<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 June 30, 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>
June 30, 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 49,519,758 49,387,790
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61,323,549 61,191,581
less accumulated depreciation 11,472,884 10,658,778
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49,850,665 50,532,803
Cash and cash equivalents 972,902 384,181
Tenant accounts receivable, net of allowance
for doubtful accounts ($299,779 in 1995 and
$353,507 in 1994) 956,783 1,380,921
Prepaid expenses and other assets 757,080 681,024
Intangible assets, net of accumulated amortization
($1,007,444 in 1995 and $966,779 in 1994) 198,640 239,305
----------- -----------
Total assets $52,736,070 $53,218,234
=========== ===========
LIABILITIES AND PARTNERS' EQUITY:
Long-term debt, including current maturities $34,856,864 $35,285,891
Accounts payable and accrued expenses 241,122 61,093
Cash flow protector loans 789,203 789,203
Interest payable 550,133 488,734
Prepaid rents and security deposits 246,841 240,888
Due to related parties 93,013 118,163
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Total liabilities 36,777,176 36,983,972
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General partners and assignor limited partner (11,830) (9,076)
Assignee limited partners (1,200,000 units
authorized, issued and outstanding) 15,970,724 16,243,338
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Total partners' equity 15,958,894 16,234,262
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Total liabilities and partners' equity $52,736,070 $53,218,234
=========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
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<PAGE> 3
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the quarters ended For the six months ended
June 30, June 30,
---------------------- -----------------------
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
Income:
Rental income $1,601,547 $1,609,636 $3,204,083 $3,158,056
Tenant reimbursement income 255,836 339,048 568,647 666,219
---------- --------- ---------- ----------
Total income 1,857,383 1,948,684 3,772,730 3,824,275
---------- --------- ---------- ----------
Operating expenses:
Interest expense 802,980 792,997 1,605,438 1,582,940
Depreciation 407,222 424,818 814,106 848,904
Repairs and maintenance 201,547 222,866 431,274 459,014
Taxes and insurance 207,287 224,123 417,819 440,019
Management and leasing to
related parties 110,817 114,860 219,847 221,044
Provision for doubtful accounts 12,960 80,988 85,629 103,191
Amortization 20,332 44,634 40,665 87,433
Other expenses 210,846 164,837 439,533 363,227
--------- --------- ---------- ----------
Total operating expenses 1,973,991 2,070,123 4,054,311 4,105,772
--------- --------- ---------- ----------
Loss from rental operations (116,608) (121,439) (281,581) (281,497)
Other income:
Interest income 2,052 3,894 6,213 4,532
--------- --------- ---------- ----------
Net loss $(114,556) $(117,545) $(275,368) $(276,965)
========= ========= ========== ==========
Net loss allocated to
general partners $ (1,146) $ (1,175) $ (2,754) $ (2,769)
========= ========= ========== ==========
Net loss allocated to assignee
limited partners $(113,410) $(116,370) $(272,614) $(274,196)
========= ========= ========== ==========
Net loss allocated to assignee
limited partners per unit
(1,200,000 units issued and
outstanding) $ (0.09) $ (0.10) $ (0.23) $ (0.23)
========= ========= ========== ==========
</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 six months ended
June 30,
-------------------------
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net loss $ (275,368) $ (276,965)
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Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 854,771 936,337
Changes in operating assets and liabilities:
Decrease in tenant accounts receivable, net 424,138 90,021
(Increase) decrease in prepaid expenses and
other assets (76,056) 69,113
Increase (decrease) in accounts payable and
accrued expenses 185,982 (1,285,494)
Increase in interest payable 61,399 26,999
Increase (decrease) in due to related parties (25,150) 5,300
---------- ----------
Total adjustments 1,425,084 (157,724)
---------- ----------
Net cash provided by (used in) operating
activities 1,149,716 (434,689)
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Cash flows from investing activities:
Improvements of real estate (131,968) (167,013)
---------- ----------
Net cash used in investing activities (131,968) (167,013)
---------- ----------
Cash flows from financing activities:
Principal payments on long-term debt (429,027) (379,750)
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 (429,027) 690,545
---------- ----------
Net increase in cash and cash equivalents 588,721 88,843
Cash and cash equivalents at beginning of period 384,181 353,577
---------- ----------
Cash and cash equivalents at end of period $ 972,902 $ 442,420
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $1,544,039 $1,705,941
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
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MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
Notes to Financial Statements
June 30, 1995
-----------------
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 $655,534 and $682,399 at June 30, 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.
