SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13
OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-17695
-------
HEALTHCARE PROPERTIES, L.P.
---------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 62-1317327
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or oganization) Identification Number)
14160 Dallas Parkway, Suite 300, Dallas, Texas 75240
(Address of principal executive office)
(972) 770-5600
(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 at least the past 90 days. YES x NO
---- ----
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
<TABLE>
<CAPTION>
<S> <C> <C>
HEALTHCARE PROPERTIES, L.P. AND SUBSIDIARIES
(A Delaware Limited Partnership)
CONSOLIDATED BALANCE SHEETS
---------------------------
September 30, 1998 December 31, 1997
------------------ -----------------
(Unaudited)
-----------
ASSETS
------
Cash and cash equivalents $ 11,627,412 $ 10,722,118
Accounts receivable, less allowance for doubtful
accounts of $346,042 in 1998 and $301,042 in 1997 997,623 800,029
Prepaid Expenses and other 15,771 50,221
Property and improvements, net 19,925,570 20,823,913
Deferred charges, less accumulated amortization
of $953,011 in 1998 and $876,760 in 1997 335,883 405,572
--------------- ---------------
$ 32,902,259 $ 32,801,853
=============== ===============
LIABILITIES AND PARTNERSHIP EQUITY
Accounts payable and accrued expenses $ 685,487 $ 818,252
Operating facility accounts payable 81,743 114,211
Mortgage loans payable 6,257,974 6,677,431
-------------- -------------
7,025,204 7,609,894
-------------- -------------
Partnership equity:
Limited partners (4,148,325 and 4,172,457 units
outstanding in 1998 and 1997, respectively) 25,970,261 25,156,971
Repurchased limited partner units (144,791) 0
General partner 51,585 34,988
---------------- ----------------
25,877,055 25,191,959
---------------- ----------------
$ 32,902,259 $ 32,801,853
================ ================
See notes to financial statements
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
HEALTHCARE PROPERTIES, L.P. AND SUBSIDIARIES
(A Delaware Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(Unaudited)
Three months ended Three months ended
September 30, 1998 September 30, 1997
------------------ ------------------
Revenues:
Rental $ 1,073,421 $ 1,056,067
Net patient services 1,140,126 1,173,806
-------------- --------------
2,213,547 2,229,873
-------------- --------------
Expenses:
Facility operating expenses 1,098,010 1,106,318
Depreciation 327,397 340,960
Lease default expenses 0 0
Administrative and other 432,667 378,649
Bad debts 15,000 15,000
-------------- --------------
1,873,074 1,840,927
-------------- --------------
Income from operations 340,473 388,946
-------------- --------------
Other income (expenses):
Interest income 145,045 92,821
Interest expenses (157,860) (168,828)
Amortization (26,384) (26,913)
--------------- --------------
(39,199) (102,920)
--------------- --------------
Net income $ 301,274 $ 286,026
=============== ==============
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ .07 $ .07
=============== ===============
WEIGHTED AVERAGE
NUMBER OF UNITS 4,148,325 4,172,457
=============== ==============
</TABLE>
See notes to financial statements
-3-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
HEALTHCARE PROPERTIES, L.P. AND SUBSIDIARIES
(A Delaware Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(Unaudited)
Nine months ended Nine months ended
September 30, 1998 September 30, 1997
------------------ ------------------
Revenues:
Rental $ 3,204,391 $ 3,214,040
Net patient services 3,289,007 3,669,101
-------------- --------------
6,493,398 6,883,141
-------------- --------------
Expenses:
Facility operating expenses 3,353,655 3,362,862
Depreciation 979,340 1,022,880
Lease default expenses 0 14,687
Administrative and other 1,110,710 1,208,760
Bad debts 45,000 43,061
-------------- --------------
5,488,705 5,652,250
-------------- --------------
Income from operations 1,004,693 1,230,891
-------------- --------------
Other income (expenses):
Interest income 385,194 256,456
Interest expenses (481,250) (512,651)
Amortization (78,750) (80,614)
-------------- --------------
(174,806) (336,809)
-------------- --------------
Net income $ 829,887 $ 894,082
============== ==============
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ .20 $ .21
============== ==============
WEIGHTED AVERAGE
NUMBER OF UNITS 4,153,602 4,172,457
============== ==============
</TABLE>
See notes to financial statements
-5-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
HEALTHCARE PROPERTIES, L.P. AND SUBSIDIARIES
(A Delaware Limited Partnership)
CONSOLIDATED STATEMENTS OF PARTNERSHIP EQUITY
Repurchased
Limited General Limited
Partners Partners Partner Units Total
Allocation of Net Income 98% 2% 100%
=== == ====
EQUITY at
December 31, 1997 $ 25,156,971 $ 34,988 $ 0 $ 25,191,959
Net Income 813,290 16,597 -- 829,887
Repurchased Limited Partner Units -- -- (144,791) (144,791)
------------ ---------- ------------ ------------
EQUITY at
September 30, 1998-Unaudited $ 25,970,261 $ 51,585 $ (144,791) $ 25,877,055
============ ========== ============ ============
</TABLE>
See notes to financial statements
-6-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
HEALTHCARE PROPERTIES, L.P. AND SUBSIDIARIES
(A Delaware Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
Nine months ended Nine months ended
September 30, 1998 September 30, 1997
------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 829,887 $ 894,082
Adjustments to reconcile net income to
net cash provided by operating activities:
