UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 0-17660
METRIC PARTNERS
GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
(Exact name of Registrant as specified in its charter)
CALIFORNIA 94-3050708
- - ---------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One California Street
San Francisco, California 94111-5415
- - ---------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(415) 678-2000
(800) 347-6707 in all states
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 1 of 18
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
BALANCE SHEETS (UNAUDITED)
March 31, December 31,
1996 1995
---- ----
ASSETS
CASH AND CASH EQUIVALENTS $ 10,683,000 $ 10,248,000
RESTRICTED CASH 306,000 302,000
ACCOUNTS RECEIVABLE 1,272,000 1,034,000
PREPAID EXPENSES AND OTHER ASSETS 249,000 196,000
PROPERTIES AND IMPROVEMENTS 88,062,000 87,885,000
ACCUMULATED DEPRECIATION (29,689,000) (28,935,000)
------------ ------------
NET PROPERTIES AND IMPROVEMENTS 58,373,000 58,950,000
DEFERRED FINANCING COSTS 113,000 127,000
DEFERRED FRANCHISE FEES 204,000 214,000
------------ ------------
TOTAL ASSETS $ 71,200,000 $ 71,071,000
============ ============
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE $ 1,896,000 $ 1,022,000
ACCRUED PROPERTY TAXES 377,000 391,000
ACCRUED INTEREST 307,000 344,000
OTHER LIABILITIES 1,235,000 1,095,000
DEFERRED GAIN ON SALE OF PROPERTY 300,000 300,000
NOTES PAYABLE 42,612,000 42,669,000
------------ ------------
TOTAL LIABILITIES 46,727,000 45,821,000
------------ ------------
PARTNERS' EQUITY (DEFICIENCY):
GENERAL PARTNERS 100,000 100,000
LIMITED PARTNERS (59,932 units outstanding) 24,373,000 25,150,000
------------ ------------
TOTAL PARTNERS' EQUITY 24,473,000 25,250,000
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 71,200,000 $ 71,071,000
============ ============
See notes to financial statements (unaudited).
Page 2 of 18
<PAGE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended
March 31,
---------
1996 1995
---- ----
REVENUES:
Hotel operations $ 5,407,000 $ 6,043,000
Interest and other 112,000 76,000
----------- -----------
Total revenues 5,519,000 6,119,000
----------- -----------
EXPENSES:
Hotel operations:
Rooms 1,138,000 1,181,000
Administrative 696,000 747,000
Marketing 625,000 589,000
Energy 347,000 363,000
Repair and maintenance 325,000 320,000
Management fees 199,000 312,000
Property taxes 191,000 219,000
Other 240,000 220,000
----------- -----------
Total hotel operations 3,761,000 3,951,000
Depreciation and other amortization 764,000 930,000
Interest 1,093,000 1,252,000
General and administrative 219,000 135,000
----------- -----------
Total expenses 5,837,000 6,268,000
----------- -----------
NET LOSS $ (318,000) $ (149,000)
=========== ===========
NET LOSS PER LIMITED PARTNERSHIP ASSIGNEE UNIT $ (5) $ (3)
=========== ===========
CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP
ASSIGNEE UNIT $ 8 $ 8
=========== ===========
See notes to financial statements (unaudited).
Page 3 of 18
<PAGE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY) (UNAUDITED)
For the Three Months Ended March 31, 1996 and 1995
General Limited
Partner Partners Total
------- -------- -----
BALANCE, JANUARY 1, 1996 $ 100,000 $ 25,150,000 $ 25,250,000
NET INCOME (LOSS) 9,000 (327,000) (318,000)
CASH DISTRIBUTIONS (9,000) (450,000) (459,000)
------------ ------------ ------------
BALANCE, MARCH 31, 1996 $ 100,000 $ 24,373,000 $ 24,473,000
============ ============ ============
BALANCE, JANUARY 1, 1995 $ (68,000) $ 23,916,000 $ 23,848,000
NET INCOME (LOSS) 57,000 (206,000) (149,000)
CASH DISTRIBUTIONS (9,000) (450,000) (459,000)
------------ ------------ ------------
BALANCE, MARCH 31, 1995 $ (20,000) $ 23,260,000 $ 23,240,000
============ ============ ============
See notes to financial statements (unaudited).
Page 4 of 18
<PAGE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended
March 31,
---------
1996 1995
---- ----
OPERATING ACTIVITIES
Net Loss $ (318,000) $ (149,000)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 811,000 957,000
Changes in operating assets and liabilities:
Accounts receivable (238,000) (167,000)
Prepaid expenses and other assets (53,000) 105,000
Accounts payable, accrued expenses,
and other liabilities 963,000 244,000
------------ ------------
Net cash provided by operating activities 1,165,000 990,000
------------ ------------
INVESTING ACTIVITIES
Capital improvements (177,000) (441,000)
Restricted cash - increase (4,000) --
------------ ------------
Net cash used by investing activities (181,000) (441,000)
------------ ------------
FINANCING ACTIVITIES
Notes payable principal payments (90,000) (91,000)
Cash distribution to partners (459,000) (459,000)
------------ ------------
Cash used by financing activities (549,000) (550,000)
------------ ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 435,000 (1,000)
Cash and cash equivalents at beginning of period 10,248,000 5,142,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,683,000 $ 5,141,000
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid in cash during the period $ 1,083,000 $ 1,244,000
============ ============
See notes to financial statements (unaudited).
Page 5 of 18
<PAGE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Reference to 1995 Audited Financial Statements
These unaudited financial statements should be read in conjunction with the
Notes to Financial Statements included in the 1995 audited financial
statements.
The financial information contained herein reflects all normal and
recurring adjustments that are, in the opinion of management, necessary for
a fair presentation.
