FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 33-11957
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 of (I.R.S. Employer
incorporation or organization) Identification)
400 South El Camino Real, Suite 1100
San Mateo, California 94402
------------------------------ --------
(Address of principal executive offices) (Zip Code)
(415) 343-9300
----------------------------
(Registrant's telephone number)
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
--- ---
Total number of units outstanding as of March 31, 1995: 2,399,217
NO EXHIBIT INDEX REQUIRED
Page 1 of 12
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Balance Sheets
(in thousands, except units outstanding)
(Unaudited)
March 31, December 31,
1995 1994
Assets -------- ---------
------
Real estate investments, at cost:
Land $ 2,704 $ 2,704
Building and improvements 14,832 14,753
-------- --------
17,536 17,457
Less accumulated depreciation
and amortization (6,847) (6,685)
-------- --------
Net real estate investments 10,689 10,772
Cash and cash equivalents 506 369
Accounts receivable, net 130 91
Prepaid expenses and other assets 404 391
-------- --------
Total assets $ 11,729 $ 11,623
======== ========
Liabilities and Partners' Equity (Deficit)
------------------------------------------
Accounts payable $ 101 $ 117
Accrued expenses 257 238
-------- --------
Total liabilities 358 355
Partners' equity (deficit):
General Partner (1,789) (1,790)
Limited Partners, 2,399,217
units outstanding 13,160 13,058
-------- --------
Total partners' equity 11,371 11,268
-------- --------
Total liabilities and
partners' equity $ 11,729 $ 11,623
======== ========
See accompanying notes to financial statements.
Page 2 of 12
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Statements of Operations
(in thousands, except per unit amounts)
(Unaudited)
Three months ended
March 31,
-----------------
1995 1994
Revenues: ----- -----
Rooms $ 1,342 $ 1,234
Interest and other 71 63
------ ------
Total revenues 1,413 1,297
------ ------
Operating costs and expenses
(including reimbursed salaries
of $301 and $266 paid to affiliates
in the three months ended
March 31, 1995 and 1994, respectively):
Rooms 278 248
Utilities 99 90
Management fees (paid to an affiliate) 70 65
Property taxes and insurance 77 62
Property general and administrative 123 105
Sales and marketing 133 121
Property operation and maintenance 99 81
Depreciation and amortization 168 151
Other general and administrative
(including $38 and $42 paid to an
affiliate during the three months
ended March 31, 1995 and 1994,
respectively) 63 58
------- -------
Total operating costs and expenses 1,110 981
------- -------
Net income $ 303 $ 316
======= =======
Net income per limited partnership
unit $ 0.13 $ 0.13
======= =======
Distributions per limited partnership
unit:
Net income $ 0.08 $ 0.07
======= =======
Return of capital $ - $ -
======= =======
See accompanying notes to financial statements.
Page 3 of 12
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Statements of Partners' Equity (Deficit)
(in thousands)
For the three months ended March 31, 1995 and 1994
(Unaudited)
Total
General Limited Partners'
Partner Partners Equity
--------- --------- ---------
Balance at December 31, 1993 $ (1,790) $ 13,070 $ 11,280
Distributions (2) (180) (182)
Net income 3 313 316
--------- --------- ---------
Balance at March 31, 1994 $ (1,789) $ 13,203 $ 11,414
========= ========= =========
Balance at December 31, 1994 $ (1,790) $ 13,058 $ 11,268
Distributions (2) (198) (200)
Net income 3 300 303
--------- --------- ---------
Balance at March 31, 1995 $ (1,789) $ 13,160 $ 11,371
========= ========= =========
See accompanying notes to financial statements.
Page 4 of 12
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Statements of Cash Flows
(in thousands)
(Unaudited)
Three months ended
March 31,
------------------
1995 1994
------ ------
Cash flows from operating activities:
Net income $ 303 $ 316
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 168 151
Changes in assets and liabilities:
Accounts receivable (39) -
Prepaid expenses and other assets (19) (54)
Accounts payable (16) 64
Accrued expenses 19 (49)
------- -------
Net cash provided by operating activities 416 428
------- -------
Cash flows used in investing activities:
Additions to real estate investments (79) (34)
------- -------
Cash used in investing activities: (79) (34)
------- -------
Cash flows used in financing activities:
Distributions to partners (200) (182)
------- -------
Cash used in financing activities (200) (182)
------- -------
Net increase in cash and cash equivalents 137 212
Cash and cash equivalents at beginning of period 369 243
------- -------
Cash and cash equivalents at end of period $ 506 $ 455
======= =======
See accompanying notes to financial statements.
Page 5 of 12
GLENBOROUGH ALL SUITE HOTELS, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
March 31, 1995
(Unaudited)
Note 1. SIGNIFICANT ACCOUNTING POLICY
------------------------------
In the opinion of Glenborough Realty Corporation, the General
Partner, the accompanying unaudited financial statements contain
all adjustments (consisting of only normal accruals) necessary to
present fairly the financial position of Glenborough All Suite
Hotels, L.P., A California Limited Partnership (the
"Partnership"), at March 31, 1995 and December 31, 1994, and the
related statements of operations, changes in partners' equity
(deficit) and cash flows for the three months ended March 31,
1995 and 1994.
Certain items in the 1994 financial statements have been
reclassified to conform to the 1995 financial statement
presentation.
Note 2. REFERENCE TO 1994 AUDITED FINANCIAL STATEMENTS
----------------------------------------------
These unaudited financial statements should be read in
conjunction with the Notes to Financial Statements included in
the 1994 audited financial statements.
