UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended March 31, 1997
-----------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to_____________
Commission file number 0-15460
--------
MCNEIL REAL ESTATE FUND XXVI, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 33-0168395
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (972) 448-5800
-----------------------------
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
<PAGE>
MCNEIL REAL ESTATE FUND XXVI, L.P.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
--------------- --------------
ASSETS
- ------
Real estate investments:
<S> <C> <C>
Land..................................................... $ 6,750,456 $ 6,750,456
Buildings and improvements............................... 54,038,939 53,911,061
-------------- -------------
60,789,395 60,661,517
Less: Accumulated depreciation and amortization......... (22,325,561) (21,682,401)
-------------- -------------
38,463,834 38,979,116
Asset held for sale......................................... 3,008,374 3,008,374
Cash and cash equivalents................................... 2,053,832 2,211,029
Cash segregated for security deposits....................... 234,724 233,426
Accounts receivable, net of allowance for doubtful
accounts of $572,392 at March 31, 1997 and
December 31, 1996........................................ 1,444,084 1,276,997
Prepaid commissions......................................... 347,500 349,018
Prepaid expenses and other assets........................... 742,095 709,030
Deferred borrowing costs, net of accumulated
amortization of $238,589 and $215,640 at March
31, 1997 and December 31, 1996, respectively............. 334,573 357,522
-------------- -------------
$ 46,629,016 $ 47,124,512
============== =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- ------------------------------------------
Mortgage notes payable...................................... $ 21,724,986 $ 21,815,746
Accounts payable and accrued expenses....................... 214,797 306,284
Accrued property taxes...................................... 174,186 58,660
Payable to affiliates - General Partner..................... 119,851 91,462
Security deposits and deferred rental revenue............... 243,644 236,436
-------------- -------------
22,477,464 22,508,588
-------------- -------------
Partners' equity (deficit):
Limited Partners -90,000,000 Units authorized;
86,530,671 and 86,533,671 Units issued and outstanding
at March 31, 1997 and December 31, 1996, respectively.. 24,554,588 25,016,816
General Partner.......................................... (403,036) (400,892)
-------------- -------------
24,151,552 24,615,924
-------------- -------------
$ 46,629,016 $ 47,124,512
============== =============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXVI, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
1997 1996
-------------- --------------
Revenue:
<S> <C> <C>
Rental revenue ........................................... $ 2,282,739 $ 2,184,549
Interest .................................................. 25,383 59,647
------------- -------------
Total revenue............................................ 2,308,122 2,244,196
------------- -------------
Expenses:
Interest................................................... 438,260 444,307
Interest - affiliates...................................... - 13,476
Depreciation and amortization.............................. 643,160 734,334
Property taxes............................................. 211,372 204,234
Personnel expenses......................................... 237,319 217,864
Utilities.................................................. 259,570 284,339
Repairs and maintenance.................................... 249,489 266,679
Property management fees -affiliates....................... 126,167 122,558
Other property operating expenses.......................... 155,612 156,470
General and administrative................................. 43,245 38,843
General and administrative - affiliates.................... 158,300 188,561
------------- -------------
Total expenses........................................... 2,522,494 2,671,665
------------- -------------
Net loss....................................................... $ (214,372) $ (427,469)
============= =============
Net loss allocable to limited partners......................... $ (212,228) $ (423,194)
Net loss allocable to General Partner.......................... (2,144) (4,275)
------------- --------------
Net loss....................................................... $ (214,372) $ (427,469)
============= =============
Net loss per thousand limited partnership units................ $ (2.45) $ (4.89)
============= =============
Distributions per thousand limited partnership units........... $ 2.89 $ -
============= ==============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXVI, L.P.
