SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended March 31, 1996
Commission File Number: 01-16874
National Real Estate Limited Partnership
Income Properties-II
(Exact name of registrant as specified in its charter)
Wisconsin
(State or other jurisdiction of incorporation or
organization)
39-1553195
(I.R.S. Employer Identification Number)
9800 West Bluemound Road
Wauwatosa, Wisconsin 53226-4353
(Address of principal executive offices)
(zip code)
Registrant's telephone number, including area code:
(414) 453-3498
N/A
Former name, address and fiscal year if changed since
last report.
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Sections 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.
(X) Yes ( ) No
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES-II
(A Wisconsin Limited Partnership)
Balance Sheet
(Unaudited)
March 31, December 31,
1996 1995
ASSETS
Current Assets:
Cash $ 462,652 $ 478,326
Escrow and other deposits (Note 5)
0 0
Accounts receivable and other assets
8,464 9,671
Other Assets:
Investment properties, at cost
Land 516,590 516,590
Buildings and improvements
4,146,875 4,145,090
4,663,465 4,661,680
Less accumulated depreciation
1,161,285 1,125,982
3,502,180 3,535,698
Intangible Assets:
Debt issue costs, net of accumulated amortization
of $5720 as of December 31, 1994 and
$3,700 as of December 31, 1993
1,852 2,357
$ 3,975,148 $ 4,026,052
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accrued expenses and other liabilities
$ 1,049 $ 926
Tenant security deposits
26,800 26,050
Mortgage notes payable (Note 6)
480,333 491,333
Rent received in advance
13,415 10,017
521,597 528,326
Partners' Capital (Note 3):
General Partners (deficit)
33,694 33,579
Limited Partners
(authorized----40,000 Interests;
3,419,857 3,464,147
outstanding--20,653.69)
3,453,551 3,497,726
$ 3,975,148 $ 4,026,052
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROERTIES-II
(A Wisconsin Limited Partnership)
Statement of Operations
(Unaudited)
Three Months Ended
March 31,
1996 1995
Income:
Operating Income $171,122 $188,483
$171,122 $479,746
Operating expenses:
Operating 92,135 77,202
Administration 36,484 33,549
Depreciation and amortization
35,808 35,619
Interest (Note 6)
12,619 13,716
177,045 160,086
Income (Loss) from operations
(5,923) 28,397
Other income (expense):
Interest and other income
8,220 7,190
Net Income/(Loss)
$ 2,297 $35,586
Net Income/(Loss) attributable to
General Partners (5%)
$ 115 $1,779
Net Income/Loss attributable to
Limited Partners (95%)
$ 2,182 $33,807
Per Limited Partnership
Interest outstanding-20,653.69
$ 0.11 $1.64
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES-II
(A Wisconsin Limited Partnership)
Statement of Cash Flows
(Unaudited)
Three Months Ended
March 31,
1996 1995
Operating Activities:
Net income (loss) for the period
$ 2,297 $ 23,252
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization
35,303 35,001
Amortization of debt issue costs
505 505
Changes in operating assets and
liabilities:
Escrow deposits and other assets
1,207 (17,280)
Rents received in advance
3,398 4,489
Accrued expenses and other liabilities
123 14,181
Tenant security deposits
750 2,350
Accrued real estate taxes
0 0
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
43,583 62,498
Investment activity:
Additions to investment property
(1,786) 0
Financing activities:
Distributions to partners
(46,471) (30,981)
Proceeds from mortgage note payable
0 0
Payments on mortgage note payable
(11,000) (11,000)
NET CASH PROVIDED BY FINANCING
ACTIVITIES (57,471) (41,981)
INCREASE (DECREASE) IN CASH
(15,674) 20,517
Cash at beginning of period
478,326 278,892
CASH AT END OF PERIOD
$462,652 $299,409
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES-II
INDEX
Page
PART I. FINANCIAL INFORMATION
Balance Sheet (unaudited) - March 31, 1996
and December 31, 1995 . . . . . . . . .2
Statement of Operations (unaudited) - Three months
ended March 31, 1996 and 1995 . . . . .3
Statement of Cash Flows (unaudited) -
Three months ended March 31, 1996 and 19954
Notes to Financial Statements (unaudited).5-6
Management's Discussion and Analysis of
Financial Condition and Results of Operation7
PART II. OTHER INFORMATION AND SIGNATURES . . .8-9
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME
PROPERTIES-II
(A Wisconsin Limited Partnership)
Notes to Financial Statements
(Unaudited)
March 31, 1996
1. In the opinion of the General Partners, the
accompanying unaudited financial statements
contain all adjustments (consisting of normal
recurring accruals) which are necessary for a fair
presentation. The statements, which do not include
all of the information and footnotes required by
generally accepted accounting principles for
complete financial statements, should be read in
conjunction with the National Real Estate Limited
Partnership Income Properties-II annual report for
the year ended December 31, 1995. Refer to the
footnotes of those statements for additional
details of the Partnership's financial condition.
