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 September 30, 1997
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-16717
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OUTLET CENTRE PARTNERS
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3498737
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
--------------
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
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<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
BALANCE SHEETS
September 30, 1997 and December 31, 1996
(UNAUDITED)
ASSETS
1997 1996
-------------- --------------
Cash and cash equivalents $ 1,906,733 $ 2,110,693
Accounts and accrued interest receivable 124,577 329,346
Escrow deposits 786,741 786,741
Prepaid expenses 47,195 37,666
Deferred expenses, net of accumulated
amortization of $270,157 in 1997 and
$207,813 in 1996 145,468 207,812
-------------- --------------
3,010,714 3,472,258
-------------- --------------
Investment in real estate:
Land 2,391,183 2,871,183
Buildings and improvements 25,045,202 27,565,202
-------------- --------------
27,436,385 30,436,385
Less accumulated depreciation 12,846,230 11,868,945
-------------- --------------
Investment in real estate, net of
accumulated depreciation 14,590,155 18,567,440
-------------- --------------
$ 17,600,869 $ 22,039,698
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 125,083 $ 133,424
Due to affiliates 38,191 34,615
Accrued liabilities - principally
real estate taxes 425,518 567,357
Security deposits 45,036 47,323
Mortgage note payable 12,318,716 12,431,154
-------------- --------------
Total liabilities 12,952,544 13,213,873
-------------- --------------
Commitments and contingencies
Limited Partners' capital (30,000
Interests issued and outstanding) 5,847,680 9,988,382
General Partner's deficit (1,199,355) (1,162,557)
-------------- --------------
Total partners' capital 4,648,325 8,825,825
-------------- --------------
$ 17,600,869 $ 22,039,698
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the nine months ended September 30, 1997 and 1996
(UNAUDITED)
1997 1996
-------------- --------------
Income:
Rental $ 2,287,781 $ 2,353,674
Service 1,593,099 1,379,209
Interest on short-term investments 80,497 88,820
-------------- --------------
Total income 3,961,377 3,821,703
-------------- --------------
Expenses:
Interest on mortgage note payable 941,642 952,441
Depreciation 977,285 990,505
Amortization 62,344 62,344
Property operating 1,924,155 1,549,932
Real estate taxes 426,422 422,962
Property management fees 168,869 171,680
Administrative 140,460 134,713
Provision for investment property
writedown 3,000,000
-------------- --------------
Total expenses 7,641,177 4,284,577
-------------- --------------
Net loss $ (3,679,800) $ (462,874)
============== ==============
Net loss allocated to General Partner $ (36,798) $ (4,629)
============== ==============
Net loss allocated to Limited Partners $ (3,643,002) $ (458,245)
============== ==============
Net loss per Limited Partnership Interest
(30,000 issued and outstanding) $ (121.43) $ (15.27)
============== ==============
Distributions to Limited Partners $ 497,700 $ 497,430
============== ==============
Distributions per Limited Partnership
Interest $ 16.590 $ 16.581
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended September 30, 1997 and 1996
(UNAUDITED)
1997 1996
-------------- --------------
Income:
Rental $ 747,937 $ 762,888
Service 468,309 468,310
Interest on short-term investments 22,539 30,828
-------------- --------------
Total income 1,238,785 1,262,026
-------------- --------------
Expenses:
Interest on mortgage note payable 312,931 316,622
Depreciation 325,762 330,168
Amortization 20,782 20,782
Property operating 617,251 510,035
Real estate taxes 141,387 140,987
Property management fees 53,627 56,125
Administrative 46,694 45,810
Provision for investment property
writedown 1,000,000
-------------- --------------
Total expenses 2,518,434 1,420,529
-------------- --------------
Net loss $ (1,279,649) $ (158,503)
============== ==============
Net loss allocated to General Partner $ (12,796) $ (1,585)
============== ==============
Net loss allocated to Limited Partners $ (1,266,853) $ (156,918)
============== ==============
Net loss per Limited Partnership
Interest (30,000 issued and outstanding) $ (42.23) $ (5.23)
============== ==============
Distribution to Limited Partners $ 165,900 $ 165,810
============== ==============