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
For the Three Months Ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
Total
Partners'
General Limited Equity
Partner Partners (Deficit)
--------------- --------------- --------------
<S> <C> <C> <C>
Balance at December 31, 1995.............. $ (377,413) $ 27,716,222 $ 27,338,809
Net loss.................................. (4,275) (423,194) (427,469)
-------------- ------------- -------------
Balance at March 31, 1996................. $ (381,688) $ 27,293,028 $ 26,911,340
============= ============= =============
Balance at December 31, 1996.............. $ (400,892) $ 25,016,816 $ 24,615,924
Net loss.................................. (2,144) (212,228) (214,372)
Distributions............................. - (250,000) (250,000)
------------- ------------- -------------
Balance at March 31, 1997................. $ (403,036) $ 24,554,588 $ 24,151,552
============= ============= =============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXVI, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Decrease in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------------
1997 1996
----------------- -----------------
Cash flows from operating activities:
<S> <C> <C>
Cash received from tenants........................ $ 2,116,354 $ 2,052,350
Cash paid to suppliers............................ (1,027,959) (1,091,378)
Cash paid to affiliates........................... (256,078) (160,115)
Interest received................................. 25,383 59,647
Interest paid..................................... (415,741) (313,090)
Interest paid to affiliates....................... - (11,398)
Property taxes paid and escrowed.................. (130,518) (66,068)
--------------- --------------
Net cash provided by operating activities............ 311,441 469,948
--------------- --------------
Net cash used in investing activities:
Additions to real estate investments.............. (127,878) (210,248)
--------------- --------------
Cash flows from financing activities:
Principal payments on mortgage notes payable...... (90,760) (60,107)
Retirement of mortgage note - affiliate........... - (952,538)
Deferred borrowing costs paid..................... - (15,578)
Distributions..................................... (250,000) -
--------------- --------------
Net cash used in financing activities................ (340,760) (1,028,223)
--------------- --------------
Net decrease in cash and cash equivalents............ (157,197) (768,523)
Cash and cash equivalents at beginning of
period............................................ 2,211,029 6,761,516
--------------- --------------
Cash and cash equivalents at end of period........... $ 2,053,832 $ 5,992,993
=============== ==============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXVI, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Loss to Net Cash Provided by
Operating Activities
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------------
1997 1996
----------------- -----------------
<S> <C> <C>
Net loss............................................. $ (214,372) $ (427,469)
--------------- ---------------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization..................... 643,160 734,334
Amortization of deferred borrowing costs.......... 22,949 22,277
Allowance for doubtful accounts................... - 12,064
Interest added to advances from affiliates -
General Partner................................. - 2,078
Changes in assets and liabilities:
Cash segregated for security deposits........... (1,298) (7,088)
Accounts receivable............................. (167,087) (124,722)
Prepaid commissions............................. 1,518 5,031
Prepaid expenses and other assets............... (33,065) (55,147)
Accounts payable and accrued expenses........... (91,487) (50,405)
Accrued property taxes.......................... 115,526 204,234
Payable to affiliates - General Partner......... 28,389 151,004
Security deposits and deferred rental
revenue....................................... 7,208 3,757
--------------- --------------
Total adjustments............................. 525,813 897,417
--------------- --------------
Net cash provided by operating activities............ $ 311,441 $ 469,948
=============== ==============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXVI, L.P.
Notes to Financial Statements
March 31, 1997
(Unaudited)
NOTE 1.
- -------
McNeil Real Estate Partners XXVI, L.P., (the "Partnership"), formerly known as
Southmark Equity Partners III, Ltd. was organized on March 4, 1985 as a limited
partnership under the provisions of the California Revised Limited Partnership
Act to acquire and operate residential and commercial properties. The General
Partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a
Delaware limited partnership, an affiliate of Robert A. McNeil ("McNeil"). The
principal place of business for the Partnership and the General Partner is 13760
Noel Road, Suite 600, LB70, Dallas, Texas 75240.
In the opinion of management, the financial statements reflect all adjustments
necessary for a fair presentation of the Partnership's financial position and
results of operations. All adjustments were of a normal recurring nature.
However, the results of operations for the three months ended March 31, 1997 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1997.
NOTE 2.
- -------
The financial statements should be read in conjunction with the financial
statements contained in the Partnership's Report on Form 10-K for the year ended
December 31, 1996, and the notes thereto, as filed with the Securities and
Exchange Commission, which is available upon request by writing to McNeil Real
Estate Fund XXVI, L.P., c/o The Herman Group, 2121 San Jacinto St., 26th Floor,
Dallas, Texas 75201.
NOTE 3.
- -------
The Partnership pays property management fees equal to 5% of gross rental
receipts for its residential property and 6% of gross rental receipts for its
commercial properties to McNeil Real Estate Management, Inc., ("McREMI"), an
affiliate of the General Partner, for providing property management services for
the Partnership's residential and commercial properties and leasing services for
its residential property. McREMI may also choose to provide leasing services for
the Partnership's commercial properties, in which case McREMI will receive
property management fees from such commercial properties equal to 3% of the
property's gross rental receipts plus leasing commissions based on the
prevailing market rate for such services where the property is located.