RECENT ACCOUNTING DEVELOPMENTS. Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to Be Disposed Of," was issued by the
Financial Accounting Standards Board in March 1995. The
Partnership expects to adopt the provisions of Statement No. 121
beginning in 1996. The Partnership is currently assessing the
effect adoption of the provisions will have on the Partnership's
financial position and results of operations.
NOTE B - RELATED PARTY TRANSACTIONS:
During the quarter ended June 30, 1995, the Partnership paid First
Washington Management, Inc., an affiliate of FW Realty Limited
Partnership, one of the general partners, $92,182 and Legg Mason
Realty Capital, Inc., an affiliate of Realty Capital IV Limited
Partnership, the other general partner, $40,073 for management fees
and reimbursement of operating expenses. At June 30, 1995, $17,492
was payable to Legg Mason Realty Capital, Inc. and $2,090 was
payable to First Washington Management, Inc. for management fees
and reimbursement of operating expenses.
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NOTE B - RELATED PARTY TRANSACTIONS, continued
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. As of June 30, 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
June 30, 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
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<PAGE> 7
NOTE C - PARTNERSHIP ALLOCATIONS AND DISTRIBUTIONS, continued:
general partners and then to the assignee limited partners and
general partners in the order described in Section 4.4 of the
Partnership Agreement.
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 June 30, 1995, tenant rent receivables prior to the allowance
for doubtful accounts totaled $1,256,562 of which amount $655,534
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 $601,028
represented the balance. As of December 31, 1994 and June 30,
1994, such rent receivables totaled $1,734,428 and $1,331,474,
respectively, of which amounts $682,399 and $671,784, respectively,
represented receivables required to be accrued and $1,052,029 and
$659,690, respectively, represented the balances.
The Partnership wrote off tenant rent receivables and charged the
allowance for doubtful accounts in the quarters ended June 30, 1995
and 1994 for $25,490 and $81,667, respectively. The Partnership
charged a provision for doubtful accounts in the amount of $12,960
for the second quarter of 1995 and $80,988 for the second quarter
of 1994. During the quarter ended June 30, 1995, the Partnership
decreased its allowance for doubtful accounts to $299,779, a net
decrease of $12,530. During the quarter ended June 30, 1994, the
Partnership decreased its allowance for doubtful accounts to
$337,126, a net decrease of $678. 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 $588,721 net increase in cash and cash
equivalents in the six months ended June 30, 1995, with $1,149,716
in net cash provided by operating activities offset by $131,968
used in investing activities for improvements of real estate and
$429,027 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 $275,368 and net cash provided by operating
activities of $1,149,716 were the noncash charge of $854,771 for
depreciation and amortization, a decrease of $424,138 in tenant
accounts receivable, net of allowance for doubtful accounts, and
an increase in accounts payable and accrued expenses of $185,982.
The decrease in net tenant accounts receivable can be attributed
to receipt of the balance a letter of credit posted by Wholesale
Depot (a former tenant at Tarrytown Mall), a portion of which
represented payment of prior period receivables, and to collection
of 1994 tenant expense reimbursements.
The Partnership presently expects to apply any increase in cash to
increase Partnership working capital reserves, 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
The cash and cash equivalents position of the Partnership at June
30, 1995 increased $588,721 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 costs 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 June 30, 1995, the Partnership is obligated to expend
approximately $66,000 for tenant fit-up costs in connection with
tenant leases which have been signed and other committed capital
expenditures. This amount does not include tenant improvement
expenditures for prospective or future tenants.
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
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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
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 collected $450,000
with regard to the letter of credit, of which $250,000 was received
in June 1995 and $200,000 was received in January 1995. The
Partnership also settled unsecured claims against Wholesale Depot
for an additional $50,000, which was received in June 1995. The
monthly lease obligations for Wholesale Depot included
approximately $36,240 in base rent and approximately $10,540 in
monthly tenant reimbursements. Total income for the quarter ended
June 30, 1995 included rental income of approximately $108,700 and
tenant reimbursement income of approximately $31,600 with respect
to the Wholesale Depot lease. Approximately $32,000 in rental
income will be recorded with respect to the Wholesale Depot lease
obligations subsequent to the second quarter of 1995 with no
further income under that lease to be recognized.