The operating results for the period ended March
31, 1996 may not be indicative of the operating
results for the entire year.
2. National Real Estate Limited Partnership Income
Properties-II (the "Partnership") was organized
under the Wisconsin Uniform Limited Partnership
Act pursuant to a Certificate of Limited
Partnership dated June 5, 1986, to acquire
primarily existing commercial and residential real
properties and hotels. John Vishnevsky and
National Development and Investment, Inc., have
contributed the sum of $1,000 to the Partnership
as General Partners. The Limited Partnership
Agreement had authorized the issuance of 40,000
Limited Partnership Interests (the "Interests") at
$250 per Interest with the offering period running
from August 18, 1986 through August 18, 1988. On
August 18, 1988, the Partnership concluded its
offering and capital contributions totaled
$5,163,031 for 20,653.69 Limited Partnership
Interests.
Pursuant to the Escrow Agreement with the First
Wisconsin Trust Company, Milwaukee, Wisconsin,
until the minimum number of Interests (4,850) and
investors (100) were subscribed, payments were
impounded in a special interest-bearing escrow
account. On February 2, 1987, the Partnership
received the required minimum capital
contributions and $1,332,470, representing
5,329.88 Interests, was released to the
Partnership.
3. Changes in Partners' Equity:
LIMITED PARTNERS
Quarter Ended March 31, 1996
Partner's Equity, beginning of quarter $3,464,147
Distributions (46,471)
Net Income (Loss) 2,182
Partners' Equity, end of quarter $3,419,858
Limited Partner's equity is net of 29.86 interests held
in treasury of ($21,671).
Quarter Ended March 31, 1995
Partner's Equity, beginning of quarter $3,474,598
Distributions (30,981)
Net Income (Loss) (33,807)
Partners' Equity, end of quarter $3,477,423
GENERAL PARTNERS
Quarter Ended March 31, 1996
Partner's Equity, beginning of quarter $33,579
Distributions --
Net Income (Loss) 115
Partners' Equity, end of quarter $33,694
Quarter Ended March 31, 1995
Partner's Equity, beginning of quarter $26,792
Distributions --
Net Income (Loss) 1,779
Partners' Equity, end of quarter $28,572
TOTAL
Quarter Ended March 31, 1996
Partner's Equity, beginning of quarter $3,497,726
Distributions (46,471)
Net Income (Loss) 2,297
Partners' Equity, end of quarter $3,453,552
Quarter Ended March 31, 1995
Partner's Equity, beginning of quarter $3,501,390
Distributions (30,981)
Net Income (Loss) (35,586)
Partners' Equity, end of quarter $3,505,995
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES-II
(A Wisconsin Limited Partnership)
Notes to Financial Statements (cont'd)
(Unaudited)
March 31, 1996
4. National Realty Management, Inc. (NRMI): The
Partnership incurred property management fees of
$9,258 under an agreement with NRMI for the three
month period ended March 31, 1996.
5. The mortgage note payable is secured by Amberwood
Apartments. Monthly principal and interest
payments are required in amounts sufficient to
fully amortize the loan over 15 years. The
interest rate is adjustable annually at 1.5% plus
First Michigan Bank prime rate and is currently at
10.25%. The note matures on March 1, 1997.
