FORM 8-K
SECURITIES AND EXCHANGE COMMISION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
December 30, 1997
-----------------
Date of Report
(Date of earliest event reported)
Metric Partners Growth Suite Investors, L.P.
--------------------------------------------
(Exact name of registrant as
Specified in its charter)
0-17660 California 94-3050708
------- ---------- ----------
(Registration (State or Other (IRS Employer
File Jurisdiction of Identification
Number) Incorporation) Number)
One California Street, San Francisco, California 94111-5415
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(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(415) 678-2000
(800) 347-6707 Wats line for all states
<PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The Registrant was organized to acquire, hold for investment, manage
and ultimately sell all-suite, extended-stay hotels operated under
franchise licenses from Residence Inn by Marriott, Inc. In the normal
course of its business, the Registrant sold the Residence Inn -Ontario
in Ontario California; the Residence Inn - Columbus (East) in Columbus,
Ohio; the Residence Inn - Fort Wayne in Fort Wayne, Indiana; the
Residence Inn-Indianapolis in Indianapolis, Indiana; the Residence Inn
Lexington in Lexington, Kentucky; the Residence Inn - Louisville in
Louisville, Kentucky; the Residence Inn - Winston-Salem in Winston -
Salem, North Carolina; and the Residence Inn - Altamonte Springs in
Altamonte Springs, Florida (the "Hotels") on December 30, 1997 to an
unaffiliated buyer.
TERMS OF ORIGINAL ACQUISITIONS
The Hotels were acquired on the dates and at costs (including financing)
presented in the table below. Cash Investment includes the cash payment to
seller as well as property upgrade costs, franchise fees, acquisition fees and
other miscellaneous costs. The Hotels were financed at the amounts shown and the
proceeds from certain of the loans were net of discounts to the lenders.
Furthermore, loan fees and costs were incurred.
<TABLE>
<CAPTION>
Financing
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Fees Discount
Cash and to the
Residence Inn Date Investment Loan Costs Lender Total
------------- ---- ---------- ---- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Ontario 4/29/88 $7,998,000 $9,000,000 $113,000 n/a $17,111,000
Columbus (East) 6/17/88 $3,282,000 $2,710,000 $44,000 $177,000 $6,213,000
Fort Wayne 6/17/88 $3,525,000 $2,840,000 $46,000 $185,000 $6,596,000
Indianapolis 6/17/88 $4,292,000 $3,295,000 $53,000 $215,000 $7,855,000
Lexington 6/17/88 $3,954,000 $3,205,000 $52,000 $209,000 $7,420,000
Louisville 6/17/88 $4,753,000 $3,700,000 $60,000 $242,000 $8,755,000
Winston Salem 6/17/88 $3,905,000 $3,250,000 $52,000 $212,000 $7,419,000
Altamonte Springs 3/16/90 $4,826,000 $6,750,000 $186,000 $898,000 $12,660,000
</TABLE>
The purchase price to seller on the Residence Inn - Ontario was subject to an
increase of $900,000 based on operational performance of the hotel in 1990.
However, the required operational performance was not met and no additional
purchase price was paid.
The seller of the Residence Inn - Ontario guaranteed certain returns to the
registrant through April 29, 1991 up to a maximum of $775,000. The full amount
of the $775,000 was paid to the Registrant.
The seller of the Residence Inns - Columbus East, Fort Wayne, Indianapolis,
Lexington, Louisville, and Winston Salem guaranteed certain returns to the
Registrant through June 17, 1991 up to a maximum of $960,000 for these six
hotels. The full amount of the $960,000 was paid to the Registrant.
The seller of the Residence Inn - Altamonte Springs guaranteed certain returns
to the Registrant through March 15, 1993 up to a maximum of $350,000. The full
amount of the $350,000 was paid to the Registrant.
<PAGE>
TERMS OF DISPOSITIONS AND FINANCINGS
The Registrant sold the Hotels on December 30, 1997. The sales information is
presented in the table below. The outstanding balances on the loans on the
Residence Inns - Ontario and Altamonte Springs were paid off on December 30,
1997, the date of sale. The outstanding balances on the remaining loans, which
were all due to the same lender, were paid off on January 2, 1998 and a
pre-payment penalty was paid on these six notes pursuant to the loan agreements.
Net
Sales Expenses Loan Pre-Payment Sales
Residence Inn Price of Sale Balance Penalty Proceeds
------------- --------------------------------------------------------------
Ontario $12,511,000 ($176,000) ($9,000,000) n/a $3,335,000
Columbus (East) 4,832,000 (66,000) (2,634,000) (63,000) 2,069,000
Fort Wayne 5,011,000 (63,000) (2,761,000) (65,000) 2,122,000
Indianapolis 5,261,000 (66,000) (3,203,000) (76,000) 1,916,000
Lexington 7,129,000 (96,000) (3,115,000) (74,000) 3,844,000
Louisville 10,064,000 (133,000) (3,597,000) (85,000) 6,249,000
Winston Salem 5,830,000 (85,000) (3,159,000) (75,000) 2,511,000
Altamonte Springs 8,862,000 (171,000) (6,350,000) n/a 2,341,000
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$59,500,000 ($856,000) ($33,819,000) ($438,000) $24,387,000
==============================================================
The Partnership was required by the purchaser, under the terms of the sales
contract, not to distribute $7.5 million of the sales proceeds for a period of
one year, which amount represents the maximum possible liability of the
Partnership for any breach of the sales agreement.
