UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the year ended December 31, 1994
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: 0-16647
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
-----------------------------------------------
(Exact name of registrant as specified in its charter)
California 33-0207312
------------------------ --------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
400 South El Camino Real, Suite 1100 94402-1708
San Mateo, California ----------
---------------------- (Zip Code)
(Address of principal executive offices)
Partnership's telephone number, including area code (415) 343-9300
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
----------------------------------------
(Title of class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
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 (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
-------- --------
No market for the Limited Partnership Units exists and therefore a market
value for such Units cannot be determined.
DOCUMENTS INCORPORATED BY REFERENCE: None
NO EXHIBIT INDEX REQUIRED
Page 1 of 41
PART I
Item 1. Business
The Partnership, Glenborough All Suite Hotels L.P., A California
Limited Partnership (formerly Outlook All Suite Hotels, L.P., An
All Equity Income Fund), was formed on January 9, 1985, as a
limited partnership under the California Revised Limited
Partnership Act. The General Partner of the Partnership was
Outlook Financial Partners, a California general partnership
consisting of Luke V. McCarthy; John R. Provine; August Advisers,
Inc., a California corporation; and August Managers Associates, a
California limited partnership. However, on February 22, 1994,
several matters submitted to a vote of security holders through
the solicitation of proxies were approved including the change in
the general partner to Glenborough Realty Corporation as managing
General Partner and Robert Batinovich as co-General Partner (see
Note 11 of the Notes to Financial Statements).
The Partnership's public offering commenced on June 12, 1987 and
terminated on December 31, 1987, having raised a total of
$24,007,170. Prior to commencing its offering, the Partnership
acquired, on December 19, 1986, six all-suite hotels. The
Partnership's acquisition of these properties was funded entirely
from indebtedness. On October 28, 1987, the Partnership had
received the necessary subscriptions in order to break impound,
and on November 5, 1987 it repaid the acquisition indebtedness on
two of the properties located in Fort Worth and Arlington, Texas.
Upon terminating its offering on December 31, 1987, the
Partnership repaid the acquisition indebtedness on a third
property located in Tucson, Arizona. Because the Partnership did
not raise enough money through its public offering to repay the
acquisition indebtedness on the three remaining hotels, these
properties were transferred on December 31, 1987 to an affiliate
of the General Partner. The transferred hotels were located in
Nashville, Tennessee; Carlsbad, California and Cathedral City,
California. The order in which the acquisition indebtedness was
retired, and consequently, the hotels which were retained after
December 31, 1987, was specified in the Partnership's prospectus
under the Securities Act of 1933.
The Partnership's primary business and only industry segment is
to own and oversee the operation of its hotels for the benefit of
its limited partners. Each hotel is comprised exclusively of
suites and each suite is equipped with a kitchen. The hotels
became part of the Country Suites by Carlson franchise on May 5,
1992, and Glenborough Hotel Group (the "Manager"), an affiliate
of Glenborough Realty Corporation, assumed management of the
properties on that same date. Prior to May 5, 1992, the hotels
were part of the Lexington Hotel Suites chain and were managed by
the developer and seller of the hotels.
As of December 31, 1994, the Partnership did not directly employ
any persons in full-time positions. All persons rendering
services on behalf of the Partnership are employees of
Glenborough Corporation, an affiliate of the general partner.
Page 2 of 41
The Partnership has been named in a Registration Statement
proposing a consolidation by merger of several entities, which
has been filed with the Securities and Exchange Commission. In
that regard, as of December 31, 1994, the Partnership has
advanced $180,000 (included in deposits) toward the transaction
costs associated with the consolidation. An additional $68,000
in transaction costs have been included in deposits and was
payable at December 31, 1994. In the event the proposal is not
approved by the Partnership's limited partners, and the
consolidation goes forward with any of the other entities, the
amounts advanced will be fully reimbursed by an affiliate of the
general partners of the Partnership. If the consolidation,
itself, does not go forward with any of the other entities, the
Partnership will bear a proportion of the transaction costs based
upon the number of limited partners who voted for approval of the
transaction as compared to those who dissented or abstained. The
limited partners are expected to receive their solicitation
materials for this potential transaction in 1995.
Item 2. Properties
As of December 31, 1994, the Partnership had investments in two
properties. One of the original three properties was sold in
1993, as discussed below. The following is a brief summary of
each real estate investment.
Country Suites - Arlington
------------------------------
On December 19, 1986, the Partnership acquired a 132-suite hotel
located at 1075 Wet N Wild Way in Arlington, Texas. The
acquisition of the property was funded entirely from debt which
was repaid November 5, 1987.
The hotel opened in March 1986 and became fully operational in
April of that year. The 132 suites consist of 90 one-
bedroom/one-bathroom suites, 30 two-bedroom/two-bathroom suites,
and 12 studio-suites. The hotel also has 145 parking spaces.
Each suite features kitchen facilities and a separate furnished
living area. The hotel contains a centrally located pool with
spa and conference facilities.
In 1994, Country Suites by Carlson - Arlington continued to
implement and comply with Country Lodging standards, the American
Disabilities Act ("A.D.A."), and city, state, and federal codes.
The lobby was refurbished, reflecting a "country" decor;
landscaping upgrades were made to enhance curb appeal; and soft
goods and selected case goods were replaced. Building
improvements included the replacement of several ceiling sections
due to deterioration, painting of guest room doors, and re-
plumbing of various sections of the irrigation system.
Improvements budgeted for 1995 include compliance with the A.D.A.
(phase II) requirements; replacement of televisions with state-
of-the-art, remote controlled equipment to address the growing
number of guest requests; replacement of numerous HVAC units,
microwave ovens, mattresses and lamps; and the addition of new
art work to complete the "country" decor and elevate the
Page 3 of 41
perceived price/value of the hotel. Management will continue to
focus on the business traveler with an emphasis on activities and
amenities making their stay a memorable and enjoyable experience.
Because the property is a hotel operation, there are no tenants
occupying ten percent or more of the space, and there are no
leases for the rooms. During 1994, the published daily room
rates (*) were as follows:
Jan 1-May 31 June 1-Aug 31 Sep 1-Dec 31
------------ ------------- ------------
$55-$65 $75-$129 $59-$79
(*)Transient rack rates (the highest, non-discounted published
rates) for a stay of one to five days.
The City of Arlington is almost equidistant from downtown Fort
Worth and downtown Dallas. This central location has helped
Arlington to become a major warehouse and distribution center for
the Dallas/Fort Worth metroplex. Numerous tourist attractions
including Six Flags Over Texas and the proximity to the
Dallas/Fort Worth International Airport have assisted in the
creation of demand for lodging. With its homebase of Arlington,
the Texas Rangers Baseball Team has provided a significant
attraction to the area.
From a lodging industry standpoint, Arlington experienced
significant impact from the baseball strike. In 1994, twenty-one
Texas Rangers home games were cancelled resulting in lost revenue
for Country Suites - Arlington as well as other area hotels. As
baseball owners and union talks continue without resolution, the
1995 revenues may be negatively impacted during the normally peak
summer months.
The hotel's marketplace has remained extremely competitive. In
addition to existing 1,000 plus hotel rooms in the immediate
area, a new supply of approximately 360 rooms is anticipated to
be introduced in 1995 as well as many local apartment complexes
converting units to accommodate corporate clientele with long-
term lodging requirements.
To the extent possible, especially during the peak months, the
goal will be to attempt to maximize rates in all segments. Past
and future product improvements have and will increase the
perceived price/value, justifying whatever rate increases can be
achieved. Management has and continues to: (i) work with a
"Countryline" network reservation system; (ii) saturate the
travel agent market segment with advertising; and (iii) utilize
cooperative advertisement vehicles in local, regional and feeder-
cities targeting mid to higher end segments.
Page 4 of 41
The hotel's operating results for the last five years are
summarized as follows:
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
Occupancy level 63% 61% 68% 73% 71%
Average daily
room rate $62.70 $51.60 $57.70 $58.40 $52.20
The hotel can earn the rack rate (highest, non-discounted
published rate) during periods of high demand. However, because
of an increase in competition, more discounts are given during
the periods of lower demand. This can result in a decreasing
average daily room rate even though the published rates may be
increasing from year to year.
In the opinion of management, the property is adequately covered
by insurance.
In 1994, the annual real estate tax rate was approximately 2.58%
based upon 100% of the assessed value, resulting in annual taxes
of approximately $100,000.
Country Suites - Tucson
-----------------------
On December 19, 1986, the Partnership acquired a 157-suite hotel
located at 7411 North Oracle Road in Tucson, Arizona, ideally
located to capture market share from numerous markets. The
acquisition of the property was funded entirely from debt which
was repaid in full on December 31, 1987.
