FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities exchange Act of 1934
For the Quarterly Period Ended September 30, 1998
Commission File Number 0-16815
NHP RETIREMENT HOUSING PARTNERS I
LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
(Exact name of registrant as specified in its charter)
DELAWARE 52-1453513
(State of other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
14160 DALLAS PARKWAY, SUITE 300
DALLAS, TX 75240
(Address of principal executive offices)
(Zip Code)
(972) 770-5600
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
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>
PART I-FINANCIAL INFORMATION
ITEM 1-FINANCIAL STATEMENTS
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NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
A Limited Partnership
Statements of Financial Position
September 30, 1998 December 31, 1997
------------------ -----------------
(Unaudited) (Audited)
ASSETS
------
Cash and cash equivalents $ 6,192,519 $ 4,495,733
Other receivables 6,483,254 31,892
Note receivable 32,520,000 0
Pension notes issuance costs 818,748 1,009,842
Organization and offering costs 177,994 215,326
Prepaid expenses 254,223 300,654
Rental property:
Land 2,391,705 6,820,468
Building net of accumulated depreciation of
$5,642,524 in 1998 and $15,456,154 in 1997 16,462.980 42,670,005
Other assets 4,033 41,920
------------- -------------
Total assets $ 65,305,456 $ 55,585,840
============= =============
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Liabilities:
Accounts payable $ 883,147 $ 320,796
Interest payable 26,245,051 23,730,407
Pension notes 42,672,000 42,672,000
Other liabilities 446,533 882,625
------------- -------------
70,246,731 67,605,828
------------- -------------
Partners' deficit:
General Partner-NHP/RHGP-I Limited
Partnership (1,499,782) (1,596,670)
Assignor Limited Partner-NHP RHP-I
Assignor Corporation-42,691 investment
unites outstanding (3,441,493) (10,423,318)
------------- -------------
Total partners' deficit (4,941,275) (12,019,988)
------------- -------------
Total liabilities and partners' deficit $ 65,305,456 $ 55,585,840
============= =============
</TABLE>
See notes to financial statements.
1
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<TABLE>
<CAPTION>
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NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
A Limited Partnership
Statement of Operations
For the Three Months Ended September 30, 1998
(Unaudited)
Three months ended September 30,
1998 1997
---- ----
REVENUE:
Rental income $ 4,010,841 $ 3,785,468
Interest income 48,401 22,346
Other income 60,585 55,501
------------- -------------
4,119,827 3,863,315
------------- -------------
COSTS AND EXPENSES:
Salaries, related benefits and overhead
reimbursements 1,037,307 1,016,138
Management fees, dietary fees and other services 388,174 379,788
Administrative and marketing 133,268 152,151
Utilities 211,770 217,240
Maintenance 129,633 131,337
Resident services, other than salaries 80,619 72,057
Food services other than salaries 415,236 404,760
Depreciation 446,800 415,548
Taxes and insurance 263,007 280,728
------------- -------------
3,105,814 3,069,747
------------- -------------
INCOME FROM RENTAL OPERATIONS 1,014,013 793,568
------------- -------------
OTHER INCOME AND (EXPENSES):
Gain on sale of properties 9,276,111 0
Interest expense - pension notes (1,582,984) (1,509,068)
Amortization of pension notes issuance costs (63,698) (63,698)
Amortization of organization and offering costs (12,444) (12,444)
Other expenses (111,458) (59,331)
------------- -------------
7,505,527 (1,644,541)
------------- -------------
NET INCOME (LOSS) $ 8,519,540 (850,973)
============= =============
NET INCOME (LOSS) PER ASSIGNEE INTEREST $ 196 $ (20)
============= =============
</TABLE>
See notes to financial statements
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
A Limited Partnership
Statement of Operations
For the Nine Months Ended September 30, 1998
(Unaudited)
Nine months ended September 30,
1998 1997
---- ----
REVENUE:
Rental income $ 12,066,537 $ 11,312,802
Interest income 116,343 66,908
Other income 195,512 145,880
------------- -------------
12,378,392 11,525,590
------------- -------------
COSTS AND EXPENSES:
Salaries, related benefits and overhead
reimbursements 3,066,387 3,035,525
