UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the 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_____________
Commission file number 0-17173
MCNEIL REAL ESTATE FUND XXVII, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 33-0214387
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (214) 448-5800
---------------------------
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
<PAGE>
MCNEIL REAL ESTATE FUND XXVII, L.P.
PART I. FINANCIAL INFORMATION
<TABLE>
ITEM 1. FINANCIAL STATEMENTS
------ --------------------
BALANCE SHEETS
(Unaudited)
June 30, December 31,
1995 1994
---------- ----------
<S> <C> <C>
ASSETS
------
Real estate investments:
Land..................................................... $ 5,387,855 $ 5,387,855
Buildings and improvements............................... 26,437,783 26,072,480
---------- ----------
31,825,638 31,460,335
Less: Accumulated depreciation and amortization......... (6,283,016) (5,538,346)
---------- ----------
25,542,622 25,921,989
---------- ----------
Mortgage loan investments................................... 1,689,371 1,821,352
Less: Allowance for impairment.............................. (258,274) (349,325)
---------- ----------
1,431,097 1,472,027
Mortgage loan investments - affiliates...................... 2,235,902 3,207,902
Cash and cash equivalents .................................. 6,425,271 7,196,410
Cash segregated for security deposits and repurchase........
of limited partnership units............................. 155,952 404,312
Accounts receivable......................................... 403,214 525,287
Accrued interest receivable................................. 21,791 49,373
Deferred borrowing costs, net of accumulated
amortization of $110,808 and $91,612 at June 30,
1995 and December 31, 1994, respectively................. 81,628 204,366
Prepaid expenses and other assets........................... 543,483 520,187
---------- ----------
$36,840,960 $39,501,853
========== ==========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
-----------------------------------------
Mortgage note payable....................................... $ 2,019,844 $ 6,726,266
Accounts payable and accrued expenses....................... 90,427 72,431
Accrued property taxes...................................... 183,772 -
Payable to limited partners................................. - 332,931
Payable to affiliates....................................... 273,654 227,189
Security deposits and deferred rental income................ 224,958 194,886
---------- ----------
2,792,655 7,553,703
---------- ----------
Partners' equity (deficit):
Limited partners - 10,000,000 limited partnership units
authorized; 5,310,877 limited partnership units
outstanding at June 30, 1995 and
December 31, 1994....................................... 34,184,750 32,105,597
General Partner......................................... (136,445) (157,447)
---------- ----------
34,048,305 31,948,150
---------- ----------
$36,840,960 $39,501,853
========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXVII, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1995 1994 1995 1994
--------- --------- -------- ---------
<S> <C> <C> <C> <C>
Revenue:
Rental revenue................ $1,879,761 $1,772,483 $ 3,811,023 $ 3,583,850
Interest income on mortgage
loan investment............. 51,869 33,199 105,641 63,801
Interest income on mortgage
loan investments - affiliates 66,100 63,695 160,071 129,107
Other interest income......... 108,302 50,376 198,245 81,727
Property tax refund........... - - 30,515 -
Gain on legal settlement...... 1,302,324 - 1,302,324 -
Gain on mortgage
modification................ - 70,484 - 70,484
--------- --------- --------- ---------
Total revenue............... 3,408,356 1,990,237 5,607,819 3,928,969
--------- --------- --------- ---------
Expenses:
Interest...................... 126,872 193,327 313,750 383,581
Depreciation and
amortization................ 373,657 352,653 744,670 705,306
Property taxes................ 184,897 199,133 404,817 397,127
Personnel costs............... 145,931 146,926 328,423 297,457
Utilities..................... 94,346 100,476 204,263 212,051
Repairs and maintenance....... 154,919 152,594 284,870 275,873
Property management
fees - affiliates........... 108,639 101,270 216,766 201,962
Other property operating
expenses.................... 169,337 181,805 333,980 343,384
General and administrative.... 14,965 30,960 22,758 65,315
General and administrative -
affiliates.................. 243,622 238,991 503,075 484,850
--------- --------- --------- ---------
Total expenses.............. 1,617,185 1,698,135 3,357,372 3,366,906
--------- --------- --------- ---------
Net income before
extraordinary item............ 1,791,171 292,102 2,250,447 562,063
Extraordinary item............... (150,292) - (150,292) -
--------- --------- --------- ---------
Net income....................... $1,640,879 $ 292,102 $2,100,155 $ 562,063
========= ========= ========= =========
Net income allocable
to limited partners........... $1,624,470 $ 289,181 $2,079,153 $ 556,442
Net income allocable
to General Partner............ 16,409 2,921 21,002 5,621
--------- --------- --------- ---------
Net income ...................... $1,640,879 $ 292,102 $2,100,155 $ 562,063
========= ========= ========= =========
Net income per hundred limited
partnership units:
Net income before extra-
ordinary item............... $ 33.39 $ 5.41 $ 41.95 $ 10.40
Extraordinary item............ (2.80) - (2.80) -
--------- --------- --------- ---------
Net income.................... $ 30.59 $ 5.41 $ 39.15 $ 10.40
========= ========= ========= =========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXVII, L.P.
