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 quarterly period ended March 31, 1998
-------------------------------------------
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.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-0214387
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (972) 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>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MCNEIL REAL ESTATE FUND XXVII, L.P.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
--------------- --------------
ASSETS
- ------
Real estate investments:
<S> <C> <C>
Land..................................................... $ 4,196,277 $ 4,196,277
Buildings and improvements............................... 23,668,002 23,241,031
-------------- -------------
27,864,279 27,437,308
Less: Accumulated depreciation and amortization......... (9,138,940) (8,806,732)
-------------- -------------
18,725,339 18,630,576
Assets held for sale........................................ 4,549,881 4,549,881
Mortgage loan investments - affiliates...................... 7,031,487 6,956,487
Cash and cash equivalents .................................. 1,224,363 2,440,084
Cash segregated for security deposits and repurchase
of limited partnership units............................. 110,746 442,193
Accounts receivable......................................... 315,194 426,825
Accrued interest receivable................................. 65,691 64,991
Prepaid expenses and other assets........................... 152,433 170,077
-------------- -------------
$ 32,175,134 $ 33,681,114
============== =============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- ------------------------------------------
Revolving credit agreement $ 3,437,648 $ 3,437,648
Accounts payable and accrued expenses....................... 43,731 107,549
Accrued property taxes...................................... 283,836 -
Payable to limited partners................................. - 332,928
Payable to affiliates....................................... 768,005 542,045
Security deposits and deferred rental revenue............... 264,526 261,767
-------------- -------------
4,797,746 4,681,937
-------------- -------------
Partners' equity (deficit):
Limited partners - 10,000,000 limited partnership units
authorized; 5,199,901 limited partnership units out-
standing at March 31, 1998 and December 31, 1997....... 27,448,084 29,076,126
General Partner.......................................... (70,696) (76,949)
-------------- -------------
27,377,388 28,999,177
-------------- -------------
$ 32,175,134 $ 33,681,114
============== =============
</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>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
1998 1997
-------------- --------------
Revenue:
<S> <C> <C>
Rental revenue ............................................ $ 2,203,177 $ 2,089,145
Interest income on mortgage loan investments -
affiliates................................................ 190,288 183,323
Other interest income....................................... 39,088 38,434
------------- -------------
Total revenue............................................. 2,432,553 2,310,902
------------- -------------
Expenses:
Interest.................................................... 96,035 60,997
Depreciation and amortization............................... 332,208 372,486
Property taxes.............................................. 283,836 249,246
Personnel costs............................................. 224,698 195,033
Utilities................................................... 106,402 116,799
Repairs and maintenance..................................... 138,995 182,145
Property management fees - affiliates....................... 121,495 113,922
Other property operating expenses........................... 147,812 167,808
General and administrative.................................. 128,428 21,737
General and administrative - affiliates..................... 227,373 208,183
------------- -------------
Total expenses............................................ 1,807,282 1,688,356
------------- -------------
Net income..................................................... $ 625,271 $ 622,546
============= =============
Net income allocable to limited partners....................... $ 619,018 $ 616,321
Net income allocable to General Partner........................ 6,253 6,225
------------- -------------
Net income..................................................... $ 625,271 $ 622,546
============= =============
Net income per weighted average hundred limited
partnership units........................................... $ 11.90 $ 11.77
============= =============
Distributions per weighted average hundred limited
partnership units........................................... $ 43.21 $ 38.19
============= =============
</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 Three Months Ended March 31, 1998 and 1997
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Equity (Deficit)
--------------- ---------------- ----------------
<S> <C> <C> <C>
Balance at December 31, 1996.............. $ (104,836) $ 30,648,258 $ 30,543,422
Net income................................ 6,225 616,321 622,546
Distributions to limited partners......... - (1,999,970) (1,999,970)
------------- ---------------- ---------------
Balance at March 31, 1997................. $ (98,611) $ 29,264,609 $ 29,165,998
============= =============== ==============
Balance at December 31, 1997.............. $ (76,949) $ 29,076,126 $ 28,999,177
Net income................................ 6,253 619,018 625,271
Distributions to limited partners......... - (2,247,060) (2,247,060)
------------- --------------- --------------
Balance at March 31, 1998................. $ (70,696) $ 27,448,084 $ 27,377,388
============= =============== ==============