The hotel construction was completed and the hotel opened in
October 1986, and became fully operational in January 1987. The
157 suites consist of 91 one-bedroom/one bathroom suites, which
can be combined to form two-bedroom/two bathroom suites, 65
studio-suites and one V.I.P. suite. The hotel also has 162
parking spaces. Each suite features kitchen facilities; one and
two bedroom suites offer a separate furnished living area. The
hotel contains a centrally located pool with spa and conference
facilities.
In 1994, Country Suites by Carlson - Tucson continued to
implement and comply with Country Lodging standards, the American
Disabilities Act ("A.D.A."), and city, state, and federal codes.
The lobby was refurbished and new chairs were purchased for the
Atrium, both reflecting a "country" decor; landscaping upgrades
were made to enhance curb appeal; and soft goods and selected
case goods were replaced. Building improvements included the re-
painting of numerous guest rooms and re-plumbing of the spa and
various sections of the swimming pool. Improvements budgeted for
1995 include compliance with the A.D.A. (phase II) requirements;
replacement of televisions with state-of-the-art, remote
controlled equipment to address the growing number of guest
Page 5 of 41
requests; replacement of numerous HVAC units, microwave ovens,
mattresses and lamps; and the addition of new art work to
complete the "country" decor and elevate the perceived
price/value of the hotel. Management will continue to focus on
the business traveler with an emphasis on activities and
amenities making their stay a memorable and enjoyable experience.
Because the property is a hotel operation, there are no tenants
occupying ten percent or more of the space, and there are no
leases for the rooms. During 1994, the published daily room
rates (*) were as follows:
Jan 1-Mar 31 Apr 1-May 31 Jun 1-Sept 30 Oct 1-Dec 31
------------ ------------ ------------ ------------
$75-$109 $59-$89 $45-$65 $59-$89
(*) Transient rack rates (highest, non-discounted published rate)
for a stay of one to five days.
The Northwest Tucson market continues to experience solid
development of industrial and retail space as well as residential
housing. The metropolitan Tucson economy has seen substantial
population growth over the past year with indications pointing to
a continuation of this trend in 1995. In addition, Country Suites
benefitted from an influx of transient business during 1994 which
was attributed to the perceived safety and security issues in
California. Travelers, typically bound for Southern California
destinations, elected to spend the winter and spring months in
Arizona. This trend is not expected to continue with as much
vigor in 1995.
Competition continues to increase within the competitive area,
with new hotels being built and older hotels (including Country
Suites) making improvements to promote a fresh and clean
appearance. It is anticipated that this increase in comparable
supply will have a negative impact on transient revenue in 1995.
The focus in 1995 will be to maximize rates in all segments where
ever possible. Past product improvements have increased the
perceived price/value, justifying a rate increase.
Management believes that there are areas of potential market
growth and has and continues to: (i) work with a "Countryline"
network reservation system; (ii) saturate the travel agent market
segment with advertising; and (iii) utilize cooperative
advertisement vehicles in local, regional and feeder-cities
targeting mid to higher end segments.
The hotel's operating results for the last five years are
summarized as follows:
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
Occupancy level 77% 77% 72% 73% 71%
Average daily
room rate $57.20 $54.50 $54.40 $51.30 $48.30
Page 6 of 41
The hotel can earn the rack rate (highest, non-discounted
published rate) during high periods of demand. However, because
of an increase in competition, more discounts are given during
the lower periods of demand. This can result in a stable average
daily room rate even though the published rates are increasing
from year to year.
In the opinion of management, the property is adequately covered
by insurance.
In 1994, the annual real estate tax rate was approximately 14.88%
based upon 25% of the assessed value, resulting in annual real
property taxes of approximately $96,000.
Item 3. Legal Proceedings
The Partnership is not a party to, nor are any of its assets the
subject of, any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
In December 1993, several matters were submitted to a vote of
security holders through the soliciation of proxies. On
February 22, 1994, these matters were approved by a majority of
security holders (see Note 1 of the Notes to Financial
Statements).
PART II
Item 5. Market for Partnership's Common Equity and Related
Stockholder Matters
Market Information
------------------
The units of limited partnership interest in the Partnership (the
"Units") have limited transferability. There is no public market
for the Units and it is not expected that any will develop.
There are restrictions upon the transferability of Units,
including requirements as to the minimum number of Units which
may be transferred, and that the General Partners must consent to
any transferee becoming a substituted limited partner (which
consent may be granted or withheld at the sole discretion of the
General Partner). In addition, restrictions on transfer may be
imposed under certain state securities laws. Consequently,
holders of Units may not be able to liquidate their investments
and the Units may not be readily acceptable as collateral.
Holders
-------
As of December 31, 1994, approximately 2,257 persons held
2,399,217 Units. Each Unit represents $10 original investment in
the Partnership.
Page 7 of 41
Cash Distributions
------------------
The Partnership has made distributions to its partners as follows
(all of which represented a return of capital):
For the year ended December 31, Total Distributions
------------------------------- -----------------
1994 $ 763,000
1993 731,000
1992 851,000
Cash generated from the Partnership's operations, after payment
of expenses, provides the basis for ongoing cash distributions.
The amount, if any, distributed by the Partnership in the future
will, accordingly, be based on the actual operating experience of
the Partnership and is determined by the General Partner.
At December 31, 1994, the Unitholders had a net original capital
investment of $23,992,170 and accumulated priority returns of
approximately $11,827,388. The capital account balance amounts
are continuing to accrue a priority return at the rate of 12% per
annum. These amounts, however, do not represent obligations of
the Partnership, but only represent the amounts which must be
paid to the holders of the Units before additional payments will
be made to other partners. A calculation of the cumulative
priority return is made each year however it is not accrued in
the accompanying financial statements. Reference should be made
to the Partnership's partnership agreement for a more complete
description of the preferential payments to be made.
Page 8 of 41
Item 6. Selected Financial Data
The selected financial data should be read in conjunction with
the financial statements and related notes contained elsewhere in
this report. This financial data is not covered by the report of
the independent public accountants.
SELECTED FINANCIAL DATA
(In thousands, except per Unit data)
For the Year Ended December 31,
1994 1993 1992 1991 1990
----- ----- ----- ----- -----
Total revenue $ 4,699 $ 4,828 $ 5,424 $ 5,750 $ 5,220
Loss on sale $ - $(1,056) $ - $ - $ -
Gain on debt
forgiveness $ - $ 1,354 $ - $ - $ -
Net income (loss) $ 751 $ (206) $ (548) $ (3) $ 54
Per Limited Partnership Unit:
Net income
(loss) $ 0.31 $ (0.09) $ (0.23) $ - $ -
Distributions:
Net income $ _ $ - $ - $ - $ 0.66
Return of
capital $ 0.31 $ 0.30 $ 0.35 $ 0.37 $ -
Total assets $11,623 $11,604 $15,370 $16,400 $17,212
Notes payable $ - $ - $ 2,676 $ 2,304 $ 2,172
Item 7. Management Discussion and Analysis of Financial
Condition and Results of Operations
The Partnership was formed to acquire and operate a maximum of
six all-suite hotels in order to provide quarterly cash
distributions, preserve and protect capital and achieve long term
appreciation in the value of the properties. Following its
public offering, and in accordance with the formula based on the
amount of offering proceeds, the Partnership retained three
hotels. The hotels were purchased in December 1986 with an
income warranty provided by the seller which was designed to
allow the Partnership to make cash distributions at an annual
rate of 8.5% through December 31, 1989.
LIQUIDITY AND CAPITAL RESOURCES
From inception through the quarter ended December 31, 1989,
distributions were paid to the limited partners at an 8.5%
annualized rate, supported first by the warranty payments
received from the seller of the Partnership's properties and then
from June 1988 through December 1989 by loans (which were
Page 9 of 41
subsequently paid off at a discount) provided by the General
Partner, the seller of the hotels and an affiliate of Shearson
Lehman Brothers Inc. For the first three quarters of 1990,
distributions were paid at a 6% annualized rate. No distribution
was paid in the fourth quarter of 1990 to reserve funds necessary
to pay for renovation costs at the Forth Worth property. This
resulted in an overall distribution rate of 4.5% for 1990.
Distributions were resumed in 1991 and paid at a rate of 5% in
1991, decreasing to a rate of 3% in 1992, 1993 and the six months
ended June 30, 1994. The distributions made in the third and
fourth quarters of 1994 were increased to a rate of 3.3%. On a
calendar basis, the Partnership distributed approximately
$755,000, $722,000 and $838,000 to the limited partners during
the years ended December 31, 1994, 1993 and 1992. Of the total
distributions paid in 1994, 1993 and 1992, $0, $722,000 and
$838,000 represented return of capital, respectively. Based upon
the projected 1995 cash flow of the Partnership, distributions
should remain at a rate of 3.3%.