The Partnership has contacted numerous potential replacement
tenants for the former 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. An additional competitive space is also expected to become
available in August 1995. The Partnership is considering all
available options in seeking to lease the space, including leasing
approximately 91,000 square feet to a potential warehouse tenant
on a temporary basis.
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
2008. The Partnership and A & P have discussed an arrangement
whereby A & P would reopen its store in exchange for certain
concessions. The Orchard Square mortgage, which had an outstanding
balance of $5,790,982 at June 30, 1995, matured on December 31,
1994. The Partnership continues to negotiate with a representative
of the lender of this mortgage, although no assurance can be given
regarding the outcome of such negotiations. The representative of
the holder of that mortgage rejected the Partnership's proffer of
the July monthly payment. However, the representative stated that
such action was not intended to evidence termination of the ongoing
negotiations.
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
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mortgage loan collateralized by Edgewood Plaza, although it is
possible that such expenditures may be partially 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 expects to close on a $1,400,000 mortgage secured
by Edgewood Plaza in August 1995 and to use the proceeds for the
proposed capital improvement plan at the property and to fund
payment of the $695,500 principal balance of the Berkeley Square
mortgage due October 1, 1995. The new Edgewood loan would have a
fixed interest rate for a five year term established at 263 basis
points above five year United States treasury obligations. There
is no assurance such financing will be consummated 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 June 30, 1995, matures on
October 1, 1995. The Partnership intends to meet this obligation
with proceeds from the financing related to Edgewood Plaza
described above 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, if at that time, 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 31, 1995. The Partnership
has requested that the first priority mortgage lender release the
letter of credit obligation in connection with the payment of the
second priority mortgage and the application of the proceeds of the
sale of a pad site at Berkeley Square toward reduction of the first
priority mortgage loan. If the lender will not release the letter
of credit obligation, 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.
The Lynnwood Place mortgage, which had an outstanding balance of
$6,367,989 at June 30, 1995, matures on July 10, 1995. The lender
extended the term of this loan for one year to July 10, 1996,
reducing the interest rate to 9% from 9.75% and increasing the rate
of principal amortization to 22 years from 30 years. The
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<PAGE> 12
Partnership is obligated to pay a $10,000 extension fee to the
lender and all legal costs incurred in connection with the mortgage
extension.
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. The Partnership is currently
seeking the necessary approvals from certain Stafford County
agencies in Virginia. 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. There
can be no assurance the necessary approvals will be obtained or the
Food Lion expansion will be completed.
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.
Quality Center was approximately 58% leased as of June 30, 1995.
Vacancies at Quality Center reflect competitive conditions in the
market. The Partnership's plan is to reposition Quality Center
from a factory outlet center to a neighborhood and community
convenience center. There can be no assurance this repositioning
of the center will be successful.
The Partnership's operations as well as the financial condition 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 operations, 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 stricter 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> 13
RESULTS OF OPERATIONS
The results of operations for the quarters and six months ended
June 30, 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 Net income (loss) for
the quarters ended the six months ended
--------------------- --------------------
Shopping Centers / Location 6/30/95 6/30/94 6/30/95 6/30/94
---------------------------- ------- --------- -------- --------
<S> <C> <C> <C> <C>
WOODLAWN VILLAGE
Fredericksburg, VA........ $(19,867) $(8,843) $(30,574) $(28,711)
LYNNWOOD PLACE
Jackson, TN............... (79,717) (69,137) (122,485) (147,036)
HIGHLANDTOWN VILLAGE
Baltimore, MD............. 3,256 2,126 (5,235) (4,685)
JACKSON HEIGHTS PLAZA
Murfreesboro, TN.......... 30,002 (10,805) 43,676 (7,643)
HOLIDAY
Collinsville, VA.......... 6,603 6,667 15,425 7,929
CLOISTER
Ephrata, PA............... 29,172 25,600 42,749 46,928
ORCHARD SQUARE
Cobb County, GA........... 39,653 53,230 76,183 89,135
EDGEWOOD PLAZA
Harford County, MD........ 45,896 40,820 79,727 72,891
TARRYTOWN MALL
Rocky Mount, NC........... (28,869) (93,396) (83,399) (188,872)
BERKELEY SQUARE
Goose Creek, SC........... (6,779) (14,606) (44,837) (8,013)
QUALITY CENTER
Lancaster, PA............. (91,363) (6,573) (164,316) (29,925)
--------- --------- --------- ---------
Shopping center totals (72,013) (74,917) (193,086) (198,002)
Other expenses (42,543) (42,628) (82,282) (78,963)
--------- --------- --------- ---------
Total $(114,556) $(117,545) $(275,368) $(276,965)
========= ========= ========= =========
</TABLE>
THREE MONTHS ENDED JUNE 30, 1995:
Net loss decreased $2,989 to net loss of $114,556 for the second
quarter of 1995 from net loss of $117,545 for the comparable
quarter of 1994. Total income decreased $91,301 to $1,857,383 for
the second quarter of 1995 from total income of $1,948,684 for the
second quarter of 1994. Total operating expenses decreased $96,132
to $1,973,991 for the 1995 quarter from $2,070,123 for the 1994
quarter.