CARRYING AMOUNTS AT DATE OF SALE
At the date of sale, the estimated carrying amounts of the Hotels for financial
statement purposes and for tax reporting purposes were as presented in the table
below.
Residence Inn Financial Tax
------------- --------- ---
Ontario $11,905,000 $11,922,000
Columbus (East) 4,284,000 4,258,000
Fort Wayne 4,293,000 4,263,000
Indianapolis 5,398,000 5,380,000
Lexington 5,239,000 5,203,000
Louisville 5,774,000 5,736,000
Winston Salem 5,247,000 5,207,000
Altamonte Springs 8,370,000 8,347,000
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$50,510,000 $50,316,000
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<PAGE>
GAIN ON SALES
The estimated gain or loss on sale to be recognized in 1997 is as follows:
Residence Inn Financial Tax
------------- --------- ---
Ontario $ 430,000 $ 413,000
Columbus (East) 419,000 508,000
Fort Wayne 590,000 685,000
Indianapolis (279,000) (185,000)
Lexington 1,720,000 1,830,000
Louisville 4,072,000 4,195,000
Winston Salem 423,000 538,000
Altamonte Springs 321,000 344,000
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$7,696,000 $8,328,000
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements
Not applicable.
(b) Pro Forma Financial Information
Historical financial information and Pro Forma financial information are
included herein.
(c) Exhibits
Upon their receipt, the Registrant will amend its Form 8-K to include the
disposition documents for the abovementioned eight hotel properties.
<PAGE>
SIGNATURE
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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: SSR Realty Advisors, Inc.
a Delaware corporation
its Managing General Partner
By: /s/ William A. Finelli
-----------------------------
William A. Finelli
Managing Director, Principal Financial
and Accounting Officer of SSR Realty
Advisors, Inc.
Date: January 14, 1998
----------------
<PAGE>
Basis of Presentation
Note 1.
The Registrant sold the Residence Inn - Ontario, Residence Inn - Columbus
(East), Residence Inn - Fort Wayne, Residence Inn - Indianapolis, Residence Inn
- - Lexington, Residence Inn - Louisville, Residence Inn - Winston Salem and the
Residence Inn - Altamonte Springs (the "Hotels") on December 30, 1997. See Item
2 of the Form 8-K for information regarding the dispositions. The pro forma
adjustments reflect the distribution of approximately $16.8 million of the net
sales proceeds that was made to the partners. Furthermore, accounts related to
the Hotels have been eliminated and interest income has been added assuming that
the portion of net sales proceeds not distributed to the partners, approximately
$7.5 million, will be invested at 5.5% per annum as presented by the pro forma
adjustments. See Note 2 below.
Note 2.
The unaudited financial statements present the pro forma balance sheet at
September 30, 1997, had the Registrant sold the Hotels on September 30, 1997,
and retained $7.5 million of the net proceeds from the sale, and the pro forma
statements of operations for the year ended December 31, 1996 and for the nine
months ended September 30, 1997, had the Registrant sold the Hotels at the
beginning of each period presented. The unaudited statements also present the
historical figures previously reported in the appropriate Form 10-K and 10-Q
reports.
No provision for Federal and state income taxes has been made in the historical
or pro forma financial statements because income taxes are the obligation of the
partners.