One of the Partnership's initial investment strategies was a
possible refinancing of up to 80% of the value of the hotels and
to return the proceeds to the investors while continuing to own
and operate the hotels. In light of current market and lending
conditions, both generally and as they affect the Partnership's
hotels, management believes that this is not the time to incur
additional debt but to continue to operate the hotels on a debt-
free basis and to enhance their performance in a very competitive
market. Therefore, in management's opinion, the financing option
should be deferred to ensure adequate partnership liquidity and a
continuation of distributions.
On May 6, 1993, the Partnership entered into a settlement of the
lawsuit filed by the seller on February 20, 1992, against the
Partnership for collection of the unsecured promissory note due
the seller, in the original principal amount of $250,000, but
with a combined balance of principal and interest of $390,400 as
of the settlement date. The suit asserted that there had been a
de facto change in the General Partner, causing the note to
become due. In a related matter, during 1992, the seller
received workers compensation deposit refunds and credit card
receipts, totalling $484,000, belonging to the Partnership. The
seller withheld payment of this amount until the lawsuit was
resolved. The Partnership's financial statements, prior to the
settlement as described below, reflected a receivable from the
seller of $378,000, after establishing a valuation reserve of
$106,000 at December 31, 1992.
In the settlement, the seller agreed to release its claim for the
unsecured promissory note in return for the Partnership allowing
the seller to retain all but $43,000 of the workers compensation
and credit card funds referenced in the preceding paragraph. The
difference between the total amount retained by the seller
($441,000) and the combined principal and interest under the note
as of the settlement date ($390,400) is attributable to the
seller's attorneys fees and other collection costs. The seller
also transferred to an affiliate of the Partnership certain
Page 10 of 41
limited partnership interests in the Partnership (equaling 1,000
units) in return for the Partnership allowing the seller to
retain an additional $10,000 of the workers compensation and
credit card funds. In addition, the Partnership, on behalf of an
affiliate of the Partnership, funded the purchase of 500 units
for $5,000 for certain limited partnership interests associated
with the seller. These 1,500 units, or limited partnership
interests, were held in trust for the benefit of the Partnership.
These units were canceled in 1993 (see Note 8 of the Notes to
Financial Statements). The final settlement was approved in the
quarter ended June 30, 1993, and the relative receivable and note
payable were eliminated with no additional revenue or expense
recorded by the Partnership.
Also on May 6, 1993, Glenborough Corporation and certain of its
affiliates entered into a settlement of a lawsuit that had been
brought by the former management company and seller of the hotels
("the seller") on November 13, 1991. The lawsuit alleged that,
in connection with the general partner's termination of the
former management company as operator and franchisor of the
Partnership's hotels, Glenborough and its affiliates had defamed
the former management company and interfered with its contractual
relationship with the Partnership. A majority of the amount paid
to the former management company under the settlement was funded
by Glenborough's insurance carriers, but a portion of the
settlement amount was funded by Glenborough Corporation.
Pursuant to Glenborough's indemnity rights as manager of the
Partnership (and as general partner of other Outlook partnerships
that own hotels), Glenborough was entitled to reimbursement of
this portion of the settlement payment. The Partnership's share
of this reimbursement was $64,300, which along with attorney's
fees, was included in litigation settlement expense on the
Partnership's December 31, 1993 statement of operations.
On October 22, 1993, the Partnership sold the Fort Worth hotel,
including all land, buildings and improvements and furniture and
fixtures, to an unaffiliated third party, for a sales price of
$1,605,000. Total cash consideration received after credits and
commissions, taxes, fees to affiliates, title and escrow costs of
$97,000 was $1,508,000. Proceeds of $500,000 were used to payoff
the notes payable-lines of credit. Additional proceeds were used
to payoff the remaining notes payable to affiliates at a discount
including the forgiveness of all related accrued interest. The
remaining cash was maintained by the Partnership as working
capital.
Management is pursuing a number of avenues to preserve and
enhance both the cash flow and value of the hotels, given their
product type and today's economic conditions. These avenues
include the following: (1) aggressive marketing to increase
business from existing corporate accounts and develop new
accounts; (2) minimize expenses; (3) property tax appeals to
reduce the tax costs; (4) re-bidding of property and casualty
insurance to reduce insurance costs; and (5) maintenance of the
hotels in a first class condition.
Page 11 of 41
The Partnership has been named in a Registration Statement
proposing a consolidation by merger of several entities, which
has been filed with the Securities and Exchange Commission. In
that regard, as of December 31, 1994, the Partnership has
advanced $180,000 (included in deposits) toward the transaction
costs associated with the consolidation. An additional $68,000
in transaction costs have been included in deposits and was
payable at December 31, 1994. In the event the proposal is not
approved by the Partnership's limited partners, and the
consolidation goes forward with any of the other entities, the
amounts advanced will be fully reimbursed by an affiliate of the
general partners of the Partnership. If the consolidation,
itself, does not go forward with any of the other entities, the
Partnership will bear a proportion of the transaction costs based
upon the number of limited partners who voted for approval of the
transaction as compared to those who dissented or abstained. The
limited partners are expected to receive their solicitation
materials for this potential transaction in 1995.
RESULTS OF OPERATIONS
1994 versus 1993
----------------
Rooms revenue decreased $71,000 from $4,526,000 in 1993 to
$4,455,000 in 1994, largely due to the Fort Worth property sale
in October 1993 as previously discussed. Offsetting this loss in
rooms revenue were increases in rooms revenue for the other two
properties. Both the Arlington and Tucson hotels were able to
increase average daily room rates in 1994 while the Arlington
hotel was also able to benefit from the devastating weather
conditions in the second quarter of 1994 (discussed below).
Interest and other revenue decreased in 1994 compared to 1993 as
a result of a partial insurance premium refund in January 1993.
The prior management company's insurance carrier's rates were
extremely high, so when the current managers assumed
responsibility in 1992, they changed carriers to a company with
more competitive rates.
Total operating costs and expenses decreased $1,178,000 or
approximately 23% in 1994 as compared to 1993. This decrease is
primarily due to the absence of $847,000 in 1993 Fort Worth
expenses in 1994, a decrease in depreciation expense for
capitalized items that have been fully depreciated since December
31, 1993, and the one-time litigation settlement expense (as
discussed above).
General and administrative costs decreased approximately $81,000
from $283,000 in 1993 to $202,000 in 1994, due mainly to the
absence of general partner liability insurance expense of $19,000
in 1994 and a decrease of $32,000 in overhead as a result of the
sale of the Fort Worth property. Since the change in the general
partner, the insurance cost has been eliminated.
Page 12 of 41
The decrease in interest expense from $206,000 in 1993 to $0 in
1994 is a direct result of the sale of the Fort Worth property,
eliminating its related debt.
The overall focus for 1995 will be to maintain its market share
by offering a wider variety of options to prospective guests and
to maximize its rates for all segments.
1993 versus 1992
----------------
In 1993, the performance of the Tucson hotel exceeded 1992
operating results but the Arlington hotel operating results
decreased from 1992 to 1993. This, along with the decrease in
revenue associated with the sale of Fort Worth in October 1993,
resulted in a decrease in overall rooms revenue of $398,000 from
$4,924,000 in 1992 to $4,526,000 in 1993.
The Arlington hotel has suffered the effects of a competitive
marketplace and not having an established base of business. The
only significant accounts the hotel had upon acquisition by the
current management company in mid-1992 were government-related
entities which have since been subject to federal and state
cutbacks. Strategies to increase occupancy included rate
concessions. Focus was on account development and direct sales
efforts. Management believed that the change in franchise had,
and will continue to have a positive effect on the hotels'
reputations, therefore ultimately benefiting the Partnership.
Interest and other revenue decreased approximately $198,000 in
fiscal year 1993 compared to fiscal year 1992 primarily due to a
worker's compensation deposit refund received in 1992. In
addition, there was a decrease in telephone revenue related to a
decrease in occupancy at the Arlington property.
Normally, with a decrease in rooms revenue, there would be a
correlating decrease in rooms expense. However, in 1993 compared
to 1992, there was an increase in rooms expense from $1,235,000
in 1992 to $1,245,000 in 1993 due to an increase in fixed costs
associated with an increase in the quality control staff whose
job is to oversee the rooms.
Sales and marketing expense decreased approximately $49,000 in
1993 over 1992 primarily due to the decrease in the Fort Worth
property's expenses in this category. In anticipation of a sale
of the property, less funds were used to actively market new
business.
In 1993, property operation and maintenance costs decreased
approximately $211,000 due to the inclusion in 1992 of $106,000
of bad debt expense (discussed below) and an overall decrease in
Fort Worth's expenses in anticipation of and relating to the
sale.
