SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 24, 1997
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MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its partnership
agreement)
MARYLAND 0-16285 52-1490861
- -------------------- --------------- ----------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
111 South Calvert Street - Baltimore, MD 21203-1476
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410)539-0000
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Not Applicable
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(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 2. DISPOSITION OF ASSETS
In July, 1997, Mid-Atlantic Centers Limited Partnership (the
"Partnership") entered into an agreement to sell Highlandtown Village
Shopping Center, a 56,200 square foot shopping center in Baltimore,
Maryland to an unrelated third party, a regional real estate company,
for a contract price of $4,675,000. The contract was terminated in
October 1997 when the proposed purchaser obtained an environmental
site assessment of the property that revealed low levels of
environmental contaminants in the soil and groundwater beneath the
center. The Partnership forwarded the reports of contamination to the
Oil Control Program at the Maryland Department of the Environment. In
a letter dated October 31, 1997, the Oil Control Program responded
that it does not require remedial action at the site. On November 20,
1997, the Partnership and the former contract purchaser reinstated the
purchase contract on substantially the same terms and the contract
purchaser's deposit of $100,000 became subject to risk of forfeiture
on November 24, 1997.
The transaction is now scheduled to close on December 19, 1997. For
financial reporting purposes, the Partnership estimates that a net
gain of approximately $340,000 will be recorded at the time of
closing. The net proceeds from the sale, after payoff of the related
mortgage debt and transaction expenses, are expected to be
approximately $1,397,000 or $1.17 per Assignee Limited Partnership
Unit ("Unit"). Actual net proceeds could differ from this estimate as
a result of differences between actual and estimated transaction
expenses, adjustment of prepaid expenses and accrued liabilities and
refund of lender escrows. The appraised net equity of Highlandtown
Village included in the appraised value of the Partnership's portfolio
at the end of 1996 was approximately $1,414,000 or $1.18 per Unit.
Pro forma financial information of the Partnership reflecting the
foregoing transactions is attached hereto as indicated in Item 7.
ITEM 7. Financial Statements, Pro Forma Financial Information and
Exhibits
The following pro forma condensed financial statements give effect to
the sale of four of the Partnership's properties, Highlandtown
Village, Berkeley Square Shopping Center (which occurred on September
10, 1997), Jackson Heights Shopping Center (which occurred on July 16,
1997) and Cloister Shopping Center (which occurred on May 28, 1997)
(the "Sales") as described below. The pro forma condensed financial
statements are based on and should be read in conjunction with the
historical financial statements of the Partnership for the nine months
ended September 30, 1997 and the year ended December 31, 1996.
The following pro forma condensed balance sheet as of September 30,
1997 assumes the sale of Highlandtown Village had occurred on
September 30, 1997. The sales of Cloister on May 28, 1997, Jackson
Heights on July 16, 1997 and Berkeley Square on September 10, 1997 are
reflected in the historical balance sheet. The following pro forma
condensed statements of operations for the nine months ended September
30, 1997 and the year ended December 31, 1996 assume the Sales all
occurred on January 1, 1997 and 1996, respectively. The following pro
forma condensed financial statements are presented for illustrative
purposes only and are not necessarily indicative of the operating
results or financial position that would have occurred if the Sales
had been consummated on the dates indicated, nor are they indicative
of future operating results or financial position.
