<PAGE> 1
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, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-16285
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its partnership
agreement)
<TABLE>
<S> <C>
MARYLAND 52-1490861
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(State or other jurisdiction (I.R.S. Employer
of the organization) Identification No.)
</TABLE>
<TABLE>
<S> <C>
111 South Calvert Street - Baltimore, MD 21203-1476
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(Address of principal executive offices) (Zip Code)
</TABLE>
(410) 539-0000
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(Registrant's telephone number, including area code)
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.
Yes X No
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
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<S> <C> <C>
ASSETS:
Investment in real estate held for lease, at cost:
Land $11,803,791 $11,803,791
Buildings and improvements 49,472,707 49,387,790
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61,276,498 61,191,581
less accumulated depreciation 11,065,662 10,658,778
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50,210,836 50,532,803
Cash and cash equivalents 384,590 384,181
Tenant accounts receivable, net of allowance
for doubtful accounts ($312,309 in 1995 and
$353,507 in 1994) 1,248,979 1,380,921
Prepaid expenses and other assets 746,591 681,024
Intangible assets, net of accumulated amortization
($987,112 in 1995 and $966,779 in 1994) 218,972 239,305
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Total assets $52,809,968 $53,218,234
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LIABILITIES AND PARTNERS' EQUITY:
Long-term debt, including current maturities $35,029,558 $35,285,891
Accounts payable and accrued expenses 131,838 61,093
Cash flow protector loans 789,203 789,203
Interest payable 480,718 488,734
Prepaid rents and security deposits 206,286 240,888
Due to related parties 98,915 118,163
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Total liabilities 36,736,518 36,983,972
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General partners and assignor limited partner (10,684) (9,076)
Assignee limited partners (1,200,000 units
authorized, issued and outstanding) 16,084,134 16,243,338
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Total partners' equity 16,073,450 16,234,262
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Total liabilities and partners' equity $52,809,968 $53,218,234
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</TABLE>
The accompanying notes are an integral part of these balance sheets.
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MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the quarters ended
March 31,
-----------------------
1995 1994
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<S> <C> <C>
Income:
Rental income $1,602,536 $1,548,420
Tenant reimbursement income 312,811 327,171
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Total income 1,915,347 1,875,591
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Operating expenses:
Interest expense 802,458 789,943
Depreciation 406,884 424,086
Repairs and maintenance 229,727 236,148
Taxes and insurance 210,532 215,896
Management and leasing to related parties 109,030 106,184
Provision for doubtful accounts 72,669 22,203
Amortization 20,333 42,799
Other expenses 228,687 198,390
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Total operating expenses 2,080,320 2,035,649
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Loss from rental operations (164,973) (160,058)
Other income:
Interest income 4,161 638
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Net loss $ (160,812) $ (159,420)
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Net loss allocated to general partners $ (1,608) $ (1,594)
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Net loss allocated to assignee
limited partners $ (159,204) $ (157,826)
========== ==========
Net loss allocated to assignee
limited partners per unit (1,200,000
units issued and outstanding) $ (0.13) $ (0.13)
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE> 4
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the three months ended
March 31,
-------------------------
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net loss $ (160,812) $ (159,420)
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Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 427,217 466,885
Changes in operating assets and liabilities:
Decrease in tenant accounts receivable, net 131,942 109,576
(Increase) decrease in prepaid expenses and
other assets (65,567) 74,903
Increase (decrease) in accounts payable and
accrued expenses 36,143 (1,381,668)
Increase (decrease) in interest payable (8,016) 51,999
Increase (decrease) in due to related parties (19,248) 20,135
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Total adjustments 502,471 (658,170)
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Net cash provided by (used in) operating activities 341,659 (817,590)
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Cash flows from investing activities:
Improvements of real estate (84,917) (69,498)
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Net cash used in investing activities (84,917) (69,498)
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Cash flows from financing activities:
Principal payments on long-term debt (256,333) (178,305)
Proceeds from long-term debt - 2,640,940
Retirement of long-term debt - (1,102,392)
Mortgage escrow deposits - (206,149)
Payment of deferred interest - (150,000)
Financing fees - (86,487)
Assigned certificate of deposit - (25,617)
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Net cash provided by (used in) financing activities (256,333) 891,990
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Net increase in cash and cash equivalents 409 4,902
Cash and cash equivalents at beginning of period 384,181 353,577
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Cash and cash equivalents at end of period $ 384,590 $ 358,479
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 810,474 $ 887,944
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
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MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
Notes to Financial Statements
March 31, 1995
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NOTE A - BASIS OF PRESENTATION POLICIES:
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for
interim financial reporting and the instructions to Form 10-Q.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments necessary for a fair presentation have been included.