Other general and administrative expenses were lower in 1993 when
compared to 1992 due to unusually high expenses in fiscal year
1992. The general partner insurance premium increased in 1992 by
approximately $18,000 due to market factors associated with
Page 13 of 41
obtaining this type of insurance. In addition, tax return
preparation costs had been expensed when paid in years prior to
1992. In 1992, an accrual was made for the 1992 costs to be paid
in 1993 in addition to expensing the 1991 costs paid in 1992.
Such an accrual resulted in a one-time increase in tax return
preparation costs of approximately $10,000.
Page 14 of 41
Hotel operations
----------------
The following tables summarize the occupancy rates and average
daily room rates, respectively, for the five year period ended
December 31 (October 31, 1993 for the Fort Worth property) for
the Partnership's properties:
OCCUPANCY:
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
Arlington 63% 61% 68% 73% 71%
Tucson 77% 77% 72% 73% 71%
Fort Worth - 55% 51% 58% 59%
AVERAGE DAILY ROOM RATE:
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
Arlington $62.70 $51.60 $57.70 $58.40 $52.20
Tucson $57.20 $54.50 $54.40 $51.30 $48.30
Fort Worth - $36.60 $37.40 $36.40 $33.90
Fiscal year 1992 marked the year of realignment with reservation
systems, significant increases in guest return and satisfaction
levels, equipment upgrades and replacements, and repositioning
efforts and new sales strategies for the three hotels. In
fiscal year 1993, many deferred maintenance issues were addressed
that now project a fresh look and enhance curb appeal. Fiscal
year 1994 included the refurbishing of the hotel lobbies to
reflect a "country" decor and continued improvements to further
enhance curb appeal. Improvements budgeted for 1995 include
replacement of televisions with state-of-the-art remote
controlled equipment to address the growing number of guest
requests, replacement of microwave ovens, mattresses, lamps,
etc., compliance with phase II of the American Disabilities Act,
and new art work to complete the "country" decor.
Arlington
---------
The Arlington Hotel's 1994 results have exceeded 1993 results.
The average daily room rate was $11.10 higher in 1994 compared to
1993. The average daily room rate was $62.70 and $51.60 in 1994
and 1993, respectively. The average occupancy rate was 2% higher
at 63% in 1994 compared to 61% in 1993. Arlington's marketplace
continues to be highly competitive, making it difficult to
establish a business base of loyal customers to increase market
share.
The Arlington hotel market is characterized by distinct seasonal
occupancy and rate fluctuations. The hotel has a strong base of
corporate business with secondary leisure business in the summer
months, which it draws from its location near Six Flags Over
Texas amusement park and Texas Rangers Stadium. From May through
August, which are peak tourist months, the city's hotel
occupancies normally range from 70% to 90%. During the four peak
season months, the Arlington hotel is able to achieve average
Page 15 of 41
rates approximately 15% higher than it achieves during the other
eight months of the year. However, there are over 1,000
competing hotel rooms in the immediate area with more on the way,
causing room rates to be highly sensitive. In 1994, expense
control was fine tuned resulting in gross operating profit
exceeding budget. For 1995, the focus will be on developing
additional corporate business to ensure a continued solid and
dependable base throughout the year. The hotel has increased the
higher-rated preferred market segment, however, opportunity
remains in the government, corporate and tour group segments.
As discussed above, the Country Suites - Arlington hotel has
typically shown significant increases in occupancy during the
summer months. As baseball owners and union talks continue
without resolution, the 1995 revenues may be negatively impacted
during these normally peak summer months. The Arlington Visitors
and Convention Bureau has taken steps to assist the local economy
by aggressively marketing and promoting Arlington and all its
activities, attractions and sights.
Tucson
------
Tucson's 1994, results have slightly exceeded 1993 results. The
average daily room rate and average occupancy for 1994 was $57.20
and 77%, compared to an average daily room rate and average
occupancy in 1993 of $54.50 and 77%. This increase in average
daily room rate did not appear to affect occupancy and can be
attributable to marketing efforts and a maturity of the franchise
reservation system.
The Tucson hotel market is characterized by distinct seasonal
occupancy and rate fluctuations. The area's high season spans
from January through mid-April when the resorts and hotels are
filled to capacity with high-rated leisure and corporate group
travelers from the cold northern U.S. cities who come to Tucson
for the mild and pleasant winter weather. The low season,
spanning from mid-April to September is characterized by low
hotel occupancies and rates because neither leisure nor
commercial travelers care to expose themselves to Tucson's
relentlessly hot summers. In 1994, Country Suites benefitted
from an influx of transient business which was attributable to
the perceived safety and security issues in California.
Travelers, typically bound for Southern California destinations,
elected to spend the winter and spring months in Arizona.
Offsetting this was a decrease in total occupied room nights by a
corporate client, Sierra Tucson.
Competition continues to increase in the area of the property,
with new hotels being built and older hotels (including Country
Suites) making improvements to promote a fresh and clean
appearance. It is anticipated that this increase in comparable
supply will have a negative impact on transient revenue in 1995,
coupled with the belief that the influx of transient business
from California will slow in 1995. The focus in 1995 will be to
maintain 1994 occupancy levels and to maximize rates in all
Page 16 of 41
segments wherever possible. Past product improvements have
increased the perceived price/value, justifying a rate increase.
Fort Worth
----------
On October 22, 1993, the Partnership sold the Fort Worth property
(See Note 10 of the Notes to Financial Statements).
Page 17 of 41
Item 8. Financial Statements and Supplementary Data
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Page
-----
Report of Independent Public Accountants . . . . . . . . . 19
Financial Statements:
Balance Sheets at December 31, 1994 and 1993 . . . . . . 20
Statements of Operations for the years ended
December 31, 1994, 1993 and 1992 . . . . . . . . . . . 21
Statements of Partners' Equity (Deficit) for the
years ended December 31, 1994, 1993 and 1992 . . . . . 22
Statements of Cash Flows for the years ended
December 31, 1994, 1993 and 1992 . . . . . . . . . . . 23
Notes to Financial Statements . . . . . . . . . . . . . . 24
Financial Statement Schedules:
Schedule III - Real Estate Investments and Related
Accumulated Depreciation and Amortization at
December 31, 1994 . . . . . . . . . . . . . . . . . . . . 33
All other financial statement schedules have been omitted because
of the absence of conditions under which they are required or
because the information is included elsewhere in this report.
Page 18 of 41
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP:
We have audited the accompanying balance sheets of GLENBOROUGH
ALL SUITE HOTELS L.P., A CALIFORNIA LIMITED PARTNERSHIP (formerly
known as Outlook All Suite Hotels, L.P., A California Limited
Partnership) as of December 31, 1994 and 1993, and the related
statements of operations, partners' equity (deficit) and cash
flows for each of the three years in the period ended
December 31, 1994. These financial statements and the schedule
referred to below are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of GLENBOROUGH ALL SUITE HOTELS L.P., A CALIFORNIA LIMITED
PARTNERSHIP as of December 31, 1994 and 1993, and the results of
its operations and its cash flows for each of the three years in
the period ended December 31, 1994 in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The schedule listed
in the index to financial statements and schedules is presented
for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial
statements. The schedule has been subjected to the auditing
procedures applied in our audits of the basic financial
statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
San Francisco, California,
February 10, 1995
Page 19 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Balance Sheets
(in thousands, except units outstanding)
December 31, 1994 and 1993
Assets 1994 1993
---------- ----------- ----------
Real estate investments, at cost:
Land $ 2,704 $ 2,704
Building and improvements 14,753 14,487
-------- --------
17,457 17,191
Less accumulated depreciation and amortization (6,685) (6,059)
-------- --------
Net real estate investments 10,772 11,132
Cash and cash equivalents 369 243
Accounts receivable, net 91 108
Prepaid expenses and other assets
(net of accumulated amortization of $76 and
$53 in 1994 and 1993, respectively) 391 121
-------- --------
Total assets $ 11,623 $ 11,604
======== ========
Liabilities and Partners' Equity (Deficit)
------------------------------------------
Accounts payable $ 117 $ 83
Accrued expenses 238 241
-------- --------
Total liabilities 355 324
Partners' equity (deficit):
General Partner (1,790) (1,790)
Limited Partners, 2,399,217 units outstanding
at December 31, 1994 and 1993 13,058 13,070
-------- --------
Total partners' equity 11,268 11,280
-------- --------
Total liabilities and partners' equity $ 11,623 $ 11,604
======== ========
The accompanying notes are an integral part of these statements.
