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 September 30, 1996
Commission File Number: 0-14453
National Real Estate Limited Partnership
Income Properties
(Exact name of registrant as specified in its charter)
Wisconsin
39-1503893
(State or other jurisdiction ofincorporation
or organization)
(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
INDEX
Page
PART I. FINANCIAL INFORMATION
Balance Sheet (unaudited) - September 30, 1996
and December 31, 1995 . . . . . . . . . . . . . .2
Statement of Operations (unaudited) -
Three months and nine months ended
September 30, 1996 and 1995 . . . . . . . . . . .3
Statements of Cash Flows (unaudited) -
Nine months ended September 30, 1996 and 1995. .4
Notes to Financial Statements (unaudited) . . .5-6
Management's Discussion and Analysis of
Financial Condition and Results of Operation. .7-8
PART II. OTHER INFORMATION AND SIGNATURES . . 9-10
<PAGE>
PART I. FINANCIAL INFORMATION
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Balance Sheet
(Unaudited)
September 30, December 31,
1996 1995
ASSETS
Current Assets
Cash $715,374 $599,315
Escrow deposits and other assets (Note 4)
42,406 10,032
Other Assets
Investment properties, at cost
Land 1,267,695 1,267,695
Buildings and improvements
6,041,914 6,018,410
7,309,609 7,286,105
Less accumulated depreciation
2,076,222 1,922,692
5,233,387 5,363,413
$5,991,167 $5,972,760
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Tenant security deposits
$5,454 $5,454
Rents received in advance
31,821 32,343
Accrued interest payable to
Individual General Partner
489,781 433,571
Accrued expenses and other liabilities
86,963 86,345
Note payable to Individual General
Partner (Note 6)
271,020 271,020
885,039 828,733
Partners' Capital (deficiency) (Note 5):
General Partners
$(86,952) $(85,815)
Limited Partners (authorized--10,000
Interests; outstanding--9,034.01 Interests)
5,214,751 5,251,513
Less 29.86 Interests held in Treasury
(21,671) (21,671)
5,106,128 5,144,027
$5,991,167 $5,972,760
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Statement of Operations
(Unaudited)
Three months ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
INCOME
Operating income
$219,240 $228,987 654,435 655,483
Other income
28,950 10,692 99,194 31,285
Total Income
248,190 239,679 753,629 686,768
OPERATING EXPENSES
Property operating expenses
108,531 131,463 345,923 329,201
Depreciation and amortization
51,177 51,220 153,530 153,424
Interest expense
19,167 18,355 56,211 53,667
Administrative expense
34,968 33,671 125,332 134,808
Total Expenses
213,843 234,709 680,996 671,100
Income(Loss) from operations
34,347 4,970 72,633 15,668
Other Income (expenses)
Interest income
12,048 7,111 28,707 21,875
Net Income (Loss)
$46,394 $12,081 101,340 37,543
Net Income (Loss) attributable to
General Partners (3%)
$1,392 $362 3,040 1,126
Net Income (Loss) attributable to
Limited Partners (97%)
$45,003 $11,719 98,300 36,417
Per Limited Partnership Interest
Outstanding--9,004.15 Interests
$5.00 $1.30 $10.92 $4.04
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE
LIMITED PARTNERSHIP - IP
(A Wisconsin Limited Partnership)
Statement of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
1996 1995
Operating Activities
Net income (loss) for the period
$101,339 $37,543
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 153,530 153,343
Changes in operating assets and
liabilities:
Escrow deposits & other assets
(32,374) 8,872
Tenant security deposits
0 (1,581)
Rents received in advance
(522) (2,167)
Accrued expenses and other liabilities
56,829 42,787
NET CASH PROVIDED BY (USED IN)
278,802 238,797
OPERATING ACTIVITIES
Investing activities:
Additions to investment property
(23,504) (11,709)
Financing activities:
Distributions to partners
(139,239) (97,468)
INCREASE (DECREASE) IN CASH
116,059 129,620
Cash at beginning of period
657,294 409,508
CASH AT END OF PERIOD
$773,353 $539,128
See notes to financial statements.