Management fees, dietary fees and other services 1,151,039 1,132,286
Administrative and marketing 427,729 434,381
Utilities 687,579 673,716
Maintenance 377,199 379,627
Resident services, other than salaries 216,576 216,193
Food services other than salaries 1,213,717 1,186,222
Depreciation 1,321,110 1,246,645
Taxes and insurance 850,905 837,156
------------- -------------
9,312,241 9,141,751
------------- -------------
INCOME FROM RENTAL OPERATIONS 3,066,151 2,383,839
------------- -------------
OTHER INCOME AND (EXPENSES):
Gain on sale of properties 9,276,111 0
Interest expense - pension notes (4,748,950) (4,527,205)
Amortization of pension notes issuance costs (191,094) (191,094)
Amortization of organization and offering costs (37,332) (37,332)
Other expenses (240,575) (269,450)
------------- -------------
4,058,160 (5,025,081)
------------- -------------
NET INCOME (LOSS) $ 7,124,311 $ (2,641,242)
============= =============
NET INCOME (LOSS) PER ASSIGNEE INTEREST $ 164 $ (61)
============= =============
</TABLE>
See notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
A Limited Partnership
Statement of Partners' Deficit
For the Nine Months Ended September 30, 1998
(Unaudited)
GENERAL
PARTNER
CAPITAL REALTY ASSIGNOR
GROUP SENIOR LIMITED
HOUSING, INC. PARTNER TOTAL
-------------- -------- -----
Parners' deficit
at December 31, 1997 $ (1,596,670) $ (10,423,318) $ (12,019,988)
Distributions (45,598) 0 (45,598)
Net Income-Nine months
ended September 30, 1998 1,056,538 6,067,773 7,124,311
------------- -------------- -------------
Partners' deficit
at September 30, 1998 $ (585,730) $ (4,355,545) $ (4,941,275)
============= ============== =============
Percentage interest
at September 30, 1998 2% 98% 100%
== === ====
</TABLE>
See notes to financial statements
4
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<TABLE>
<CAPTION>
<S> <C> <C>
NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
A Limited Partnership
Statement of Cash Flows
For the Nine Months Ended September 30, 1998
(Unaudited)
Nine months ended September 30,
1998 1997
---- ----
Cash flows from operating activities:
Rent collections $ 12,075,762 $ 11,310,916
Interest received 116,343 68,108
Other income 195,512 145,880
Salary and related benefits (3,977,341) (3,043,414)
Management fees, dietary fees
and other services (1,157,605) (1,138,430)
Other operating expenses paid (3,648,908) (3,777,828)
Interest paid (2,234,306) (2,234,306
------------ -------------
Net cash provided by operating activities 2,269,457 1,330,926
------------ -------------
Cash flows from investing activities:
Capital Expenditures (527,073) (412,899)
------------ -------------
Net cash used in investing activities (527,073) (412,899)
------------ -------------
Cash flows from financing activities:
Distributions (45,598) (45,598)
------------ -------------
Net cash used in financing activities (45,598) (45,598)
------------ -------------
Net increase in cash and cash equivalents 1,696,786 872,429
Cash and cash equivalents
at beginning of period 4,495,733 4,017,181
------------ -------------
Cash and cash equivalents
at end of period $ 6,192,519 $ 4,889,610
============ =============
</TABLE>
See notes to financial statements
5
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<TABLE>
<CAPTION>
<S> <C> <C>
NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
A Limited Partnership
Statement of Cash Flows
(Contnued)
Nine months ended September 30,
1998 1997
---- ----
RECONCILIATION OF NET LOSS
TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
Net Income (Loss) $ 7,124,311 $ (2,641,242)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Gain on sale of properties (9,276,111) 0
Depreciation 1,321,110 1,246,645
Amortization of organization
and offering costs 37,332 37,332
Amortization of pension notes
issuance costs 191,094 191,094
Changes in operating assets and liabilities:
Interest receivable 0 1,200
Other assets and receivables 47,112 (569)
Prepaid expenses 25,122 72,929
Accounts payable 562,351 14,807
Interest payable 2,514,644 2,292,899
Other liabilities (277,508) 115,831
------------ ------------
Total adjustments (4,854,854) 3,972,168
------------ ------------
Net cash provided by operating activities $ 2,269,457 $ 1,330,926
============ ============
</TABLE>
See notes to financial statements.