Page 20 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Statements of Operations
(in thousands, except per unit amounts)
For the years ended December 31, 1994, 1993 and 1992
1994 1993 1992
Revenues: ----- ----- -----
Rooms $ 4,455 $ 4,526$ 4,924
Interest and other 244 302 500
------ ------ ------
Total revenues 4,699 4,828 5,424
------ ------ ------
Operating costs and expenses:
(including $1,105,000 and $1,375,000 paid to
affiliates in 1994 and 1993, respectively)
Rooms 1,138 1,245 1,235
Utilities 376 470 471
Management fees (paid to an affiliate) 234 239 253
Property taxes and insurance 271 323 327
Property general and administrative 411 467 487
Sales and marketing 363 407 456
Property operation and maintenance 304 421 632
Contract termination expenses - - 253
Depreciation and amortization 649 1,189 1,278
Other general and administrative (including
$150,000 and $177,000 paid to an affiliate
in 1994 and 1993, respectively) 202 283 313
Litigation settlement expense - 82 35
------ ------ ------
Total operating costs and expenses 3,948 5,126 5,740
------ ------ ------
Income (loss) from operations 751 (298) (316)
Other expenses:
Interest - 206 232
Loss on sale - 1,056 -
------ ------ ------
Income (loss) before extraordinary item 751 (1,560) (548)
------ ------ ------
Extraordinary item:
Gain on debt forgiveness - 1,354 -
------ ------ ------
Net income (loss) $ 751 $ (206) $ (548)
====== ====== ======
Income (loss) before extraordinary item
per limited partnership unit $ 0.31 $(0.64) $(0.23)
====== ====== ======
Extraordinary item per limited partnership unit $ - $ 0.55 $ -
====== ====== ======
Net income (loss) per limited partnership unit $ 0.31 $(0.09) $(0.23)
====== ====== ======
Distributions per limited partnership unit:
Net income $ - $ - $ -
====== ====== ======
Return of capital $ 0.31 $ 0.30 $ 0.35
====== ====== ======
The accompanying notes are an integral part of these statements.
Page 21 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Statements of Partners' Equity (Deficit)
(in thousands)
For the years ended December 31, 1994, 1993 and 1992
Total
General Limited Partners'
Partner Partners Equity
------- ------- -------
Balance at December 31, 1991 $ (1,761) $ 15,392 $ 13,631
Distributions (13) (838) (851)
Net loss (5) (543) (548)
------- ------- -------
Balance at December 31, 1992 (1,779) 14,011 12,232
Distributions (9) (722) (731)
Redemptions - (15) (15)
Net loss (2) (204) (206)
------- ------- -------
Balance at December 31, 1993 (1,790) 13,070 11,280
Distributions (8) (755) (763)
Net income 8 743 751
------- ------- -------
Balance at December 31, 1994 $ (1,790) $ 13,058 $ 11,268
======= ======= =======
The accompanying notes are an integral part of these statements.
Page 22 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Statements of Cash Flows
(in thousands)
For the years ended December 31, 1994, 1993 and 1992
Cash flows from operating activities: 1994 1993 1992
------------------------------------ ------ ------ -----
Net income (loss) $ 751 $ (206) $ (548)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 649 1,189 1,278
Loss on sale - 1,056 -
Gain on debt forgiveness - (1,354) -
Changes in assets and liabilities:
Accounts receivable - net 17 (39) 27
Due from the seller - - (378)
Prepaid expenses and other assets (293) 114 (103)
Accounts payable 34 (70) (5)
Accrued expenses (3) 23 (8)
Accrued interest payable - (2) 10
Interest compounded on notes payable to
affiliates - 150 200
------ ------ ------
Total adjustments 404 1,067 1,021
Net cash provided by operating ------ ------ ------
activities 1,155 861 473
------ ------ ------
Cash flows provided by (used in) investing activities:
Additions to real estate investments (266) (466) (136)
Proceeds from sale of Fort Worth - 1,508 -
------ ------ ------
Net cash provided by (used in)
investing activities (266) 1,042 (136)
------ ------ ------
Cash flows provided by (used in) financing activities:
Distributions to partners (763) (731) (851)
Limited partner unit redemptions - (15) -
Principal payments on notes payable - - (300)
Borrowings on notes payable - line of
credit - 350 500
Principal payments on notes payable
-line of credit - (822) (28)
Principal payments on notes payable
to affiliates - (722) -
------ ------ ------
Net cash used in financing activities (763) (1,940) (679)
------ ------ ------
Net increase (decrease) in cash and cash
equivalents 126 (37) (342)
Cash and cash equivalents at
beginning of period 243 280 622
------ ------ ------
Cash and cash equivalents at
end of period $ 369 $ 243 $ 280
====== ====== ======
Supplemental disclosure of cash flow information:
Cash paid for interest $ - $ 34 $ 22
====== ====== ======
Supplemental disclosure on non-cash transactions:
Write-off of receivable due from the seller
and corresponding accrued interest $ - $ 378 $ -
====== ====== ======
The accompanying notes are an integral part of these statements.
Page 23 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1994, 1993 and 1992
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
--------------------------------------------------
POLICIES
---------
Organization - Glenborough All Suite Hotels L.P., (formerly
Outlook All Suite Hotels L.P. (An All Equity Income Fund) - see
Note 11), A California Limited Partnership, (the "Partnership")
was organized in January 1985 in accordance with the provisions
of the California Revised Limited Partnership Act. The General
Partner of the Partnership was Outlook Financial Partners, a
California general partnership consisting of Luke V. McCarthy,
John R. Provine, August Managers Association, a California
limited partnership, and August Advisors, Inc., a California
corporation. However, on February 22, 1994, Glenborough Realty
Corporation and Robert Batinovich were approved by the security
holders to be the new general partners (collectively,
"Glenborough" or the "General Partner"), (see discussion below).
On December 19, 1986, the Partnership purchased six all-suite
hotels for a total purchase price of $36,657,000, of which
$600,000 was paid by an affiliate as a deposit and the balance
was evidenced by all-inclusive promissory notes. On December 31,
1987, three of the hotels (and their respective promissory notes)
were transferred to an affiliate of the General Partner. The
proceeds of the public offering were used to repay the remaining
debt. As of December 31, 1994, the Partnership owned a 132-suite
hotel in Arlington, Texas, and a 157-suite hotel in Tucson,
Arizona (the "Hotels"). The third hotel originally owned by the
Partnership was sold on October 22, 1993 for $1,605,000 (see Note
11).
The Partnership's public offering of 4,652,800 limited
partnership units began in June 1987. The offering was
terminated on December 31, 1987 with 2,400,717 units sold. In
1994, after approval by a majority of security holders, 1,500 of
these units were cancelled, resulting in 2,399,217 units
outstanding at December 31, 1994.
On February 22, 1994, several matters submitted to a vote of
security holders in December 1993, through the solicitation of
proxies, were approved. The Limited Partners and Unitholders had
given consent on the following matters:
a) the approval of the admission of Glenborough Realty
Corporation as managing general partner and Robert
Batinovich as co-general partner and the withdrawal of
Outlook Financial Partners as General Partner;
Page 24 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1994, 1993 and 1992
b) the change in the name of the Partnership to Glenborough
All Suite Hotels L.P. by amendment to the partnership
agreement;
c) the further amendment of the partnership agreement to
permit Glenborough Corporation, as an affiliate of the new
General Partner, to continue to receive fees and expense
reimbursements in substantially the same amount that are
currently provided for in the management agreement;
d) the further amendment to the partnership agreement
formally eliminating the provision for the Depositary
(which was originally adopted to facilitate public trading
of the Units, which is no longer expected to occur) and
conversion of each Unit into a Limited Partnership
Interest.
The Partnership Agreement provides for varying allocations of net
income or net loss and distributions (see Note 9).
Real Estate Investments - Real estate investments are stated at
cost. Subsequent improvements and acquisition fees paid for
acquired properties are included in real estate investments at
cost. Amounts recorded under income warranties are recorded as
reductions in the cost basis. Total amounts received under
income warranties were $1,904,000, all prior to December 31,
1988.
Buildings and improvements and furnishings are depreciated and
amortized on a straight-line basis over useful lives ranging from
seven to thirty years. Major replacements and improvements and
repairs and maintenance are charged to operations as incurred.
Cash Equivalents - The Partnership considers short-term
investments (including certificates of deposit) with a maturity
of three months or less at the time of the purchase to be cash
equivalents.
Income Taxes - Federal and state income tax laws provide that
income or loss of the Partnership is reportable by the partners
in their tax returns. Accordingly, no provisions for such taxes
have been made in the accompanying financial statements. The
Partnership reports certain transactions differently for tax and
financial statement purposes.
Net income (loss) and distributions per limited partnership unit-
Net income (loss) and distributions per limited partnership unit
are based on 2,399,217, 2,399,842 and 2,400,717 weighted average
Page 25 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1994, 1993 and 1992
limited partnership units outstanding for 1994, 1993 and 1992,
respectively.