<PAGE> 3
<TABLE>
Pro Forma Condensed Balance Sheet
September 30, 1997
(Unaudited)
<CAPTION>
Pro Forma
Adjustments
Related to
Highlandtown Adjusted
Historical Village Historical
----------- ------------ -----------
<S> <C> <C> <C>
ASSETS:
Investment in real estate
held for lease, at cost:
Land $ 6,763,681 $(1,048,888) $ 5,714,793
Buildings and improvements 31,276,530 (4,386,659) 26,889,871
----------- ----------- -----------
38,040,211 (5,435,547) 32,604,664
Less: accumulated
depreciation (14,639,344) 1,400,159 (13,239,185)
----------- ----------- -----------
23,400,867 (4,035,388) 19,365,479
Cash 6,297,170 1,475,517 7,753,123
Tenant accounts receivable,
net of allowance for
doubtful accounts 642,228 (97,963) 563,829
Escrows 621,724 (35,926) 585,798
Prepaid expenses and other
assets 291,852 (112,078) 179,774
Intangible assets, net of
accumulated amortization 218,356 (1,604) 216,752
----------- ----------- -----------
Total assets $31,472,197 $(2,807,442) $28,664,755
=========== =========== ===========
LIABILITIES AND PARTNERS' EQUITY:
Long-term debt, including
current maturities $22,639,010 $(3,102,945) $19,536,065
Interest payable 1,341,736 (27,399) 1,314,337
Cash flow protector loans 789,203 - 789,203
Accounts payable and
accrued expenses 199,520 - 199,520
Prepaid rents and security
deposits 115,788 (14,673) 101,115
Due to related parties 139,547 (2,517) 137,030
----------- ----------- -----------
Total liabilities 25,224,804 (3,147,534) 22,077,270
----------- ----------- -----------
Partners' equity 6,247,393 340,092 6,587,485
----------- ----------- -----------
Total liabilities and
partners' equity $31,472,197 $(2,807,442) $28,664,755
=========== =========== ===========
The accompanying Notes are an integral part of these Pro Forma
Condensed Financial Statements.
</TABLE>
<PAGE> 4
<TABLE>
Pro Forma Condensed Statement of Operations
For the Nine Months Ended September 30, 1997
(Unaudited)
<CAPTION>
Pro Forma
Adjustments
Related to Pro Forma
Cloister Adjustments
Jackson Heights Related to Total
and Berkeley Highlandtown Pro Forma Adjusted
Historical Square Village Adjustments Historical
------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME:
Rental income $ 3,661,785 $(1,006,010) $ (439,266) $(1,445,276) $ 2,216,509
Tenant reimbursement
income 766,953 (106,671) (202,314) (308,985) 457,968
------------ ----------- ----------- ----------- -----------
4,428,738 (1,112,681) (641,580) (1,754,261) 2,674,477
------------ ----------- ----------- ----------- -----------
OPERATING EXPENSES:
Interest expense 1,862,250 (264,955) (237,054) (502,009) 1,360,241
Depreciation and
amortization 1,054,245 (216,688) (108,848) (325,536) 728,709
Write-down of assets 550,000 (550,000) - (550,000) -
Repairs and maintenance 606,599 (93,475) (71,657) (165,132) 441,467
Real estate taxes and
insurance 522,548 (137,627) (99,041) (236,668) 285,880
Management and leasing
to related parties 258,145 (62,845) (36,000) (98,845) 159,300
Provision for doubtful
accounts 54,013 (31,450) (12,252) (43,702) 10,311
Other expenses 545,271 (79,043) (32,119) (111,162) 434,109
------------ ----------- ----------- ----------- -----------
Total expenses 5,453,071 (1,436,083) (596,971) (2,033,054) 3,420,017
------------ ----------- ----------- ----------- -----------
Results from rental
operations (1,024,333) 323,402 (44,609) 278,793 (745,540)
OTHER INCOME (LOSS):
Gain on sale of
shopping center 304,323 (304,323) - (304,323) -
Interest income 137,074 - - - 137,074
------------ ----------- ----------- ----------- -----------
Net loss $ (582,936) $ 19,079 $ (44,609) $ (25,530) $ (608,466)
============ =========== =========== =========== ===========
Net loss allocated to
assignee limited partners
per unit: (1,200,000 units
issued and outstanding) $ (0.54) $ 0.08 $ (0.04) $ 0.04 $ (0.50)
======= ======= ======== ======= ========
The accompanying Notes are an integral part of these Pro Forma Condensed
Financial Statements.