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
<PAGE>
The Partnership is incurring an asset management fee which is payable to the
General Partner. Through 1999, the Asset Management Fee is calculated as 1% of
the Partnership's tangible asset value. Tangible asset value is determined by
using the greater of (i) an amount calculated by applying a capitalization rate
of 9% to the annualized net operating income of each property or (ii) a value of
$10,000 per apartment unit for residential property and $50 per gross square
foot for commercial property to arrive at the property tangible asset value. The
property tangible asset value is then added to the book value of all other
assets excluding intangible items. The fee percentage decreases subsequent to
1999.
The General Partner has, in its discretion, advanced funds to enable the
Partnership to meet its working capital requirements. These advances, which were
unsecured and due on demand, accrued interest at a rate equal to the prime
lending rate plus 1%. In May 1996, the Partnership repaid all outstanding
affiliate advances and the related accrued interest.
In March 1993, the Partnership obtained a loan from McNeil Real Estate Fund
XXVII, L.P., an affiliate of the General Partner, which allows the Partnership
to borrow funds totaling $1,536,000. Of this amount available, $952,538 was
borrowed at December 31, 1995. The note was secured by Continental Plaza and
required monthly interest-only payments equal to the prime lending rate of Bank
of America plus 2 1/2% with the principal balance due March 1, 1996. On January
8, 1996 the Partnership repaid the mortgage loan.
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner and its affiliates are as follows:
Three Months Ended
March 31,
-----------------------
1997 1996
---------- ----------
Property management fees - affiliates............. $ 126,167 $ 122,558
Charged to interest - affiliates:
Interest on advances from affiliates -
General Partner.............................. - 2,078
Interest on mortgage note payable - affiliate.. - 11,398
Charged to general and administrative affiliates:
Partnership administration..................... 34,735 55,174
Asset management fee........................... 123,565 133,387
--------- ---------
$ 284,467 $ 324,595
========= =========
The total payable to affiliates - General Partner at March 31, 1997 and December
31, 1996 consisted primarily of unpaid asset management fees, property
management fees and partnership general and administrative expenses and are due
and payable from current operations.
<PAGE>
NOTE 4.
- -------
In 1996, the Partnership adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
This statement requires the cessation of depreciation on assets held for sale.
Since Edison Ford Square is currently classified as an asset held for sale, no
depreciation was taken effective April 1, 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
There has been no significant change in the operations of the Partnership's
properties since December 31, 1996. The Partnership reported a net loss of
$214,372 for the first three months of 1997 as compared to $427,469 for the
first three months of 1996. Revenues increased slightly to $2,308,122 in 1997
from $2,244,196 in 1996, while expenses dropped to $2,522,494 in 1997 from
$2,671,665 in 1996.
Net cash provided by operating activities was $311,441 for the first three
months of 1997. The Partnership expended $127,878 for capital improvements and
$90,760 for principal payments on its mortgage notes payable. After
distributions of $250,000 to the limited partners, cash and cash equivalents
totaled $2,053,832 at March 31, 1997, a net decrease of $157,197 from the
balance at December 31, 1996.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Total Partnership revenue increased by $63,926 or 3% for the three month ended
March 31, 1997 as compared to the three months ended March 31, 1996 mainly due
to an increase of rental revenue, slightly offset by a decrease in interest
income, as discussed below.
Rental revenue for the three months ended March 31, 1997 increased by $98,190 or
4% as compared to the same period in 1996. Rental revenue of all properties
increased slightly in 1997 as compared to 1996, except at Westwood Center and
Edison Ford Square. Rental revenue at Westwood Center increased approximately
$62,000 due to an increase in straight-line rent adjustments. Rental revenue at
Edison Ford Square decreased slightly by $13,000 due to a decrease in
reimbursements from tenants for common area maintenance in 1997. In addition,
the Partnership received $11,000 of rental revenue from a move-out tenant in
1996. No such revenue was received in 1997. The decrease was partially offset by
an increase of occupancy rate at Edison Ford Square.
<PAGE>
Interest income decreased by $34,264 or 57% for the three months ended March 31,
1997 as compared to the same period in 1996 due to a lower amount of cash
available for short-term investment in 1997. The Partnership held $2 million of
cash and cash equivalents at March 31, 1997 as compared to $6 million at March
31, 1996.
Expenses:
Total expenses decreased by $149,171 or 6% for the three months ended March 31,
1997 as compared to the three months ended March 31, 1996.