2. Transactions with the Managing General Partner and Affiliates
In accordance with the Partnership Agreement, the Partnership is charged by
the managing general partner and affiliates for services provided to the
Partnership. The amounts are as follows:
For the Three Months Ended
March 31,
---------
1996 1995
---- ----
Partnership management fees $ 40,000 $ 40,000
Reimbursement of administrative expenses 62,000 56,000
-------- --------
Total $102,000 $ 96,000
======== ========
3. Net Loss Per Limited Partnership Assignee Unit
The net loss per limited partnership assignee unit is computed by dividing
the net loss allocated to the limited partners by 59,932 assignee units
outstanding.
4. Cash Investments
The Partnership considers cash investments to be those investments with an
original maturity date of more than three months at the time of purchase.
There were no cash investments at March 31, 1996.
5. Legal Proceedings
The Partnership is a plaintiff and counterclaim defendant in legal
proceedings relating to the management agreement at the Residence Inn -
Ontario, a defendant in legal proceedings seeking damages for alleged
failure to consummate a settlement of the Residence Inn - Ontario case, and
a plaintiff and defendant in legal proceedings related to the Residence Inn
- Nashville; see Part II, Item 1, Legal Proceedings, for a detailed
description of these matters.
6. Subsequent Event
On April 15, 1996, the Partnership made a payment of approximately $176,000
to the lender of the underlying mortgage of the wrap note on the Residence
Inn-Nashville (Airport). The payment was made to cure defaults issued by
that lender to the holder of the wrap note for non-payment of the debt and
impound payments due on January 1, 1996 and February 1, 1996. See Part II
Item 1 - Legal Proceedings for further information regarding this matter.
As a result, the Partnership's note payable balance has been increased by
approximately $74,000; however, future monthly debt service payments will
be reduced by approximately $2,600 per month and, in addition, payments
totaling $50,000 per year are no longer due on the ground lease.
Page 6 of 18
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
This Item should be read in conjunction with Financial Statements and other
Items contained elsewhere in this Report.
Properties
A description of the properties in which the Partnership has an ownership
interest, along with the occupancy and room rate data, follows:
<TABLE>
OCCUPANCY AND ROOM RATE SUMMARY
<CAPTION>
Average
Average Daily
Occupancy Rate Room Rate
(%) (%)
Three Three
Months Months
Date Ended Ended
of March 31, March 31,
Name and Location Rooms Purchase 1996 1995 1996 1995
----------------- ----- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Residence Inn - Ontario 200 04/88 73 82 68.80 67.91
Ontario, California
Residence Inn - Fort Wayne 80 06/88 92 87 64.61 60.64
Fort Wayne, Indiana
Residence Inn - Columbus (East) 80 06/88 83 90 72.80 65.57
Columbus, Ohio
Residence Inn - Indianapolis (North) 88 06/88 77 77 73.51 69.61
Indianapolis, Indiana
Residence Inn - Lexington 80 06/88 90 77 63.72 69.36
Lexington, Kentucky
Residence Inn - Louisville 96 06/88 84 75 79.05 75.61
Louisville, Kentucky
Residence Inn - Winston-Salem 88 06/88 85 80 71.21 70.28
Winston-Salem, North Carolina
Residence Inn - Nashville (Airport) 168 05/89 67 70 70.80 71.93
Nashville, Tennessee
Residence Inn - Atlanta (1) 128 10/89 N/A 78 N/A 87.82
(Perimeter West)
Atlanta, Georgia
Residence Inn - Altamonte Springs 128 03/90 87 88 89.89 82.39
Altamonte Springs, Florida
(1) Property was sold in October 1995.
</TABLE>
Page 7 of 18
<PAGE>
Results of Operations
Net loss increased $169,000 in the first quarter of 1996 compared to the
same period in 1995. The increase in net loss was primarily attributable to the
sale of the Partnership's Residence Inn - Atlanta (Perimeter West) in the fourth
quarter of 1995 and an increased loss at the Residence Inn-Nashville and
decreased income at the Residence Inn- Ontario. Revenues from rooms decreased
10% for the first quarter of 1996, compared to the same period of 1995 primarily
due to the loss of income from the Residence Inn - Atlanta which was only
partially offset by a 3% increase in room revenues at the Partnership's nine
remaining hotels. Hotel operating expenses decreased 5% in comparison to the
same period in 1995 primarily as the result of the sale of the Residence Inn -
Atlanta. Hotel operating expenses, exclusive of the effect of the sale of the
Residence Inn-Atlanta, increased 8% due to a significant increase in expenses
incurred at the Residence Inn-Nashville to counteract weak market conditions and
to enable the hotel to maintain a competitive position in the challenging
operating environment. (See Residence Inn-Nashville, below). Overall management
fees expense decreased compared to the first quarter in 1995 for the remaining
nine properties due to the restructured agreements with Marriott. Interest and
other income increased $36,000 in the first quarter of 1996 compared to the same
period in 1995 due to higher cash balances, specifically the proceeds from the
sale of the Residence Inn - Atlanta, invested in interest-bearing instruments.
Depreciation and amortization decreased $166,000 in the first quarter of 1996
compared to the same period in 1995 due to the sale of one hotel as well as
fully depreciated furnishings at certain of the other hotels. General and
administrative expenses increased $84,000 in the first quarter of 1996 compared
to the same period in 1995 primarily due to increases in legal costs. (See Item
1. of Part II of the Form 10-Q).
On an ongoing basis, the Partnership monitors the markets where the hotels
are located and reviews potential opportunities for the sale of the properties.
During the second quarter of 1995, the Partnership initiated discussions with
several potential purchasers regarding the sale of the Residence Inn - Atlanta
(Perimeter West). After a series of negotiations, the Partnership entered into a
contract for sale with a non-affiliated buyer and on October 3, 1995 the sale of
the property was recorded. The proceeds from sale have been added to the
Partnership's working capital reserve pending consideration and development of a
plan regarding the near term capital needs of the nine remaining hotels.
