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 quarterly period ended June 30, 1998
---------------------------------------------
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>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- ------- --------------------
MCNEIL REAL ESTATE FUND XXVI, L.P.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------------- -------------
ASSETS
- ------
Real estate investments:
<S> <C> <C>
Land ........................................................ $ 6,750,456 $ 6,750,456
Buildings and improvements .................................. 55,061,007 54,854,340
------------ ------------
61,811,463 61,604,796
Less: Accumulated depreciation and amortization ............ (25,594,602) (24,345,484)
------------ ------------
36,216,861 37,259,312
Asset held for sale ............................................ - 3,047,765
Cash and cash equivalents ...................................... 5,410,403 2,823,216
Cash segregated for security deposits .......................... 240,672 235,617
Accounts receivable, net of allowance for doubtful
accounts of $536,718 at June 30, 1998 and
$572,392 at December 31, 1997.............. ................. 1,047,641 1,221,528
Prepaid commissions ............................................ 371,941 381,923
Prepaid expenses and other assets .............................. 265,937 229,664
Deferred borrowing costs, net of accumulated
amortization of $354,333 and $307,435 at
June 30, 1998 and December 31, 1997, respectively ........... 218,829 265,727
------------ ------------
$ 43,772,284 $ 45,464,752
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- ------------------------------------------
Mortgage notes payable ......................................... $ 21,244,192 $ 21,442,045
Accounts payable and accrued expenses .......................... 281,776 488,719
Accrued property taxes ......................................... 220,916 81,308
Payable to affiliates - General Partner ........................ 724,206 292,574
Security deposits and deferred rental revenue .................. 300,980 297,859
------------ ------------
22,772,070 22,602,505
------------ ------------
Partners' equity (deficit):
Limited Partners - 90,000,000 Units authorized;
86,530,671 Units issued and outstanding at
June 30, 1998 and December 31, 1997, respectively.......... 21,414,763 23,273,176
General Partner ............................................. (414,549) (410,929)
------------ ------------
21,000,214 22,862,247
------------ ------------
$ 43,772,284 $ 45,464,752
============ ============
</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 Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
Revenue:
<S> <C> <C> <C> <C>
Rental revenue ...................... $ 2,099,774 $ 2,249,106 $ 4,405,034 $ 4,531,845
Interest ............................ 44,667 58,892 74,555 84,275
Gain on sale of real estate ......... 116,297 - 116,297 -
----------- ----------- ----------- -----------
Total revenue ..................... 2,260,738 2,307,998 4,595,886 4,616,120
----------- ----------- ----------- -----------
Expenses:
Interest ............................ 429,606 435,498 861,114 873,758
Depreciation and
amortization ...................... 632,028 673,967 1,249,118 1,317,127
Property taxes ...................... 177,985 211,380 368,218 422,752
Personnel expenses .................. 178,080 193,069 404,874 430,388
Utilities ........................... 236,319 237,069 470,160 496,639
Repairs and maintenance ............. 247,405 215,263 478,907 464,752
Property management
fees - affiliates ................. 137,215 128,823 268,253 254,990
Other property operating
expenses .......................... 109,459 124,466 231,257 280,078
General and administrative .......... 108,716 27,002 231,442 70,247
General and administrative -
affiliates ........................ 201,892 204,050 394,584 362,350
----------- ----------- ----------- -----------
Total expenses .................... 2,458,705 2,450,587 4,957,927 4,973,081
----------- ----------- ----------- -----------
Net loss ............................... $ (197,967) $ (142,589) $ (362,041) $ (356,961)
=========== =========== =========== ===========
Net loss allocable
to limited partners ................. $ (195,987) $ (141,163) $ (358,421) $ (353,391)
Net loss allocable
to General Partner .................. (1,980) (1,426) (3,620) (3,570)
----------- ----------- ----------- -----------
Net loss ............................... $ (197,967) $ (142,589) $ (362,041) $ (356,961)
=========== =========== =========== ===========
Net loss per thousand
limited partnership units ........... $ (2.30) $ (1.63) $ (4.14) $ (4.08)
=========== =========== =========== ===========
Distribution per thousand
limited partnership units ........... $ - $ - $ 17.33 $ 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 Six Months Ended June 30, 1998 and 1997
<TABLE>
<CAPTION>
Total
Partners'
General Limited Equity
Partner Partners (Deficit)
------------- ------------- -------------
<S> <C> <C> <C>
Balance at December 31, 1996 ............ $ (400,892) $ 25,016,816 $ 24,615,924