All adjustments made in the interim period were of a normal
recurring nature. Operating results of any interim period are not
necessarily indicative of the results that may be expected for the
year ending December 31, 1995.
RENTAL INCOME. Certain leases provide for either abatement of
rents or scheduled rent increases over the life of the leases.
Rental income is recorded on a straight-line basis of equal monthly
payments over the respective terms of the leases. The receivables
related to the recording of rental income on a straight-line basis
totalled $666,718 and $682,399 at March 31, 1995 and December 31,
1994, respectively.
STATEMENTS OF CASH FLOWS. For purposes of the statements of cash
flows, the Partnership considers cash in banks, commercial paper
and repurchase agreements with original maturities of less than
three months to be cash and cash equivalents.
NOTE B - RELATED PARTY TRANSACTIONS:
During the quarter ended March 31, 1995, the Partnership paid First
Washington Management, Inc., an affiliate of FW Realty Limited
Partnership, one of the general partners, $118,878 and Legg Mason
Realty Capital, Inc., an affiliate of Realty Capital IV Limited
Partnership, the other general partner, $40,714 for management fees
and reimbursement of operating expenses. At March 31, 1995,
$21,478 was payable to Legg Mason Realty Capital, Inc. and $4,006
was payable to First Washington Management, Inc. for management
fees and reimbursement of operating expenses.
The general partners agreed to lend to the Partnership, without
interest, up to 50% of the acquisition fees actually paid to them
at the time the loan was made in the event the annual cumulative
non-compounded return to assignee limited partners fell below 7%
of the allocable invested capital for the period from February 1,
1989 through January 31, 1992. In 1990, the general partners
fulfilled their obligation under these cash flow protector loan
provisions.
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NOTE B - RELATED PARTY TRANSACTIONS, continued
As of March 31, 1995, cash flow protector loans totalling $789,203
were outstanding ($599,794 to FW Realty Limited Partnership and
$189,409 to Realty Capital IV Limited Partnership). The loans are
non-interest bearing and are required to be repaid from
distributable cash flow or sale or refinancing proceeds after the
payment of a preferred return to assignee limited partners equal
to a 10% annual cumulative non-compounded return on invested
capital.
In addition, acquisition fees totalling $73,431 were payable as of
March 31, 1995 to FW Realty Limited Partnership in the amount of
$55,808 and to Realty Capital IV Limited Partnership in the amount
of $17,623.
NOTE C - PARTNERSHIP ALLOCATIONS AND DISTRIBUTIONS:
Distributable cash flow is payable quarterly as follows:
1. 99% to the assignee limited partners and 1% to the general
partners until each assignee limited partner has received
an annual cumulative return equal to 10% of invested
capital; and
2. the balance is distributable 98% to the assignee limited
partners and 2% to the general partners.
Income and loss from operations for each fiscal year is allocated
as follows:
1. If there has been a distribution of distributable cash flow
during such fiscal year, net income from operations shall
be allocated to the assignee limited partners and general
partners in proportion to such distribution of
distributable cash flow.
2. If there has been no distribution of distributable cash flow
during such fiscal year, net income from operations shall be
allocated 99% to the assignee limited partners and 1% to the
general partners.
3. Net loss from operations for each fiscal year shall be
allocated 99% to the assignee limited partners and 1% to
the general partners.
Sale or refinancing proceeds are distributed first to meet debts
and obligations of the Partnership and to fund reserves for
contingent liabilities to the extent deemed reasonable by the
general partners and then to the assignee limited partners and
general partners in the order described in Section 4.4 of the
Partnership Agreement.