No interest expense - affiliates was recorded for the three months ended March
31, 1997 as compared to $13,476 for the same period in 1996 due to the repayment
of the loan from McNeil Real Estate Fund XXVII, L.P. in January 1996, as well as
the repayment of all advances from affiliates in May 1996.
Depreciation and amortization decreased by $91,174 or 12% for three months ended
March 31, 1997 as compared to the same period in 1996 mainly due to Edison Ford
Square which is currently classified as an asset held for sale; and accordingly,
no depreciation was taken effective April 1, 1996.
General and administrative expenses for the first three months of 1997 increased
by $4,402 or 11% as compared to the same period in 1996. Costs incurred for
investor services were paid to an unrelated third party in 1997. In the first
quarter of 1996, such costs were paid to an affiliate of the General Partner and
were included in general and administrative - affiliates on the Statements of
Operations. The increase was also attributable to costs incurred by the
Partnership to evaluate and disseminate information regarding an unsolicited
1996 tender offer. The increase was partially offset by a decrease of
professional fees.
General and administrative - affiliates decreased by $30,261 or 16% for the
three months ended March 31, 1997 as compared to the same period in 1996. The
decrease was mainly due to a decrease in overhead expenses allocated to the
Partnership by McREMI, which was partially due to investor services being
performed by an unrelated third party in 1997, as discussed above. In addition,
there was a slight decrease in asset management fees as a result of a decrease
in the tangible asset value of the Partnership, on which the fees are based.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnership generated $311,441 of cash through operating activities for the
three months ended March 31, 1997 as compared to $469,948 for the same period in
1996. The change in cash flow from operations is primarily due to an increase in
cash paid to affiliates, interest paid and property taxes paid and escrowed. The
increase is partially offset by an increase in cash received from tenants and a
decrease in cash paid to suppliers, as discussed above. The increase in cash
paid to affiliates was due to the payments of $101,000 of the deferred asset
management fees in the first quarter of 1997. No such payments were made in the
first quarter of 1996. The increase in interest paid was primarily due to the
Northway Mall's new mortgage loan. The Partnership began making the monthly debt
service payment in February 1996. The increase in property taxes paid and
escrowed was due to the timing of the property taxes payments.
<PAGE>
Additions to real estate investments totaled $127,878 for the three months ended
March 31, 1997 as compared to $210,248 for the same period of 1996. A majority
of the capital improvements in 1997 and 1996 was spent at Northway Mall. A
greater amount was spent in 1996 at Edison Ford Square for roof replacements and
at Continental Plaza for paving and outdoor lighting.
Total principal payments on mortgage notes payable were $90,760 for the three
months ended March 31, 1997 as compared to $60,107 for the same period of 1996.
With the loan proceeds of Northway Mall, the Partnership repaid a loan of
$952,538 from McNeil Real Estate Fund XXVII, L.P. in the first quarter of 1996.
Additional deferred borrowing costs of $15,578 was paid in 1996 relating to the
Northway Mall's refinancing. The Partnership distributed $250,000 to the limited
partners during the first quarter of 1997. No distributions were made during the
first quarter of 1996.
Short-term liquidity:
At March 31, 1997, the Partnership held cash and cash equivalents of $2,053,832.
The present cash balance plus cash to be provided by operating activities is
considered adequate to meet the Partnership's needs for debt service, normal
amounts of repairs and maintenance and capital improvements to preserve and
enhance the value of the properties. The Partnership has budgeted $2,041,000 for
necessary capital improvements for all properties in 1997.
The General Partner has, at its discretion, advanced funds to the Partnership to
fund working capital requirements. All outstanding advances from affiliates and
the related accrued interest were repaid in 1996. The General Partner is not
obligated to advance funds to the Partnership and there is no assurance that the
Partnership will receive additional funds.
Long-term liquidity:
While the present outlook for Partnership's liquidity is favorable, market
conditions may change and property operations could deteriorate. In that event,
the Partnership would require other sources of working capital. No such other
sources have been identified, and the Partnership has no established lines of
credit. Other possible actions to resolve working capital deficiencies include
refinancing or renegotiating terms of existing loans, deferring major capital
expenditures on Partnership properties except where improvements are expected to
enhance the competitiveness or marketability of the properties, or arranging
working capital support from affiliates. There is no assurance that affiliate
support could be arranged, since neither the General Partner nor any affiliates
have any obligation in this regard.
The Partnership has significant mortgage maturities during 1998, and management
expects to refinance these mortgage notes as they mature. However, if management
is unable to refinance the mortgage notes as they mature, the Partnership will
require other sources of cash. No such sources have been identified.