Note 3. 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 relating to the
management and operation of the hotels and was compensated
$70,000 and $65,000 for management fees for the three months
ended March 31, 1995 and 1994, respectively. In addition,
Glenborough Hotel Group was reimbursed for salaries related to
the management and operations of the hotels in the amount of
$301,000 and $266,000 for the three months ended March 31, 1995
and 1994, respectively. These costs are included in operating
costs and expenses on the statements of operations.
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 $38,000 and $42,000 for
these costs and services for the three months ended March 31,
1995 and 1994, respectively.
Note 4. OTHER INFORMATION
-----------------
Page 6 of 12
GLENBOROUGH ALL SUITE HOTELS, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
Notes to Financial Statements
March 31, 1995
(Unaudited)
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 March 31, 1995, the Partnership has advanced
$245,000 (included in prepaid expenses and other assets) toward
their pro rata share of the transaction costs associated with the
consolidation. 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 7 of 12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
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 warranty payments received
from the seller of the Partnership's properties and then from
June 1988 through December 1989 by loans provided by the former
general partner, the seller of the hotels and an affiliate of
Shearson Lehman Brothers Inc. (all of which were subsequently
paid off at a discount). 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 Fort Worth property. This
resulted in a distribution rate of 4.5% for 1990. Distributions
were paid at a rate of 5% in 1991, a rate of 3% in 1992, 1993 and
the six months ended June 30, 1994. The distribution made in the
third quarter of 1994 was increased to a rate of 3.3% and has
remained at that rate since. Based on the projected cash flow of
the Partnership, distributions are expected to continue at a rate
of 3.3% for the remainder of 1995.
With the performance of the Partnership's two hotels and the
projected cash flow of the Partnership on budget, the
Partnership's $506,000 cash position at March 31, 1995 is
believed to be sufficient to cover its $358,000 in total
liabilities while maintaining its current distribution rate of
3.3% for the remainder of 1995.
Another factor improving the Partnership's liquidity and capital
resource position would be an increase in corporate and contract
business during the first quarter of 1995. This increased
corporate and contract business played a major part in the
Partnership's increased the accounts receivable from $91,000 at
December 31, 1994 to $130,000 at March 31, 1995.
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 March 31, 1995, the Partnership has advanced
$245,000 (included in prepaid expenses and other assets) toward
their pro rata share of the transaction costs associated with the
consolidation. 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 8 of 12
RESULTS OF OPERATIONS
Total revenue increased $116,000 or 8% during the three months
ended March 31, 1995 over the three months ended March 31, 1994
due in large part to an increase in rooms revenue. This is a
result of a greater role the "Countryline" reservation system has
played in the hotels' increased occupancy which generally yield
higher average daily room rates. To a lesser extent, the total
revenue increase can partially be attributable to telephone
upgrades at the Tucson hotel which has enabled the hotel guests
to more easily dial direct from their rooms.
Total operating costs and expenses increased $129,000 or 13%
during the three months ended March 31, 1995 over the same period
in 1994. This increase is primarily due in part to increases in
variable expenses associated with higher occupancy such as rooms
expense, utilities, property management fees, property operation
and maintenance, and sales and marketing costs (the "Countryline"
reservation system).
The overall focus for the remainder of 1995 continues to be the
hotels' maintenance of market share by offering a wider variety
of options to prospective guests and to maximize rates for all
segments wherever possible.
ARLINGTON OPERATIONS
For the three months ended March 31, 1995, the average occupancy
level for the Arlington hotel was 67% and the average daily room
rate was $61.12, as compared to the same period in the prior year
when the average occupancy was at 55% and the average daily room
rate was $55.69.
The Arlington hotel market is characterized by distinct seasonal
occupancy and rate fluctuations. From May through August, which
are peak tourist months, the city's hotel occupancies range from
70% to 90%. During the four peak season months, the Arlington
hotel is able to achieve average rates approximately 15% higher
than it achieves during the other eight months of the year.
Arlington had experienced declining occupancy attributable to
the absence of contract and negotiated business and has been
concentrating on improving performance in these areas. In 1995,
the hotel has begun to benefit from its efforts in attracting
contract business. However, the replacement of lost accounts and
the retention of existing accounts continue to be challenging in
this highly competitive market. Management's focus is now on
continuing to further develop corporate business to ensure a
solid and dependable base throughout the year. Incentive
programs for booking higher rates has proved to be a successful
way of earning more revenue without losing occupancy. The hotel
has increased the higher-rated preferred market segment.
Management believes opportunities also remain in the government
and corporate segments.
TUCSON OPERATIONS
Page 9 of 12
The Tucson hotel continued to achieve strong operating results
for the three months ended March 31, 1995. The March 31, 1995
average occupancy and average daily room rate were 91% and
$66.28, respectively, while the March 31, 1994 results were 90%
and $68.12, respectively.
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. The focus for the remainder of 1995
will be to maintain its current occupancy levels given its peak
periods and to maximize rates in all segments wherever possible.
Past product improvements have increased the perceived
price/value, justifying a rate increase.
Page 10 of 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is not a part to, nor any of its assets
the subject of any material pending legal proceedings.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K.
No reports on Form 8-K were required to be filed by the
Partnership in the current quarter.
Page 11 of 12
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.
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
By: Glenborough Realty Corporation,
a California corporation
the Managing General Partner
Date: May 10, 1995 By:
Andrew Batinovich
Senior Vice President,
Chief Financial Officer and
Director
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.
GLENBOROUGH ALL SUITE HOTELS L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
By: Glenborough Realty Corporation,
a California corporation
the Managing General Partner
Date: May 10, 1995 By: /s/ ANDREW BATINOVICH
---------------------------------
-
Andrew Batinovich
Senior Vice President,
Chief Financial Officer and
Director
Page 12 of 12
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