The following discussion provides information concerning the operations of
the Partnership's remaining nine hotels:
Residence Inn - Ontario: Room revenues declined approximately 9% for the
first quarter of 1996 in comparison to the same period of the prior year due to
a significant decline in occupancy at the hotel, which was only partially offset
by a slight decrease in expenses. Although the local economy continues to
improve with new business development and construction activity, the long-term
patronage at the hotel has been impacted due to the slowdown in governmental
business, which has been curtailed over the past several months as a result of
the budget impasse in Washington. Another factor which accounted for the decline
in occupancy was the termination of a major client's project which had accounted
for over 600 room nights during the first quarter of 1995. Responsive marketing
and promotional programs remain in place to improve occupancy and strengthen
operational results.
Residence Inn - Columbus: Room revenues increased 3% for the first quarter
of 1996 in comparison to the same period of 1995 due to a significant increase
in room rates, while room operating costs decreased 5%. Occupancy at the hotel
declined 7% primarily due to severe winter weather, less-than-anticipated
patronage from a corporate client, and competition in the marketplace. As
additional new competition is anticipated in the marketplace, direct sales
efforts have focused on attracting new clientele, while an emphasis continues to
be placed on the importance of customer service to retain the existing patronage
base.
Residence Inn - Fort Wayne: Room revenues increased 12% in 1996 in
comparison to the same period of 1995, which was only partially offset by a 7%
increase in hotel operations expense, primarily for marketing costs. Both
occupancy and room rates increased for the period, as the local economy
continues to grow with the addition of new business and expansion by local
corporations. As several new hotels are scheduled to come on line in 1996, the
operator's primary focus is to build and maintain the loyalty of the strong
existing client base.
Residence Inn - Indianapolis (North): A 5% improvement in room revenues for
the first quarter of 1996 was primarily attributable to an increase in room
rates in comparison to the same period of the prior year and stability in the
occupancy rate. Operating expenses remained relatively unchanged as compared to
Page 8 of 18
<PAGE>
the first quarter of 1995. The local economy remains stable; however, the hotel
is expected to experience additional competition as new units are expected to
come on line in the market this summer. The hotel operator continues to focus on
expanding business with major corporate accounts in an effort to maintain
competitive market position.
Residence Inn - Lexington: Room revenues increased 8% for the first quarter
of 1996, which was more than offset by an 18% increase in expenses in comparison
to the same period of 1995. Operating expenses increased due to additional costs
for marketing programs and due to an insurance deductible of $25,000 relating to
a guest accident. The local economy remains stable and unemployment low;
however, conditions in the hotel market continue to be competitive as several
new properties are scheduled to come on line in 1996. Marketing programs are in
place to attempt to retain the existing long-term business and attract new
corporate patronage.
Residence Inn - Louisville: An 18% increase in room revenues for the first
quarter of 1996 was attributable to a significant increase in occupancy as well
as an escalation in room rates. This increase was only partially offset by a 7%
increase in expenses primarily in the categories of room operating and marketing
costs. Economic conditions in the area remain stable, although several apartment
complexes in the marketplace, which offer corporate units for lease at rates
significantly lower than local hotels, continue to provide competition for the
Partnership's hotel. Marketing programs including direct mail and telemarketing
efforts are in place to increase business activity.
Residence Inn - Winston Salem: Room revenues increased 9% for the first
quarter of 1996 in comparison to the same period of 1995 due to an increase in
occupancy and a slight increase in room rates. This increase was offset by a 10%
increase in expenses at the hotel, primarily for room operating and marketing
costs. The operator has continued a responsive marketing program, including
direct sales efforts, to enable the property to retain a competitive position in
the challenging local hotel operating environment.
Residence Inn - Nashville (Airport): A 6% decline in room revenues for the
first quarter of 1996 was a result of a decline in occupancy and room rates at
the hotel in comparison to the same period of 1995. Hotel operating expenses
increased 26% due to significant additional costs incurred for room operating,
marketing, administrative and repair and maintenance costs which were necessary
to enable the hotel to maintain market position. As a result of these factors,
the hotel generated negative project operations for the quarter. Hotel market
conditions in Nashville weakened substantially in the first quarter as economic
activity slowed due to factors such as the reduction of flights to the area by
American Airlines, and postponement of several corporate relocations. In
addition, competition remains strong as several new suite hotels have opened in
the area, directly competing with the Partnership's Residence Inn. The property
has been assessed $123,000 as a result of a sales and use tax audit by the State
of Tennessee. The Partnership has filed a complaint with the State and is
evaluating its options at this time.
Residence Inn - Altamonte Springs: Room revenues improved 8% for the first
quarter of 1996 due to an increase in room rates, representing the largest
increase in the portfolio in comparison to the same quarter of 1995. Hotel
operating expenses increased 5% due to an increase in marketing costs. The local
economy remains stable and the operator is focusing on maintaining current
clients while working to attract new relocation and training business.
During the second and third quarters of 1995 the Partnership worked with
Marriott in an effort to restructure contracts on certain Partnership hotels
under their management. An agreement was reached whereby Marriott reduced the
overall management fees, as well as the length of the contract terms. In
addition, the Partnership is permitted to terminate the contract after a
five-year term in connection with a sale of the hotels. A termination fee would
be payable if the purchaser were not to continue the Residence Inn by Marriott
franchise. In exchange, the Partnership executed new agreements with Marriott
for the management of the Residence Inns located in Altamonte Springs,
Nashville, and Ontario. Effective January 1, 1996, Marriott manages all nine of
the Partnership's remaining hotels.
Partnership Liquidity and Capital Resources
First Quarter of 1996
As presented in the Statement of Cash Flows, cash was provided by operating
activities. Cash was used by investing activities for capital improvements. Cash
was used by financing activities for distributions to partners and principal
payments on notes payable.
