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, 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
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . $ 42,846,908 3,743,541
Interest, rents and other receivables (net of allowance
for doubtful accounts of $298,339 in 1997 and
$48,604 in 1996) . . . . . . . . . . . . . . . . . . . . . 1,111,461 1,232,970
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . 40,409 71,674
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . 116,264 144,050
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . 44,115,042 5,192,235
Investment properties held for sale or disposition . . . . . . 15,464,332 72,718,307
------------ -----------
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 392,101 732,036
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 366,522 1,455,105
------------ -----------
$ 60,337,997 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)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . $ 196,744 313,664
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 67,584 300,262
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 37,971 194,950
Accrued real estate taxes. . . . . . . . . . . . . . . . . . 52,563 1,201,572
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . 493,579 444,575
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . 848,441 2,455,023
Tenant security deposits . . . . . . . . . . . . . . . . . . . 172,526 314,124
Long-term debt, less current portion . . . . . . . . . . . . . 6,027,942 25,482,974
------------ -----------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . 7,048,909 28,252,121
------------ -----------
Partners' capital accounts (deficits):
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net earnings (losses) . . . . . . . . . . . . 829,569 721,969
Cumulative cash distributions. . . . . . . . . . . . . . (1,687,789) (1,631,037)
------------ -----------
(838,220) (889,068)
------------ -----------
Limited partners (126,414 interests):
Capital contributions, net of offering costs . . . . . . 113,741,315 113,741,315
Cumulative net earnings (losses) . . . . . . . . . . . . 38,808,836 30,903,922
Cumulative cash distributions. . . . . . . . . . . . . . (98,422,843) (91,910,607)
------------ -----------
54,127,308 52,734,630
------------ -----------
Total partners' capital accounts (deficits). . . . . . 53,289,088 51,845,562
------------ -----------
$ 60,337,997 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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------- ------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . $ 1,634,688 2,999,877 7,131,520 8,467,988
Interest income. . . . . . . . . . . . . 411,611 168,474 521,626 617,138
----------- ---------- ---------- ----------
2,046,299 3,168,351 7,653,146 9,085,126
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest. . . . . . . 181,839 586,672 1,309,521 1,764,006
Depreciation . . . . . . . . . . . . . . -- 313,973 -- 1,463,471
Property operating expenses. . . . . . . 559,833 1,207,912 2,365,533 3,016,219
Professional services. . . . . . . . . . -- 37,136 134,122 155,008
Amortization of deferred expenses. . . . 21,997 63,264 111,267 150,363
General and administrative . . . . . . . 76,149 72,797 316,878 333,764
Provision for value impairment . . . . . -- -- 2,500,000 --
----------- ---------- ---------- ----------
839,818 2,281,754 6,737,321 6,882,831
----------- ---------- ---------- ----------
Operating earnings (loss). . . . . 1,206,481 886,597 915,825 2,202,295
Partnership's share of operations
from unconsolidated ventures . . . . . . -- 179,129 -- 305,823
----------- ---------- ---------- ----------
Net operating earnings (loss). . . 1,206,481 1,065,726 915,825 2,508,118
Gain on sale of interest in
unconsolidated venture and of
investment properties. . . . . . . . . . 5,247,288 1,268,270 7,007,144 10,872,859
----------- ---------- ---------- ----------
<PAGE>
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
-------------------------- ------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
Net earnings (loss)
before extraordinary items . . . 6,453,769 2,333,996 7,922,969 13,380,977
Extraordinary items. . . . . . . . . . . . -- -- 89,545 --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . $ 6,453,769 2,333,996 8,012,514 13,380,977
=========== ========== ========== ==========
Net earnings (loss) per
limited partnership
interest:
Net operating earnings . . . . . $ 9.16 8.09 6.95 19.05
Gain on sale of interest
in unconsolidated venture
and investment properties. . . 41.09 9.93 54.88 85.15
Extraordinary items. . . . . . . -- -- .70 --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . $ 50.25 18.02 62.53 104.20
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest . . . . . . . . . . . . $ 35.00 105.00 51.00 206.00
=========== ========== ========== ==========
<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
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . $ 8,012,514 13,380,977