Distribution per Limited Partnership
Interest $ 5.530 $ 5.527
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the nine months ended September 30, 1997 and 1996
(UNAUDITED)
1997 1996
-------------- --------------
Operating activities:
Net loss $ (3,679,800) $ (462,874)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation of property 977,285 990,505
Amortization of deferred expenses 62,344 62,344
Provision for investment property
writedown 3,000,000
Net change in:
Accounts and accrued interest
receivable 204,769 (142,921)
Prepaid expenses (9,529) (28,728)
Accounts payable (8,341) (9,013)
Due to affiliates 3,576 12,309
Accrued liabilities (141,839) (195,930)
Security deposits (2,287) (4,150)
-------------- --------------
Net cash provided by operating activities 406,178 221,542
-------------- --------------
Financing activities:
Distributions to Limited Partners (497,700) (497,430)
Principal payments on
mortgage note payable (112,438) (101,639)
Release of capital improvement escrow 191,600
-------------- --------------
Net cash used in financing activities (610,138) (407,469)
-------------- --------------
Net change in cash and cash equivalents (203,960) (185,927)
Cash and cash equivalents at beginning
of year 2,110,693 2,406,064
-------------- --------------
Cash and cash equivalents at end of period $ 1,906,733 $ 2,220,137
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the nine months and quarter
ended September 30, 1997, and all such adjustments are of a normal and
recurring nature.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. The Partnership has entered into a contract to sell the Factory
Outlet Centre (the "Centre"). The timing of the termination of the Partnership
and final distribution of cash will depend upon the nature and extent of
liabilities and contingencies which exist or may arise. Such contingencies may
include legal and other fees stemming from litigation involving the Partnership
including, but not limited to, the lawsuit discussed in Note 6 of Notes to the
Financial Statements. In the absence of any contingency, the reserves will be
paid within twelve months of the Centre being sold. In the event a contingency
continues to exist or arises, reserves may be held by the Partnership for a
longer period of time.
3. Interest Expense:
During the nine months ended September 30, 1997 and 1996, the Partnership
incurred and paid interest expense on the mortgage note payable of $941,642 and
$952,441, respectively.
4. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
nine months and quarter ended September 30, 1997 are:
Paid
----------------------
Nine Months Quarter Payable
------------ --------- ----------
Reimbursement of expenses to
the General Partner, at cost $47,519 $22,326 $38,191
5. Investment Property Writedown:
During the quarter ended June 30, 1997, the Partnership determined that an
impairment had occurred to the asset value of the Centre due to continued
competition in the market which has resulted in a decline in the value of the
property. Consequently, the property was written down to its estimated fair
value at June 30, 1997 and a $2,000,000 provision for investment property
writedown was recognized. In August 1997, the Partnership entered into a
<PAGE>
contract to sell the property for $17,000,000. In October 1997, the Partnership
and the purchaser agreed to a $2,000,000 purchase price reduction. The current
sales price is $15,000,000. As a result, the property was written down to the
current sales value less estimated closing costs and the Partnership recognized
an additional $1,000,000 provision for investment property writedown during the
quarter ended September 30, 1997.
6. Contingency:
The Partnership is currently involved in a lawsuit whereby the Partnership and
certain affiliates have been named as defendants alleging certain federal
securities law violations with regard to the adequacy and accuracy of
disclosures of information concerning, as well as the marketing efforts related
to, the offering of the Limited Partnership Interests of the Partnership. The
defendants continue to vigorously contest this action. A plaintiff class has
not yet been certified, and no determination of the merits have been made. It
is not determinable at this time whether or not an unfavorable decision in this
action would have a material adverse impact on the financial position,
operations and liquidity of the Partnership. The Partnership believes it has
meritorious defenses to contest the claims.