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<PAGE> 7
NOTE C - PARTNERSHIP ALLOCATIONS AND DISTRIBUTIONS, continued:
Any gain from a sale or refinancing is allocated as follows:
1. To the assignee limited partners and general partners having
negative balances in their capital accounts, prior to
distribution of sale or refinancing proceeds, an amount of
such gain sufficient to increase their negative balances
to zero;
2. To each assignee limited partner and general partner who has
received or will receive a distribution out of the sale or
refinancing proceeds, the amount of and in proportion to
the excess of such distribution over the positive balance
in his capital account, determined after any allocation of
gain from a sale or refinancing pursuant to (1) above,
and
3. The balance, 75% to the assignee limited partners and 25% to
the general partners.
Any loss from a sale or refinancing shall be allocated 99% to the
assignee limited partners and 1% to the general partners.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Partnership's financial statements are prepared based on the
accrual method of accounting. The Partnership's rental income from
its shopping center properties consists of base rents from tenants
occupying space in each shopping center. In addition, certain
leases provide for additional rent computed on the basis of a
percentage of gross sales in excess of specified levels. In some
cases, leases provide for rent abatements and scheduled rent
increases over the life of the lease. To the extent a lease
provides for rent abatements or adjustments, the Partnership, in
accordance with generally accepted accounting principles,
recognizes rental income on a straight-line basis of equal monthly
payments over the term of such lease. Market conditions have
dictated offering a wide variety of concessions to prospective
tenants, which most frequently include a combination of free rent
and reduced rental rate.
As of March 31, 1995, tenant rent receivables prior to the
allowance for doubtful accounts totaled $1,561,288 of which amount
$666,718 represented receivables required to be accrued in
accordance with applicable accounting principles to reflect
scheduled rent increases over the terms of the applicable leases
and $894,570 represented the balance. As of December 31, 1994 and
March 31, 1994, such rent receivables totaled $1,734,428 and
$1,312,597, respectively, of which amounts $682,399 and $719,057,
respectively, represented receivables required to be accrued and
$1,052,029 and $593,540, respectively, represented the balances.
The Partnership wrote off tenant rent receivables and charged the
allowance for doubtful accounts in the quarters ended March 31,
1995 and 1994 for $113,867 and $104,715, respectively. The
Partnership charged a provision for doubtful accounts in the amount
of $72,669 for the first quarter of 1995 and $22,203 for the first
quarter of 1994. During the quarter ended March 31, 1995, the
Partnership decreased its allowance for doubtful accounts to
$312,309, a net decrease of $41,198. During the quarter ended
March 31, 1994, the Partnership decreased its allowance for
doubtful accounts to $337,804, a net decrease of $82,512. The
allowance for doubtful accounts represents an allowance for tenant
rent receivables that may become uncollectible in the future.
CASH FLOW
The Partnership recorded a $409 net increase in cash and cash
equivalents in the quarter ended March 31, 1995, with $341,659
in net cash provided by operating activities offset by $84,917 used
in investing activities for improvements of real estate and
$256,333 used in financing activities for principal payments on
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<PAGE> 9
long-term debt. The principal differences between net loss from
operations of $160,812 and net cash provided by operating
activities of $341,659 was the noncash charge of $427,217 for
depreciation and amortization and a decrease of $131,942 in tenant
accounts receivable, net of allowance for doubtful accounts.
The Partnership presently expects to apply any increase in cash to
increase Partnership working capital reserves and to provide for
shopping center improvements if and when necessary, and to repay
and refinance debt as required. The General Partners believe it
is necessary to maintain adequate reserves to fund capital
improvements and tenant fit-up allowances that may be needed to
lease vacant space, as well as to provide funds that may be
required to reduce Partnership debt in connection with refinancing
mortgage obligations. Consequently, there is no assurance as to
the availability of cash flow to make distributions to partners.
This policy reflects the fact that existing working capital
reserves have been fully committed by the Partnership to carrying
tenant rent receivables and making capital improvements and other
expenditures. The General Partners believe that such a policy is
prudent in view of the current real estate and general economic
environments and is consistent with the Partnership's objective to
maintain and increase the value of its shopping centers.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity has been adversely affected by lower than anticipated
rental income and higher than anticipated tenant rents receivable.
The cash and cash equivalents position of the Partnership at March
31, 1995 increased $409 from that at December 31, 1994. The
Partnership's cash and cash equivalents position fluctuates from
quarter to quarter as follows: (i) decreasing with the funding of
lease-up costs and tenant improvements; (ii) decreasing with the
funding of renovation and expansion expenses of the shopping
centers; (iii) increasing as borrowing proceeds, net rental income
and interest income are received; (iv) decreasing as expenses
(including debt service requirements) are paid; and (v) decreasing
by any payment of Partnership distributions.