Items not requiring cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . -- 1,463,471
Amortization of deferred expenses. . . . . . . . . . . . . . . 111,267 150,363
Partnership's share of operations of unconsolidated
ventures, net of distributions . . . . . . . . . . . . . . . -- 271,619
Partnership's gain on sale of interest in
unconsolidated venture and investment properties . . . . . . (7,007,144) (10,872,859)
Extraordinary items. . . . . . . . . . . . . . . . . . . . . . (89,545) --
Provision for value impairment . . . . . . . . . . . . . . . . 2,500,000 --
Changes in:
Interest, rents and other receivables. . . . . . . . . . . . . 127,794 (106,902)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 31,265 (56,827)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 27,556 158,683
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . (232,644) (60,820)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . (156,979) (1,322)
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . 49,004 (109,128)
Accrued real estate taxes. . . . . . . . . . . . . . . . . . . (1,149,009) (185,925)
Tenant security deposits . . . . . . . . . . . . . . . . . . . (121,683) (15,783)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . 27,786 (8,678)
----------- -----------
Net cash provided by (used in) operating activities. . . 2,130,182 4,006,869
----------- -----------
Cash flows from investing activities:
Cash sales proceeds from sale of investment properties,
net of selling expenses. . . . . . . . . . . . . . . . . . . . 43,972,567 18,316,350
Additions to investment properties, net. . . . . . . . . . . . . (111,673) (65,293)
Partnership's distributions from unconsolidated ventures . . . . -- 340,210
Partnership's contributions to unconsolidated ventures . . . . . -- (2,000)
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (84,769) (91,525)
----------- -----------
Net cash provided by (used in) investing activities. . . 43,776,125 18,497,742
----------- -----------
<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 . . . . . . . . . . . . . . (233,952) (216,685)
Distributions to limited partners. . . . . . . . . . . . . . . . (6,512,236) (26,170,252)
Distributions to general partners. . . . . . . . . . . . . . . . (56,752) (180,895)
----------- -----------
Net cash provided by (used in) financing activities. . . (6,802,940) (26,567,832)
----------- -----------
Net increase (decrease) in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . 39,103,367 (4,063,221)
Cash and cash equivalents, beginning of year . . . . . . 3,743,541 13,599,171
----------- -----------
Cash and cash equivalents, end of period . . . . . . . . $42,846,908 9,535,950
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . . $ 1,466,500 1,765,328
=========== ===========
Non-cash investing and financing activities:
Total sales proceeds from sale of investment property:
Total sales proceeds, net of selling expenses. . . . . $63,400,112 --
Prepayment premium . . . . . . . . . . . . . . . . . . (89,545) --
Payoff of mortgage loans . . . . . . . . . . . . . . . (19,338,000) --
----------- -----------
Cash proceeds from sale of investment properties . . $43,972,567 --
=========== ===========
<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
SEPTEMBER 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. The Partnership has committed to a plan to sell its remaining
investment property. Accordingly, all consolidated 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 $880,251 and $2,131,584, respectively, for
the nine months ended September 30, 1997 and 1996. In addition, the
accompanying consolidated financial statements include $0 and $305,823,
respectively, of the Partnership's share of total property operations of $0
and $713,370 for the nine months ended September 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 September 30, 1997 and for the nine months ended
September 30, 1997 and 1996 were as follows:
<PAGE>
Unpaid at
September 30,
1997 1996 1997
------- ------ -------------
Property management and
leasing fees. . . . . . . $91,393 70,608
Insurance commissions. . . 8,094 10,028
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 . . 59,258 110,188 15,527
-------- ------- ------
$158,745 190,824 15,527
======== ======= ======
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 nine months ended September 30, 1997 were approximately $94,000,
all of which was paid at September 30, 1997. Effective November 1, 1996,
and through it's date of sale on August 11, 1997, 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 September 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
this amount. Additionally, the General Partners waived their right to
receive their 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, the sale of First Financial Plaza in 1996, the sales of the two
parcels of the Fountain Valley Industrial Park investment property in 1996
and 1997 and the sale in 1997 of Adams/Wabash Self-Park, Rivertree Court
Shopping Center and the Cerritos Industrial Park.