7. Subsequent Event:
In October 1997, the Partnership paid $165,900 to Limited Partners representing
the regular quarterly distribution of available Net Cash Receipts of $5.53 per
Interest for the third quarter of 1997.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Outlet Centre Partners (the "Partnership") was formed in 1987 and owns and
operates the Factory Outlet Centre (the "Centre") in Bristol, Wisconsin. The
Partnership raised $30,000,000 through the sale of Limited Partnership
Interests and utilized these proceeds to acquire the Centre. Currently, the
Partnership has entered into a contract for the sale of the Centre.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1996 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
Summary of Operations
- ---------------------
The recognition of provisions for investment property writedown during the
second and third quarter of 1997 resulted in a higher net loss during the nine
months and quarter ended September 30, 1997 as compared to the same periods in
1996. Higher property operating expenses also contributed to the higher net
loss during the nine months and quarter ended September 30, 1997 as compared to
the same periods in 1996. Further discussion of the operations of the
Partnership is summarized below.
1997 Compared to 1996
- ---------------------
Discussions of fluctuations between 1997 and 1996 refer to the nine months and
quarters ended September 30, 1997 and 1996.
The Partnership bills tenants on a monthly basis for common area maintenance
and real estate taxes based on estimates. Adjustments are periodically made to
these billings once the Partnership has determined the actual amounts due.
Service income increased during the nine months ended September 30, 1997 when
compared to the same period in 1996 due to higher billings related to common
area maintenance in 1997.
Interest income on short-term investments decreased during the nine months
ended September 30, 1997 when compared to the same period in 1996 due to lower
average cash balances.
Higher tenant related expenditures were incurred in 1997 resulting from
increased costs related to improvements required under the terms of new leases.
Additionally, parking lot and sidewalk repairs were completed in 1997. As a
result, property operating expense increased during 1997 when compared to 1996.
A provision is charged to income when the General Partner believes an
impairment has occurred to the value of the Centre. Determinations of fair
<PAGE>
value are made periodically based on the current estimated sales price less
closing costs and market conditions. During the quarters ended June 30, 1997
and September 30, 1997, the Partnership recognized a provision for investment
property writedown of $2,000,000 and $1,000,000, respectively, to provide for
changes in the estimate of the fair value of the Centre.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased approximately $204,000 as of
September 30, 1997 when compared to December 31, 1996, as a result of cash
reserves used to fund distributions to Limited Partners. The Partnership
generated cash flow of approximately $406,000 from its operating activities.
The operating activities reflect the operations of the Centre and interest
income earned on short-term investments, offset by the payment of
administrative expenses. The Partnership used cash to fund its financing
activities of approximately $610,000 which consisted of the payment of
distributions totaling approximately $498,000 to Limited Partners and the
payment of principal on the mortgage note payable of approximately $112,000.
As of September 30, 1997, the occupancy rate at the Centre was 82%. During the
nine months ended September 30, 1997 and 1996, the Centre generated positive
cash flow, which is defined as an amount equal to the property's revenue
receipts less property related expenses, which include debt service payments.
In August 1997, the Partnership entered into a contract to sell the Centre for
$17,000,000. In October 1997, the Partnership and the purchaser agreed to a
$2,000,000 purchase price reduction. The current sales price is $15,000,000.
The sale is expected to close in December 1997. See Item 5. Other Information
for additional information. The timing of the termination of the Partnership
and final distribution of cash will depend upon the nature and extent of
liabilities and contingencies which exist or may arise. Such contingencies may
include legal and other fees and costs stemming from litigation involving the
Partnership including, but not limited to, the lawsuit discussed in Note 6 of
Notes to Financial Statements. In the absence of any contingency, the reserves
will be paid within twelve months of the property being sold. In the event a
contingency continues to exist or arises, reserves may be held by the
Partnership for a longer period of time. In light of results to date, the
General Partner does not anticipate that investors will recover a substantial
portion of their original investment.
In October 1997, the Partnership paid a distribution of Net Cash Receipts of
$165,900 ($5.53 per Interest) to the holders of Limited Partnership Interests
for the third quarter of 1997. This distribution is consistent with the amount
paid for the first and second quarters of 1997. Including the October 1997
distribution, Limited Partners have received distributions of Net Cash Receipts
of $316.07 and Net Cash Proceeds of $263.08, totaling $579.15 per $1,000
Interest. The Partnership expects to make a distribution from available
proceeds from the sale of the Centre and available cash reserves in January
1998 if the sale of the Centre closes in December 1997. The General Partner
believes it has retained, on behalf of the Partnership, an appropriate amount
of working capital to meet cash or liquidity requirements which may occur.