Reclassification - Certain amounts in the 1993 and 1992 financial
statements have been reclassified to conform to the 1994
presentation.
Note 2. MANAGEMENT CONTRACT FEE
-----------------------
In July 1988, the Partnership renegotiated the termination
provisions of the Management and Operating Agreement (see Note 6)
with the former management company and seller of the hotels ("the
seller"). The Partnership paid $393,000 in consideration for
early termination rights of the agreement. Such amount was
capitalized as a management contract fee. On January 6, 1992,
the Partnership exercised its termination rights and terminated
the Management and Operating Agreement with the former management
company, giving 120 days notice. As a result, in 1992 the
unamortized portion of the management contract fee was written
off and is included in depreciation and amortization expense in
the accompanying statement of operations.
Additionally, a contract termination fee of $253,000 was paid by
the Partnership to the former management company in 1992. The
amount of the termination fee was determined in accordance with
the Management and Operating Agreement and was included in
contract termination expenses in the accompanying statement of
operations.
Note 3. NOTES PAYABLE TO AFFILIATES
---------------------------
On May 6, 1993, the Partnership entered into a settlement of the
lawsuit filed by the seller on February 20, 1992, against the
Partnership for collection of the unsecured promissory note due
the seller, in the original principal amount of $250,000, but
with a combined balance of principal and interest of $390,400 as
of the settlement date (see Note 8). In the settlement, the
seller released its claim for the unsecured promissory note in
return for the Partnership allowing the seller to retain all but
$43,000 of the workers compensation and credit card funds the
seller held which were due to the Partnership.
The remaining notes payable and accrued interest totalling
$2,076,000 at October 31, 1993 were paid off at a significant
discount for an aggregate amount of $722,000 from the proceeds of
the sale of the Fort Worth hotel (see Note 10).
Note 4. NOTE PAYABLE - LINES OF CREDIT
------------------------------
Page 26 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1994, 1993 and 1992
The Partnership obtained short-term financing through two Lines
of Credit from banks. The first line of credit, which was
unsecured, bore interest at 8%, and had a total of $250,000
available. It matured on February 10, 1993, but was extended
until March 17, 1993, when the second line of credit increased
its available funds from $250,000 to $500,000. This increase in
funds was used to pay off the first line of credit. The second
line of credit, which was also unsecured, bore interest at 8.5%
(payable monthly), and matured February 28, 1994. On October 22,
1993, the Partnership paid off this line of credit with the
proceeds from the sale of the Fort Worth hotel (see Note 10).
Note 5. TAXABLE INCOME
--------------
The Partnership's tax return, its qualification as a partnership
for Federal income tax purposes and the amount of taxable income
or loss are subject to examination by Federal and State taxing
authorities. If such examinations result in changes to the
Partnership's taxable income or loss, the tax liability of the
partners could change accordingly.
For Federal income tax reporting, (a) fees paid for services
related to seeking and evaluating potential real estate
investments are deducted if and when the plans of acquisition are
subsequently abandoned, (b) depreciation is provided for under
accelerated and modified accelerated cost recovery methods,
(c) lease income is recognized under the terms of the lease
contract; (d) bad debts are written off when deemed
uncollectible, and (e) gains or losses from the sales of
properties are adjusted for the turn-around effect of the prior
tax treatment of advisory fees and accelerated cost recovery.
The following is a reconciliation for the years ended December
1994, 1993 and 1992, of the net income (loss) for financial
reporting purposes to the taxable income (loss) determined in
accordance with accounting practices used in preparation of
Federal income tax returns (in thousands).
1994 1993 1992
----- ----- -----
Net income (loss) per financial
statements $ 751 $ (206) $ (548)
Amortization and depreciation 113 28 (124)
Interest income - 79 208
Bad debt reserve - - 107
General and administrative 2 - -
------ ------ ------
Partnership income (loss) for
Federal income tax basis $ 866 $ (99) $ (357)
====== ====== =======
Page 27 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1994, 1993 and 1992
The following is a reconciliation as of December 31, 1994, 1993
and 1992, of partners' equity for financial reporting purposes to
partners' capital for Federal income tax purposes (in thousands).
1994 1993 1992
---- ---- -----
Partners' equity per financial
statement $ 11,268 $11,280 $12,232
Amortization and depreciation (1,574) (1,686) (2,800)
Income warranties 889 899 1,054
Technical termination basis
adjustment - - 85
Limited partner redemptions 8 8 -
Interest on notes payable to
affiliate - - 445
Provisions for doubtful accounts 8 5 117
-------- -------- --------
Partners' capital for Federal
income tax basis $ 10,599 $10,496 $11,133
======== ======== ========
Note 6. MANAGEMENT AND OPERATING AGREEMENT
----------------------------------
The Partnership had a management and operating agreement with the
former management company and seller of the hotels whereby the
seller of the hotels was paid various fees for performance of
services related to the management and operation of the hotels.
As discussed in Note 2, the Management and Operating Agreement
with the former management company was terminated effective May
5, 1992. On that date, the Property became part of the Country
Suites by Carlson franchise and Glenborough Hotel Group, an
affiliate of Glenborough Corporation, assumed management of the
Properties. Franchise and management compensation continues
under arrangements similar to those with the former management
company.
The Partnership paid the former management company $86,200 for
the above fees in 1992. The Partnership paid Glenborough Hotel
Group $234,000 $239,000 and $166,800 in 1994, 1993 and 1992,
respectively, for the above fees.
Page 28 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1994, 1993 and 1992
Note 7. TRANSACTIONS WITH AFFILIATES
----------------------------
In accordance with the limited partnership agreement, the
Partnership paid the General Partner and its affiliates
compensation for services provided to the Partnership.
Glenborough Hotel Group provided services, in addition to
property management services as discussed in Note 6, and was
compensated as follows:
1994 1993
---------- ---------
Hotel salaries - reimbursed $1,105,000 $1,375,000
These costs are included in operating costs and expenses on the
statements of operations.
Additionally, the Partnership reimburses Glenborough Corporation
for general and administrative costs and services including
investor relations, office supplies and legal and administrative
services. Glenborough Corporation was reimbursed $150,000 and
$177,000 for these costs and services for the years ended
December 31, 1994 and 1993, respectively.
Note 8. LITIGATION
----------
On May 6, 1993, the Partnership entered into a settlement of the
lawsuit filed by the seller on February 20, 1992, against the
Partnership for collection of the unsecured promissory note due
the seller, in the original principal amount of $250,000, but
with a combined balance of principal and interest of $390,400 as
of the settlement date. The suit asserted that there had been a
de facto change in the General Partner, causing the note to
become due. In a related matter, during 1992, the seller
received workers compensation deposit refunds and credit card
receipts, totalling $484,000, belonging to the Partnership. The
seller withheld payment of this amount until the lawsuit was
resolved. The Partnership's financial statements, prior to the
settlement as described below, reflected a receivable from the
seller of $378,000, after establishing a valuation reserve of
$106,000 at December 31, 1992.
In the settlement, the seller agreed to release its claim for the
unsecured promissory note in return for the Partnership allowing
the seller to retain all but $43,000 of the workers compensation
and credit card funds referenced in the preceding paragraph. The
difference between the total amount retained by the seller
($441,000) and the combined principal and interest under the note
as of the settlement date ($390,400) is attributable to the
seller's attorneys fees and other collection costs. The seller
Page 29 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1994, 1993 and 1992
also transferred to an affiliate of the Partnership certain
limited partnership interests in the Partnership (equaling 1,000
units) in return for the Partnership allowing the seller to
retain an additional $10,000 of the workers compensation and
credit card funds. In addition, the Partnership, on behalf of an
affiliate of the Partnership, funded the purchase of 500 units
for $5,000 for certain limited partnership interests associated
with the seller. These 1,500 units, or limited partnership
interests, were held in trust for the benefit of the Partnership.
These units were cancelled in 1993. The final settlement was
approved in the quarter ended June 30, 1993, and the relative
receivable and note payable were eliminated with no additional
revenue or expense recorded by the Partnership.
Also, on May 6, 1993, Glenborough Corporation and certain of its
affiliates entered into a settlement of a lawsuit that had been
brought by the former management company and seller of the hotels
on November 13, 1991. The lawsuit alleged that, in connection
with the general partner's termination of the former management
company as operator and franchisor of the Partnership's hotels,
Glenborough and its affiliates had defamed the former management
company and interfered with its contractual relationship with the
Partnership. A majority of the amount paid to the former
management company under the settlement was funded by
Glenborough's insurance carriers, but a portion of the settlement
amount was funded by Glenborough Corporation. Pursuant to
Glenborough's indemnity rights as manager of the Partnership (and
as general partner of other Outlook partnerships that own
hotels), Glenborough was entitled to reimbursement of this
portion of the settlement payment. The Partnership's share of
this reimbursement was $64,300, which along with attorney's fees,
was included in litigation settlement expense on the
Partnership's 1993 statement of operations.