Subsequent to March 31, 1995, the Partnership is obligated to
expend approximately $12,000 for tenant fit-up costs in connection
with tenant leases which have been signed. This amount does not
include tenant improvement expenditures for prospective or future
tenants. In the first quarter of 1995, approximately $45,000 was
expended for a new roof at Cloister Shopping Center.
Wholesale Depot at Tarrytown Mall filed for reorganization under
the provisions of Chapter XI of the U.S. Bankruptcy Code in May
1994. Wholesale Depot vacated its space at Tarrytown Mall in late
June 1994 and rejected its lease on October 7, 1994. Wholesale
Depot met its obligations to the Partnership for rent payments
through September 30, 1994 with the exception of base rent and
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<PAGE> 10
expense reimbursement for the month of April 1994.
The Partnership had as a security deposit a $500,000 letter of
credit issued by Shawmut Bank to be used to fund the lease
obligations of Wholesale Depot. The Partnership expects to collect
$450,000 with regards to the letter of credit, $200,000 of which
was received in January 1995, and to settle unsecured claims
against Wholesale Depot for an additional $50,000. The monthly
lease obligations for Wholesale Depot include approximately $36,240
in base rent and approximately $10,540 in monthly tenant
reimbursements. Total income for the quarter ended March 31, 1995
included rental income of approximately $108,700 and tenant
reimbursement income of approximately $31,600 with respect to the
Wholesale Depot lease. The Partnership anticipates that no
material income will be recorded with respect to the Wholesale
Depot lease obligations subsequent to the second quarter of 1995.
The Partnership has contacted numerous potential replacement
tenants for the Wholesale Depot space. Given competitive
conditions in the marketplace, including new Target and K-Mart
stores and available competitive space formerly occupied by K-
Mart, there is no assurance that a replacement tenant will be
found. A competitive space currently occupied by Roses Stores
Incorporated is also expected to become available in August 1995.
The Partnership is considering all available options in seeking to
lease the space formerly occupied by Wholesale Depot. The
Partnership expects that it may be required to make substantial
expenditures to retrofit the space to meet the requirements of a
replacement tenant and is exploring alternatives regarding
financing such expenditures.
On March 29, 1995, in connection with Tarrytown Mall, the
Partnership made certain modifications to its first trust loan.
Effective July 1, 1995, the required monthly payments of principal
will be reduced from $39,000 to $19,000. That reduction will
remain in effect until June 30, 1996 or such earlier date as a
replacement tenant is found for the Wholesale Depot space. All
other loan terms remain unchanged.
The Orchard Square mortgage, which had an outstanding balance of
$5,811,827 at March 31, 1995, matured on December 31, 1994. The
Partnership is currently negotiating an extension of this mortgage
with the lender. The lender has informed the Partnership that a
review of the extension request is in process. In the interim, the
lender has instructed the Partnership to continue making monthly
payments. The acceptance of these payments by the lender does not
constitute a commitment to modify or extend the loan.
A & P, an anchor tenant at Orchard Square, closed its store in that
center in August of 1994. A & P, which leases 36,990 square feet,
is obligated to continue to pay rent under its lease until a
replacement tenant is found or until its lease expires in January
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2008. The Partnership and A & P have discussed an arrangement
whereby A & P would reopen its store in exchange for certain
concessions. The Partnership is currently negotiating with the
lender seeking approval of the proposed A & P lease modifications
and a modification of the mortgage debt. These negotiations are
ongoing and there can be no assurance a favorable agreement will
be reached.
In 1995, the Partnership anticipates that approximately $375,000
will be expended for proposed improvements to Edgewood Plaza which
include a new facade and parking lot resurfacing. The proposed
Edgewood Plaza improvements are contingent on obtaining financing
for the capital expenditures. The Partnership expects that the
proposed capital expenditures will be funded principally from a
mortgage loan collateralized by Edgewood Plaza, although it is
possible that such expenditures may be funded from the sale of a
pad site at Edgewood now being considered. The Partnership has
reached an agreement with Santoni's Market, an anchor tenant, on
terms of a new lease with an annual rent increase of approximately
$25,000 which would commence when the improvements are
substantially completed.