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<PAGE> 14
Rental income decreased $8,089 to $1,601,547 for the second quarter
of 1995 from $1,609,636 for the second quarter of 1994. Rental
income consists of rents paid by tenants occupying space in each
shopping center, rental income accrued for adjustments and
scheduled rent increases and rent computed on the basis of a
percentage of gross sales in excess of specified levels.
Significant changes in rental income during the quarter, excluding
changes in percentage rent, included an increase in rental income
at Jackson Heights of $33,411, which was primarily due to an
increase in the shopping center's leased percentage. Jackson
Heights was 99% leased at June 30, 1995, which represented an
increase of 5% compared to June 30, 1994. This increase in rental
income was offset by declines in rental income at Quality Center
of $38,867 and Orchard Square of $17,431. The declines in rental
income at Quality Center and Orchard Square were primarily due to
declines in the shopping centers' leased percentages. Quality
Center and Orchard Square were 58% and 96% leased, respectively,
at June 30, 1995, which represented net leasing declines of 26% and
2%, respectively, from June 30, 1994.
The following changes in leased percentages also contributed to
changes in rental income. Woodlawn, Highlandtown, Cloister and
Holiday experienced net leasing increases from June 30, 1994 to
June 30, 1995. Woodlawn and Holiday were 93% and 79% leased at
June 30, 1995, respectively, which represented net leasing gains
of 3% at each center. Highlandtown and Cloister were 100% leased,
which represented net leasing gains of 2% and 1%, respectively.
Lynnwood Place, Edgewood Plaza and Berkeley Square remained
unchanged at June 30, 1995 from June 30, 1994 at 100%, 100% and 86%
leased, respectively. Tarrytown Mall was 65% leased at June 30,
1995, a net decrease of 23% from June 30, 1994. The 23% decline
at Tarrytown Mall 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. The
Partnership's aggregate portfolio was 84% leased at June 30, 1995,
a decrease of 7% from June 30, 1994.
Percentage rent for the Partnership increased $14,241 to $56,307
for the second quarter of 1995 from $42,066 for the second quarter
of 1994. The net increase is primarily attributable to an increase
at Jackson Heights of $14,326.
Tenant reimbursement income decreased $83,212 to $255,836 for the
1995 quarter from $339,048 for the 1994 quarter. The net decline
in tenant reimbursement income was primarily due to decreases at
Lynnwood Place of $53,590, Woodlawn of $17,420, and Orchard Square
of $12,729. The decline at Lynnwood Place can be attributed to a
reduction in estimated real estate tax tenant reimbursements and
to adjustments for prior year accruals.
- 14 -
<PAGE> 15
Interest expense increased $9,983 to $802,980 for the quarter ended
June 30, 1995 from $792,997 for the comparable quarter of 1994.
Depreciation expense decreased $17,596 to $407,222 for the quarter
ended June 30, 1995 from $424,818 for the comparable quarter of
1994. This decrease was primarily the result of a decrease at
Tarrytown Mall of $26,853 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 $21,319 to $201,547 for
the 1995 quarter from $222,866 for the 1994 quarter. The largest
single change in repairs and maintenance expense was a decline at
Woodlawn of $13,291.