</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>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------------
1998 1997
----------------- ----------------
Cash flows from operating activities:
<S> <C> <C>
Cash received from tenants........................ $ 2,304,967 $ 2,070,397
Cash paid to suppliers............................ (780,244) (693,497)
Cash paid to affiliates........................... (122,908) (288,934)
Interest received................................. 39,088 38,434
Interest received from affiliates................. 189,588 161,670
Interest paid..................................... (96,035) (24,513)
--------------- --------------
Net cash provided by operating activities............ 1,534,456 1,263,557
--------------- --------------
Cash flows from investing activities:
Additions to real estate investments.............. (426,971) (112,614)
Mortgage loan investments - affiliates............ (75,000) (2,336,029)
--------------- --------------
Net cash used in investing activities................ (501,971) (2,448,643)
--------------- --------------
Cash flows from financing activities:
Net decrease in cash segregated for
repurchase of limited partnership units......... 331,782 247,731
Proceeds from revolving credit agreement.......... - 2,336,029
Repurchase of limited partnership units........... (332,928) (332,928)
Distributions to limited partners................. (2,247,060) (1,999,970)
--------------- --------------
Net cash provided by (used in) financing
activities........................................ (2,248,206) 250,862
--------------- --------------
Net decrease in cash and cash equivalents............ (1,215,721) (934,224)
Cash and cash equivalents at beginning of
period............................................ 2,440,084 3,022,851
--------------- --------------
Cash and cash equivalents at end of period........... $ 1,224,363 $ 2,088,627
=============== ==============
</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>
<CAPTION>
Three Months Ended
March 31,
----------------------------------------
1998 1997
---------------- ---------------
<S> <C> <C>
Net income........................................... $ 625,271 $ 622,546
--------------- --------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization..................... 332,208 372,486
Amortization of deferred borrowing costs.......... - 24,383
Changes in assets and liabilities:
Cash segregated for security deposits........... (335) (395)
Accounts receivable............................. 111,631 (23,733)
Accrued interest receivable..................... (700) (21,653)
Prepaid expenses and other assets............... 17,644 20,049
Accounts payable and accrued expenses........... (63,818) (43,012)
Accrued property taxes.......................... 283,836 249,246
Payable to affiliates........................... 225,960 33,171
Security deposits and deferred rental
revenue....................................... 2,759 30,469
--------------- --------------
Total adjustments............................. 909,185 641,011
--------------- --------------
Net cash provided by operating activities............ $ 1,534,456 $ 1,263,557
=============== ==============
</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
March 31, 1998
(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 600, 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 three months ended March 31, 1998 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1998.
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, 1997, 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 600, LB70, Dallas, Texas 75240.
NOTE 3.
- -------
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.
<PAGE>
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:
Three Months Ended
March 31,
----------------------------
1998 1997
---------- -----------
Property management fees..................... $ 121,495 $ 113,922
Charged to general and administrative -
affiliates:
Partnership administration................ 69,177 63,254
Asset management fee...................... 158,196 144,929
--------- ----------
$ 348,868 $ 322,105
========= ==========
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 made loans to affiliates of $75,000 during the first three months of
1998 and $2,336,029 during the first three months of 1997.
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 $190,288 and $183,323 for the three months ended
March 31, 1998 and 1997, respectively, of which $25,948 and $22,401,
respectively, was paid or payable by the General Partner.
Payable to affiliates at March 31, 1998 and December 31, 1997 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.
<PAGE>
NOTE 4.
- -------
On February 28, 1997, the Partnership loaned $2,336,029 to McNeil Real Estate
Fund X, Ltd. ("Fund X"), at an interest rate of prime plus 1% per annum (the
maximum rate allowed to be incurred by Fund X in connection with borrowings from
affiliates pursuant to Fund X's partnership agreement). This loan is secured by
a first lien on La Plaza Business Center located in Las Vegas, Nevada. Interest
on the loan is payable monthly, with principal payable in February 2000.
On October 25, 1996, the Partnership agreed to loan an aggregate of $1.68
million to McNeil Pension Investment Fund, Ltd. ("McPIF"), an affiliate of the
General Partner, at an interest rate of prime plus 1% per annum (the maximum
rate allowed to be incurred by McPIF in connection with borrowings from
affiliates pursuant to McPIF's partnership agreement). In 1996, $820,426 was
borrowed by McPIF pursuant to this commitment and an additional $75,000 was
borrowed in the first quarter of 1998. This loan is secured by a first lien on
Verre Center Office Building located in Chamblee, Georgia. Interest on the loan
is payable monthly. Principal is payable in November 1999.