Inflation has several types of potentially conflicting impacts on real estate
<PAGE>
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
OUTLET CENTRE PARTNERS
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- --------------------------
As previously reported, on August 25, 1997, the Partnership contracted to sell
the Factory Outlet Centre, Bristol, Wisconsin (the "Property"), for a sale
price of $17,000,000 to Insignia Commercial Investments Group Inc., a Delaware
corporation ("Insignia"). Pursuant to a letter agreement dated October 7, 1997,
the Partnership and Insignia agreed to reduce the sale price to $15,000,000 and
extend the closing date from November 8, 1997 to December 8, 1997.
Subsequently, with the consent of the Partnership, Insignia assigned its rights
under the agreement of sale (the "Agreement") to a party not affiliated with
Insignia or the Partnership, Clearview Investments, Ltd., a Texas limited
partnership. Insignia remains liable for all obligations of the purchaser under
the Agreement.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement previously filed as Exhibit No. 4.1 to
Amendment No. 1 to the Registrant's Registration Statement on Form S-11 dated
April 2, 1987 (Registration No. 33-13097) and Form of Confirmation regarding
Interests in the Partnership set forth as Exhibit 4.2 to the Registrant's
Report on Form 10-Q for the quarter ended September 30, 1992 (Commission File
No. 0-16717) are incorporated herein by reference.
(10) Material Contracts:
(a) Agreement of Sale relating to the sale of the Factory Outlet Centre,
Bristol, Wisconsin, previously filed as Exhibit (2)(i) to the Registrant's
Current Report on Form 8-K dated August 29, 1997 is incorporated herein by
reference.
(b) Letter Agreement dated August 25, 1997 relating to the sale of the Factory
Outlet Centre, Bristol, Wisconsin, previously filed as Exhibit (2)(ii) to the
Registrant's Current Report on Form 8-K dated August 29, 1997 is incorporated
herein by reference.
(c) Letter Agreement dated September 8, 1997 relating to the sale of the
Factory Outlet Centre, Bristol, Wisconsin is attached hereto.
(d) Letter Agreement dated October 7, 1997 relating to the sale of the Factory
Outlet Centre, Bristol, Wisconsin, is attached hereto.
(e) Letter Agreement relating to the sale of the Factory Outlet Centre,
Bristol, Wisconsin is attached hereto.
<PAGE>
(f) Letter Agreement dated November 4, 1997 relating to the sale of the Factory
Outlet Centre, Bristol, Wisconsin, is attached hereto.
(g) Letter Agreement dated November 7, 1997 relating to the sale of the Factory
Outlet Centre, Bristol, Wisconsin, is attached hereto.
(27) Financial Data Schedule of the Registrant for the nine month period ending
September 30, 1997 is attached hereto.
(b) Reports on Form 8-K: A Current Report on Form 8-K dated August 29, 1997
was filed reporting the execution of a contract for the sale of the Factory
Outlet Centre, Bristol, Wisconsin.
<PAGE>
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.
OUTLET CENTRE PARTNERS
By:/s/Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners-XXII, the General Partner
By:/s/Jayne A. Kosik
------------------------------
Jayne A. Kosik
Managing Director and Chief Financial
Officer (Principal Accounting Officer) of
Balcor Partners-XXII, the General Partner
Date: November 13,1997
---------------------------
<PAGE>
INSIGNIA COMMERCIAL INVESTMENT GROUP INC.
2626 Cole Avenue - Suite 300
Dallas, Texas 75204-1072
September 8, 1997
Factory Outlet Centre Limited Liability Company
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Re: Agreement of Sale dated as of August 25, 1997 between Insignia
Commercial Investments Group Inc. ("Purchaser") and Factory Outlet
Centre Limited Liability Company ("Seller") for the purchase and sale
of property known as the Factory Outlet Center in Kenosha, Wisconsin
("Property")
Dear Madam or Sir:
Under the above referenced Agreement of Sale, the Inspection Period, as
defined therein, expires on September 15, 1997 and the Closing Date, as defined
therein, was set to be October 16, 1997.