<PAGE>
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Notes to Financial Statements
(Unaudited)
September 30, 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 annual report for
the year ended December 31, 1995. Refer to the
footnotes of those statements for additional
details on the Partnership's financial condition.
The operating results for the period ended
September 30, 1996, may not be indicative of the
operating results for the entire year.
2. National Real Estate Limited Partnership Income
Properties (the "Partnership") was organized under
the Wisconsin Uniform Limited Partnership Act
pursuant to a Certificate of Limited Partnership
dated December 18, 1984, for the purpose of
investing in residential, commercial, and
industrial real properties. John Vishnevsky and
National Development and Investment, Inc.,
contributed the sum of $6,000 to the Partnership
as General Partners. The Limited Partnership
Agreement had authorized the issuance of 10,000
Limited Partnership Interests (the "Interests") at
$1,000 per Interest with the offering period
commencing January 31, 1985. Upon conclusion of
the offering in December 1986, the Partnership had
raised $9,024,556 in capital representing 9,034.01
Interests.
3. National Realty Management, Inc. (NRMI): The
Partnership incurred property management fees of
$39,805 under an agreement with NRMI for the
period presented.
4. Real estate taxes are charged to operations based
on actual taxes paid for the prior year and are
adjusted for normal annual increases. Taxes for
Tucson Lock-It Lockers, Phoenix Lock-It Lockers,
Cave Creek Lock-It Lockers, and Northridge Commons
are being accrued monthly at $4,869, $2,115, $434,
and $3,451, respectively.
5. Changes in Partners' Equity:
LIMITED PARTNERS
Quarter Ended September 30, 1996
Partner's Equity, beginning of quarter $5,214,768
Distributions (45,021)
Net Income (Loss) 45,002
Partners' Equity, end of quarter $5,214,749
Limited Partner's equity is net of 29.86 interests held
in treasury of ($21,671).
Quarter Ended September 30, 1995
Partner's Equity, beginning of quarter $5,242,083
Distributions (31,515)
Net Income (Loss) 41,027
Partners' Equity, end of quarter $5,298,976
Limited Partner's equity is net of 29.86 interests held
in treasury of ($21,671).
GENERAL PARTNERS
Quarter Ended September 30, 1996
Partner's Equity, beginning of quarter $(86,951)
Distributions (1,392)
Net Income (Loss) 1,392
Partners' Equity, end of quarter $(86,951)
Quarter Ended September 30, 1995
Partner's Equity, beginning of quarter $(85,436)
Distributions (974)
Net Income (Loss) 1,269
Partners' Equity, end of quarter $(83,678)
TOTAL
Quarter Ended September 30, 1996
Partner's Equity, beginning of quarter $5,139,892
Distributions (46,413)
Net Income (Loss) 46,393
Partners' Equity, end of quarter $5,139,872
Quarter Ended September 30, 1995
Partner's Equity, beginning of quarter $5,156,647
Distributions (32,489)
Net Income (Loss) 42,296
Partners' Equity, end of quarter $5,215,298
Limited Partner's equity is net of 29.86
interests held in treasury of ($21,671).
6. As outlined in the prospectus, the General
Partners agreed to make loans to the Partnership
up to an aggregate of 3% of the gross proceeds of
the offering to the extent necessary to provide
distributions to the limited partners at
annualized rates equal to 8% in 1985, 8.25% in
1986, and 8.5% in 1987. The loan will be repaid
solely from sales proceeds, with compounding
interest equal to the cost of their funds or 12%,
whichever is lower. As of September 30, 1996,
interest totaling $489,781 has accrued.
7. Northridge Commons' tenants pay monthly fixed rent
payments plus estimated charges for taxes, costs
of insurance premiums, administrative costs, and
operating expenses with respect to common areas.
NATIONAL REAL ESTATE LIMITED PARTNERSHIP
INCOME PROPERTIES
(A Wisconsin Limited Partnership)
Management's Discussion and Analysis of
Financial Condition and Results of Operations
September 30, 1996
The Partnership currently owns and operates four
investment properties; Tucson Lock-It Lockers, a 49,885
net rentable square foot mini warehouse complex in
Tucson, Arizona; Phoenix Lock-It Lockers, a 58,766 net
rentable square foot mini warehouse complex in Phoenix,
Arizona; a portion of Cave Creek Lock-It Lockers
containing 8,236 of 46,028 net rentable square feet in
Phoenix, Arizona; and Northridge Commons, a 20,700 net
rentable square foot community shopping center in
Milwaukee, Wisconsin.