NOTE 5.
- -------
In 1996, the Partnership adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
This statement requires the cessation of depreciation on assets held for sale.
Since AAA Century Airport Self-Storage and Burbank Mini-Storage were placed on
the market for sale, no depreciation was taken effective August 1, 1997.
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, 1997. The Partnership reported net income for the
first three months of 1998 of $625,271, comparable to the $622,546 reported for
the first three months of 1997. Revenues were $2,432,553 for the first three
months of 1998, up from $2,310,902 for the same period in 1997. Expenses were
$1,807,282 in 1998 as compared to $1,688,356 in 1997.
Net cash provided by operating activities was $1,534,456 for the three months
ended March 31, 1998. The Partnership expended $426,971 for capital
improvements, loaned $75,000 to an affiliate, paid $1,146 for the repurchase of
limited partnership units (net of a decrease in cash segregated for the
repurchase of limited partnership units) and distributed $2,247,060 to the
limited partners. Cash and cash equivalents totaled $1,224,363 at March 31,
1998, a net decrease of $1,215,721 from the balance at December 31, 1997.
<PAGE>
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Total revenue increased by $121,651 for the three months ended March 31, 1998 as
compared to the same period in the prior year, primarily due to an increase in
rental revenue, as discussed below.
Rental revenue for the first three months of 1998 increased by $114,032 as
compared to the same period in 1997. Rental revenue increased approximately
$79,000 and $22,000 at One Corporate Center I and III office buildings,
respectively, mainly due to increased rental rates.
Expenses:
Total expenses increased by $118,926 for the three months ended March 31, 1998
as compared to the same period in the prior year, as discussed below.
Interest expense for the three months ended March 31, 1998 increased by $35,038
in relation to the respective period in the prior year, due to a greater average
amount of borrowings under the Partnership's line of credit agreement in 1998.
The Partnership had borrowed $1,101,619 as of December 31, 1996. The Partnership
borrowed an additional $2,336,029 at the end of February 1997, resulting in
total borrowing under the line of credit agreement of $3,437,648 as of March 31,
1998 and 1997.
For the first quarter of 1998, depreciation and amortization expense decreased
by $40,278 as compared to the first quarter of 1997. The decrease was due to AAA
Century Airport and Burbank mini-storages being classified as assets held for
sale by the Partnership effective August 1, 1997. In accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," the Partnership ceased recording
depreciation on the assets at the time they were placed on the market for sale.
Property taxes for the three months ended March 31, 1998 increased by $34,590 as
compared to the same period in 1997. The increase was due to an increase in the
assessed taxable value of One Corporate Center I and III office buildings by
taxing authorities.
Personnel costs increased by $29,665 for the first three months of 1998 in
relation to the first three months of 1997. The increase was mainly due to an
overall increase in office salaries at all the properties in 1998. In addition,
there was an increase in bonuses paid to employees at One Corporate Center I and
III office buildings for renewing tenant leases in 1998.
For the first three months of 1998, repairs and maintenance expense decreased by
$43,150 as compared to the first three months of the prior year. The decrease
was mainly due to lower snow removal expenses at One Corporate Center I and III
office buildings in 1998 due to a milder winter in Minnesota, where the
properties are located.
Other property operating expenses decreased by $19,996 for the quarter ended
March 31, 1998 as compared to the same quarter in 1997. The decrease was due to
a decline in bad debts at all of the properties in 1998.
<PAGE>
General and administrative expenses increased by $106,691 for the three months
ended March 31, 1998 as compared to the same period in 1997. The increase was
mainly due to costs incurred to explore alternatives to maximize the value of
the Partnership (see Liquidity and Capital Resources).
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnership generated $1,534,456 of cash through operating activities in the
first three months of 1998 as compared to $1,263,557 for the same period in
1997. Cash received from tenants increased in 1998 partially due to an increase
in rental revenue, as discussed above. In addition, a tenant reimbursed One
Corporate Center I approximately $98,000 in 1998 for tenant improvements
completed on its behalf. There was also a decrease in cash paid to affiliates in
1998.