Edgewood Plaza Shopping Center is not encumbered by any mortgage.
The Partnership is seeking to obtain mortgage financing of up to
$1,400,000 secured by Edgewood Plaza in 1995 and to use the
mortgage proceeds for the proposed capital improvement plan at
Edgewood Plaza and to fund the payment of the principal balance of
the Berkeley Square mortgage due October 1, 1995. There is no
assurance such financing will be obtained or the capital
improvement plan at Edgewood Plaza will be completed.
The Berkeley Square second priority mortgage, which had an
outstanding balance of $695,500 at March 31, 1995, matures on
October 1, 1995. The Partnership intends to meet this obligation
with proceeds from new financing related to Edgewood Plaza or with
Partnership working capital reserves and proceeds from sale of a
pad site at Edgewood Plaza.
The Partnership's first priority mortgage loan on Berkeley Square
shopping center requires a $425,000 letter of credit as additional
collateral. The letter of credit is to be released when the
shopping center's net operating income reaches certain levels
specified in the mortgage documents and the lender has a reasonable
expectation the shopping center will maintain those levels in the
next twelve months. The letter of credit is scheduled to expire
on August 30, 1995. The Partnership intends to seek renewal of the
letter of credit. The Partnership's obligation to the issuer of
the letter of credit is secured by a second mortgage on Cloister.
The Partnership has also pledged a $75,000 certificate of deposit
as additional collateral for the loan. The assigned certificate
of deposit is included in prepaid expenses and other assets in the
Partnership's financial statements.
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The Partnership is currently negotiating the sale of a pad site at
Berkeley Square to an existing tenant as part of that tenant's
right under its lease. The outcome of these negotiations is
dependent on negotiations with the holders of the mortgages. The
proceeds of the sale would be required to be used to pay down the
mortgage debt on Berkeley Square.
The Lynnwood Place mortgage, which had an outstanding balance of
$6,382,645 at March 31, 1995, matures on July 10, 1995. The lender
has verbally agreed to extend this loan for one year to July 10,
1996 with no change in loan terms.
The Partnership has entered into an agreement, subject to zoning
and land use approvals, to expand the Food Lion store at Woodlawn
Village from 25,000 to 32,744 square feet. The expansion would add
4,344 square feet to the center and convert 3,400 square feet of
in-line space to Food Lion use. As part of the agreement, Food
Lion would fund substantially all of the expansion costs. If
effected, the expansion is intended to add to the stability of the
center.
The Partnership has begun to seek opportunities to sell Partnership
properties in markets where the General Partners believe a sale
would be appropriate. Pursuant to that course of action, the
Partnership has entered into brokerage agreements to sell two of
its centers, Highlandtown Village and Holiday. There can be no
assurance a sale of either of these properties will occur.
In the fourth quarter of 1994, the Partnership negotiated a
contract to sell Quality Center to an unrelated third party. In
February of 1995, the buyer terminated the contract, after
determination that it would not be able to overcome local zoning
objections to its proposed use.
Quality Center was approximately 59% leased as of March 31, 1995.
Vacancies at Quality Center reflect competitive conditions in the
market and a determination by the Partnership not to seek new
tenants while the sale contract was pending because of the
requirement that the space be delivered vacant to the contract
purchaser. The Partnership's plan is to reposition Quality Center
from a factory outlet center to a neighborhood and convenience
center to attempt to take advantage of the expansion of Rockvale
Square, a competing, substantially larger outlet center that is
located directly across U.S. Route 30 from Quality Center. There
can be no assurance this repositioning of the center will be
successful.
The Partnership's operations as well as the operations and
financial conditions of many of its tenants have been adversely
affected by economic and competitive conditions. If the
Partnership is not able to fund its cash requirements from opera-
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<PAGE> 13
tions, the Partnership may be required to seek additional
borrowing. The Partnership could be adversely affected by the
decrease in the number of sources of mortgage financing and the
increased standards employed by lenders to determine the amount,
terms and underwriting requirements for such financing, all of
which have affected the amount and cost of borrowing. If
additional borrowing is not available, the Partnership may be
required to sell one or more of its shopping center properties.