Net loss ................................ (3,570) (353,391) (356,961)
Distributions to limited partners........ - (250,000) (250,000)
------------ ------------ ------------
Balance at June 30, 1997 ................ $ (404,462) $ 24,413,425 $ 24,008,963
============ ============ ============
Balance at December 31, 1997 ............ $ (410,929) $ 23,273,176 $ 22,862,247
Net loss ................................ (3,620) (358,421) (362,041)
Distributions to limited partners ....... - (1,499,992) (1,499,992)
------------ ------------ ------------
Balance at June 30, 1998 ................ $ (414,549) $ 21,414,763 $ 21,000,214
============ ============ ============
</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)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------------------
1998 1997
----------- -----------
Cash flows from operating activities:
<S> <C> <C>
Cash received from tenants .......................... $ 4,470,362 $ 4,313,036
Cash paid to suppliers .............................. (2,091,567) (1,318,638)
Cash paid to affiliates ............................. (231,205) (610,574)
Interest received ................................... 74,555 84,275
Interest paid ....................................... (815,153) (829,731)
Property taxes paid and escrowed .................... (228,610) (239,217)
----------- -----------
Net cash provided by operating activities .............. 1,178,382 1,399,151
----------- -----------
Cash flows from investing activities:
Additions to real estate investments ................ (206,667) (304,085)
Additions to assets held for sale ................... (11,638) -
Proceeds from sale of real estate ................... 3,324,955 -
----------- -----------
Net cash provided by (used in)
investing activities ................................ 3,106,650 (304,085)
----------- -----------
Cash flows from financing activities:
Principal payments on mortgage notes payable......... (197,853) (183,276)
Distributions to limited partners ................... (1,499,992) (250,000)
----------- -----------
Net cash used in financing activities .................. (1,697,845) (433,276)
----------- -----------
Net increase in cash and cash equivalents .............. 2,587,187 661,790
Cash and cash equivalents at beginning of
period .............................................. 2,823,216 2,211,029
----------- -----------
Cash and cash equivalents at end of period ............. $ 5,410,403 $ 2,872,819
=========== ===========
</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>
Six Months Ended
June 30
-------------------------------
1998 1997
----------- -----------
<S> <C> <C>
Net loss ............................................. $ (362,041) $ (356,961)
----------- -----------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization ..................... 1,249,118 1,317,127
Amortization of deferred borrowing costs .......... 46,898 45,897
Gain on sale of real estate ....................... (116,297) -
Changes in assets and liabilities:
Cash segregated for security deposits ........... (5,055) 421
Accounts receivable ............................. 59,218 (204,970)
Prepaid commissions ............................. 9,982 24,486
Prepaid expenses and other assets ............... (70,859) 373,892
Accounts payable and accrued expenses ........... (206,943) (89,974)
Accrued property taxes .......................... 139,608 290,012
Payable to affiliates - General Partner ......... 431,632 6,766
Security deposits and deferred rental
revenue ....................................... 3,121 (7,545)
----------- -----------
Total adjustments ............................. 1,540,423 1,756,112
----------- -----------
Net cash provided by operating activities ............ $ 1,178,382 $ 1,399,151
=========== ===========
</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
June 30, 1998
(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 six months ended June 30, 1998 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1998.
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, 1997, 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 McNeil Real Estate Management, Inc., Investor
Services, 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240.
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.
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.
<PAGE>
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner and its affiliates are as follows:
Six Months Ended
June 30,
---------------------
1998 1997
--------- ---------
Property management fees - affiliates................ $ 268,253 $ 254,990
Charged to gain on sale of real estate:
Disposition fee................................... 106,500 -
Charged to general and administrative -
affiliates:
Partnership administration........................ 92,905 71,425
Asset management fee.............................. 301,679 290,925
-------- --------
$ 769,337 $ 617,340
======== ========
The total payable to affiliates - General Partner at June 30, 1998 and December
31, 1997 consisted primarily of unpaid asset management fees, property
management fees and partnership general and administrative expenses and are due
and payable from current operations.
