United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended March 31, 1997
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: 33-12791
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.
Exact Name of Registrant as Specified in its Charter
Delaware 95-4098476
State or Other Jurisdiction of
Incorporation or Organization I.R.S. Employer Identification No.
3 World Financial Center, 29th Floor,
New York, NY Attn.: Andre Anderson 10285
Address of Principal Executive Offices Zip Code
(212) 526-3237
Registrant's Telephone Number, Including Area Code
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 ____
Balance Sheets At March 31, At December 31,
1997 1996
Assets
Real estate, at cost:
Land $ 8,379,434 $8,379,434
Building, building improvements and equipment 41,976,106 41,921,813
50,355,540 50,301,247
Less accumulated depreciation (14,486,336) (14,031,118)
35,869,204 36,270,129
Cash and cash equivalents 1,889,716 1,648,513
Restricted cash 628,006 498,257
Accounts and other receivables 83,676 105,552
Leasing commissions and prepaid expenses,
net of accumulated amortization
of $230,483 in 1997 and $212,762 in 1996 250,244 292,542
Other assets, net of accumulated amortization
of $260,654 in 1997 and $253,135 in 1996 40,101 47,620
Deferred rent receivable 406,727 388,464
Total Assets $39,167,674 $39,251,077
Liabilities and Partners' Capital (Deficit)
Liabilities:
Accounts payable and accrued expenses $ 314,487 $ 213,517
Due to affiliates 348,000 337,765
Security deposits payable 185,837 179,725
Secured note payable 13,839,715 13,902,293
Total Liabilities 14,688,039 14,633,300
Partners' Capital (Deficit):
General Partner (206,331) (206,331)
Limited Partners (5,540,000 units outstanding) 24,685,966 24,824,108
Total Partners' Capital 24,479,635 24,617,777
Total Liabilities and Partners' Capital $39,167,674 $39,251,077
Statement of Partners' Capital (Deficit)
For the three months ended March 31, 1997
General Limited
Partner Partners Total
Balance at December 31, 1996 $(206,331) $24,824,108 $24,617,777
Net loss -- (138,142) (138,142)
Balance at March 31, 1997 $(206,331) $24,685,966 $24,479,635
Statements of Operations
For the three months ended March 31, 1997 1996
Income
Rental $1,046,061 $ 992,321
Interest 30,125 22,038
Other 3,777 6,968
Total Income 1,079,963 1,021,327
Expenses
Depreciation and amortization 480,458 472,957
Property operating 412,840 436,122
Interest 268,955 273,606
General and administrative 43,352 44,622
Asset management fee 12,500 12,500
Total Expenses 1,218,105 1,239,807
Net Loss $ (138,142) $ (218,480)
Net Loss Allocated:
To the General Partner $ -- $ --
To the Limited Partners (138,142) (218,480)
$ (138,142) $ (218,480)
Per limited partnership unit
(5,540,000 outstanding) $(.02) $(.04)
Statements of Cash Flows
For the three months ended March 31, 1997 1996
Cash Flows From Operating Activities:
Net loss $(138,142) $(218,480)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 480,458 472,957
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Restricted cash (129,749) (127,817)
Accounts and other receivables 21,876 272,755
Prepaid expenses 24,577 37,412
Deferred rent receivable (18,263) 15,131
Accounts payable and accrued expenses 100,970 75,647
Due to affiliates 10,235 13,492
Security deposits payable 6,112
Net cash provided by operating activities 358,074 541,097
Cash Flows From Investing Activities:
Additions to real estate (88,272) (85,295)
Accounts payable - real estate 33,979 8,483
Net cash used for investing activities (54,293) (76,812)
Cash Flows From Financing Activities:
Payments of principal on note payable (62,578) (57,925)
Net cash used for financing activities (62,578) (57,925)
Net increase in cash and cash equivalents 241,203 406,360
Cash and cash equivalents, beginning of period 1,648,513 1,026,560
Cash and cash equivalents, end of period $1,889,716 $1,432,920
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 268,955 $273,606
Notes to the Financial Statements
The unaudited financial statements should be read in conjunction
with the Partnership's annual 1996 audited financial statements
within Form 10-K.
The unaudited financial statements include all normal and
reoccurring adjustments which are, in the opinion of management,
necessary to present a fair statement of financial position as of
March 31, 1997 and the results of operations and cash flows for
the three months ended March 31, 1997 and 1996 and the statement
of partners' capital (deficit) for the three months ended March
31, 1997. Results of operations for the period are not
necessarily indicative of the results to be expected for the full
year.
Certain prior year amounts have been reclassified in order to
conform to the current year's presentation.