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(Unaudited)
For the Six Months Ended June 30, 1995 and 1994
<TABLE>
Total
General Limited Partners'
Partner Partners Equity
--------- ---------- ----------
<S> <C> <C> <C>
Balance at December 31, 1993.............. $(171,003) $31,096,521 $30,925,518
Net income................................ 5,621 556,442 562,063
-------- ---------- ----------
Balance at June 30, 1994.................. $(165,382) $31,652,963 $31,487,581
======== ========== ==========
Balance at December 31, 1994.............. $(157,447) $32,105,597 $31,948,150
Net income................................ 21,002 2,079,153 2,100,155
-------- ---------- ----------
Balance at June 30, 1995.................. $(136,445) $34,184,750 $34,048,305
======== ========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXVII, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
Six Months Ended
June 30,
------------------------------------
1995 1994
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Cash received from tenants........................ $ 3,925,395 $ 3,657,624
Cash paid to suppliers............................ (1,160,707) (1,334,543)
Cash paid to affiliates........................... (673,376) (798,529)
Interest received................................. 212,835 152,191
Interest received from affiliates................. 187,653 144,593
Interest paid..................................... (276,328) (362,440)
Property taxes paid............................... (221,045) (249,504)
Property tax refund............................... 30,515 -
Cash received from legal settlement............... 1,302,324 -
Mortgage prepayment penalty paid.................. (46,750) -
---------- ----------
Net cash provided by operating activities............ 3,280,516 1,209,392
---------- ----------
Cash flows from investing activities:
Additions to real estate investments.............. (365,303) (228,734)
Proceeds from collection of mortgage loan
investments..................................... 131,981 176,349
Mortgage loan investments - affiliates............ - (174,830)
Proceeds from collection of mortgage loan
investments - affiliates........................ 972,000 1,603,135
---------- ----------
Net cash provided by investing activities............ 738,678 1,375,920
---------- ----------
Cash flows from financing activities:
Net decrease in cash segregated for repurchase
of limited partnership units.................... 249,020 166,053
Principal payments on mortgage note
payable......................................... (4,706,422) (62,960)
Repurchase of limited partnership units........... (332,931) (332,933)
---------- ----------
Net cash used in financing activities................ (4,790,333) (229,840)
---------- ----------
Net increase (decrease) in
cash and cash equivalents........................ (771,139) 2,355,472
Cash and cash equivalents at beginning of
period............................................ 7,196,410 4,580,636
---------- ----------
Cash and cash equivalents at end of period........... $ 6,425,271 $ 6,936,108
========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXVII, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Income to Net Cash Provided by
Operating Activities
<TABLE>
Six Months Ended
June 30,
---------------------------------
1995 1994
--------- --------
<S> <C> <C>
Net income........................................... $2,100,155 $ 562,063
--------- ---------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization..................... 744,670 705,306
Amortization of deferred borrowing costs.......... 19,196 21,141
Gain on mortgage modification..................... - (70,484)
Allowance for impairment of mortgage loan
investment...................................... (91,051) -
Changes in assets and liabilities:
Cash segregated for security deposits........... (660) (6,109)
Accounts receivable............................. 122,073 87,712
Accrued interest receivable..................... 27,582 22,150
Deferred borrowing costs........................ 103,542 -
Prepaid expenses and other assets............... (23,296) (74,547)
Accounts payable and accrued expenses........... 17,996 (116,296)
Accrued property taxes.......................... 183,772 147,622
Payable to affiliates........................... 46,465 (111,717)
Security deposits and deferred rental
income........................................ 30,072 42,611
--------- ---------
Total adjustments............................. 1,180,361 647,329
--------- ---------
Net cash provided by operating activities............ $3,280,516 $1,209,392
========= =========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXVII, L.P.