6
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NHP RETIREMENT HOUSING PARTNERS I LIMITED PARTNERSHIP
A Limited Partnership
Notes to Financial Statements
September 30, 1998
(1) ACCOUNTING POLICIES
Nature of Business
NHP Retirement Housing Partners I Limited Partnership (the "Partnership")
is a limited partnership organized under the laws of the State of
Delaware on March 10, 1986. The Partnership was formed for the purpose of
raising capital by issuing both Pension Notes ("Notes") to tax-exempt
investors and selling additional partnership interests in the form of
Assignee Interests ("Interests") to taxable individuals. Interests
represent assignments of the limited partnership interests of the
Partnership issued to the Assignor Limited Partner, NHP RHP-I Assignor
Corporation. The proceeds from the sale of the Notes and Interests have
been invested in residential rental properties for retirement age
occupants.
Basis of Presentation
The accompanying unaudited interim financial statements reflect all
adjustments which are, in the opinion of management, necessary to present
a fair statement of the financial condition and results of operations for
the interim periods presented.
While the General Partner believes that the disclosures presented are
adequate to make the information not misleading, it is suggested that
these financial statements be read in conjunction with the financial
statements and the notes included in the Partnership's Annual Reports
filed in Forms 10-K for the year ended December 31, 1997.
(2) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES OF THE GENERAL
PARTNER
Until January 23, 1995, the sole general partner of the Partnership was
NHP/RHGP-1 Limited Partnership (NHP/RHGP-1). On December 19, 1991,
NHP/RHGP-1 executed an amended and restated purchase agreement with
Capital Realty Group Properties, Inc. (CRGP) for the transfer of the
General Partner's interest in the Partnership, subject to the approval of
holders of Interests ("Assignee Holders.") CRGP's rights and obligations
under the purchase agreement were subsequently assigned to Capital Realty
Group Senior Housing, Inc. (CRGSH). Pursuant to a Consent Solicitation
dated October 25, 1994, Assignee Holders holding more than 64% of the
equity interests in the Partnership approved the election of CRGSH, as
the replacement general partner of the Partnership. Effective January 23,
1995, CRGSH has become the new sole general partner of the Partnership
and NHP/RHGP-I has withdrawn as general partner.
On June 10, 1998, the sole owner of the General Partner, Capital Realty
Group Corporation, sold all of its shares of CRGSH common stock to
7
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Retirement Associates, Inc. ("Associates") for $855,000. The source of
the funds is a Promissory Note for $855,000 with a five year term and
bearing an interest rate of 10% per annum. The interest will accrue on
the Promissory Note and be payable at the maturity of the Promissory
Note. Associates is the maker of the Note and Capital Realty Group
Corporation is the payee. Mr. Robert Lankford is the President of
Associates and has brokered real estate with Capital Realty Group Corp-
oration and its affiliates.
As discussed below, in Note 4, on September 30, 1998, the Partnership
sold its four wholly owned properties to Capital Senior Living Properties
2 - NHPCT, Inc., a wholly owned subsidiary of Capital Senior Living
Corporation ("CSLC"), for $40,650,000. An independent third party
appraiser valued the assets at 40,425,000. In connection with this sale
of properties, Capital Realty Group Brokerage, Inc., an affiliate of
CSLC, received $1,219,500 in brokerage fees.
