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) January 29, 1998
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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)
100 Light Street - Baltimore, MD 21202
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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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111 South Calvert Street - Baltimore, MD 21203-1476
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(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 2. DISPOSITION OF ASSETS
On January 29, 1998, Mid-Atlantic Centers Limited Partnership (the
"Partnership") sold Lynnwood Place Shopping Center, a 96,666 square
foot shopping center in Jackson, Tennessee to an unrelated third
party, a regional real estate company, for a contract price of
$6,365,000. For financial reporting purposes, the Partnership recorded
a net loss of approximately $277,000 at the time of closing. The net
proceeds from the sale, after payoff of the related mortgage debt,
transaction expenses and adjustment of accrued liabilities and refund
of lender escrows, were approximately $249,000 or $0.21 per Assignee
Limited Partnership Unit ("Unit"). The appraised net equity of
Lynnwood Place included in the appraised value of the Partnership's
portfolio at the end of 1996 was approximately $530,000 or $0.44 per
Unit.
On February 9, 1998, the Partnership entered into an agreement to sell
Edgewood Plaza Shopping Center, a 47,112 square foot shopping center
in Harford County, Maryland to an unrelated third party, a regional
real estate company, for a contract price of $2,220,000. The
transaction is scheduled to close on March 2, 1998. For financial
reporting purposes, the Partnership estimates that a net gain of
approximately $300,000 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 $840,000 or
$0.70 per 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 Edgewood Plaza
included in the appraised value of the Partnership's portfolio at the
end of 1996 was approximately $770,000 or $0.64 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 six of the Partnership's properties, Lynnwood Place and
Edgewood Plaza (as discussed above), Highlandtown Village (which
occurred on December 19, 1997), Berkeley Square (which occurred on
September 10, 1997), Jackson Heights (which occurred on July 16, 1997)
and Cloister (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.
<PAGE> 3
The following pro forma condensed balance sheet as of September 30,
1997 assumes the sale of Lynnwood Place, Edgewood Plaza and
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> 4
<TABLE>
Pro Forma Condensed Balance Sheet
September 30, 1997
(Unaudited)
<CAPTION>
Pro Forma Adjustments Related to
------------------------------------- Total
Highlandtown Lynnwood Edgewood Pro Forma Adjusted
Historical Village Place Plaza Adjustments Historical
----------- ------------ ------------ ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in real estate
held for lease, at cost:
Land $ 6,763,681 $(1,048,888) $(1,055,305) $ (462,369) $(2,566,562) $ 4,197,119
Buildings and improvements 31,276,530 (4,386,659) (7,995,562) (1,658,776) (14,040,997) 17,235,533
----------- ----------- ----------- ----------- ------------ -----------
38,040,211 (5,435,547) (9,050,867) (2,121,145) (16,607,559) 21,432,652
Less: accumulated
depreciation (14,639,344) 1,400,159 2,578,239 367,206 4,345,604 (10,293,740)
----------- ----------- ----------- ----------- ------------ -----------
23,400,867 (4,035,388) (6,472,628) (1,753,939) (12,261,955) 11,138,912
Cash 6,297,170 1,475,517 388,975 874,828 2,739,320 9,036,490
Tenant accounts receivable,
net of allowance for
doubtful accounts 642,228 (97,963) (7,954) (74,981) (180,898) 461,330
Escrows 621,724 (35,926) (82,166) (78,401) (196,493) 425,231
Prepaid expenses and other
assets 291,852 (112,078) (7,716) (17,597) (137,391) 154,461
Intangible assets, net of
accumulated amortization 218,356 (1,604) (100,786) (39,381) (141,771) 76,585
----------- ----------- ----------- ----------- ------------ -----------
Total assets $31,472,197 $(2,807,442) $(6,282,275) $(1,089,471) $(10,179,188) $21,293,009
=========== =========== =========== =========== ============ ===========
LIABILITIES AND PARTNERS' EQUITY:
Long-term debt, including
current maturities $22,639,010 $(3,102,945) $(5,862,430) (1,366,894) (10,332,269) 12,306,741
Interest payable 1,341,736 (27,399) (46,778) (10,043) (84,220) 1,257,516
Cash flow protector loans 789,203 - - - - 789,203
Accounts payable and
accrued expenses 199,520 - (61,618) (3,364) (64,982) 134,538
Prepaid rents and security
deposits 115,788 (14,673) (23,049) (4,212) (41,934) 73,854
Due to related parties 139,547 (2,517) (11,069) (4,816) (18,402) 121,145
----------- ----------- ----------- ----------- ------------ ----------
Total liabilities 25,224,804 (3,147,534) (6,004,944) (1,389,329) (10,541,807) 14,682,997
----------- ----------- ----------- ----------- ------------ ----------
Partners' equity 6,247,393 340,092 (277,331) 299,858 362,619 6,610,012
----------- ----------- ----------- ----------- ------------ ----------
Total liabilities and
partners' equity $31,472,197 $(2,807,442) $(6,282,275) $(1,089,471) $(10,179,188) $21,293,009
=========== =========== =========== =========== ============ ===========
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 Nine Months Ended September 30, 1997
(Unaudited)
<CAPTION>
Pro Forma Adjustments Related to
---------------------------------------
Cloister, Jackson
Heights, Berkeley Total
Square and Lynnwood Edgewood Pro Forma Adjusted