Notes to Financial Statements
June 30, 1995
(Unaudited)
NOTE 1.
------
McNeil Real Estate Fund XXVII, L.P. (the "Partnership"), formerly known as
Southmark Prime Plus, L.P., was organized by affiliates of Southmark Corporation
("Southmark") on January 16, 1987, as a limited partnership under the provisions
of the Delaware Revised Uniform Limited Partnership Act to make short-term loans
to affiliates of the general partner. The general partner of the Partnership is
McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership,
an affiliate of Robert A. McNeil ("McNeil"). The principal place of business for
the Partnership and the General Partner is 13760 Noel Road, Suite 700, Dallas,
Texas 75240.
In the opinion of management, the financial statements reflect all adjustments
necessary for a fair presentation of the Partnership's financial position and
results of operations. All adjustments were of a normal recurring nature.
However, the results of operations for the six months ended June 30, 1995 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1995.
NOTE 2.
------
The financial statements should be read in conjunction with the financial
statements contained in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1994, and the notes thereto, as filed with the
Securities and Exchange Commission, which is available upon request by writing
to McNeil Real Estate Fund XXVII, L.P., c/o McNeil Real Estate Management, Inc.,
Investor Services, 13760 Noel Road, Suite 700, Dallas, Texas 75240.
NOTE 3.
------
Certain prior period amounts have been reclassified to conform to the current
period presentation.
NOTE 4.
------
The Partnership pays property management fees equal to 5% of the gross rental
receipts for its mini-storage warehouses and 6% of gross rental receipts for its
commercial properties to McNeil Real Estate Management, Inc. ("McREMI"), an
affiliate of the General Partner, for providing property management services for
the Partnership's mini-storage warehouses and commercial properties and leasing
services for its mini-storage warehouses. McREMI may also choose to provide
leasing services for the Partnership's commercial properties, in which case
McREMI will receive property management fees from such commercial properties
equal to 3% of the property's gross rental receipts plus leasing commissions
based on the prevailing market rate for such services where the property is
located.
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
The Partnership is paying an asset management fee, which is payable to the
General Partner. Through 1999, the asset management fee is calculated as 1% of
the Partnership's tangible asset value. Tangible asset value is determined by
using the greater of (i) an amount calculated by applying a capitalization rate
of 9% to the annualized net operating income of each property or (ii) a value of
$30 per gross square foot for mini-storage warehouses and $50 per gross square
foot for commercial properties to arrive at the property tangible asset value.
The property tangible asset value is then added to the book value of all other
assets excluding intangible items. The fee percentage decreases subsequent to
1999.
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner or its affiliates are as follows:
<TABLE>
Six Months Ended
June 30,
-------------------------------
1995 1994
------- -------
<S> <C> <C>
Property management fees............................. $216,766 $201,962
Charged to general and administrative -
affiliates:
Partnership administration........................ 216,367 202,208
Asset management fee.............................. 286,708 282,642
------- -------
$719,841 $686,812
======= =======
</TABLE>
Under the terms of its amended partnership agreement, the Partnership is
expressly permitted to make loans to affiliates of the General Partner, so long
as such loans meet certain conditions, including that such loans bear interest
at a rate of prime plus 2.5%, or prime plus 3.5% if the loan is junior to other
indebtedness. These loans are secured by income-producing real estate and may be
either junior or senior to other indebtedness secured by such property. The
Partnership received repayments from affiliates of $972,000 during the first six
months of 1995. The Partnership loaned $174,830 and received repayments from
affiliates of $1,603,135 during the first six months of 1994.
In order to induce the Partnership to lend funds to affiliates of the General
Partner, the General Partner agreed to pay (i) the difference between the
interest rate required by the Partnership's amended partnership agreement to be
charged to affiliates and the interest rate actually paid by certain of those
affiliates, and (ii) all points (1.5% or 2% if the loan is junior to other
indebtedness), closing costs and expenses. The Partnership recorded interest
income on affiliate loans of $160,071 and $129,107 for the six months ended June
30, 1995 and 1994, respectively, of which $13,513 and $5,452, respectively, was
paid or payable by the General Partner. In addition, the General Partner paid in
advance the interest which would be owed for one year pursuant to this
arrangement which totaled $1,320 for the six months ended June 30, 1994. The
Partnership repaid $42,500 of such prepaid interest to the General Partner in
connection with loans repaid during the first six months of 1994. No such
payments were received or repayments were made during the first six months of
1995.