Page 9 of 18
<PAGE>
The results of project operations before capital improvements for the
quarter ended March 31, 1996 and 1995 (as shown in the tables on pages 12 and
13) are determined by net income or loss adjusted for non-cash items such as
depreciation and amortization and reduced by principal payments made on the
notes payable. The project operations before capital improvements is an
indication of the operational performance of the property. During the first
quarter of 1996, seven of the Partnership's nine remaining hotel properties
generated positive project operations before deduction for capital improvements,
while the Residence Inn - Nashville (Airport) and the Residence Inn - Lexington
experienced negative operations. The Partnership, after taking into account
results of project operations before capital improvements, interest income, and
general and administrative expenses, on an accrual basis, experienced positive
results from operations for the period. Project operations should not be
considered as an alternative to net loss (as presented in the financial
statements) as an indicator of the Partnership's operating performance or as an
alternative to cash flow as a measure of liquidity. The project operations after
capital improvements for any given period may not be indicative of the
property's general performance as capital improvements are likely to be made in
large amounts associated with renovation programs.
In the first quarter of 1996, the Partnership spent $177,000 on capital
improvements. The majority was spent for room renovations at the Residence Inn -
Louisville, doors and entry way improvements at the Residence Inn - Fort Wayne,
and for lock upgrades at the Residence Inns - Columbus, Lexington and
Louisville. In the remainder of 1996, the Partnership anticipates spending
approximately $2,550,000 on capital improvements. These improvements are
required to keep the properties competitive in their respective markets and are
required under the franchise agreements.
In accordance with, and as is customary in the management of hotels, a
percentage of revenues is placed in capital replacement funds. The capital
replacement funds are used to fund on-going capital improvements as well as room
or other major renovation programs. In general, the capital replacement funds
are being held at the individual properties with additions, generally made
monthly, based on revenues and expenditures which are based on approved capital
expenditure budgets by the Partnership. Unused funds are being held in
interest-bearing accounts. To the extent not available from an individual
property's capital replacement fund, a capital improvement or renovation may be
funded from the Partnership's working capital reserve.
The Partnership became aware that on February 12, 1996, a third party made
an unsolicited offer, to a large number of unit holders of the Partnership, to
purchase up to 1,200 units, representing approximately 2% of the outstanding
units, at a price of $205 per unit. Under applicable securities laws, the
Partnership was required to notify its investors of the Partnership's views
regarding this offer. A letter dated February 15, 1996 was provided to investors
in fulfillment of that requirement. It should be noted that the Partnership did
not take a position with respect to the offer but rather advised the holders of
the assignee limited partnership units to consult their personal financial
advisors on the matter, as the desirability of the offer to any unit holder
could differ greatly depending upon such unit holder's financial, tax, and other
individual circumstances.
Unit holders were also advised that the Partnership and its Transfer Agent
would take such action as the Partnership deemed appropriate to ensure that
resale transactions did not result in the termination of the Partnership for tax
purposes, cause the Partnership to be classified as a publicly traded
partnership or cause the Partnership to be taxed as a corporation. In order to
protect its status as a partnership for federal income tax purposes, secondary
market activity in its units will be limited to less than 5% of the outstanding
units per year.
Gemisys, the Partnership's Transfer Agent, informed the Partnership that
resale transactions of Assignee Units in the Partnership reached 4.9 percent as
of April 9, 1996 which is near the five percent maximum percentage which, under
IRS guidance, may be traded in a calendar year without jeopardizing the
Partnership's tax status. In order to protect its tax status as a partnership
for Federal income tax purposes,the Partnership informed Gemisys that it would
no longer recognize resales of limited partnership assignee Units in 1996.
Investors were notified of such suspension of trading in accordance with Section
12.3 of the Partnership Agreement by way of a special communication dated April
10, 1996.
Conclusion
The Partnership established an estimated value for the assignee units in
the Partnership as of December 31, 1995. Appraisals of the hotels were
commissioned and undertaken by a firm which is a recognized appraiser and
consultant to the hotel industry. The primary methodology employed in the
appraisals used in the evaluation, which was selected by the appraiser and, not
pursuant to any instructions from the Partnership, was the income approach to
value utilizing a discounted cash flow analysis. In conjunction with the
preparation of the appraisals, a discount rate was determined by the appraiser
based on several relevant factors, including, but not limited to, the current
Page 10 of 18
<PAGE>
investment climate for hotel properties, local hotel market and economic
conditions, comparisons of occupancy and room rates with prevailing market rates
for similar properties and the status of the management contract for each hotel.
The Partnership believes that the assumptions utilized in the process were not
unreasonable. The value of the properties as determined by the appraisal
process, in combination with the book value of other Partnership assets, has
resulted in an estimated net asset value of each assignee unit of $521 as of
December 31, 1995. As of December 31, 1994, the value of the properties as
determined by the appraisal process, in combination with the book value of other
Partnership assets, resulted in an estimated net asset value of each assignee
unit of $335. It should be noted, however, that appraised values represent the
opinion of the appraisal firm as of the date of the appraisals and are based on
market conditions at the time of the appraisals and on assumptions concerning
future circumstances which may or may not be accurate.
This valuation is an estimate of the assignee unit value only which has
been made as of December 31, 1995 based on the methodology described herein and
does not represent a market value. There can be no assurance that the sales of
the assets in the current market or at any time in the future would yield net
proceeds which on a per assignee unit basis would be equal to or greater than
the estimated value. Further, there can be no assurance that sales of assignee
units now or in the future would yield net proceeds equal to or greater than
this value. The assignee units are illiquid and there is no formal liquid market
where they are regularly traded. However, the Partnership is aware that some
resales have taken place in the informal secondary market. In this informal
market, transactions may or may not take place in any time period and occur at a
price negotiated between buyer and seller. We have no knowledge concerning how a
particular price may be determined. Resale transactions of which the Partnership
has knowledge, reflect prices ranging from $200 to $340 in 1996 (through April
9, 1996). In 1995, sixty-five resale transactions, of which the Partnership had
knowledge, were recorded at a simple average price (not weighted) of $244 per
assignee unit. The Partnership's knowledge of these transactions is based solely
on the books and records of its Transfer Agent.