This letter shall confirm that Seller has agreed to provide Purchaser
with additional time to conduct tests, investigations and studies of the
Property, for the purpose and in consideration of deciding, in Purchaser's sole
discretion, whether to elect to purchase the Property, or to terminate the
Agreement of Sale, as provided in Article 7 thereof.
The Inspection Period shall be revised to end at 5:00 p.m. Chicago time on
October 8, 1997 and the Closing Date shall be revised to be on November 12,
1997.
Except as provided herein, the Agreement of Sale shall remain unmodified
and in full force and effect.
If the amendments to the Agreement of Sale provided in this letter are
acceptable, please indicate your agreements on behalf of Seller, where
indicated below.
Sincerely,
/s/ Michael Horowitz
Michael Horowitz
President
<PAGE>
Agreed to and Accepted this
8th day of September, 1997
Factory Outlet Centre Limited Liability Company
By: Outlet Centre Investors, a member
By: Balcor Partners-XXI, its general partner
By: The Balcor Company, its general partner
By: /s/ Beth Goldstein
----------------------------------
Name: Beth Goldstein
Its: Authorized Representative
<PAGE>
Insignia Commercial
Investments Group, Inc.
October 7, 1997
Factory Outlet Centre Limited Liability Company
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Re: Agreement of Sale dated as of August 25, 1997 between Insignia
Commercial Investments Group, Inc. ("Purchaser") and Factory Outlet
Centre Limited Liability Company ("Seller") for the purchase and sale
of property known as the Factory Outlet Center in Kenosha, Wisconsin
("Property") as amended by September 8, 1997 Letter Agreement
Dear Madam or Sir:
Under the above referenced Agreement of Sale, the Purchase Price (as
defined herein) is $17,000,000, the Inspection Period, as defined therein,
expires on October 8, 1997 and the Closing Date, as defined therein, was set to
be November 12, 1997.
This letter shall confirm that Seller has, among other things, agreed to
provide Purchaser with additional time to conduct investigations and studies of
the Property, and to attempt to finalize an agreement with one of the
Purchaser's equity partners. It shall be at Purchaser's sole discretion,
whether to elect to purchase the Property, or to terminate the Agreement of
Sale, as provided in Article 7 thereof.
The Purchase Price shall be revised to read $15,000,000, the Inspection
Period shall be revised to end at 5:00 p.m. Chicago time on November 8, 1997
and the Closing Date shall be revised to be on December 8, 1997.
Except as provided herein, the Agreement of Sale shall remain unmodified
and in full force and effect.
If the amendments to the Agreement of Sale provided in this letter are
acceptable, please indicate your agreement on behalf of Seller, where indicated
below.
Sincerely,
/s/ Michael R. Horowitz
Michael R. Horowitz
President
<PAGE>
Agreed and Accepted this 7th day of October, 1997
Factory Outlet Centre Limited Liability Company
By: Outlet Centre Investors, a member
By: Balcor Partners-XXI, its general partner
By: /s/ Beth Goldstein
------------------------------
Name: Beth Goldstein
Its: Authorized Representative
<PAGE>
[FACTORY OUTLET CENTRE LIMITED LIABILITY COMPANY]
Insignia Commercial Investments Group, Inc.