Payable to affiliates at June 30, 1995 and December 31, 1994 consisted primarily
of a performance incentive fee of $141,647 accrued in prior years, Partnership
general and administrative expenses, asset management fees and prepaid interest.
Except for the performance incentive fee and prepaid interest, all accrued fees
are due and payable from current operations.
NOTE 5.
------
The Partnership filed claims with the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division (the "Bankruptcy Court") against
Southmark for damages relating to improper overcharges, breach of contract and
breach of fiduciary duty. The Partnership settled these claims in 1991, and such
settlement was approved by the Bankruptcy Court.
An Order Granting Motion to Distribute Funds to Class 8 Claimants dated April
14, 1995 was issued by the Bankruptcy Court. In accordance with the Order, in
May 1995 the Partnership received in full satisfaction of its claims, $984,649
in cash, and common and preferred stock in the reorganized Southmark
subsequently sold for $317,675, which amounts represent the Partnership's
pro-rata share of Southmark assets available for Class 8 Claimants.
NOTE 6.
------
On May 9, 1995, the Partnership paid down its mortgage note payable by
$4,628,250. In connection with this repayment, the Partnership paid a prepayment
penalty of $46,750 and wrote off $103,542 of deferred borrowing costs relating
to the portion of the loan repaid, resulting in an extraordinary loss of
$150,292 in the second quarter of 1995.
In July 1995, the Partnership secured a $5 million line of credit that will be
used to fund any loans made to affiliates of the General Partner. In connection
with obtaining the line or credit, the Partnership paid off the remaining
$2,019,844 balance of its mortgage note payable and paid a $20,198 prepayment
penalty.
NOTE 7.
------
In April 1994, the Partnership and the borrower on the Partnership's mortgage
loan investment secured by A-Quality Mini-Storage reached a settlement
concerning the loan. Under the settlement, the borrower paid the Partnership
$150,000 in cash and the loan was renewed for $1,453,194 (representing
$2,100,000 principal balance less all post-bankruptcy petition payments made by
the borrower) effective January 1, 1994. Principal and interest at a rate of
prime plus 2% is payable monthly. An additional second lien loan was executed in
the amount of $134,397 at an interest rate of 6%. Payments on the second lien
are paid from one-half of the net cash flow from the property after payments on
the first lien loan. Both loans mature in January 1997. A gain of $70,484 was
recorded in connection with this transaction.
NOTE 8.
------
A mortgage loan investment to an affiliate of the General Partner in the amount
of $483,364 matured in May 1995. A new loan under substantially the same terms
is currently being negotiated.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------ ----------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
-------------------
There has been no significant change in the operations of the Partnership's
properties since December 31, 1994. The Partnership reported net income for the
first six months of 1995 of $2,100,155 as compared to $562,063 for the first six
months of 1994. Revenues were $5,607,819 for the first six months of 1995, up
from $3,928,969 for the same period in 1994. Expenses were $3,357,372 in 1995 as
compared to $3,366,906 in 1994. The Partnership also recognized a $150,292
extraordinary loss in 1995, as discussed below.
Net cash provided by operating activities was $3,280,516 for the six months
ended June 30, 1995, an increase from the $1,209,392 provided during the same
six month period in 1994. The Partnership expended $365,303 for capital
improvements, $4,706,422 for principal payments on the mortgage note payable and
$83,911 for the repurchase of limited partnership units (net of a decrease in
cash segregated for the repurchase of limited partnership units). The
Partnership received $972,000 for repayment of affiliate loans and $131,981 in
collections of principal on mortgage loan investments to an unaffiliated
borrower, resulting in a net decrease in cash of $771,139 at June 30, 1995.
RESULTS OF OPERATIONS
---------------------
Revenue:
Total revenue increased by $1,418,119 and $1,678,850 the first three and six
months of 1995, respectively, as compared to the same periods in the prior year.
The increase was primarily due to a gain on a legal settlement and an increase
in rental revenue, as discussed below.
Rental revenue for the three and six months ended June 30, 1995 increased by
$107,278 and $227,173, respectively, as compared to the same periods in 1994.