No provision for State or Federal income taxes has been made as the
liability for such taxes is that the Partners rather than the Partnership.
However, in certain instances, the Partnership may be required under
applicable law to remit directly to the tax authorities amounts
representing withholding from distributions paid to Partners.
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. The Partnership realized net sale proceeds of
approximately $4,070,000 after repayment of the mortgage loan securing the
property in the amount of $3,168,000, 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) and the payment
of selling expenses of approximately $180,000. The sale of the property
resulted in an approximate $1,396,000 gain on sale to the Partnership in
1997 for financial reporting purposes. The Partnership expects to
<PAGE>
recognize a loss of approximately $2,230,000 for Federal income tax
purposes in 1997. In addition, in connection with the sale of this
property and as is customary in such transactions, the Partnership agreed
to certain representations and warranties, with a stipulated survival
period which expires December 15, 1997. Although it is not expected, the
Partnership may ultimately have some liability under such representations
and warranties. The property was 100% occupied at the date of sale.
FOUNTAIN VALLEY INDUSTRIAL PARK
During the quarter, occupancy of this industrial park remained at
100%. The Partnership in 1997 leased vacant space of 22,826 square feet
and has renewed 57,490 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 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 than 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 $436,000 after payment of
closing costs and the prepayment premium to the lender. The sale of the
building and related land parcel resulted in an approximate $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 has reached an agreement in principle to sell the
remainder of the property by the end of 1997 to an unaffiliated third
party. However, the sale is subject to various contingencies including
final documentation, and therefore, there can be no assurance that a sale
transaction will be completed in the near term with this or any other
purchaser. If the sale of the property was completed on the proposed
terms, the Partnership would expect to recognize a gain for both financial
reporting and Federal income tax purposes. Also, if the sale is completed,
upon expiration of the survival period for certain representations and
warranties, if the Partnership contracts to any, the affairs of the
Partnership are expected to be wound up in the 1997-1998 time frame,
barring unforeseen economic developments.
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 due to the
sales of the Cerritos Industrial Park in 1997 and sales of the outparcels
at the Fountain Valley Industrial Park in 1996 and 1997. Under the
modification, the Partnership was required to repay principal of
approximately $3,988,000 on the outstanding mortgage note. Accordingly,
the $88,998 monthly loan installments of principal and interest were recast
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. The Partnership received
approximately $14,915,000 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 selling expenses
<PAGE>
and closing costs of approximately $560,000). Based upon the proposed sale
price the Partnership recognized a provision for value impairment of
$2,500,000 for the three months ended June 30, 1997. The sale resulted in
a nominal gain for financial reporting purposes and the Partnership expects
to recognize an approximate loss of $965,000 for Federal income tax
purposes in 1997. In addition, in connection with the sale of this
property and as is customary in such transactions, the Partnership agreed
to certain representations and warranties, with a stipulated survival
period which expires December 1, 1997. Although it is not expected, the
Partnership may ultimately have some liability under such representations
and warranties.
ADAMS/WABASH
On August 11, 1997, the Adams/Wabash joint venture sold the
Adams/Wabash Self-Park to an unaffiliated third party. The sale price of
the land and improvements, determined by arm's-length negotiations, was
$25,000,000. Net cash proceeds from the sale, net of closing costs and
selling expenses of approximately $454,000, are approximately $25,545,000.