Maturities of the mortgage from 1996 to 1997 based
on the current accrual rate, are as follows:
$44,000, and $447,333.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES-II
(A Wisconsin Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
March 31, 1996
The Partnership owns and operates two investment
properties: a portion of Cave Creek Lock-It Lockers,
located in Phoenix, Arizona, and the Amberwood
Apartments, a 56-unit apartment complex in Holland,
Michigan.
National Real Estate Limited Partnership Income
Properties ("NRELP-IP") owns the remaining portion of
Cave Creek Lock-It Lockers. National Real Estate
Limited Partnership-VI ("NRELP-VI") owned 12 units of
Amberwood through February 28, 1992, at which time the
units were sold to the Partnership for $660,000 and a
Future Interest Proceeds Agreement. The purchase was
funded by proceeds of a first mortgage note. The
mortgage is collateralized by all 56 units of Amberwood
Apartments. The Partnership is contingently liable to
pay NRELP-VI proceeds from a future sale of Amberwood
Apartments as set forth in a Future Interest Proceeds
Agreement. Upon the future sale of Amberwood
Apartments, NRELP-VI is entitled to receive 50% of the
net sales price above $57,500 per unit (reduced by
normal selling costs) until the Partnership earns a
cumulative return of 20% on its investment. Beyond
that, once the Partnership earns its cumulative return
of 20% on its investment, NRELP-VI will receive 60% of
the net sales price above $57,500 per unit. NRELP-IP
and NRELP-VI are Wisconsin limited partnerships,
affiliated with the General Partners.
Amberwood is located in a wooded setting and is
conveniently located near shopping, bike paths and
businesses, and offers superior amenities. The economy
within the area has remained stable. The rental market
is very strong which has prompted several apartment
communities to add additional units.
Amberwood's occupancy rate for the first quarter of
1996 was 90.77%. Cave Creek Lock-It Lockers' occupancy
during the same period was 92.33% based on net rentable
square footage. During the comparable period in 1995
occupancy rates were 100% for Amberwood and 98.2% for
Cave Creek Lock-It Lockers.
Total operating revenues for Cave Creek Lock-It Lockers
in 1996 are in line with the comparable period of 1995.
Total operating revenue for Amberwood Apartments
decreased due to higher vacancies. Operating expenses
have increased over the same quarter of 1995 due to
increased maintenance expense at Amberwood Apartments.
Interest expense remained in line with the same quarter
of 1995 due to a slight increase in interest rates.
The distributions have increased to $2.25 per share per
quarter and totaled $46,470.80 for the first quarter.
These distributions are required to be allocated 100%
to the Limited Partners, as outlined in the prospectus.
<PAGE>
PART II. OTHER INFORMATION
Item 6(b). Reports on Form 8-K
There were no reports on Form 8-K for the quarter ended
March 31, 1996.
<PAGE>
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.
National Real Estate Limited Partnership
Income Properties
(Registrant)
Date /S/May 15, 1996
/S/ John Vishnevsky
________________________________
John Vishnevsky
President and Chief Operating and
Executive Officer
National Development and Investment, Inc.
Corporate General Partner
Date /S/May 15, 1996
/S/ John Vishnevsky
__________________________________
John Vishnevsky
Chief Financial and Accounting Officer
Date /S/May 15, 1996
Stephen P. Kotecki
__________________________________
Stephen P. Kotecki
President
EC Corp
Corporate General Partner
B:\NIP2-1QT.ELE
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 462652
<SECURITIES> 0
<RECEIVABLES> 8464
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 471116
<PP&E> 4663465
<DEPRECIATION> 1161285
<TOTAL-ASSETS> 3975148
<CURRENT-LIABILITIES> 521597
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3453551<F1>
<TOTAL-LIABILITY-AND-EQUITY> 3975148
<SALES> 0
<TOTAL-REVENUES> 171122
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 164426
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12619
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2297
<EPS-PRIMARY> 0.11<F2>
<EPS-DILUTED> 0
<FN>
<F1>Refers to General Partners and Limited Partners Capital.
<F2>95% Limited Partners - Interests Outstanding = 20,653.69.
</FN>
</TABLE>