Personnel working at the Property sites and certain home office personnel
who perform services for the Partnership are employees of Capital Senior
Living, Inc. (CSL), an affiliate of CSLC. The Partnership reimburses CSL
for the salaries, related benefits, and overhead reimbursements of such
personnel as reflected in the accompanying financial statements. Salary,
related benefits and overhead reimbursements reimbursed and expensed by
the Partnership to CSL for the third fiscal quarter ended September 30,
1998 and 1997, were $1,037,307 and $1,016,138, respectively. Management
fees, dietary fees and other services reimbursed and expensed by the
Partnership to CSL for the third fiscal quarter ended September 30, 1998
and 1997, were $388,174 and $379,789, respectively.
Distributions of $45,598 were made to the General Partner during the nine
months ended September 30, 1998.
(3) VALUATION OF RENTAL PROPERTY
Generally accepted accounting principles require that the Partnership
evaluate whether it is probable that the estimated undiscounted future
cash flows of its properties, taken individually, will be less than the
respective net book value of the properties. If such a shortfall exists
and is material, then a write-down is warranted. The Partnership performs
such evaluations on an on-going basis. During the nine months ended
September 30, 1998, based on the Partnership's evaluation of each
respective property, the Partnership did not believe that any additional
write-down was warranted.
(4) DISPOSITION OF RENTAL PROPERTY
On September 30, 1998, the Partnership sold its four wholly owned
properties to Capital Senior Living Properties 2-NHPCT, Inc., a wholly
owned subsidiary of Capital Senior Living Corporation, for $40,650,000.
An independent third party appraiser valued the assets at 40,425,000.
The four properties sold are the Atrium at Carmichael, Crosswood Oaks,
The Heatherwood and The Veranda Club. After the sale, the Amberleigh is
the only remaining property in the Partnership. After payment of closing
costs, on September 30, 1998 the Partnership received a short term
promissory note for $32,520,000 and recorded a $6,460,587 account
receivable on the sale. The note receivable and account receivable were
subsequently paid on October 2, 1998. The Partnership used the sales
proceeds as follows: $22,514,174 was allocated for partial redemption of
Pension Notes, $15,703,636 was allocated for partial payment of deferred
8
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interest on the Pension Notes, $413,188 was used for payment of current
interest due on redeemed Pension Notes and the remaining $349,589 was
retained by the Partnership. Approximately $12,787,113 used in payment of
principal and deferred interest on the Pension Notes held by Capital Senior
Living Properties, Inc. ("CSLP") has been retained by the Partnership and
will be subsequently released to CSLP. Interest income accrued on these
funds will be paid to CSLP. The Partnership recognized a $9,276,111 gain on
sale of those properties at September 30, 1998. In October, 1998, the
Partnership will recognize approximately $1,856,485 of additional interest
expense paid on redeemed Pension Notes resulting from the difference
between the stated interest rate of 13% on the Pension Notes and the
accrued interest rate of approximately 9% recorded by the Partnership under
the effective interest rate method.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The following schedule summarizes the occupancy levels at the four properties
wholly owned by the Partnership prior to their sale on September 30, 1998 and at
Amberleigh in which the Partnership has a 99.9% partnership interest.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Available September 30 September 30
Units 1998 1997
----- ---- ----
The Amberleigh 271 98% 96%
The Atrium at Carmichael 153 96% 97%
Crosswood Oaks 122 93% 88%
Heatherwood 160 93% 94%
Veranda Club 189 90% 91%
</TABLE>
Rent collections for the nine month period increased to $12,075,762 in 1998 from
$11,310,916 in 1997, or 6.8%, primarily from rental rate increases and increased
occupancies. Salaries, management fees and other operating expenses paid
likewise decreased, from $7,959,672 in 1997 to $7,883,854 in 1998 or 1.0%,
primarily from increased accounts payable.