3100 Monticello
Suite 400
Dallas, Texas 75202
Re: Agreement of Sale ("Agreement of Sale") dated as of August 25, 1997
between Insignia Commercial Investments Group, Inc. ("Purchaser") and
Factory Outlet Center Limited Liability Company ("Seller") for the
purchase and sale of property known as the Factory Outlet Center in
Kenosha, Wisconsin ("Property") as amended by September 8, 1997
Letter Agreement
Gentlemen:
The undersigned hereby consent to the assignment of the Agreement of Sale
to Clearview Investments, Ltd., a Texas limited partnership ("Assignee"),
provided that Assignee assumes all of the obligations of Purchaser under the
Agreement of Sale and Purchaser remains liable for all the obligations of
Purchaser under the Agreement of Sale. Purchaser and Assignee represent that
no monetary consideration is being paid to Purchaser by any person or entity in
exchange for the assignment of Purchaser's interest in the Agreement of Sale,
except as to (i) independent consideration of $100, (ii) Expense Reimbursement
of $160,000, (iii) Earnest Money Replacement of $150,000, and (iv) Equity
Placement Fee of $250,000. The assignment rights pertaining to Purchaser
contained in paragraph 14 of the Agreement of Sale shall apply to Assignee
provided that any additional assignee assumes all of the obligations of
Purchaser under the Agreement of Sale, neither Purchaser nor Assignee should be
released from any liability under the Agreement of Sale, any such additional
Assignee agrees to execute a letter in form and substance identical to this
letter. Purchaser shall be a permitted additional Assignee. Any entity in
which Assignee retains an ownership or net profits interest, as well as
Purchaser, shall be a permitted additional Assignee, so long as no additional
compensation is paid to Purchaser. In exchange for the consent contained
herein, Purchaser and Assignee agree to release the Earnest Money and direct
the Escrow Agent to disburse the Earnest Money to the undersigned on November
10, 1997 provided that the Agreement of Sale has not been terminated pursuant
to paragraph 7 of the Agreement of Sale.
<PAGE>
FACTORY OUTLET CENTRE LIMITED
LIABILITY COMPANY, an Illinois limited
liability company
By: Outlet Centre Investors, an Illinois
partnership, a member
By: Balcor Partners-XXI, an Illinois
general partnership, its general
partner
By: The Balcor Company, a
Delaware corporation, its
general partner
By: /s/ Beth Goldstein
--------------------------
Name: Beth Goldstein
Its: Authorized Representative
Agreed To and Accepted this
24th day of October, 1997.
INSIGNIA COMMERCIAL INVESTMENTS GROUP, INC.,
a Delaware corporation
By: /s/Michael R. Horowitz
----------------------
Name: Michael R. Horowitz
Its: President
CLEARVIEW INVESTMENTS, LTD.,
a Texas limited partnership
By:/s/Carla B. Fulton
-----------------
<PAGE>
CLEARVIEW INVESTMENTS, LTD.
2000 East Lamar Blvd., Suite 150
Arlington, Texas 76006
November 4, 1997
Factory Outlet Centre Limited Liability Company
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Site A-200
Bannockburn, Illinois 60015
RE: Agreement of Sale dated as of August 25, 1997 between Insignia
Commercial Investments Group, Inc. ("Assignor") and Factory Outlet
Centre Limited Liability Company ("Seller") for the purchase and sale
of property known as the Factory Outlet Center in Kenosha, Wisconsin
("Property") as amended by September 8, 1997 Letter Agreement, as
amended by October 7, 1997 Letter Agreement, and as assigned on
October 24, 1997 to Clearview Investments, Ltd. ("Assignee") herein
referred to as Purchaser
Dear Madam or Sir:
Under the above referenced Agreement of Sale, the Purchase Price (as
defined herein) is $15,000,000.00, the Inspection Period, as defined therein,
expires on November 8, 1997 and the Closing Date, as defined therein, was to be
December 8, 1997.
This letter shall confirm that Seller, has among other things, agreed to
provide Purchaser with additional time to conduct investigations and studies of
the Property. It shall be at Purchaser's sole discretion, whether to elect to
purchase the Property, or to terminate the Agreement of Sale, as provided in
Article 7 thereof.
The Inspection Period shall be revised to end at 5:00 p.m. Chicago time on
November 17, 1997 and the Closing Date shall be revised to be December 15,
1997.
Except as provided herein, the Agreement of Sale shall remain unmodified
and in full force and effect.
The date that Purchaser shall release the Earnest Money to Seller pursuant
to the Consent to Assignment of the agreement dated October 24, 1997 shall be
revised from November 10, 1997 to November 17, 1997.