There is no assurance that loans would be available, or that the
Partnership would be able to sell a particular shopping center, or
that the terms of such loans or any sales would be advantageous to
the Partnership. Furthermore, if alternative sources of cash were
needed and not found, the Partnership could default on its
obligations, including obligations to pay debt service and mortgage
interest, which could result in the foreclosure by its mortgage
lenders of one or more shopping centers.
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<PAGE> 14
RESULTS OF OPERATIONS
The results of operations for the quarters ended March 31, 1995
and 1994 reflect the operations of eleven shopping centers. The
net income (loss) for each shopping center is as follows:
<TABLE>
<CAPTION>
Net income (loss) for
the quarters ended
----------------------
Shopping Centers / Location 3/31/95 3/31/94
---------------------------- --------- ---------
<S> <C> <C>
WOODLAWN VILLAGE
Fredericksburg, VA........ $(10,707) $(19,868)
LYNNWOOD PLACE
Jackson, TN............... (42,768) (77,899)
HIGHLANDTOWN VILLAGE
Baltimore, MD............. (8,491) (6,811)
JACKSON HEIGHTS PLAZA
Murfreesboro, TN.......... 13,674 3,162
HOLIDAY
Collinsville, VA.......... 8,822 1,262
CLOISTER
Ephrata, PA............... 13,577 21,328
ORCHARD SQUARE
Cobb County, GA........... 36,530 35,905
EDGEWOOD PLAZA
Harford County, MD........ 33,831 32,071
TARRYTOWN MALL
Rocky Mount, NC........... (54,530) (95,476)
BERKELEY SQUARE
Goose Creek, SC........... (38,058) 6,593
QUALITY CENTER
Lancaster, PA............. (72,953) (23,352)
--------- ---------
Shopping center totals (121,073) (123,085)
Other expenses (39,739) (36,335)
--------- ---------
Total $(160,812) $(159,420)
========= =========
</TABLE>
THREE MONTHS ENDED MARCH 31, 1995:
Net loss increased $1,392 to net loss of $160,812 for the first
quarter of 1995 from net loss of $159,420 for the comparable
quarter of 1994. Total income increased $39,756 to $1,915,347 for
the first quarter of 1995 from total income of $1,875,591 for the
first quarter of 1994. Total operating expenses increased $44,671
to $2,080,320 for the 1995 quarter from $2,035,649 for the 1994
quarter.
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<PAGE> 15
Rental income increased $54,116 to $1,602,536 for the first quarter
of 1995 from $1,548,420 for the first quarter of 1994. For
purposes of the following discussion, rental income consists of
rents paid by tenants occupying space in each shopping center and
rental income accrued for adjustments and scheduled rent increases.
Significant changes in rental income during the quarter included
increases in rental income at Lynnwood Place of $13,486, Jackson
Heights of $36,791 and Tarrytown Mall of $21,088. The increase in
rental income at Lynnwood Place can be attributed to the execution
of a lease with base annual rent of $29,580 commencing in the
second quarter of 1994 and to increases in tenant rental rates as
a result of annual lease increases and lease renewals. However,
Lynnwood Place's leased percentage decreased 3% to 97% at March 31,
1995 from 100% at March 31, 1994 primarily due to the loss of one
tenant leasing 2,800 square feet in the first quarter of 1995.
The increase in rental income at Jackson Heights was primarily due
to an increase in the shopping center's leased percentage. Jackson
Heights was 99% leased at March 31, 1995, which represented an
increase of 4% compared to March 31, 1994. The increase in rental
income at Tarrytown Mall can be attributed to leasing activity
subsequent to the quarter ended March 31, 1994 and to increases in
tenant rental rates as a result of annual lease increases and lease
renewals. Tarrytown Mall was 64% leased at March 31, 1995, a
decrease of 24% from March 31, 1994. The 24% decline primarily
resulted from the loss of Wholesale Depot which occupied 79,066
square feet. Wholesale Depot terminated its lease at Tarrytown
Mall on October 7, 1994. Rental income for both the 1995 and
1994 quarters included approximately $108,700 with respect to
the Wholesale Depot lease.
These increases in rental income were partially offset by declines
in rental income at Berkeley Square of $17,038 and at Quality
Center of $26,419. The declines in rental income at Berkeley
Square and Quality Center were primarily due to declines in the
shopping centers' leased percentages. Berkeley Square was 85%
leased at March 31, 1995, a decrease of 9% from March 31, 1994.