9
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Cash generated from rental operations prior to the payment of interest expense
was sufficient to pay all of the interest on the Pension Notes currently
payable, which was $2,234,306 for the nine month period ended September 30,
1998. Net cash provided from operations, after the payment of interest expense,
during the nine months ended September 30, 1998 and 1997 was $2,269,457 and
$1,330,926, respectively. Interest on the Pension Notes bears stated simple
interest at 13% rate per annum, however is accrued under the effective interest
method at a rate of approximately 9% per annum compounded quarterly, which
totaled $4,748,950 and $4,527,205 for the nine months ended September 30, 1998
and 1997, respectively, but is paid based on a 7% pay rate. The remaining 6%
unpaid portion is due at maturity. Total accrued and unpaid interest amounted to
$26,245,051 and $23,730,407 at September 30, 1998 and December 31, 1997,
respectively.
Capital expenditures increased $114,174 from $412,899 in 1997 to $527,073 in
1998. Capital improvement programs implemented at several of the properties
during 1995 continued during 1996, 1997 and 1998.
Cash and cash equivalents at September 30, 1998 and December 31, 1997 amounted
to $6,192,519 and $4,495,733, respectively.
Future funds may not be available to meet operating requirements, including the
ultimate payment of principal and deferred interest on the Pension Notes. This
cash need has caused the General Partner to determine that it is not financially
appropriate to make distributions to Assignee Holders.
Since 1993, cash generated from operations has been sufficient to meet the
Partnership's minimum interest payment requirements. Subsequent to the sale of
the four Partnership properties, the General Partner anticipates making interest
payments at the full 13% stated interest rate on the current outstanding Pension
Notes. Should this occur, the Partnership estimates total unpaid interest and
principal will approximate $33 million at December 31, 2001, the maturity date
of the Pension Notes, which is far in excess of projected cash reserves.
Accordingly, there will need to be very significant improvements or expansions
and/or increases in the disposition dand/or refinancing valuesd of the remaining
property to fund both the accrued interest and the face value of the Pension
Notes upon their maturity. The Pension Notes will need to be paid in full before
any funds would be available to the Assignee Holders
RESULTS OF OPERATIONS
The Partnership's net loss for the nine months ended September 30, 1998 includes
rental operations from each of the Partnership's properties. The net loss also
includes depreciation, amortization of Pension Notes issuance costs,
amortization of organization and offering costs and accrued Pension Note
interest expense which are noncash in nature.
The Partnership incurred net income of $7,124,311 for the nine month period
ending September 30, 1998 and a net loss of $2,641,242 for the nine months
ending September 30, 1997. Net income (loss) per assignee interest is $164 and
($61) for the nine month period ending September 30, 1998 and 1997,
respectively. Increased net income for the nine month period ending September
30, 1998 in comparison to the nine month period ending September 30, 1997 was
principally due to the gain incurred on the sale of the properties. Rental
income increased to $12,066,537 for the nine months ended September 30, 1998
from $11,312,802 for the same period in 1997, or approximately 6.7%, primarily
10
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as a result of rental rate increases and increased occupancies. Rental expenses
increased to $9,312,241 from $9,141,751 for the nine month period ending
September 30, 1998 and 1997, respectively, or 1.9%. Increased rental expense was
primarily due to inflation and additional depreciation expense due to increased
capital expenditures. Pension Note interest expense increased from $4,527,205 to
$4,748,950 for the nine month period ending September 30, 1997 and 1998
respectively. Other expenses relating to Partnership administration decreased
from $269,450 to $240,575 for the nine month periods ending September 30, 1997
and 1998, respectively.
For the three months ended September 30,1998 as compared with the three months
ended September 30, 1997, the Partnership's revenue and expenses reflect the
same variances as discussed above, with the exception that other expenses
increased from $59,331 to $111,458 for the three month periods ending September
30, 1997 and 1998, respectively. The increase in other expenses was due to
increased printing and legal costs.
As discussed previously, the Partnership performs an on-going evaluation of the
individual carrying value of each of the rental properties. Based on the
Partnership's evaluation of these carrying values at September 30, 1998, it was
determined that no write-downs were warranted.
Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Partnership's
computer programs or hardware that have date-sensitive software or embedded
chips may recognize the year 2000 as a date other than the year 2000. This could
result in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Based on ongoing assessments, the Partnership has developed a program to modify
or replace significant portions of its software and certain hardware, which are
generally PC-based systems, so that those systems will properly utilize dates
beyond December 31, 1999. The Partnership expects to substantially complete
software reprogramming and software and hardware replacement no later than
December 31, 1998, with 100% completion targeted for September 30, 1999. The
Partnership presently believes that these modifications and replacements of
existing software and certain hardware will mitigate the Year 2000 Issue.
However, if such modifications and replacements are not completed timely, the
Year 2000 Issue could have a material impact on the operations of the
Partnership.
The Partnership has assessed its exposure to operating equipment, and such
exposure is not significant due to the nature of the Partnership's business.
The Partnership is not aware of any external agent with a Year 2000 Issue that
would materially impact the Partnership's results of operations, liquidity, or
capital resources. However, the Partnership has no means of determining whether
or ensuring that external agents will be Year 2000 ready. The inability of
external agents to complete their Year 2000 resolution process in a timely
fashion could materially impact the Partnership.
Management of the Partnership believes it has an effective program in place to
resolve the Year 2000 Issue in a timely manner. As noted above, the Partnership
has completed most but not all necessary phases of its Year 2000 program. In the
event that the Partnership does not complete the current program or any
additional phases, the Partnership could incur disruptions to its operations. In
addition, disruptions in the economy generally resulting from Year 2000 Issues
could also materially adversely affect the Partnership. The Partnership could be
subject to litigation for computer systems failure. The amount of potential
liability and lost revenue cannot be reasonably estimated at this time.
The Partnership currently has no contingency plans in place in the event it does
not complete all phases of its Year 2000 program. The Partnership plans to
evaluate the status of completion in early 1999 and determine whether such a
plan is necessary.
11
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable
PART II
ITEM 1. LEGAL PROCEEDINGS
On October 28, 1998, the Partnership received notice that a complaint had been
filed in Chancery Court in Delaware by an Interest holder in the Partnership
against the Partnership, CSLC, Capital Senior Living Properties 2 - NHPCT, Inc.
and CRGSH (collectively "the Defendants"). This Interest holder purchased 90
Interests in the Partnership in February 1993 for $180. The complaint, which
seeks class action status, alleges violations of the terms of the NHP
Partnership Agreement in completing the transaction whereby four of the five
properties in NHP were sold to Capital Senior Living Properties 2 - NHPCT, Inc.
The complaint seeks rescission of the sale by the Partnership of the four
properties and various other relief. The Partnership believes the complaint is
without merit and intends to vigorously contest the complaint.
All other items not applicable.
- ------------------------------
12
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SIGNATURES
- ----------
Pursuant to the requirements of Section 13 or 15(d) 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.
NHP Retirement Housing Partners I, Limited Partnership
by: Capital Realty Group Senior Housing, Inc.
General Partner
By: /s/ Robert Lankford
----------------------------------------
Robert Lankford
President
Date: November 12, 1998
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Financial Data Sheet for NHP Retirement Housing Partners I, L.P.
</LEGEND>
<CIK> 0000793730
<NAME> NHP Retirement Housing Partners I, L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 6,192,519
<SECURITIES> 0
<RECEIVABLES> 39,003,254
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 24,497,209
<DEPRECIATION> (5,642,524)
<TOTAL-ASSETS> 65,305,456
<CURRENT-LIABILITIES> 0
<BONDS> 42,672,000
0
0
<COMMON> 0
<OTHER-SE> (4,941,275)
<TOTAL-LIABILITY-AND-EQUITY> 65,305,456
<SALES> 0
<TOTAL-REVENUES> 21,654,503
<CGS> 0
<TOTAL-COSTS> 9,312,241
<OTHER-EXPENSES> 469,001
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,748,950
<INCOME-PRETAX> 7,124,311
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,124,311
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
