCONTINUED> 1,759,856
<EXTRAORDINARY> 89,545
<CHANGES> 0
<NET-INCOME> 1,558,745
<EPS-PRIMARY> 12.27
<EPS-DILUTED> 12.27
</TABLE>