</TABLE>
<PAGE> 5
<TABLE>
Pro Forma Condensed Statement of Operations
For the Year Ended December 31, 1996
(Unaudited)
<CAPTION>
Pro Forma
Adjustments
Related to Pro Forma
Cloister, Adjustments
Jackson Heights Related to Total
and Berkeley Highlandtown Pro Forma Adjusted
Historical Square Village Adjustments Historical
------------ ------------ ------------ ----------- -----------
(Audited)
<S> <C> <C> <C> <C> <C>
INCOME:
Rental income $ 5,404,431 $(1,657,462) $ (575,386) $(2,232,848) $ 3,171,583
Tenant reimbursement
income 1,072,243 (224,766) (272,611) (497,377) 574,866
------------ ----------- ----------- ----------- -----------
6,476,674 (1,882,228) (847,997) (2,730,225) 3,746,449
------------ ----------- ----------- ----------- -----------
OPERATING EXPENSES:
Write-down of assets 2,895,000 - - - 2,895,000
Interest expense 2,759,025 (502,855) (319,824) (822,679) 1,936,346
Depreciation and
amortization 1,494,716 (386,593) (145,132) (531,725) 962,991
Repairs and maintenance 920,829 (203,706) (101,090) (304,796) 616,033
Real estate taxes and
insurance 756,028 (265,056) (132,005) (397,061) 358,967
Management and leasing
to related parties 386,327 (107,508) (50,517) (158,025) 228,302
Provision for doubtful
accounts 73,599 (10,903) (9,798) (20,701) 52,898
Other expenses 691,931 (117,865) (51,417) (169,282) 522,649
------------ ----------- ----------- ----------- -----------
Total expenses 9,977,455 (1,594,486) (809,783) (2,404,269) 7,573,186
------------ ----------- ----------- ----------- -----------
Results from rental
operations (3,500,781) (287,742) (38,214) (325,956) (3,826,737)
OTHER INCOME (LOSS):
Gain on sale of pad sites 241,290 (22,208) - (22,208) 219,082
Loss on sale of shopping
center (78,687) - - - (78,687)
Interest income 112,710 - - - 112,710
------------ ----------- ----------- ----------- -----------
Net loss $ (3,225,468) $ (309,950) $ (38,214) $ (348,164) $(3,573,632)
============ =========== =========== =========== ===========
Net loss allocated to
assignee limited partners
per unit: (1,200,000 units
issued and outstanding) $ (2.71) $ (0.25) $ (0.03) $ (0.28) $ (2.99)
======= ======= ======== ======= ========
The accompanying Notes are an integral part of these Pro Forma Condensed
Financial Statements.
</TABLE>
<PAGE> 6
Notes to Pro Forma Condensed
Financial Information
Note 1 - Balance Sheet
Sale of Shopping Centers
Reflects sale of Highlandtown Village Shopping Center. The sales
of Cloister on May 28, 1997, Jackson Heights on July 16, 1997 and
Berkeley Square on September 10, 1997 are reflected in the
historical balance sheet. The amount added to cash of $1,475,517
in the Pro Forma Condensed Balance Sheet could differ from cash
actually received at the closing of the sale of Highlandtown
Village due to closing adjustments, the assumed payment of accrued
expenses and related party payables and the assumed reimbursement
of prepaid insurance and real estate tax expense.
The Partnership retained the tenant accounts receivables related to
Highlandtown and reversed the accrual of receivables related to the
recording of rental income on a straight-line basis in accordance
with generally accepted accounting principles.
The amount added to partners' equity reflects the net estimated
gain on sale of Highlandtown Village at the closing date.
Note 2 - Statements of Operations
Net Gain on Sale of Shopping Centers
An estimated net gain of approximately $340,000 on the pro forma
sale of Highlandtown Village on January 1, 1997 and 1996,
respectively, has not been included in the accompanying Pro Forma
Condensed Statements of Operations for the nine months ended
September 30, 1997 and the year ended December 31, 1996,
respectively.
<PAGE> 7
SIGNATURES
Pursuant to the requirements of The Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
By: Realty Capital IV Limited Partnership,
General Partner
By: LMRC IV, Inc., General Partner
Date: December 8, 1997 By: /s/ Richard J. Himelfarb
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Richard J. Himelfarb, President
By: FW Realty Limited Partnership,
General Partner
By: FW Corporation, General Partner
Date: December 8, 1997 By: /s/ William J. Wolfe
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William J. Wolfe, President