NOTE 4.
- -------
On April 28, 1998, the Partnership sold to Anglo-Florida Investments I, Ltd., an
unaffiliated buyer, Edison Ford Square, an 145,417 square foot shopping center
located in Fort Myers, Florida, for a cash purchase price of $3,550,000. Cash
proceeds from this transaction, as well as the gain on sale is detailed below:
<TABLE>
<CAPTION>
Gain on Sale Cash Proceeds
--------------- -------------
<S> <C> <C>
Cash sales price.................................... $ 3,550,000 $ 3,550,000
Selling costs....................................... (225,045) (225,045)
Basis of real estate sold........................... (3,208,658)
-------------
Gain on sale of real estate......................... $ 116,297
============= -----------
Proceeds from sale of real estate................... $ 3,324,955
===========
</TABLE>
The selling costs above include a disposition fee at 3% of the gross sales price
paid to the General Partner in the amount of $106,500.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- ------- ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- -------------------
The Partnership is engaged in diversified real estate activities, including the
ownership, operation and management of residential and commercial real estate
and other real estate related assets. At June 30, 1998, the Partnership owned
one apartment property, two office buildings and one retail center. Three of the
four Partnership's properties are subject to mortgage notes.
The Partnership recorded a $116,297 gain on the sale of Edison Ford Square. Net
proceeds from the sale amounted to $3,324,955. The net proceeds from the sale
were added to the Partnership's balance of cash reserves.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Total Partnership revenue decreased by $20,234 and $47,260 for the three months
and six months ended June 30, 1998 as compared to the same period in 1997.
Rental revenue for the three and six months ended June 30, 1998 decreased by
$149,332 and $126,811, respectively, as compared to the same periods in 1997.
This decrease is primarily due to the sale of Edison Ford Square on April 28,
1998.
Interest income for the three and six months ended June 30, 1998 decreased by
$14,225 and $9,720, respectively, as compared to the same periods last year.
This decrease is due to interest income earned on funds held in escrow for
Northway Mall in 1997. No such funds were held in 1998.
The Partnership recorded a $116,297 gain on the sale of Edison Ford Square for
the period ended June 30, 1998. Net proceeds from the sale amounted to
$3,324,955. The net proceeds from the sale were added to the Partnership's
balance of cash reserves.
Expenses:
Total expenses increased by $8,118 for the three months ended June 30, 1998 and
decreased by $15,154 for the six months ended June 30, 1998 as compared to the
same periods of 1997.
Property taxes for the three and six months ended June 30, 1998 decreased
$33,395 and $54,534, respectively, as compared to the same periods in 1997. This
decrease is primarily due to the reduction in the estimated tax liability on
Northway Mall and the sale of Edison Ford Square.
Other property operating expenses decreased by $15,007 and $48,821 for the
quarter and six months ended June 30, 1998, respectively, as compared to the
same period in 1997. The decrease was due to decrease in advertising, space
planning, property insurance premiums and bad debt expense.
<PAGE>
General and administrative expenses increased for the three and six months ended
June 30, 1998 by $81,714 and $161,195, respectively, as compared to the same
period in 1997. The increase was mainly due to costs incurred to explore
alternatives to maximize the value of the Partnership (see Liquidity and Capital
Resources). The increase was partially offset by decreases attributable to
investor services. During 1997, charges for investor services were provided by a
third party vendor. Beginning with 1998, these services are provided by
affiliates of the General Partner.
General and administrative - affiliates expense increased by $32,234 or 9% for
the first six months of 1998 as compared to the same period last year due to the
change in investor services as discussed above.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnership generated $1,178,382 of cash through operating activities for
the six months ended June 30, 1998 as compared to $1,399,151 for the same period
in 1997. The $220,769 decrease can be attribute to the increase in cash paid to
suppliers, an increase in cash received from tenants and a decrease in the cash
paid to affiliates.