The Partnership anticipates that it will have sufficient resources to meet
its capital and operating requirements into the foreseeable future. A cash
distribution to investors for the first quarter of 1996 will be made at an
annualized rate of 3%. Cash distributions for 1995 were made quarterly, at an
annualized rate of 3%.
Page 11 of 18
<PAGE>
<TABLE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
a California Limited Partnership
Project Operations of the Residence Inns for
the Three Months Ended March 31, 1996
(000's)
<CAPTION>
Columbus Fort
Ontario (East) Wayne Indianapolis Lexington Louisville
------- -------- ----- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Hotel operations:
Rooms $913 $405 $400 $ 417 $ 387 $537
Telephone and other 55 24 25 17 34 37
---- ---- ---- ----- ----- ----
Hotel operations 968 429 425 434 421 574
Interest and other 0 0 0 0 0 0
---- ---- ---- ----- ----- ----
Total revenues 968 429 425 434 421 574
---- ---- ---- ----- ----- ----
EXPENSES:
Hotel operations:
Rooms 164 91 77 102 84 105
Administrative 106 66 43 71 97 58
Marketing 107 44 55 51 54 64
Energy 61 33 33 33 31 25
Repair and maintenance 48 21 15 29 33 26
Management fees 30 13 17 13 13 19
Property taxes 27 13 16 19 12 20
Other 39 14 15 11 23 23
---- ---- ---- ----- ----- ----
Hotel operations 582 295 271 329 347 340
Depreciation and other
amortization 125 54 53 63 63 73
Interest 214 70 73 85 82 95
General and administrative 0 0 0 0 0 0
---- ---- ---- ----- ----- ----
Total expenses 921 419 397 477 492 508
---- ---- ---- ----- ----- ----
NET INCOME(LOSS) 47 10 28 (43) (71) 66
Plus non-cash items - net 125 55 55 65 65 74
Less notes payable
principal payments 1 4 5 5 5 6
---- ---- ---- ----- ----- ----
Project operations 171 61 78 17 (11) 134
Capital Improvements 0 26 24 15 35 63
---- ---- ---- ----- ----- ----
Project operations after
capital improvements $171 $ 35 $ 54 $ 2 ($ 46) $ 71
==== ==== ==== ===== ===== ====
</TABLE>
<PAGE>
<TABLE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
a California Limited Partnership
Project Operations of the Residence Inns for
the Three Months Ended March 31, 1996
(000's)
<CAPTION>
Winston Altamonte
Salem Nashville Atlanta Springs Partnership Total
------- --------- ------- --------- ----------- -----
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Hotel operations:
Rooms $450 $ 713 $ 0 $914 $ 0 $ 5,136
Telephone and other 25 27 0 27 0 271
---- ------- --- ---- ----- -------
Hotel operations 475 740 0 941 0 5,407
Interest and other 0 0 0 0 112 112
---- ------- --- ---- ----- -------
Total revenues 475 740 0 941 112 5,519
---- ------- --- ---- ----- -------
EXPENSES:
Hotel operations:
Rooms 102 243 0 170 0 1,138
Administrative 69 108 5 73 0 696
Marketing 57 99 0 94 0 625
Energy 32 53 0 46 0 347
Repair and maintenance 29 87 0 37 0 325
Management fees 14 22 0 58 0 199
Property taxes 12 28 0 44 0 191
Other 14 80 0 21 0 240
---- ------- --- ---- ----- -------
Hotel operations 329 720 5 543 0 3,761
Depreciation and other
amortization 62 134 0 137 0 764
Interest 83 223 0 168 0 1,093
General and administrative 0 0 0 0 219 219
---- ------- --- ---- ----- -------
Total expenses 474 1,077 5 848 219 5,837
---- ------- --- ---- ----- -------
NET INCOME(LOSS) 1 (337) (5) 93 (107) (318)
Plus non-cash items - net 64 134 0 174 0 811
Less notes payable
principal payments 5 29 0 30 0 90
---- ------- --- ---- ----- -------
Project operations 60 (232) (5) 237 (107) 403
Capital Improvements 14 0 0 0 0 177
---- ------- --- ---- ----- -------
Project operations after
capital improvements $ 46 ($ 232) ($5) $237 ($107) $ 226
==== ======= === ==== ===== =======
</TABLE>
Page 12 of 18
<PAGE>
<TABLE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
a California Limited Partnership
Project Operations of the Residence Inns for
the Three Months Ended March 31, 1995
(000's)
<CAPTION>
Columbus Fort
Ontario (East) Wayne Indianapolis Lexington Louisville
------- -------- ----- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Hotel operations:
Rooms $1,007 $ 395 $ 356 $ 399 $ 359 $456
Telephone and other 60 11 17 19 29 35
------ ----- ----- ----- ----- ----
Hotel operations 1,067 406 373 418 388 491
Interest and other 10 0 0 0 0 0
------ ----- ----- ----- ----- ----
Total revenues 1,077 406 373 418 388 491
------ ----- ----- ----- ----- ----
EXPENSES:
Hotel operations:
Rooms 165 90 75 97 90 89
Administrative 106 81 48 69 67 62
Marketing 122 32 35 53 28 51
Energy 59 21 29 28 28 20
Repair and maintenance 44 22 13 27 33 27
Management fees 43 26 24 27 25 32
Property taxes 12 24 17 18 13 20
Other 45 13 12 11 11 18
------ ----- ----- ----- ----- ----
Hotel operations 596 309 253 330 295 319
Depreciation and other
amortization 123 51 51 67 60 73
Interest 214 70 73 85 83 95
General and administrative 0 0 0 0 0 0
------ ----- ----- ----- ----- ----
Total expenses 933 430 377 482 438 487
------ ----- ----- ----- ----- ----
NET INCOME(LOSS) 144 (24) (4) (64) (50) 4
Plus non-cash items - net 113 52 52 68 61 74
Less notes payable
principal payments 1 4 4 5 5 5
------ ----- ----- ----- ----- ----
Project operations 256 24 44 (1) 6 73
Capital Improvements 16 13 5 11 21 48
------ ----- ----- ----- ----- ----
Project operations after
capital improvements $ 240 $ 11 $ 39 ($ 12) ($ 15) $ 25
====== ===== ===== ===== ===== ====
</TABLE>
<PAGE>
<TABLE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
a California Limited Partnership
Project Operations of the Residence Inns for