The Partnership determined to evaluate market and other economic conditions to
establish the optimum time to commence an orderly liquidation of the
Partnership's assets in accordance with the terms of the Amended Partnership
Agreement. Taking such conditions as well as other pertinent information into
account, the Partnership has determined to begin orderly liquidation of all its
assets. Although there can be no assurance as to the timing of the liquidation
<PAGE>
due to real estate market conditions, the general difficulty of disposing of
real estate, and other general economic factors, it is anticipated that such
liquidation would result in the dissolution of the Partnership followed by a
liquidating distribution to Unit holders by December 1998. In this regard, the
Partnership has placed Edison Ford Square on the market for sale.
Distributions:
During the first quarter of 1997, the Partnership distributed $250,000 to the
limited partners. The General Partner will continue to monitor the cash reserves
and working capital needs of the Partnership to determine when cash flows will
support distributions to the limited partners.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger,
Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil,
Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI,
Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd.,
McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate
Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., McNeil Real Estate Fund
XXVI, L.P., and McNeil Real Estate Fund XXVII, L.P., et al. - Superior Court of
the State of California for the County of Los Angeles, Case No. BC133799 (Class
and Derivative Action Complaint).
The action involves purported class and derivative actions brought by limited
partners of each of the fourteen limited partnerships that were named as nominal
defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their fiduciary duties and certain obligations under the respective Amended
Partnership Agreement. Plaintiffs allege that Defendants have rendered such
Units highly illiquid and artificially depressed the prices that are available
for Units on the resale market. Plaintiffs also allege that Defendants engaged
in a course of conduct to prevent the acquisition of Units by an affiliate of
Carl Icahn by disseminating purportedly false, misleading and inadequate
information. Plaintiffs further allege that Defendants acted to advance their
own personal interests at the expense of the Partnerships' public unit holders
by failing to sell Partnership properties and failing to make distributions to
unitholders.
On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs are suing for breach of fiduciary duty, breach of contract and an
accounting, alleging, among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive, that these fees should
be reduced retroactively and that the respective Amended Partnership Agreements
governing the Partnerships are invalid.
<PAGE>
Defendants filed a demurrer to the consolidated and amended complaint and a
motion to strike on February 14, 1997, seeking to dismiss the consolidated and
amended complaint in all respects. A hearing on Defendant's demurrer and motion
to strike was held on May 5, 1997. The Court granted Defendants' demurrer,
dismissing the consolidated and amended complaint with leave to amend.
Plaintiffs have until May 27, 1997 to file a second amended complaint, unless
otherwise agreed to by the parties.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits.
Exhibit
Number Description
------- -----------
4. Amended and Restated Limited Partnership
Agreement dated March 30, 1992.
(Incorporated by reference to Current Report
of the Registrant on Form 8-K dated March
30, 1992, as filed on April 10, 1992).
4.1 Amendment No. 1 to the Amended and Restated
Limited Partnership Agreement of McNeil Real
Estate Fund XXVI, L.P. dated June 1995.
11. Statement regarding computation of Net Loss
per Thousand Limited Partnership Units: Net
loss per thousand limited partnership units
is computed by dividing net loss allocated
to the limited partners by the weighted
average number of limited partnership units
outstanding expressed in thousands. Per unit
information has been computed based on
86,531 and 86,534 limited partnership units
(in thousands) outstanding in 1997 and 1996,
respectively.
27. Financial Data Schedule for the quarter
ended March 31, 1997.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended March 31, 1997.
<PAGE>
MCNEIL REAL ESTATE FUND XXVI, L.P.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
McNEIL REAL ESTATE FUND XXVI, L.P.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
May 15, 1997 By: /s/ Ron K. Taylor
- -------------- ------------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)
May 15, 1997 By: /s/ Carol A. Fahs
- -------------- ------------------------------------------
Date Carol A. Fahs
Vice President of McNeil Investors, Inc.
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,053,832
<SECURITIES> 0
<RECEIVABLES> 2,016,476
<ALLOWANCES> (572,392)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 60,789,395
<DEPRECIATION> (22,325,561)
<TOTAL-ASSETS> 46,629,016
<CURRENT-LIABILITIES> 0
<BONDS> 21,724,986
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 46,629,016
<SALES> 2,282,739
<TOTAL-REVENUES> 2,308,122
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,084,234
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 438,260
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (214,372)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (214,372)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