Historical Highlandtown Place Plaza Adjustments Historical
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME:
Rental income $ 3,661,785 $(1,445,276) $ (578,722) $ (248,858) $(2,272,856) $ 1,388,929
Tenant reimbursement
income 766,953 (308,985) (101,960) (32,358) (443,303) 323,650
------------ ----------- ----------- ----------- ----------- -----------
4,428,738 (1,754,261) (680,682) (281,216) (2,716,159) 1,712,579
------------ ----------- ----------- ----------- ----------- -----------
OPERATING EXPENSES:
Interest expense 1,862,250 (502,009) (420,695) (88,915) (1,011,619) 850,631
Depreciation and
amortization 1,054,245 (325,536) (224,575) (49,400) (599,511) 454,734
Write-down of assets 550,000 (550,000) - - (550,000) -
Repairs and maintenance 606,599 (165,132) (49,726) (35,036) (249,894) 356,705
Real estate taxes and
insurance 522,548 (236,668) (73,236) (19,788) (329,692) 192,856
Management and leasing
to related parties 258,145 (98,845) (36,000) (11,700) (146,545) 111,600
Provision for doubtful
accounts 54,013 (43,702) (18,354) (5,378) (67,434) (13,421)
Other expenses 545,271 (111,162) (25,394) (15,043) (151,599) 393,672
------------ ----------- ----------- ----------- ----------- -----------
Total expenses 5,453,071 (2,033,054) (847,980) (225,260) (3,106,294) 2,346,777
------------ ----------- ----------- ----------- ----------- -----------
Results from rental
operations (1,024,333) 278,793 167,298 (55,956) 390,135 (634,198)
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) $ (25,530) $ 167,298 $ (55,956) $ 85,812 $ (497,124)
============ =========== =========== =========== =========== ===========
Net loss allocated to
assignee limited partners
per unit: (1,200,000 units
issued and outstanding) $ (0.54) $ 0.04 $ 0.14 $ (0.05) $ 0.13 $ (0.41)
======= ======= ======= ======= ======= =======
The accompanying Notes are an integral part of these Pro Forma Condensed
Financial Statements.
</TABLE>
<PAGE> 6
<TABLE>
Pro Forma Condensed Statement of Operations
For the Year Ended December 31, 1996
(Unaudited)
<CAPTION>
Pro Forma Adjustments Related to
-----------------------------------------
Cloister,
Jackson Heights Total
Berkeley Square Lynnwood Edgewood Pro Forma Adjusted
Historical and Highlandtown Place Plaza Adjustments Historical
------------ -------------- ----------- ----------- ------------ -----------
(Audited)
<S> <C> <C> <C> <C> <C> <C>
INCOME:
Rental income $ 5,404,431 $(2,232,848) $ (819,449) $ (319,340) $(3,371,637) $ 2,032,794
Tenant reimbursement
income 1,072,243 (497,377) (124,329) (45,257) (666,963) 405,280
------------ ----------- ----------- ----------- ----------- -----------
6,476,674 (2,730,225) (943,778) (364,597) (4,038,600) 2,438,074
------------ ----------- ----------- ----------- ----------- -----------
OPERATING EXPENSES:
Write-down of assets 2,895,000 - - - - 2,895,000
Interest expense 2,759,025 (822,679) (575,989) (119,865) (1,518,533) 1,240,492
Depreciation and
amortization 1,494,716 (531,725) (263,478) (64,262) (859,465) 635,251
Repairs and maintenance 920,829 (304,796) (54,629) (54,808) (414,233) 506,596
Real estate taxes and
insurance 756,028 (397,061) (97,378) (25,774) (520,213) 235,815
Management and leasing
to related parties 386,327 (158,025) (59,069) (20,416) (237,510) 148,817
Provision for doubtful
accounts 73,599 (20,701) (8,841) 2,322 (27,220) 46,379
Other expenses 691,931 (169,282) (15,037) (461) (184,780) 507,151
------------ ----------- ----------- ----------- ----------- -----------
Total expenses 9,977,455 (2,404,269) (1,074,421) (283,264) (3,761,954) 6,215,501
------------ ----------- ----------- ----------- ----------- -----------
Results from rental
operations (3,500,781) (325,956) 130,643 (81,333) (276,646) (3,777,427)
OTHER INCOME (LOSS):
Gain on sale of pad sites 241,290 (22,208) - (65,003) (87,211) 154,079
Loss on sale of shopping
center (78,687) - - - - (78,687)
Interest income 112,710 - - - - 112,710
------------ ----------- ----------- ----------- ----------- -----------
Net loss $ (3,225,468) $ (348,164) $ 130,643 $ (146,336) $ (363,857) $(3,589,325)
============ =========== =========== =========== =========== ===========
Net loss allocated to
assignee limited partners
per unit: (1,200,000 units
issued and outstanding) $ (2.71) $ (0.28) $ 0.11 $ (0.12) $ (0.29) $ (3.00)
======= ======= ======= ======= ======= =======
The accompanying Notes are an integral part of these Pro Forma Condensed
Financial Statements.
</TABLE>
<PAGE> 7
Notes to Pro Forma Condensed
Financial Information
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Note 1 - Balance Sheet
Sale of Shopping Centers
Reflects sale of Lynnwood Place and Edgewood Plaza and
Highlandtown Village shopping centers. 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 in the Pro Forma Condensed
Balance Sheet could differ from cash actually received at the
closings of the sales of Lynnwood Place and Edgewood Plaza 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 shopping centers sold 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 shopping centers.
Note 2 - Statements of Operations
Net Gain on Sale of Shopping Centers
A net loss of approximately $277,000 on the pro forma sale of
Lynnwood Place and an estimated net gain of approximately $300,000
on the pro forma sale of Edgewood Plaza on January 1, 1997 and
1996, respectively, have 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> 8
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: February 13, 1998 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: February 13, 1998 By: /s/ William J. Wolfe
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William J. Wolfe, President