<PAGE>
If the amendments to the Agreement of Sale provided in this letter are
acceptable, please indicate your agreement on behalf of Seller, where indicated
below.
Sincerely,
CLEARVIEW INVESTMENTS, LTD.
By: Redbud Capital, Inc.
Its general partner
By: /s/ Carla B. Fulton, Vice President
------------------------------------------
Title: Carla B. Fulton, Vice President
Agreed and Accepted this 5th day of November, 1997
Factory Outlet Centre Limited Liability Company
By: Outlet Centre Investors, a member
By: Balcor Partners-XXI, its general partner
By: /s/ Beth Goldstein
------------------------------
Name: Beth Goldstein
Its: Authorized Representative
cc: Michael R. Horowitz
<PAGE>
CLEARVIEW INVESTMENTS, LTD.
2000 East Lamar Blvd., Suite 150
Arlington, Texas 76006
November 7, 1997
Factory Outlet Centre Limited Liability Company
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Site A-200
Bannockburn, Illinois 60015
RE: Agreement of Sale dated as of August 25, 1997 between Insignia Commercial
Investments Group, Inc. ("Assignor") and Factory Outlet Centre Limited
Liability Company ("Seller") for the purchase and sale of property known as the
Factory Outlet Center in Kenosha, Wisconsin ("Property") as amended by
September 8, 1997 Letter Agreement, as amended by October 7, 1997 Letter
Agreement, and as assigned on October 24, 1997 to Clearview Investments, Ltd.
("Assignee") herein referred to as Purchaser
Dear Madam or Sir:
Under the above referenced Agreement of Sale, the Purchase Price (as
defined herein) is $15,000,000.00, the Inspection Period, as defined therein,
expires on November 17, 1997 and the Closing Date, as defined therein, was to
be December 15, 1997.
This letter shall confirm that Seller, has among other things, agreed to
provide Purchaser with additional time to conduct investigations and studies of
the Property. It shall be at Purchaser's sole discretion, whether to elect to
purchase the Property, or to terminate the Agreement of Sale, as provided in
Article 7 thereof.
The Inspection Period shall be revised to end at 5:00 p.m. Chicago time on
November 24, 1997 and the Closing Date shall be December 15, 1997.
Except as provided herein, the Agreement of Sale shall remain unmodified
and in full force and effect.
The date that Purchaser shall release the Earnest Money to Seller pursuant
to the Consent to Assignment of the agreement dated October 24, 1997 shall be
revised from November 17, 1997 to November 24, 1997.
If the amendments to the Agreement of Sale provided in this letter are
acceptable, please indicate your agreement on behalf of Seller, where indicated
below.
<PAGE>
Sincerely,
CLEARVIEW INVESTMENTS, LTD.
By: Redbud Capital, Inc.
Its general partner
By: /s/Carla B. Fulton
------------------------------------
Title: Carla B. Fulton, Vice President
Agreed and Accepted this 7th day of November, 1997
Factory Outlet Centre Limited Liability Company
By: Outlet Centre Investors, a member
By: Balcor Partners-XXI, its general partner
By: /s/ Michael J. Becker
------------------------------
Name: Michael J. Becker
Its: Authorized Representative
cc: Michael R. Horowitz
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1907
<SECURITIES> 0
<RECEIVABLES> 125
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2865
<PP&E> 27436
<DEPRECIATION> 12846
<TOTAL-ASSETS> 17601
<CURRENT-LIABILITIES> 634
<BONDS> 12319
0
0
<COMMON> 0
<OTHER-SE> 4648
<TOTAL-LIABILITY-AND-EQUITY> 17601
<SALES> 0
<TOTAL-REVENUES> 3961
<CGS> 0
<TOTAL-COSTS> 2519
<OTHER-EXPENSES> 1180
<LOSS-PROVISION> 3000
<INTEREST-EXPENSE> 942
<INCOME-PRETAX> (3680)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3680)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3680)
<EPS-PRIMARY> (121.43)
<EPS-DILUTED> (121.43)
</TABLE>