The increase was mainly due to increases in occupancy at One Corporate Center
III Office Building and AAA Century Mini-Storage. One Corporate Center III was
98% occupied at June 30, 1995 as compared to 94% at June 30, 1994, resulting in
an increase in rental revenue of approximately $80,000. Rental revenue increased
by approximately $49,000 at AAA Century as occupancy increased to 97% at the end
of the first quarter of 1995 from 79% for the same period in 1994. In addition,
increases in rental rates resulted in rental revenue increases of approximately
$26,000, $20,000 and $19,000 at AAA Century, Forest Hill and Fountainbleau
mini-storages.
Interest income on the Partnership's mortgage loan investments to an
unaffiliated borrower (the A-Quality Mini-Storage loan) increased by $18,670 and
$41,840 for the three and six months ended June 30, 1995, respectively, in
relation to the comparable periods in the prior year. The increase was mainly
due to an increase in the interest rate earned on the first lien loan which is
based on the prime lending rate of Bank of America.
Interest income on mortgage loans investments - affiliates increased by $2,405
and $30,964 for the three and six months ended June 30, 1995, respectively, as
compared to the same periods in the prior year. The increase was mainly the
result of higher interest rates earned on outstanding loans, which are based on
the prime lending rate of Bank of America. This increase was partially offset by
lower total loans outstanding in the second quarter of 1995. The Partnership had
$2.2 million of loans outstanding at June 30, 1995 as compared to $2.6 million
at June 30, 1994.
Other interest income for the three and six months ended June 30, 1995 increased
by $57,926 and $116,518, respectively, as compared to the same periods in the
prior year. The increase was primarily the result of higher average cash
balances available for short-term investment in 1995. In addition, there was a
slight increase in interest rates earned on invested cash in 1995.
In the first quarter of 1995, the Partnership received a $30,515 property tax
refund for AAA Century Self- Storage as a result of an appeal filed on behalf of
the property. No such tax refund was received in 1994.
As discussed in Item 1 - Note 5, in 1995 the Partnership received cash and
common and preferred stock in the reorganized Southmark in settlement of its
bankruptcy claims against Southmark. The Partnership recognized a $1,302,324
gain as a result of this settlement. No such gain was recognized in 1994.
In 1994, the Partnership recognized a gain on mortgage modification of $70,484
relating to the settlement for the A-Quality mini-storage loan. No such gain was
recognized in 1995.
In May 1995, the Partnership recognized a $150,292 extraordinary loss incurred
in connection with the pay down of its mortgage note payable as discussed in
Item 1 - Note 6. The loss consisted of a $46,750 prepayment penalty and $103,542
write off of deferred borrowing costs relating to the portion of the loan
repaid.
Expenses:
Total expenses decreased by $80,950 and $9,534 for the first three and six
months of 1995, respectively, as compared to the same periods in the prior year,
as discussed below.
Interest expense decreased by $66,455 and $69,831 for the three and six months
ended June 30, 1995, respectively, in relation to the respective periods in the
prior year. The decrease was due to the paydown of the Partnership's mortgage
note payable in the second quarter of 1995 as further discussed in Item 1 - Note
6.
Personnel costs for the first three and six months of 1995 decreased by $995 and
$30,966, respectively, as compared to the same periods in 1994. The increase was
due to an increase in compensation paid to on-site personnel at all of the
properties in the first quarter of 1995.
General and administrative expenses decreased by $15,995 and $42,557 for the
three and six months ended June 30, 1995, respectively, as compared to the same
periods in 1994. The decrease was mainly due to a greater amount of legal
expenses incurred in the first six months of 1994 which were attributable to a
law suit against the borrower on the A-Quality Mini-Storage loan and a suit
against the officers and directors of the original general partner and the
Partnership's former auditors.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Partnership generated $3,280,516 of cash through operating activities in the
first six months of 1995 as compared to $1,209,392 for the same period in 1994.
The increase in 1995 was mainly due to $1,302,324 of cash received in 1995 from
the settlement of the Partnership's bankruptcy claims against Southmark. In
addition, there was an increase in cash received from tenants (see discussion of
the increase in rental revenue above), and a decrease in cash paid to suppliers
and cash paid to affiliates due to the timing of the payment of invoices at the
end of the period.
The Partnership expended $365,303 and $228,734 for capital improvements to its
properties in 1995 and 1994, respectively. The increase in 1995 was mainly due
to expenditures made at One Corporate Center I Office Building to replace an
aging air conditioning system.
In the first six months of 1995 and 1994, the Partnership received $131,981 and
$176,349, respectively, in payments on its mortgage loan investment to an
unaffiliated borrower. The loan was modified effective January 1994; however, no
principal payments were received on the loan until April 1994. Prior to the
modification, interest only from the excess cash flow of the property was paid
on the loan.