Taxes and insurance expense decreased $16,836 to $207,287 for the
quarter ended June 30, 1995 from $224,123 for the comparable
quarter of 1994. This net decrease was primarily attributable to
a $16,883 decrease in real estate tax expense at Lynnwood Place as
a result of a reduced assessment for 1995.
The aggregate provision for doubtful accounts was $12,960 for the
quarter ended June 30, 1995 as compared to $80,988 for the quarter
ended June 30, 1994. The provisions for Tarrytown Mall and
Berkeley Square were lower by $55,794 and $13,333, respectively,
in the second quarter of 1995 as compared to the second quarter of
1994.
Amortization expense decreased $24,302 to $20,332 for the quarter
ended June 30, 1995 from $44,634 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 due
to full amortization of loan costs in the quarter ended June 30,
1994.
Other expenses increased $46,009 to $210,846 for the quarter ended
June 30, 1995 from $164,837 for the comparable period in 1994.
This increase was primarily the result of an increase in
administrative expense at Quality Center of $57,128. This increase
at Quality Center was primarily due to an adjustment in the
marketing fund as a result of a decline in tenant contributions for
this period and prior periods based on occupancy at the property.
SIX MONTHS ENDED JUNE 30, 1995:
Net loss decreased $1,597 to net loss of $275,368 for the six
months ended June 30, 1995 from net loss of $276,965 for the
comparable six months of 1994. Total income decreased $51,545 to
$3,772,730 for the first six months of 1995 from total income of
$3,824,275 for the first six months of 1994. Total operating
expenses decreased $51,461 to $4,054,311 for the 1995 period from
$4,105,772 for the 1994 period.
- 15 -
<PAGE> 16
Rental income increased $46,027 to $3,204,083 for the six months
ended June 30, 1995 from $3,158,056 for the six months ended June
30, 1994. Rental income consists of rents paid by tenants
occupying space in each shopping center, rental income accrued for
adjustments and scheduled rent increases and rent computed on the
basis of a percentage of gross sales in excess of specified levels.
Significant changes in rental income during the six months,
excluding changes in percentage rent, included an increase at
Jackson Heights of $70,202. The increase in rental income at
Jackson Heights was primarily due to an increase in the shopping
center's leased percentage to 99% leased at June 30, 1995, which
represented an increase of 5% compared to June 30, 1994. Other
significant changes in rental income included declines at Quality
Center of $65,286 and Berkeley Square of $20,720. The decline in
rental income at Quality Center was primarily due to a decline in
the shopping center's leased percentage to 58% at June 30, 1995,
a net decrease of 26% from June 30, 1994. The decline at Berkeley
Square can be attributed to the loss of one tenant paying aggregate
annual rent of $42,000 at the end of the second quarter of 1994.
Berkeley Square's leased percentage remained unchanged at June 30,
1995 from June 30, 1994 at 86%.
The following changes in leased percentages also contributed to
changes in rental income. Woodlawn, Highlandtown, Cloister and
Holiday experienced net leasing increases from June 30, 1994 to
June 30, 1995. Woodlawn and Holiday were 93% and 79% leased at
June 30, 1995, respectively, which represented net leasing gains
of 3% at each center. Highlandtown and Cloister were 100% leased,
which represented net leasing gains of 2% and 1%, respectively.
Edgewood Plaza and Lynnwood Place remained unchanged at June 30,
1995 from June 30, 1994 at 100% leased. Orchard Square and
Tarrytown Mall experienced net leasing declines from June 1994 to
June 1995. Orchard Square was 96% leased at June 30, 1995, a
decrease of 2% from June 30, 1994. Tarrytown Mall was 65% leased
at June 30, 1995, a decrease of 23% from June 30, 1994. The 23%
decline at Tarrytown Mall 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 six months included approximately
$217,400 with respect to the Wholesale Depot lease. The
Partnership's aggregate portfolio was 84% leased at June 30, 1995,
a decrease of 7% from June 30, 1994.
Percentage rent for the Partnership increased $18,053 to $95,821
for the six months in 1995 from $77,768 for the six months in 1994.