<PAGE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
a California Limited Partnership
PRO FORMA BALANCE SHEETS (UNAUDITED)
September 30, 1997
Pro Forma As
Adjustments Adjusted
Historical (Note 1) (Note 2)
---------- -------- --------
ASSETS
CASH AND CASH EQUIVALENTS $ 3,843,000 $ 5,363,000 $ 9,206,000
CASH INVESTMENTS 3,888,000 0 3,888,000
RESTRICTED CASH 327,000 0 327,000
ACCOUNTS RECEIVABLE 1,546,000 ($ 1,155,000) 391,000
PREPAID EXPENSES AND OTHER ASSETS 207,000 ($ 79,000) 128,000
PROPERTIES AND IMPROVEMENTS 13,906,000 0 13,906,000
ACCUMULATED DEPRECIATION ($ 5,127,000) 0 ($ 5,127,000)
------------ ------------ ------------
NET PROPERTIES AND IMPROVEMENTS 8,779,000 0 8,779,000
REAL ESTATE HELD FOR SALE 49,336,000 ($49,336,000) 0
DEFERRED FINANCING COSTS 33,000 ($ 33,000) 0
DEFERRED FRANCHISE FEES 148,000 ($ 118,000) 30,000
------------ ------------ ------------
TOTAL ASSETS $ 68,107,000 ($45,358,000) $ 22,749,000
============ ============ ============
LIABILITIES AND PARTNERS' EQUITY
ACCOUNTS PAYABLE $ 1,375,000 ($ 946,000) $ 429,000
ACCRUED PROPERTY TAXES 593,000 ($ 466,000) 127,000
ACCRUED INTEREST 295,000 ($ 158,000) 137,000
OTHER LIABILITIES 1,640,000 ($ 805,000) 835,000
DEFERRED GAIN ON SALE OF PROPERTY 300,000 0 300,000
NOTES PAYABLE 42,351,000 ($33,803,000) 8,548,000
------------ ------------ ------------
TOTAL LIABILITIES 46,554,000 ($36,178,000) 10,376,000
------------ ------------ ------------
PARTNERS' EQUITY (DEFICIENCY):
GENERAL PARTNERS 59,000 0 59,000
LIMITED PARTNERS (59,932 units
outstanding) 21,494,000 ($ 9,180,000) 12,314,000
------------ ------------ ------------
TOTAL PARTNERS' EQUITY 21,553,000 ($ 9,180,000) 12,373,000
------------ ------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 68,107,000 ($45,358,000) $ 22,749,000
============ ============ ============
<PAGE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
a California Limited Partnership
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
Pro Forma As
Adjustments Adjusted
Historical (Note 1) (Note 2)
---------- -------- --------
REVENUES:
Hotel operations $ 24,610,000 ($20,718,000) $ 3,892,000
Interest and other 435,000 334,000 769,000
------------ ------------ ------------
Total revenues 25,045,000 ($20,384,000) 4,661,000
------------ ------------ ------------
EXPENSES
Hotel operations:
Rooms 4,899,000 ($ 3,969,000) 930,000
Administrative 3,101,000 ($ 2,465,000) 636,000
Marketing 2,762,000 ($ 2,311,000) 451,000
Energy 1,281,000 ($ 1,042,000) 239,000
Repair and maintenance 1,411,000 ($ 1,091,000) 320,000
Management fees 916,000 ($ 799,000) 117,000
Property taxes 738,000 ($ 626,000) 112,000
Other 917,000 ($ 601,000) 316,000
------------ ------------ ------------
Total hotel operations 16,025,000 ($12,904,000) 3,121,000
Depreciation and other amortization 2,933,000 ($ 2,437,000) 496,000
Interest 4,350,000 ($ 3,478,000) 872,000
General and administrative 1,216,000 ($ 214,000) 1,002,000
------------ ------------ ------------
Total expenses 24,524,000 ($19,033,000) 5,491,000
------------ ------------ ------------
NET INCOME (LOSS) $ 521,000 ($ 1,351,000) ($ 830,000)
============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP ASSIGNEE UNIT $ 8 ($ 22) ($ 14)
============ ============ ============
CASH DISTRIBUTIONS PER LIMITED
PARTNERSHIP ASSIGNEE UNIT $ 68 ($ 35) $ 33
============ ============ ============
<PAGE>
METRIC PARTNERS GROWTH SUITE INVESTORS, L.P.
a California Limited Partnership
STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1997
Pro Forma As
Adjustments Adjusted
Historical (Note 1) (Note 2)
---------- -------- --------
REVENUES:
Hotel operations $ 18,748,000 ($15,305,000) $ 3,443,000
Interest and other 261,000 267,000 528,000
------------ ------------ ------------
Total revenues 19,009,000 ($15,038,000) 3,971,000
------------ ------------ ------------
EXPENSES:
Hotel operations:
Rooms 3,674,000 ($ 2,947,000) 727,000
Administrative 2,140,000 ($ 1,838,000) 302,000
Marketing 1,939,000 ($ 1,572,000) 367,000
Energy 887,000 ($ 716,000) 171,000
Repair and maintenance 1,014,000 ($ 800,000) 214,000
Management fees 747,000 ($ 644,000) 103,000
Property taxes 568,000 ($ 441,000) 127,000
Other 717,000 ($ 483,000) 234,000
------------ ------------ ------------
Total hotel operations 11,686,000 ($ 9,441,000) 2,245,000
Depreciation and other amortization 1,621,000 ($ 1,238,000) 383,000
Interest 3,248,000 ($ 2,602,000) 646,000
General and administrative 656,000 ($ 175,000) 481,000
------------ ------------ ------------
Total expenses 17,211,000 ($13,456,000) 3,755,000
------------ ------------ ------------
NET INCOME $ 1,798,000 ($ 1,582,000) $ 216,000
============ ============ ============
NET INCOME PER LIMITED PARTNERSHIP
ASSIGNEE UNIT $ 29 ($ 25) $ 4
============ ============ ============
CASH DISTRIBUTIONS PER LIMITED
PARTNERSHIP ASSIGNEE UNIT $ 30 ($ 30) $ 0
============ ============ ============