The Partnership expended $218,305 and $304,085 in capital improvements to its
properties for the six months ended June 30, 1998 and 1997, respectively. In
addition the Partnership received proceeds of $3,324,955 from the sale of Edison
Ford Square.
Total principal payments on mortgage notes payable were $197,853 for the six
months ended June 30, 1998 as compared to $183,276 for the same period of 1997.
The Partnership distributed $1,499,992 to the limited partners during 1998,
while $250,000 was paid during 1997.
Short-term liquidity:
At June 30, 1998, the Partnership held cash and cash equivalents of $5,410,403.
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 $1.2 million
for necessary capital improvements for all properties in 1998.
The Partnership has significant mortgage maturities during 1998, and management
expects to extend or refinance these mortgage notes as they mature. However, if
management is unable to refinance the mortgage notes as they mature, the
Partnership will require the use of existing cash reserves.
Long-term liquidity:
While the present outlook for the 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.
<PAGE>
As previously announced, the Partnership has retained PaineWebber
("PaineWebber"), Incorporated as its exclusive financial advisor to explore
alternatives to maximize the value of the Partnership including, without
limitation, a transaction in which limited partnership interests in the
Partnership are converted into cash. The Partnership, through PaineWebber, has
provided financial and other information to interested parties and is currently
conducting discussions with one such party in an attempt to reach a definitive
agreement with respect to a sale transaction. It is possible that the General
Partner and its affiliates will receive non-cash consideration for their
ownership interests in connection with any such transaction. There can be no
assurance that any such agreement will be reached nor the terms thereof.
Distributions:
During 1998, the Partnership distributed $1,499,992 to the limited partners. In
light of the discussions relating to the sale transaction as disclosed, the
Partnership is presently deferring any decision with respect to the amount or
timing of distributions to limited partners.
Forward-Looking Information:
Within this document, certain statements are made as to the expected occupancy
trends, financial condition, results of operations, and cash flows of the
Partnership for periods after June 30, 1998. All of these statements are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements are not
historical and involve risks and uncertainties. The Partnership's actual
occupancy trends, financial condition, results of operations, and cash flows for
future periods may differ materially due to several factors. These factors
include, but are not limited to, the Partnership's ability to control costs,
make necessary capital improvements, negotiate sales or refinancings of its
properties, and respond to changing economic and competitive factors.
Other Information:
Management has begun to review its information technology infrastructure to
identify any systems that could be affected by the year 2000 problem. The year
2000 problem is the result of computer programs being written using two digits
rather than four to define the applicable year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in major systems failure or
miscalculations. The information systems used by the Partnership for financial
reporting and significant accounting functions were made year 2000 compliant
during recent systems conversions. The Partnership is in the process of
evaluating the computer systems at the various properties. The Partnership also
intends to communicate with suppliers, financial institutions and others to
coordinate year 2000 issues. Management believes that the remediation of any
outstanding year 2000 conversion issues will not have a material or adverse
effect on the Partnership's operations.
<PAGE>
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.
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. On
October 31, 1997, the Plaintiffs filed a second consolidated and amended
complaint. The case has been stayed pending settlement discussions. While
actively working toward a final resolution, there can be no assurances regarding
settlement.
<PAGE>
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 limited partnership units (in
thousands) outstanding in 1998 and 1997,
respectively.
27. Financial Data Schedule for the quarter
ended June 30, 1998.
(b) Reports on Form 8-K. A Form 8-K dated April 28, 1998 was filed on
May 7, 1998 regarding the sale of Edison Ford Square.
<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
August 14, 1998 By: /s/ Ron K. Taylor
- --------------- -----------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)
August 14, 1998 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 5,410,403
<SECURITIES> 0
<RECEIVABLES> 1,584,359
<ALLOWANCES> (536,718)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 61,811,463
<DEPRECIATION> (25,594,602)
<TOTAL-ASSETS> 43,772,284
<CURRENT-LIABILITIES> 0
<BONDS> 21,244,192
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 43,772,284
<SALES> 4,405,034
<TOTAL-REVENUES> 4,595,886
<CGS> 0
<TOTAL-COSTS> 4,096,813
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 861,114
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (362,041)
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</TABLE>