Quality Center was 59% leased at March 31, 1995, a decrease of 17%.
The following changes in leased percentages also contributed to
changes in rental income. Woodlawn, Highlandtown, Cloister and
Holiday experienced net leasing increases from March 31, 1994 to
March 31, 1995. Woodlawn, Highlandtown and Cloister were 93%, 98%
and 100% leased at March 31, 1995, respectively, which represented
net leasing gains of 3% at each center. Holiday was 84% leased,
a net leasing gain of 1%. Edgewood Plaza remained unchanged at
March 31, 1995 from March 31, 1994 at 100% leased. Orchard Square
was 94% leased at March 31, 1995, a decline of 3% from March 31,
1994. The Partnership's aggregate portfolio was 84% leased at
March 31, 1995, a decrease of 8% from March 31, 1994.
Tenant reimbursement income decreased $14,360 to $312,811 for the
1995 quarter from $327,171 for the 1994 quarter. A significant
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change in tenant reimbursement income contributing to the net
decrease was a decline in tenant reimbursement income at Highland-
town Village of $13,015.
Interest expense increased $12,515 to $802,458 for the quarter
ended March 31, 1995 from $789,943 for the comparable quarter of
1994. The net increase is primarily attributable to an increase
in interest expense at Cloister of $12,823. The increase at
Cloister was due to an increase in the interest rate on the
Cloister mortgage which bears interest at prime plus 1.25% (with
a floor of 7.25%).
Depreciation expense decreased $17,202 to $406,884 for the quarter
ended March 31, 1995 from $424,086 for the comparable quarter of
1994. This decrease was primarily the result of a decrease at
Tarrytown Mall of $26,960 which was predominantly attributable to
the write-down, recorded in the fourth quarter of 1994, of
approximately $1,129,000 of leasehold improvements related to
Wholesale Depot.
Repairs and maintenance expense decreased $6,421 to $229,727 for
the 1995 quarter from $236,148 for the 1994 quarter. Significant
changes in repairs and maintenance expense included increases at
Jackson Heights of $28,570 and Berkeley Square of $10,619 and a
decline at Tarrytown Mall of $22,815.
Taxes and insurance expense decreased $5,364 to $210,532 for the
quarter ended March 31, 1995 from $215,896 for the comparable
quarter of 1994. The decrease was primarily attributable to a
$16,882 decrease in real estate taxes expense at Lynnwood Place for
the 1995 quarter in comparison to the 1994 quarter. The decline
in Lynnwood Place's taxes is due to a reduced assessment for 1995.
Management and leasing to related parties increased $2,846 to
$109,030 for the 1995 quarter from $106,184 for the 1994 quarter.
The aggregate provision for doubtful accounts was $72,669 for the
quarter ended March 31, 1995 as compared to $22,203 for the quarter
ended March 31, 1994. The provisions related to Cloister and
Berkeley Square were higher by $11,889 and $17,502, respectively,
in the first quarter of 1995 as compared to the first quarter of
1994.
Amortization expense decreased $22,466 to $20,333 for the quarter
ended March 31, 1995 from $42,799 for the comparable quarter of
1994. A significant change contributing to this decrease was a
decline in amortization expense at Lynnwood Place of $16,917.
Other expenses increased $30,297 to $228,687 for the quarter ended
March 31, 1995 from $198,390 for the comparable period in 1994.
This increase was primarily the result of increases in legal
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expense at Tarrytown Mall and Quality Center of $31,236 and
$19,314, respectively. The increase in legal expenses at Tarrytown
Mall was related to the bankruptcy of Wholesale Depot and lease
negotiations with a potential tenant for the Wholesale Depot space.
The increase in legal expenses at Quality Center was related to
negotiations of the sale contract for that center. In February
1995, the buyer terminated the contract.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Partnership during the
quarter ended March 31, 1995.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
By: Realty Capital IV Limited Partnership,
General Partner
By: LMRC IV, Inc., General Partner
Date: May 12, 1995 By: /s/ Richard J. Himelfarb
------------------ --------------------------------
Richard J. Himelfarb, President
By: FW Realty Limited Partnership,
General Partner
By: FW Corporation, General Partner
Date: May 12, 1995 By: /s/ William J. Wolfe
------------------ --------------------------------
William J. Wolfe, President
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