The Partnership collected principal on loans to affiliates (net of loans made)
of $972,000 and $1,428,305 in the first six months of 1995 and 1994,
respectively.
The Partnership paid $4,706,422 and $62,960 in principal payments on its
mortgage note payable in the six months ended June 30, 1995 and 1994,
respectively. As further discussed in Item 1 - Note 6, the Partnership prepaid
$4,628,250 of the loan in May 1995.
Short-term liquidity:
--------------------
At June 30, 1995, the Partnership held cash and cash equivalents of $6,425,271.
This balance provides a reasonable level of working capital for the
Partnership's immediate needs in operating its properties.
For the Partnership as a whole, management projects positive cash flow from
operations in 1995. The Partnership has budgeted $641,000 for necessary capital
improvements for all properties in 1995 which is expected to be funded from
available cash reserves or from operations of the properties.
At the present time, the Partnership anticipates resuming distributions to the
limited partners in 1995 and is reviewing cash requirements to determine the
amount and timing of such distributions.
In July 1995, the Partnership secured a $5 million line of credit. This line of
credit will be used to fund any loans to affiliates of the General Partner.
<PAGE>
PART II. OTHER INFORMATION
ITEM 5. OTHER EVENTS
------ ------------
On May 9, 1995, the Partnership paid down its mortgage note payable by
$4,628,250. In connection with this repayment, the Partnership paid a prepayment
penalty of $46,750 and wrote off $103,542 of deferred borrowing costs relating
to the portion of the loan repaid, resulting in an extraordinary loss of
$150,292 in the second quarter of 1995.
In July 1995, the Partnership secured a $5 million line of credit that will be
used to fund any loans made to affiliates of the General Partner. In connection
with obtaining the line or credit, the Partnership paid off the remaining
$2,019,844 balance of its mortgage note payable and paid a $20,198 prepayment
penalty.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
------ --------------------------------
(a) Exhibits.
<TABLE>
Exhibit
Number Document Description
------- --------------------
<S> <C>
4.2 Amended and Restated Partnership Agreement of McNeil XXVII, L.P. dated
March 30, 1992. (Incorporated by reference to the Current Report of the
registrant on Form 8-K dated March 30, 1992, as filed on April 10, 1992).
10. Mutual Release and Settlement Agreement between Southmark Storage Associates
Limited Partnership and McNeil Real Estate Fund XXVII, L.P. (Incorporated by
reference to the current report of the registrant on Form 10-Q dated March 30, 1995,
as filed on May 15, 1995.)
11. Statement regarding computation of Net Income per Hundred Limited
Partnership Units. Net income per one hundred limited partnership units
is computed by dividing net income allocated to the limited partners by the
weighted average number of limited partnership units outstanding (expressed
in hundreds). Per unit information has been computed based on 53,109 and
53,483 weighted average limited partnership units (in hundreds)
outstanding in 1995 and 1994.
</TABLE>
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during the
quarter ended June 30, 1995.
<PAGE>
MCNEIL REAL ESTATE FUND XXVII, L.P.
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:
<TABLE>
<S> <C>
McNEIL REAL ESTATE FUND XXVII, L.P.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
August 14, 1995 By: /s/ Donald K. Reed
------------------------------ ----------------------------------
Date Donald K. Reed
President and Chief Executive Officer
August 14, 1995 By: /s/ Robert C. Irvine
------------------------------ ----------------------------------
Date Robert C. Irvine
Chief Financial Officer of McNeil Investors, Inc.
Principal Financial Officer
August 14, 1995 By: /s/ Carol A. Fahs
------------------------------ ----------------------------------
Date Carol A. Fahs
Chief Accounting Officer of McNeil Real Estate
Management, Inc.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 6,425,271
<SECURITIES> 0
<RECEIVABLES> 425,005
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 31,825,638
<DEPRECIATION> (6,283,016)
<TOTAL-ASSETS> 36,840,960
<CURRENT-LIABILITIES> 0
<BONDS> 2,019,844
<COMMON> 0
0
0
<OTHER-SE> 34,048,305
<TOTAL-LIABILITY-AND-EQUITY> 36,840,960
<SALES> 3,811,023
<TOTAL-REVENUES> 5,607,819
<CGS> 0
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<EPS-DILUTED> 0
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