No significant events have occurred subsequent to fiscal year
1996, and no material contingencies exist, which would require
disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At March 31, 1997, the Partnership had cash and cash equivalents
of $1,889,716 compared with $1,648,513 at December 31, 1996. The
increase is attributable to net cash provided by operating
activities exceeding cash used for real estate additions and
mortgage principal payments. Net cash provided by operating
activities decreased primarily as a result of a reduction in
accounts receivable due mainly to the receipt of real estate tax
abatements for prior periods in 1996.
At March 31, 1997, the Partnership had restricted cash, which is
comprised of security deposits and real estate tax and insurance
escrows, of $628,006, compared with $498,257 at December 31, 1996.
The increase is attributable to escrow contributions and interest
earned for the three-month period ended March 31, 1997.
At March 31, 1997, accounts and other receivables were $83,676
compared to $105,552 at December 31, 1996. The decrease is
primarily due to the receipt of real estate tax abatements for the
1994-95 tax year in 1997.
Leasing commissions and prepaid expenses, net of accumulated
amortization, decreased from $292,542 at December 31, 1996 to
$250,244 at March 31, 1997. The decrease largely represents the
amortization of prepaid insurance for the three-month period ended
March 31, 1997, partially offset by an increase in leasing
commissions capitalized subsequent to December 31, 1996.
Accounts payable and accrued expenses increased from $213,517 at
December 31, 1996 to $314,487 at March 31, 1997. The increase is
mainly attributable to the accrual of three months of real estate
taxes and an accrual for tenant improvements.
During the first three months of 1997, the Partnership signed two
new leases representing 1,572 sq. ft. which were partially offset
by the early termination of a 780 sq. ft. lease. In addition, the
Partnership successfully renewed four leases totaling 10,108 sq.
ft., with one tenant expanding by 411 sq. ft. As a result of this
activity, the Property's occupancy level rose to 73.5% at March
31, 1997 as compared to 69.8% at March 31, 1996. Six leases
representing 10,017 sq. ft., or approximately 6.3% of the
Property's total rentable area, are scheduled to expire during the
remainder of 1997. Although we will attempt to renew these
leases, there can be no assurance of success given the extremely
competitive market conditions and uncertainty surrounding changes
in the health care industry.
In order to remain competitive, the Partnership must pay leasing
commissions and tenant improvement costs associated with new and
renewal leases. The amount of such costs is uncertain at this
time and depends upon the amount of space leased and the extent of
required tenant improvements. The General Partner intends to fund
such costs from net cash flow from operations and Partnership cash
reserves, to the extent possible.
Results of Operations
For the three-month period ended March 31, 1997, Partnership
operations resulted in a net loss of $138,142, compared with a net
loss of $218,480 for the corresponding period in 1996. The
decrease in net loss is mainly due to higher rental and interest
income and lower property operating expenses.
Rental income was $1,046,061 for the three-month period ended
March 31, 1997, compared with $992,321 for the corresponding
period in 1996. The increase is the result of higher occupancy
during the first three months of 1997 compared to 1996. Interest
income totaled $30,125 for the three-month period ended
March 31, 1997, compared with $22,038 for the corresponding period
in 1996. The increase is mainly due to higher cash balances in
1997.
Property operating expenses were $412,840 for the three-month
period ended March 31, 1997, compared to $436,122 for the
corresponding period in 1996. The decrease is primarily due to
lower professional fees, lower utility expenses as the result of a
reduction obtained in the latter half of 1996 in the rate charged
for the Property's electricity usage, and lower payroll expenses
for the property management staff. These reductions were
partially offset by higher repairs and maintenance expense as a
result of the final phase of the ongoing HVAC retrofit.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K
were filed during the quarter ended March 31, 1997.
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.
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.
Medical Office Properties Inc.
General Partner
Date: May 14, 1997 BY:/s/ Rocco F. Andriola
Director, President and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Mar-31-1997
<CASH> 2,517,722
<SECURITIES> 000
<RECEIVABLES> 83,676
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 50,355,540
<DEPRECIATION> (14,486,336)
<TOTAL-ASSETS> 39,167,674
<CURRENT-LIABILITIES> 848,324
<BONDS> 13,839,715
<COMMON> 000
000
000
<OTHER-SE> 000
<TOTAL-LIABILITY-AND-EQUITY> 24,479,635
<SALES> 1,046,061
<TOTAL-REVENUES> 1,079,963
<CGS> 000
<TOTAL-COSTS> 412,840
<OTHER-EXPENSES> 536,310
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 268,955
<INCOME-PRETAX> (138,142)
<INCOME-TAX> 000
<INCOME-CONTINUING> (138,142)
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (138,142)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