The retail portion of the Property was 39% occupied at the date of sale.
The Adams/Wabash joint venture has reported a gain on sale of approximately
$5,150,000, all of which is allocable to the Partnership, for financial
reporting purposes in 1997. The Adams/Wabash joint venture expects to
recognize a gain of approximately $5,160,000 for Federal income tax
reporting purposes, substantially all of which is allocable to the
Partnership, in 1997. In addition, in connection with the sale of this
property and as is customary in such transactions, the Adams/Wabash joint
venture agreed to certain representations and warranties, with a stipulated
survival period which expires December 15, 1997. Although it is not
expected, the Adams/Wabash joint venture may ultimately have some liability
under such representations and warranties.
The Partnership was entitled to a cumulative annual preferred return,
payable from operating cash flow, of 10% of its capital contributions to
Adams/Wabash. Any distributable cash flow in excess of the Partnership's
preferred return would have been distributed in accordance with the
ownership interests of Adams/Wabash. The Adams/Wabash partnership
agreement stipulated that sale or financing proceeds would be distributed
such that the Partnership shall first receive any deficit in its cumulative
annual preferred return followed by the return of the Partnership's
original capital investment in Adams/Wabash of approximately $24,996,000.
Since there is a deficit in the Partnership's cumulative preferred annual
return and sale proceeds are below the Partnership's original capital
investment, all distributable sale proceeds were distributed to the
Partnership.
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,
1997 and for the three and nine months ended September 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. 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 $245 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 4.19% 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. The Partnership has been notified that an unaffiliated third
party intends to commence an offer for approximately 4,388 Interests
(approximately 3.5% of the outstanding Interests) for $350 per Interest,
and it is possible that other offers for Interests may be made by
unaffiliated third parties in the future. However, 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.
At September 30, 1997, the Partnership and its consolidated venture
had cash and cash equivalents of approximately $42,800,000. A substantial
portion of such funds will be distributed to partners, as described below,
with the remaining amount of approximately $4,000,000 available for working
capital requirements including tenant and capital improvements at the
Partnership's remaining investment property.
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 of 1997). In August 1997, the Partnership
made a distribution of $35 per Interest of cash generated from the sales of
the Fountain Valley Industrial Park parcels in 1996 and 1997 and sale of
the Cerritos Industrial Park in 1997. In late November, 1997 the
Partnership expects to make a semi-annual distribution of cash generated
from operations of $4 per Interest ($2 per interest for each of the third
and fourth quarter of 1997) and a distribution of cash generated from the
sales of the Adams/Wabash Self Park and the Rivertree Court Shopping Center
of $300 per Interest.
After reviewing the remaining property and the marketplace in which it
operates, the General Partners of the Partnership expects to be able to
sell its remaining investment property, the Fountain Valley investment
<PAGE>
property, as quickly as practicable. As reported above, the Partnership
has reached an agreement in principle to sell such property potentially by
the end of 1997. Therefore, the affairs of the Partnership are expected to
be wound up in the 1997-1998 time frame, barring unforseen economic
developments.
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, Rivertree Court Shopping Center and Adams/Wabash
Self-Park in 1997 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 September 30, 1997 as
compared to December 31, 1996 is primarily due to the receipt and temporary
investment in 1997 of approximately $44,000,000 of sales proceeds.
The decrease in prepaid expenses at September 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 increase and decrease in interest income for the three and nine
months ended September 30, 1997, respectively, as compared to the three and
nine months ended September 30, 1996 is primarily due to the fluctuation of
the Partnership's average invested balance in U.S. Government obligations
due to the timing of receipts of cash generated from the various sales of
the Partnership's investment properties in 1996 and 1997 and the timing of
the Partnership's subsequent distribution of sales proceeds to the Holders
of Interests.
The decrease in depreciation for the three and nine months ended
September 30, 1997 as compared to the three and nine months ended September
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 nine
months ended September 30, 1997 was recorded based upon the sale price
expected to be obtained when the Rivertree Court Shopping Center investment
property was sold July 17, 1997.