Note 9. PARTNERSHIP ALLOCATIONS AND DISTRIBUTIONS
-----------------------------------------
Net losses are generally allocated 1% to the General Partner and
99% to the Limited Partners. Net income shall be allocated first
to those Partners with negative balances in their capital
accounts, in the ratio of such negative balances, until no
Partner has a negative balance in its capital account. At that
time, 99% of net income will be allocated to the Limited
Partners and 1% to the General Partner until the aggregate
positive capital accounts of the Limited Partners equal the
unpaid adjusted capital investment (as defined). Finally, all
remaining net income will be allocated 90% to the Limited
Partners and 10% to the General Partner.
Page 30 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1994, 1993 and 1992
Cash available for distributions, to the extent deemed available
by the General Partner, will be distributed 99% to the Limited
Partners and 1% to the General Partner until the Limited Partners
have received distributions equal to a 10% per annum non-
cumulative, non-compounded return on their adjusted capital
investment. Further distributions, if available, will be made
based on various criteria, including a 12% priority return to the
Limited Partners, as outlined in the Partnership Agreement.
Distributions, if any, will generally be made on a quarterly
basis. The Partnership is under no obligation to make
distributions at any time.
Note 10. PROPERTY SALES
--------------
On October 22, 1993, the Partnership sold the Fort Worth hotel,
including all land, building and improvements and furniture and
fixtures, to an unaffiliated third party, for a sales price of
$1,605,000. Total cash consideration received after credits and
commissions, taxes, title and escrow costs and fees of $97,000
was $1,508,000. Proceeds of $500,000 were used to payoff the
notes payable-line of credit (see Note 4). Additional proceeds
were used to payoff the remaining notes payable to affiliates at
a significant discount and all related accrued interest was
forgiven (see Note 3). The remaining cash was maintained by the
Partnership as working capital.
Note 11. PARTNERSHIP EVENTS
------------------
On March 1, 1994, following the receipt of consent from limited
partners owning a majority interest of the outstanding limited
partnership units on February 22, 1994, Glenborough was
substituted for Outlook Financial Partners as the General
Partners of the Partnership. In addition to approving the change
in the General Partner, the limited partners approved the change
in the name of the Partnership from Outlook All Suite Hotels L.P.
(An All Equity Income Fund) to Glenborough All Suite Hotels L.P.;
the amendment to the partnership agreement to permit Glenborough
Corporation, as an affiliate of the new General Partner, to
continue to receive fees and expense reimbursements in
substantially the same or somewhat lower amounts that were
provided for in the existing management agreement; and the
further amendment to the partnership agreement formally
eliminating the provision for the depositary and conversion of
each unit into a limited partnership interest.
Note 12. OTHER INFORMATION
-----------------
The Partnership has been named in a Registration Statement
proposing a consolidation by merger of several entities, which
Page 31 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1994, 1993 and 1992
has been filed with the Securities and Exchange Commission. In
that regard, as of December 31, 1994, the Partnership has
advanced $180,000 (included in deposits) toward the transaction
costs associated with the consolidation. An additional $68,000
in transaction costs have been included in deposits and was
payable at December 31, 1994. In the event the proposal is not
approved by the Partnership's limited partners, and the
consolidation goes forward with any of the other entities, the
amounts advanced will be fully reimbursed by an affiliate of the
general partners of the Partnership. If the consolidation,
itself, does not go forward with any of the other entities, the
Partnership will bear a proportion of the transaction costs based
upon the number of limited partners who voted for approval of the
transaction as compared to those who dissented or abstained. The
limited partners are expected to receive their solicitation
materials for this potential transaction in 1995.
Page 32 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Schedule III
Real Estate Investments and Related Accumulated
Depreciation and Amortization
Costs
Capitalized
(Reduced)
Initial Cost Subsequent
------------ to Acqtn
Bldgs
Encum- and(1) (1) Purch Price
Properties brances Land Imprvmnts Imprvmnts Adjust
---------- --------- ----- -------- --------- --------
Arlington $ - $ 1,526,500 $ 5,346,400 $1,328,746 $(344,300)
Tucson - 1,048,400 7,600,300 1,495,550 (545,000)
--------- ---------- ---------- --------- ---------
Total $ - $ 2,574,900 $12,946,700 $2,824,296 $(889,300)
========= ========== ========== ========= =========
Gross Amount at Which
Carried on Books
---------------------------------------
Buildings Accumulated
and (1) (2) Depreciation
Properties Land Improvements Total and Amort
---------- ---- ---------- ----- ----------
Arlington $ 1,610,747 $ 6,246,599 $ 7,857,346 $ 2,846,557
Tucson 1,092,897 8,506,353 9,599,250 3,838,125
---------- ---------- ---------- ----------
$ 2,703,644 $14,752,952 $17,456,596 $ 6,684,682
========== ========== ========== ==========
Date of
----------------------------
Depreciable
Properties Construction Acquisition Lives
---------- ------------ ----------- -----------
Arlington 3/86 12/88 7-25 yrs
Tucson 10/86 12/86 7-25 yrs
----------------------
(1) Amounts include furniture and equipment
(2) Aggregate cost for Federal Income tax purposes in $9,414,000 at
December 31, 1994.
Page 33 of 41
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Schedule III
Real Estate Investments and Related Accumulated
Depreciation and Amortization
Following is a summary of real estate investments for the years
ended December 31, 1994, 1993, and 1992:
1994 1993 1992
---- ---- ----
Balance at beginning
of period $ 17,190,530 $20,830,045 $20,693,700
Improvements 266,066 454,452 136,345
Retirements - (4,093,967) -
---------- ----------- -----------
Balance at end
of period $ 17,456,596 $ 17,190,530 $20,830,045
========== =========== ===========
Following is a summary of accumulated depreciation and
amortization of real estate investments for the years ended
December 31, 1994, 1993 and 1992:
1994 1993 1992
---- ---- ----
Balance at beginning
of period $ 6,058,564 $6,422,440 $5,268,500
Additions charged to
expense 626,118 1,164,610 1,153,940
Retirements - (1,528,486) -
---------- ----------- ----------
Balance at end
of period $ 6,684,682 $6,058,564 $6,422,440
========== =========== ==========
Page 34 of 41
Item 9. Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Partnership
General Partners
The Partnership has no directors or executive officers.
Effective February 22, 1994, the General Partners of the
Partnership are Glenborough Realty Corporation (the "Managing
General Partner") and Robert Batinovich. For informational
purposes, the following are the names and additional information
relating to each of the controlling persons, directors and
executive officers of the Managing General Partner as of February
27, 1995:
Name Age Position
---- --- --------
Robert Batinovich 58 President and Chairman of the
Board
Andrew Batinovich 36 Senior Vice President, Chief
Financial Officer and Director
Sandra L. Boyle 46 Vice President
Barbara L. Evans 54 Vice President, Secretary and
Corporate Counsel
Eugene F. Daly 51 Director
Wallace A. Krone Jr. 63 Director
Laurence N. Walker 62 Director
J. Sydney Whalen 60 Director
The following is a brief description of the background and
experience of Robert Batinovich and each of the officers and
directors of Glenborough Realty Corporation.
Robert Batinovich has been the President and a Director of
Glenborough Corporation since its inception in l978 and of
Glenborough Realty Corporation since its inception in l985. He
has been the Chief Financial Officer ("CFO") of Glenborough
Corporation since April l986 and the CFO of Glenborough Realty
Corporation from April l986 through April l988. He was a member
of the California Public Utilities Commission from l975 to
January l979 and served as its Chairman from January l977 to
January l979. He has extensive real estate investment
experience. Mr. Batinovich's business background includes
Page 35 of 41
managing and owning manufacturing, vending and service companies
and a national bank.
Andrew Batinovich has been Senior Vice President and Chief
Financial Officer of Glenborough Realty Corporation since April
l988. He was Vice President-Property Management of Glenborough
Realty Corporation from April l986 to April l988. He also is
Senior Vice President in charge of property management and
partnership accounting for Glenborough Corporation. Prior to
joining Glenborough Corporation in June l983, he was employed at
Security Pacific National Bank in its international and corporate
banking groups specializing in real estate lending. He is the
son of Robert Batinovich.
Sandra L. Boyle has been Vice President of Glenborough Realty
Corporation since February 1991. She first joined Glenborough
Corporation in 1984 and is responsible for property management,
including maintenance, capital and tenant improvements, rent
collection, budgeting and supervision of regional offices. Prior
to joining Glenborough Corporation, she was a residential real
estate marketing representative for Great Western Realtors.