the Three Months Ended March 31, 1995
(000's)
<CAPTION>
Winston Altamonte
Salem Nashville Atlanta Springs Partnership Total
------- --------- ------- --------- ----------- -----
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Hotel operations:
Rooms $ 414 $ 758 $741 $845 $ 0 $ 5,730
Telephone and other 21 36 47 38 0 313
----- ----- ---- ---- ----- -------
Hotel operations 435 794 788 883 0 6,043
Interest and other 0 5 4 0 57 76
----- ----- ---- ---- ----- -------
Total revenues 435 799 792 883 57 6,119
----- ----- ---- ---- ----- -------
EXPENSES:
Hotel operations:
Rooms 75 178 139 183 0 1,181
Administrative 74 81 82 77 0 747
Marketing 41 80 75 72 0 589
Energy 26 69 41 42 0 363
Repair and maintenance 27 53 38 36 0 320
Management fees 28 24 39 44 0 312
Property taxes 17 23 28 47 0 219
Other 12 62 18 18 0 220
----- ----- ---- ---- ----- -------
Hotel operations 300 570 460 519 0 3,951
Depreciation and other
amortization 62 175 114 154 0 930
Interest 84 225 155 168 0 1,252
General and administrative 0 0 0 0 135 135
----- ----- ---- ---- ----- -------
Total expenses 446 970 729 841 135 6,268
----- ----- ---- ---- ----- -------
NET INCOME(LOSS) (11) (171) 63 42 (78) (149)
Plus non-cash items - net 64 170 113 190 0 957
Less notes payable
principal payments 5 26 9 27 0 91
----- ----- ---- ---- ----- -------
Project operations 48 (27) 167 205 (78) 717
Capital Improvements 15 236 20 56 0 441
----- ----- ---- ---- ----- -------
Project operations after
capital improvements $ 33 ($263) $147 $149 ($ 78) $ 276
===== ===== ==== ==== ===== =======
</TABLE>
Page 13 of 18
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
Metric Partners Growth Suite Investors, L.P. vs. Kenneth E. Nelson, The
Nelson Group, et al., San Francisco County Superior Court, Case No. 928065 (the
"SF Lawsuit"). [This lawsuit is related to the other five proceedings described
below. Terms defined in the description of one case may be used in the
description of the other cases.]
This lawsuit relates to management of the Partnership's Residence Inn -
Ontario by an entity controlled by Kenneth E. Nelson ("Nelson") from April 1988
to February 1991. As a result of several defaults by the Nelson entity under the
management agreement, the Partnership gave notice of termination of the
management agreement and filed the SF Lawsuit in January 1991 seeking damages
and declaratory and injunctive relief against Nelson and certain related parties
(collectively, the "Nelson Parties"). The Nelson Parties counterclaimed for
damages and declaratory relief.
In March 1993, the Partnership and the Nelson Parties verbally agreed to
settle the SF Lawsuit at a settlement conference (the "SF Settlement"). Under
this settlement, the Partnership is to purchase the land (the "Land") underlying
the Partnership's Residence Inn - Nashville (the "Hotel") currently leased by
the Partnership from Nashville Lodging Company ("NLC"), an entity controlled by
Nelson. The Land purchase would be 100% seller-financed pursuant to a
non-recourse promissory note of the Partnership in the amount of $1,700,000. The
Court retained jurisdiction to enforce the terms of the SF Settlement.
Various disagreements between the Partnership and Nelson regarding the
meaning of several provisions of the SF Settlement arose after March 1993. A
major disagreement related to whether the SF Settlement required the Partnership
to purchase the Land subject to a certain lis pendens filed against the Land by
Orlando Residence Ltd. ("Orlando") (see the "Nashville Case I" below). In
February 1994, the Nelson Parties filed a motion to enforce the SF Settlement
which was granted and in June 1994, the Court ruled that the Partnership had
agreed to purchase the Land subject to the lis pendens filed by Orlando.
Following this ruling, the Partnership has attempted to negotiate and enter
into a settlement agreement and a land purchase agreement and related agreements
(the "Settlement Documents") among itself and Nelson and NLC and another Nelson
entity, 2300 Elm Hill Pike, Inc. ("2300"). To date, these parties have not been
able to reach agreement on all issues relating to the Settlement Documents.
Since June 1994, numerous appearances before the Court have been made in an
effort to resolve all issues regarding the Settlement Documents, but as of the
date hereof, the Settlement Documents had not been completed or executed.
Another appearance before the Court to resolve open issues is scheduled for May
20, 1996. No assurance can be given that GSI will be able to complete or
consummate the Settlement Documents.
In July 1994, the Court in the Nashville Case I, discussed below, ruled
that the Hotel had been fraudulently conveyed to NLC by 2300 in 1986 and voided
the conveyance. Orlando is attempting to execute judgments against Nelson, NLC
and 2300 on the Land, which could deprive the Partnership of the benefits of the
SF Settlement. There is also a risk that consummation of the SF Settlement,
which would result in ownership of the Hotel and the Land being combined in the
Partnership while the Land may be subject to the lis pendens filed by Orlando
and/or other liens and judgments related to Nashville Case I, may adversely
affect the Partnership's equity interest in the Hotel. However, the Partnership
does not believe that consummation of the SF Settlement will have a material
adverse effect on the Partnership or on its equity interest in the Hotel.