Occupancy based upon net rentable square feet for the
third quarter averaged 94.0% for Tucson Lock-It
Lockers; 97.9% for Phoenix Lock-It Lockers; 100% for
Northridge Commons; and 94.2% for Cave Creek Lock-It
Lockers. This compares to an average of 98.9% for
Tucson Lock-It Lockers; 98.4% for Phoenix Lock-It
Lockers; 100% for Northridge Commons; and 98% for Cave
Creek Lock-It Lockers during the same period of 1995.
Rental rates were increased at Tucson, Phoenix, and
Cave Creek Lock-It Lockers in April 1996. Tucson
Lock-It Lockers continued to install security lighting
and started painting the buildings. Future projects to
be completed at Tucson Lock-It Lockers include
continued painting and asphalt work. Phoenix Lock-It
Lockers is continuing to replace doors on units as
warranted, repaired roofs and have future projects
consisting of paving or continued roof repairs.
Talbots, the anchor tenant, ended its lease October 1,
1996. The corporate decision was based on closing the
Talbots surplus stores which are in a secondary
location. The new surplus stores are in California,
Boston, and Illinois and will have 12,000 to 15,000
square feet of floor space. Talbots had occupied 6,792
square feet at Northridge.
The Talbot's space is being extensively marketed.
Additional signage is on the property, commercial
brokers have been contacted, ads are being run and
national retailers are being contacted. There is a
considerable amount of vacant retail space in strip
malls in the area. Northridge Commons does have
advantages over some of the competing space. The new
pylon sign installed by CellularOne has given the
property greater visibility and all tenants have seen
an increase in business due to this signage. Talbots
has a premium location on the pylon sign which will be
a big incentive for a new tenant, and Northridge
Commons tenants have direct street access.
During the third quarter of 1996 rental revenue for
Tucson Lock-It Lockers, Phoenix Lock-It Lockers, and
Cave Creek Lock-It Lockers increased compared to the
second quarter of 1995 due to increased rental rates.
Also during the third quarter of 1996, rental revenue
for Northridge Commons increased compared to the third
quarter of 1995 due to a increase in occupancy at
Northridge Commons.
Operating expenses during the third quarter of 1996
increased compared to the operating expenses during the
same quarter in 1995 due to maintenance costs at Tucson
Lock-It and Cave Creek Lock-It Lockers.
The Partnership continued cash distributions to its
partners with distributions totaling $46,413 for the
third quarter of 1996. These distributions are required
to be allocated 97% to Limited Partners ($45,021) and
3% to the General Partners ($1,392).
<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
September 30, 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/November 15, 1996
/S/ John Vishnevsky
________________________________
John Vishnevsky
President and Chief Operating and
Executive Officer
National Development and Investment, Inc.
Corporate General Partner
Date /S/November 15, 1996
/S/ John Vishnevsky
__________________________________
John Vishnevsky
Chief Financial and Accounting Officer
Date /S/November 15, 1996
Stephen P. Kotecki
__________________________________
Stephen P. Kotecki
President
EC Corp
Corporate General Partner
F:\WPDOCS\LETTERS\NIP3QTR.EL6
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 757780
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 757780
<PP&E> 7309609
<DEPRECIATION> 2076222
<TOTAL-ASSETS> 5991167
<CURRENT-LIABILITIES> 885039
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5106128<F1>
<TOTAL-LIABILITY-AND-EQUITY> 5991167
<SALES> 0
<TOTAL-REVENUES> 753629
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 680996
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 101340
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
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<CHANGES> 0
<NET-INCOME> 101340
<EPS-PRIMARY> 98300
<EPS-DILUTED> 10.92<F2>
<FN>
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<F2>Limited Partners - Interests Outstanding=9004.15
</FN>
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