The decrease in Partnership's share of operations from unconsolidated
ventures for the three and nine months ended September 30, 1997 as compared
to the three and nine months ended September 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
nine months ended September 30, 1997 is due to the sale of the Cerritos
Industrial Park investment property on May 29, 1997, the sale of the
Adams/Wabash investment property on August 11, 1997 and the sale of the
Rivertree Court Shopping Center investment property on July 17, 1997. In
addition, the Partnership recognized a gain on sale due to the sale of a
land parcel and related building at the Fountain Valley Industrial Park
investment property on May 1, 1997.
The extraordinary item reported for the three and nine months ended
September 30, 1997 represents the prepayment premiums on the early
termination of debt in conjunction with the sales of certain of the
Partnership's investment properties 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 . . . . . . . . 84% 83% 89% 90% 96% 96% N/A
2. Fountain Valley
Industrial Park
Fountain Valley
(Los Angeles),
California (a) . . . . . 93% 100% 94% 94% 94% 100% 100%
3. Cerritos Industrial Park
Cerritos (Los Angeles),
California . . . . . . . 100% 100% 100% 100% 100% N/A N/A
4. Adams/Wabash Self Park
Chicago, Illinois. . . . * * * * * * N/A
<FN>
- ---------------
An asterisk indicates that the property is primarily a parking garage and occupancy information is not
applicable.
(a) 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 in the
applicable periods.
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 herein
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.
10-A. 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 herein by reference to Exhibits 1 and 2 to the
Partnership's Form 8-K (File No. 000-19496) dated November 15, 1988.
10-B. Option Agreement to sell Adams/Wabash Self Park, dated
June 27, 1997, is hereby incorporated by reference to Exhibit 10.1 to the
Partnership's Report for August 11, 1997 on Form 8-K (File No. 000-19496).
10-C. Agreement to purchase Rivertree Court Shopping Center,
dated June 11, 1997, and exhibits thereto are hereby incorporated herein by
reference to Exhibit 10.1 to the Partnership's Report for July 17, 1997 on
Form 8-K (File No. 000-19496).
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.
<PAGE>
(b) The following reports on Form 8-K have been filed during the
last quarter of the period covered by this report:
The Partnership's Report on Form 8-K (File No. 0-19496) for
August 11, 1997 (describing the sale of the Adams/Wabash investment
property) was filed. This report was filed August 11, 1997.
The Partnership's Report on Form 8-K (File No. 0-19496) for
July 17, 1997 (describing the sale of the Rivertree Court Shopping Center
investment property) was filed. This report was filed July 17, 1997.
<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:November 12, 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.
By: GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date:November 12, 1997
<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, 1997 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-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 42,846,908
<SECURITIES> 0
<RECEIVABLES> 1,268,134
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 44,115,042
<PP&E> 15,464,332
<DEPRECIATION> 0
<TOTAL-ASSETS> 60,337,997
<CURRENT-LIABILITIES> 848,441
<BONDS> 6,027,942
<COMMON> 0
0
0
<OTHER-SE> 53,289,088
<TOTAL-LIABILITY-AND-EQUITY>60,337,997
<SALES> 7,131,520
<TOTAL-REVENUES> 7,653,146
<CGS> 0
<TOTAL-COSTS> 2,476,800
<OTHER-EXPENSES> 451,000
<LOSS-PROVISION> 2,500,000
<INTEREST-EXPENSE> 1,309,521
<INCOME-PRETAX> 915,825
<INCOME-TAX> 0
<INCOME-CONTINUING> 915,825
<DISCONTINUED> 7,007,144
<EXTRAORDINARY> 89,545
<CHANGES> 0
<NET-INCOME> 8,012,514
<EPS-PRIMARY> 62.53
<EPS-DILUTED> 62.53
</TABLE>