Orlando Residence Ltd. vs. Metric Partners Growth Suite Investors, L.P. et
al., Chancery Court for Davidson County, in Nashville, Tennessee, Case No.
92-3086-III ("Nashville Case I")
2300 was the original owner of the Hotel (including the Land). In 1985,
2300's shareholders severed their business relationships and 2300 executed a
promissory note (the "Note") in favor of Orlando. 2300 defaulted on the Note and
in March 1990 Orlando obtained a judgment against 2300 on the Note. 2300
conveyed its interest in the Hotel (including the Land) to NLC in 1986. In April
1989, NLC sold the Hotel and leased the Land to the Partnership.
In October 1992, Orlando filed this lawsuit against Nelson and NLC and
2300, and the Partnership, alleging that the sale of the Hotel and the Land by
Page 14 of 18
<PAGE>
2300 to NLC in 1986 and NLC's subsequent sale of the Hotel and lease of the Land
to the Partnership in 1989 were fraudulent conveyances, intended to hinder
Plaintiff's recovery of its Note judgment against 2300. In August 1993, the
Court dismissed this action against the Partnership. Orlando has previously
stated that it will appeal from the judgment in favor of the Partnership, but
had not done so as of April 15, 1996.
The Partnership cross-claimed against NLC for indemnity and breach of
representations and warranties under the purchase and sale agreement between NLC
and the Partnership. In April 1995, the Court awarded judgment to the
Partnership against NLC and 2300 for approximately $29,670 of the Partnership's
legal fees in the case. GSI plans to assign this judgment to the title insurer
which defended GSI in Nashville Case I.
In July 1994, the Court ruled that the sale of the Hotel by 2300 to NLC had
been a fraudulent conveyance and voided this conveyance. In September 1994, the
Court entered judgment against Nelson, NLC and 2300 for approximately $500,000.
These rulings do not directly adversely affect the equity interest of the
Partnership in the Hotel or its leasehold interest in the Land. In September
1995, punitive damages of $850,000 against Nelson, NLC and 2300 were awarded to
Orlando. The defendants appealed from these judgments after they became final on
December 1, 1995.
In this and other actions Orlando is seeking to subject the land for sale
to apply to satisfaction of its judgments against NLC.
Metric Partners Growth Suite Investors, L.P. vs. Nashville Lodging Co.,
Orlando Residence Ltd., and LaSalle National Bank, in the United States
Bankruptcy Court, Eastern District of Wisconsin, Case No. 96-20017
("Interpleader Action").
In January 1996, NLC filed a petition with the U.S. Bankruptcy Court in
Milwaukee, Wisconsin, for reorganization under Chapter 11 of the Bankruptcy
Code. In connection with this filing, GSI filed an interpleader action against
NLC and Orlando (which had garnished payments due to NLC from the Partnership)
and LaSalle National Bank as the holder (the "Lender") of the underlying
mortgage of the Hotel (the "Underlying Mortgage"), asking the Court to determine
which parties were entitled to receive payments to be made by the Partnership to
NLC under the ground lease (the "Lease") of the Land and the promissory note
(the "Wrap Note") held by NLC which "wraps around" the Underlying Mortgage. All
payments due to NLC under the Lease and the Wrap Note from the filing of this
action through February 1996 were paid into the clerk of the Bankruptcy Court.
In February 1996, the Bankruptcy Court granted motions to dismiss the
reorganization proceeding filed by Orlando and the Lender. Following this
dismissal, in late February 1996, the parties to the interpleader action filed
by the Partnership agreed that all payments theretofore paid into the clerk of
the Bankruptcy Court pursuant to the Wrap Note and all payments due under such
Note on March 1, 1996 and in the future, to the extent such payments constituted
payments due under the Underlying Mortgage, would be paid directly to the Lender
until further order to the contrary by the Bankruptcy Court. (However, this
agreement has not yet been documented by the parties.) The parties were asked by
the Bankruptcy Court to present their arguments as to the disposition of
payments due under the Lease and the portion of the Wrap Note payments to be
retained by NLC (the "NLC Payments"). The NLC Payments due for March and April
1996 were paid by the Partnership into the clerk of the Bankruptcy Court and
will continue to be so paid until further order to the contrary by the
Bankruptcy Court. A hearing before the Bankruptcy Court regarding entitlement to
the NLC Payments was held on May 6, 1996 and the matter was taken under
submission by the Court.
In another related recent development, the Lender declared a default for,
among other things, NLC's failure to make the January and February 1996 debt
service and tax escrow payments for approximately $176,464 under the Underlying
Mortgage (the "Jan.-Feb. Payments") (such payments having been included in the
amounts paid by the Partnership into the clerk of the Bankruptcy Court). On
April 15, 1996, GSI paid the Jan.-Feb. Payments to cure these defaults. As a
result, GSI has notified NLC that pursuant to a certain Three Party Agreement
dated April 24, 1989 among GSI, the Lender and NLC, GSI has elected to make all
future payments when and as due and otherwise perform all obligations of NLC
under the Underlying Loan for and in place of NLC and to assume all NLC's
obligations under the Underlying Loan. GSI further informed NLC that such
payment and assumption satisfies all of GSI's obligations under the Wrap Note.
NLC has denied that it is in default of the Underlying Loan and has informed GSI
by letter dated April 12, 1996 that GSI has no right to exercise any rights it
may have in the event of a default by NLC, including any rights granted under
the above-referenced Three Party Agreement. On May 3, 1996, GSI filed a lawsuit
in the Tennessee Chancery Court seeking a judicial determination of the rights
and obligations of GSI and NLC with respect to the Underlying Loan, the Wrap
Note and the Lease. See the "Nashville Case III" below.