Tenant reimbursement income decreased $97,572 to $568,647 for the
1995 period from $666,219 for the 1994 period. The decline in
tenant reimbursement income was primarily due to decreases at
Lynnwood Place of $55,616 and Orchard Square of $20,987. The
decline at Lynnwood Place can be attributed to a reduction in
- 16 -
<PAGE> 17
estimated real estate tax tenant reimbursements and to adjustments
for prior year accruals.
Interest expense increased $22,498 to $1,605,438 for the six months
ended June 30, 1995 from $1,582,940 for the comparable six months
of 1994. The net increase is primarily attributable to an increase
in interest expense at Cloister of $22,143. This increase was due
to adjustments in the interest rate on the Cloister mortgage which
floats at prime plus 1.25%.
Depreciation expense decreased $34,798 to $814,106 for the six
months in 1995 from $848,904 for six months in 1994. This decrease
was primarily the result of a decrease at Tarrytown Mall of $53,813
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 $27,740 to $431,274 for
the 1995 period from $459,014 for the 1994 period. Significant
changes in repairs and maintenance expense included decreases at
Tarrytown Mall of $23,664 and Woodlawn of $18,232, which were
partially offset by an increase at Jackson Heights of $31,822.
Taxes and insurance expense decreased $22,200 to $417,819 for the
six months ended June 30, 1995 from $440,019 for the comparable
period of 1994. The decrease was primarily attributable to a
$33,765 decrease in real estate tax expense at Lynnwood Place as
a result of a reduced assessment for 1995.
The aggregate provision for doubtful accounts was $85,629 for the
six months ended June 30, 1995 as compared to $103,191 for the six
months ended June 30, 1994. The provision related to Tarrytown
Mall was lower by $63,212 in 1995 as compared to 1994.
Amortization expense decreased $46,768 to $40,665 for the six
months ended June 30, 1995 from $87,433 for the comparable six
months of 1994. A significant change contributing to this decrease
was a decline in amortization expense at Lynnwood Place of $33,834
due to full amortization of loan costs in the six months ended June
30, 1994.
Other expenses increased $76,306 to $439,533 for the six months in
1995 from $363,227 for the comparable period in 1994. This
increase was primarily the result of increases in administrative
expense and legal expense at Quality Center of $50,395 and $19,434,
respectively. The increase in administrative expense at Quality
Center was primarily due to an adjustment in the marketing fund as
a result of a decline in tenant contributions for this period and
prior periods based on occupancy at the property. The increase in
legal expense at Quality Center was related to negotiations of a
sale contract for that center. In February 1995, the buyer
terminated the contract.
- 17 -
<PAGE> 18
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
27.1 Financial Data Schedule for the six months ended
June 30, 1995.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the Partnership during
the quarter ended June 30, 1995.
- 18 -
<PAGE> 19
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: July 28, 1995 By: /s/ Richard J. Himelfarb
--------------- -----------------------------------
Richard J. Himelfarb, President
By: FW Realty Limited Partnership,
General Partner
By: FW Corporation, General Partner
Date: July 28, 1995 By: /s/ William J. Wolfe
--------------- ---------------------------------
William J. Wolfe, President
- 19 -
EXHIBIT INDEX
Exhibit
Number
27.1 Financial Data Schedule for the six months
ended June 30, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> $972,902
<SECURITIES> $0
<RECEIVABLES> $1,256,562
<ALLOWANCES> $299,779
<INVENTORY> $0
<CURRENT-ASSETS> $0
<PP&E> $61,323,549
<DEPRECIATION> $11,472,884
<TOTAL-ASSETS> $52,736,070
<CURRENT-LIABILITIES> $0
<BONDS> $34,856,864
<COMMON> $0
$0
$0
<OTHER-SE> $15,958,894
<TOTAL-LIABILITY-AND-EQUITY> $52,736,070
<SALES> $0
<TOTAL-REVENUES> $3,772,730
<CGS> $0
<TOTAL-COSTS> $2,322,579
<OTHER-EXPENSES> $0
<LOSS-PROVISION> $85,629
<INTEREST-EXPENSE> $1,605,438
<INCOME-PRETAX> ($275,368)
<INCOME-TAX> $0
<INCOME-CONTINUING> ($275,368)
<DISCONTINUED> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> ($275,368)
<EPS-PRIMARY> ($.23)
<EPS-DILUTED> ($.23)
</TABLE>