Barbara L. Evans has been Secretary of Glenborough Realty
Corporation since April 1986 and Vice President since February
1991. She joined Glenborough Corporation in l985 and serves as
Counsel and Secretary. She was admitted as an attorney in the
State of California in l983. Prior to attending law school and
on a part-time basis during law school, Ms. Evans was a co-owner
of TES Associates, a property management and real estate
investment advisor.
Eugene F. Daly was elected a Director of Glenborough Realty
Corporation in August 1989. He is President of Daly
International Financial and Insurance Services. Mr. Daly is a
Registered Principal with the National Association of Securities
Dealers (NASD) and his firm Daly International Financial and
Insurance Services is a Registered Investment Advisor with the
Securities and Exchange Commission.
Wallace A. Krone, Jr. was elected a Director of Glenborough
Realty Corporation in August 1989. He has been associated with
Glenborough for approximately 15 years as an investor in
Glenborough sponsored partnerships. For the past twenty-seven
years, he has been self-employed owning various restaurants in
the San Francisco Bay Area. Currently Mr. Krone owns a number of
Burger King restaurants in the same area.
Laurence N. Walker was a Director of Glenborough Corporation from
October l984 to November l985 and served as Treasurer from
January l985 to November l985. He has been a Director of
Glenborough Realty Corporation since its inception in l985. He
is an attorney specializing in real estate law.
J. Sydney Whalen was elected a Director of Glenborough Realty
Corporation in April l988. He is a Canadian Chartered Accountant
and since l983 has been president of Whalen & Associates, a
Page 36 of 41
management consulting firm specializing in executive management
and chief financial officer services to companies experiencing
operating or financial difficulties. In 1993, Mr. Whalen was a
co-founder and became President of Round Hill Securities, Inc., a
securities industry broker/dealer. From l975 to l982, he was
Vice President-Finance and Administration of Raymond Kaiser
Engineers, Inc.
The General Partner of the Partnership, prior to the substitution
by Glenborough Realty Corporation and Robert Batinovich,
collectively, as General Partner (see Note 11 in Notes to the
Financial Statements) was Outlook Financial Partners, a general
partnership originally consisting of Luke V. McCarthy and John R.
Provine, August Advisers, Inc., a California corporation and
August Managers Associates, a California limited partnership.
Effective January 1992, Mr. McCarthy and Mr. Provine were no
longer partners of Outlook Financial Partners.
The principal business experience and other affiliations of the
partners of Outlook Financial Partners during the last five years
or more were:
August Advisers, Inc.
August Advisers, Inc. ("AAI") is a California corporation and a
wholly-owned subsidiary of AFC. The executive officers and
directors of August Advisers, Inc. are as follows:
Melvin F. Barror - President
Mr. Barror (age 65) has been the Senior Vice President and Chief
Financial and Administrative Officer of GLENFED Service
Corporation, a major subsidiary of Glendale Federal Bank, since
1984. Mr. Barror was Senior Vice President-Finance of The
Colwell Company from October 1977 to August 1984. Mr. Barror has
a Bachelor of Science degree in Economics and Accounting from
Wayne State University, Detroit, Michigan.
Rajan Puri - Vice President
Mr. Puri (age 35) has been a Vice President and senior financial
analyst with Glendale Federal Bank since 1984 where he
specialized in structuring, negotiating and monitoring
transactions in the bank's real estate and corporate equity
investment portfolios. Mr. Puri received a Bachelor of Science
degree in Chemical Engineering from the University of Sheffield
in England and a Master of Business Administration from
California State University of Bakersfield.
August Financial Corporation
On February 28, 1986, GLENFED Service Corporation, a California
corporation and wholly owned-subsidiary of Glendale Federal
Savings and Loan Association, purchased all of the outstanding
stock of AFC, an affiliate of the Partnership.
Page 37 of 41
Notwithstanding the acquisition, partnership units are not
obligations of Glendale Federal Bank, nor are they insured or
guaranteed by the FDIC.
Through June 30, 1989, AFC, a California corporation, rendered
services for the Partnership, including, without limitation,
property investment analysis, appraisal and evaluation of
potential property acquisitions, and disposition of properties by
the Partnership, as well as Partnership administrative services.
The executive officers and directors of AFC are as follows:
Terry D. Hess - Chairman
Mr. Hess (age 48) was President of GLENFED Properties, Inc. from
June 1986 to September 1988 and was Chairman of GLENFED
Development from October 1988 to December 1990. Mr. Hess was
Executive Vice President and Manager of the Special Asset
Department of Glendale Federal from December 1990 to June 1991.
In June 1991, Mr. Hess was elected Executive Vice President and
Chief Credit Officer of Glendale Federal. From 1973 until
joining Glendale Federal, Mr. Hess served in management positions
for The First National Bank of Chicago (Real Estate Department)
and The Martin Z. Margulies Interests. Mr. Hess holds a Master
of Business Administration degree from Stanford and received a
Bachelor of Arts degree from Dartmouth.
August Managers Associates
August Managers Associates is a California limited partnership.
Its general partner is August Management, Inc., a California
corporation and wholly owned subsidiary of AFC. Its limited
partners are former senior management officers of the affiliated
corporations of the General Partner.
Item 11. Executive Compensation
No direct compensation was paid or is payable by the Partnership
to directors or officers (since it does not have any directors or
officers) for its fiscal year ended December 31, 1994, nor was
any direct compensation paid or is payable by the Partnership to
members of the General Partner and sponsor for the fiscal year
ended December 31, 1994. The Partnership has no plans to pay any
such compensation to any members of the General Partner in the
future.
Item 12. Security Ownership of Certain Owners and Management
To the best knowledge of the Partnership, no person of record or
beneficially more than five percent (5%) of the Units at December
31, 1994.
The Partnership, as an entity, does not have any directors or
officers. At December 31, 1994, no Units were owned by any
officers or directors of the General Partner.
Item 13. Certain Relationships and Related Transactions
Page 38 of 41
During the year ended December 31, 1994, the Partnership had no
transactions or business relationships with officers or directors
of Glenborough required to be reported pursuant to Item 404 of
Regulation S-K. As of December 31, 1994, none of the members of
the General Partner were indebted to the Partnership.
In accordance with the limited partnership agreement, the
Partnership paid the General Partner and its affiliates
compensation for services provided to the Partnership.
Glenborough Hotel Group provided property management services and
was compensated as follows.
1994 1993
-------- --------
Management fees $ 234,000$ 239,000
Hotel salaries - reimbursed $1,105,000$1,375,000
These costs are included in operating costs and expenses on the
statements of operations.
Additionally, the Partnership reimburses Glenborough Corporation
for general and administrative costs and services including
investor relations, office supplies and legal and administrative
services. Glenborough Corporation was reimbursed $150,000 and
$177,000 for these costs and services for the years ended
December 31, 1994 and 1993, respectively.
Page 39 of 41
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K
(a)(1) Financial Statements - See Index to Financial
Statements contained in Item 8.
(2) Financial Statement Schedules - See Item 14(d)
below.
(3) Exhibits - None.
(b) Reports on Form 8-K - None.
(c) Exhibits - None.
(d) Financial Statement Schedules -
Schedule III - Real Estate Investments and
Related Accumulated Depreciation and
Amortization at December 31, 1994.
All other schedules for which provision is
made in the applicable accounting regulation
of the Securities and Exchange Commission are
not required under the related instructions or
are inapplicable, and therefore have been
omitted.
Page 40 of 41
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GLENBOROUGH ALL SUITE HOTELS L.P.
A CALIFORNIA LIMITED PARTNERSHIP
By:/s/ Robert Batinovich By: Glenborough Realty Corporation,
---------------------
Robert Batinovich a California Corporation,
General Partner Its Managing General Partner
Date: 8/15/95 By:/s/ Robert Batinovich
--------------- ----------------------------
Robert Batinovich
President and
Chairman of the Board
Date: 8/15/95
-------------------
By:/s/ Andrew Batinovich
---------------------------
Andrew Batinovich
Senior Vice President,
Chief Financial Officer
and Director
Date: 8/15/95
--------------------
By:/s/ Laurence N. Walker
----------------------------
Laurence N. Walker
Director
Date: 8/15/95
-----------------------
By:/s/ J. Sydney Whalen
----------------------------
J. Sydney Whalen
Director
Date: 8/15/95
-------------
(A Majority of the Board of Directors of the General Partner)
Page 41 of 41
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 369
<SECURITIES> 0
<RECEIVABLES> 91
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 391
<PP&E> 17457
<DEPRECIATION> (6685)
<TOTAL-ASSETS> 11623
<CURRENT-LIABILITIES> 355
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 11268
<TOTAL-LIABILITY-AND-EQUITY> 11623
<SALES> 0
<TOTAL-REVENUES> 4699
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3948
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 751
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 751
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.31
</TABLE>