Page 15 of 18
<PAGE>
Orlando has claimed that it is entitled to the Jan.-Feb. Payments since the
claim of the Lender to these payments was satisfied by GSI's payment to the
Lender on April 15, 1996. NLC has also claimed it is entitled to the Jan.-Feb.
Payments. GSI disputes the claims of Orlando and NLC to the Jan.-Feb. Payments
and believes that it is entitled to these payments from the clerk.
The Bankruptcy Court has scheduled a hearing for June 21, 1996 at which the
parties' positions as to entitlement to the Jan.-Feb. Payments will be argued.
No assurance can be given that the Court will hold that GSI is entitled to the
Jan.-Feb. Payments.
Nashville Lodging Company vs. Metric Partners Growth Suite Investors, L.P.
et al., Circuit Court, State of Wisconsin, Case No. 94CV001212.
In February 1994, NLC served this lawsuit on the Partnership. NLC alleges
fraud, breach of settlement contract and breach of good faith and fair dealing
and seeks compensatory, punitive and exemplary damages in an unspecified amount
for the Partnership's failure to consummate the SF Settlement. In February 1994,
the Partnership filed an answer and requested that the Court stay the action
pending resolution of the SF Lawsuit including all appeals. The Court refused to
stay the action and discovery commenced. In February 1995, the Court determined
that the Partnership could be sued in Wisconsin but stayed the case until the
settlement of the SF Lawsuit has been finalized.
Orlando Residence Ltd. vs. 2300 Elm Hill Pike, Inc. and Nashville Lodging
Company vs. Metric Partners Growth Suite Investors, L.P., Chancery Court for
Davidson County, in Nashville, Tennessee, Case No. 94-1911-I ("Nashville Case
II").
Orlando has filed an action against 2300 and NLC in the Davidson County
Chancery Court to attempt to execute on its judgment against Nelson, NLC and
2300 in Nashville Case I by subjecting the Land to sale. In May 1995, 2300 and
NLC filed a third-party complaint against the Partnership, alleging it had
refused to purchase the Land as required by the SF Settlement. 2300 and NLC
demand payment by the Partnership of 2300 and NLC's costs of defending Nashville
Case II and indemnification for any loss resulting from the claims of Orlando,
among other claims of damage.
In September 1995, the Court dismissed this action by Orlando against 2300
and NLC for lack of standing. However, the Court has refused to dismiss the
third-party action against the Partnership. In February 1996, the Court granted
a motion filed by 2300 and NLC for partial summary judgement, ruling that the
Partnership had breached the SF Settlement. The action will continue to
determine damages and other issues. The Partnership does not believe it breached
the SF Settlement and will appeal this ruling at an appropriate time. However,
no assurance can be given that its appeal will be successful. In any event, the
Partnership does not believe that any damages it might ultimately be required to
pay in this action will have a material adverse effect on the Partnership.
Metric Partners Growth Suite Investors, L.P., vs. Nashville Lodging Co.,
Orlando Residence, Ltd., and LaSalle National Bank, as trustee under that
certain pooling and servicing agreement, dated July 11, 1995, for the holders of
the WHP Commercial Mortgage Pass Through Certificates, Series 1995C1, Chancery
Court for Davidson County, in Nashville, Tennessee, Case No. 96-1405-III
("Nashville Case III").
GSI filed this action May 3, 1996 to obtain, among other things, a judicial
determination of the rights and obligations of GSI and NLC and NLC under the
Underlying Loan, the Wrap Note and the Lease under a certain Three Party
Agreement ("TPA") as a consequence of GSI's cure of defaults by NLC under the
Underlying Loan. (See the "Interpleader Action" above for information regarding
the TPA, the defaults by NLC and GSI's cure of such defaults.) GSI believes that
as a result of these events, it has become the direct obligor to the Lender
under the Underlying Loan and that the Wrap Note has been satisfied and the
payments due under the Lease reduced by $50,000 per year. GSI also seeks
preliminary and permanent injunctive relief to prevent NLC from attempting to
accelerate or foreclose the Wrap Note in connection with this matter and a
judgment establishing that GSI is the owner of the Residence Inn-Nashville
subject only to the Lease and certain specified security interests.
No responses to this action have yet been filed by the defendants.
The ultimate disposition of these lawsuits cannot be predicted at this
time; however, based solely on the facts known to it as of the date hereof, the
Partnership does not believe the lawsuits will have a material adverse effect on
the Partnership.
Page 16 of 18
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) No reports on Form 8-K were required to be filed during the period
covered by this Report. On February 27, 1996, the Form 8-K, originally filed on
October 3, 1995, reporting the disposition of the Residence Inn-Atlanta
(Perimeter West), was amended to include additional information concerning the
disposition of the asset.
Page 17 of 18
<PAGE>
SIGNATURE
---------
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.
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.,
a California Limited Partnership
By: Metric Realty
an Illinois general partnership
its Managing General Partner
By: Metric Realty Corp.
a Delaware corporation
its managing general partner
By: /s/ Margot M. Giusti
--------------------
Margot M. Giusti
Executive Vice President, Finance and
Administration; Principal Financial
and Accounting Officer of Metric Realty Corp.
Date: May 13, 1996
------------
Page 18 of 18
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 10,683,000
<SECURITIES> 0
<RECEIVABLES> 1,272,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,204,000
<PP&E> 88,062,000
<DEPRECIATION> 29,689,000
<TOTAL-ASSETS> 71,200,000
<CURRENT-LIABILITIES> 3,815,000
<BONDS> 42,612,000
0
0
<COMMON> 0
<OTHER-SE> 24,473,000
<TOTAL-LIABILITY-AND-EQUITY> 70,900,000
<SALES> 0
<TOTAL-REVENUES> 5,407,000
<CGS> 0
<TOTAL-COSTS> 3,761,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,093,000
<INCOME-PRETAX> (318,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (318,000)
<EPS-PRIMARY> (5.00)
<EPS-DILUTED> 0.00
</TABLE>