The Partnership expended $426,971 and $112,614 for capital improvements to its
properties for the first three months of 1998 and 1997, respectively. A greater
amount of tenant improvements were performed at One Corporate Center I and III
office buildings in the first quarter of 1998. In addition, the roof at AAA
Sentry Mini-Storage was replaced in 1998.
The Partnership loaned $75,000 to an affiliate of the General Partner in the
first three months of 1998. In the first three months of 1997, the Partnership
received $2,336,029 from its line of credit agreement, which it loaned to an
affiliate of the General Partner.
The Partnership distributed $2,247,060 and $1,999,970 to the limited partners in
the first three months of 1998 and 1997, respectively.
Short-term liquidity:
At March 31, 1998, the Partnership held cash and cash equivalents of $1,224,363.
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 1998. The Partnership has budgeted approximately $1.2 million for
necessary capital improvements for all properties in 1998 which is expected to
be funded from available cash reserves or from operations of the properties.
Additional efforts to maintain and improve Partnership liquidity have included
continued attention to property management activities. The objective has been to
obtain maximum occupancy rates while holding expenses to levels necessary to
maximize cash flows. The Partnership has made capital expenditures on its
properties where improvements were expected to increase the competitiveness and
marketability of the properties.
Long-term liquidity:
While the outlook for maintenance of adequate levels of liquidity is favorable,
should operations deteriorate and present cash resources be insufficient for
current needs, the Partnership would require other sources of working capital.
The Partnership acquired a $5 million line of credit in 1995 that may be used
for property operations. Other possible actions to resolve cash deficiencies
include refinancings, deferral of capital expenditures on Partnership properties
except where improvements are expected to increase the competitiveness and
marketability of the properties, arranging financing from affiliates or the
ultimate sale of the properties.
<PAGE>
Pursuant to the Partnership's previously announced liquidation plans, the
Partnership has recently retained PaineWebber, Incorporated as its exclusive
financial advisor to explore alternatives to maximize the value of the
Partnership. The alternatives being considered by the Partnership include,
without limitation, a transaction in which limited partnership interests in the
Partnership are converted into cash. The General Partner of the Partnership or
entities or persons affiliated with the General Partner will not be involved as
a purchaser in any of the transactions contemplated above. Any transaction will
be subject to certain conditions including (i) approval by the limited partners
of the Partnership, and (ii) receipt of an opinion from an independent financial
advisory firm as to the fairness of the consideration received by the
Partnership pursuant to such transaction. Finally, there can be no assurance
that any transaction will be consummated, or as to the terms thereof.
The Partnership has placed AAA Century Airport Self-Storage and Burbank
Mini-Storage on the market for sale effective August 1, 1997.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
(a) Exhibits.
Exhibit
Number Document Description
------- --------------------
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).
11. Statement regarding computation of Net
Income (Loss) per Hundred Limited
Partnership Units. Net income (loss) per one
hundred limited partnership units is
computed by dividing net income (loss)
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 51,999 and 52,369 weighted
average limited partnership units (in
hundreds) outstanding in 1998 and 1997.
27. Financial Data Schedule for the quarter
ended March 31, 1998.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended March 31, 1998.
<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:
McNEIL REAL ESTATE FUND XXVII, L.P.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
May 14, 1998 By: /s/ Ron K. Taylor
- ------------ -----------------------------------------
Date Ron K. Taylor
President and Director of McNeil
Investors, Inc.
(Principal Financial Officer)
May 14, 1998 By: /s/ Carol A. Fahs
- ------------ -----------------------------------------
Date Carol A. Fahs
Vice President of McNeil Investors, Inc.
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,224,363
<SECURITIES> 0
<RECEIVABLES> 315,194
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 27,864,279
<DEPRECIATION> (9,138,940)
<TOTAL-ASSETS> 32,175,134
<CURRENT-LIABILITIES> 0
<BONDS> 3,437,648
0
0
<COMMON> 0
<OTHER-SE> 27,377,388
<TOTAL-LIABILITY-AND-EQUITY> 32,175,134
<SALES> 2,203,177
<TOTAL-REVENUES> 2,432,553
<CGS> 1,023,238
<TOTAL-COSTS> 1,355,446
<OTHER-EXPENSES> 355,801
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 96,035
<INCOME-PRETAX> 625,271
<INCOME-TAX> 0
<INCOME-CONTINUING> 625,271
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 625,271
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