Bad debts 45,000 43,061
Depreciation and amortization 1,058,090 1,103,494
Changes in assets and liabilities:
Accounts receivable (242,594) (14,129)
Prepaid expenses 34,450 23,693
Accounts payable &
accrued expenses (165,233) (432,217)
-------------- --------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,559,600 1,617,984
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and improvement (80,997) (62,399)
-------------- --------------
NET CASH USED IN
INVESTING ACTIVITIES (80,997) (62,399)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on mortgage loans payable (419,457) (384,961)
Distributions 0 (325,000)
Repurchased limited partner units (144,791) 0
Increase in deferred charges (9,061) (1,234)
-------------- --------------
NET CASH USED IN
FINANCING ACTIVITIES (573,309) (711,195)
-------------- --------------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 905,294 844,390
CASH AND CASH EQUIVALENTS
Beginning of Period 10,722,118 8,995,455
-------------- --------------
CASH AND CASH EQUIVALENTS
End of Period $ 11,627,412 $ 9,839,845
============== ==============
CASH PAID FOR INTEREST $ 481,250 $ 512,651
============== ==============
See notes to financial statements
</TABLE>
-7-
<PAGE>
HEALTHCARE PROPERTIES, L.P. AND SUBSIDIARIES
(A Delaware Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998 AND 1997
(Unaudited)
A. ACCOUNTING POLICIES
-------------------
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary have been
included. Operating results are not necessarily indicative of the results that
may be expected for the year ending December 31, 1998. The financial statements
should be read in conjunction with the consolidated financial statements and the
footnotes thereto included in Registrant's annual report on Form 10-K for the
year ended December 31, 1997.
B. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES OF THE GENERAL
-------------------------------------------------------------------
PARTNER
-------
Personnel working at the Cambridge facility and certain home office
personnel who perform services for the Registrant are employees of Capital
Senior Living, Inc. (CSL), which was until June 10, 1998, an affiliate of
Capital Realty Group Senior Housing, Inc. ("CRGSH"), the General Partner of the
Registrant. The Registrant reimburses CSL for the salaries, related benefits,
and overhead reimbursements of such personnel as reflected in the accompanying
financial statements. Reimbursements and fees paid to CRGSH and CSL are as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Nine months ended Nine months ended
September 30, 1998 September 30, 1997
Salary and benefit reimbursements $2,291,860 $2,380,491
Administrative reimbursements 104,635 171,401
Asset management fees 413,475 345,967
Property management fees 229,881 251,725
General partner management fees 64,884 68,101
---------- ----------
$3,104,735 $3,217,685
========== ==========
</TABLE>
Currently, Capital Senior Living Properties, Inc., formerly an affiliate of
CRGSH, holds approximately 56% of the outstanding units of the Registrant. The
9
<PAGE>
Registrant is included in the consolidated financial statements of Capital
Senior Living Properties, Inc. and its parent company, Capital Senior Living
Corporation, a public company that files with the Securities and Exchange
Commission.
On June 10, 1998, the sole owner of the General Partner, Capital Realty Group
Corporation, sold all of its shares of CRGSH common stock to Retirement
Associates, Inc. ("Associates") for $855,000. The source of the funds is a
Promissory Note for $855,000 with a five year term and bearing an interest rate
of 10% per annum. The interest will accrue on the Promissory Note and be payable
at the maturity of the Promissory Note. Associates is the maker of the Note and
Capital Realty Group Corporation is the payee. Mr. Robert Lankford is the
President of Associates and has brokered real estate with Capital Realty Group
Corporation and its affiliates.
10
<PAGE>
C. VALUATION OF RENTAL PROPERTY
----------------------------
Generally accepted accounting principles require that the Registrant
evaluate whether an event or circumstance has occurred that would indicate that
the estimated undiscounted future cash flows of its properties, taken
individually, will be less than the respective net book value of the properties.
If such a shortfall exists and is material, then a write-down to fair value is
recorded. The Registrant performs such evaluations on an on-going basis. During
the nine months ended September 30, 1998, based on the Registrant's evaluation
of the properties, the Registrant did not record any impairment.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
Liquidity and Capital Resources
- -------------------------------
Registrant commenced an offering to the public on August 31, 1987, of
depository units representing beneficial assignments of limited partnership
interests ("Units"). On October 14, 1987, Registrant commenced operations,
having previously accepted subscriptions for more than the specified minimum of
120,000 Units. As of August 30, 1989, the offering was closed except for Units
for sale to existing investors under the terms of a distribution reinvestment
plan. As of September 30, 1995, Registrant had sold Units aggregating
approximately $43.4 million. Due to the suspension of the distribution
reinvestment plan, Registrant does not anticipate any additional inflow of
investment.
All of the net proceeds of the offering were originally invested in 12
properties or used for working capital reserves. The Registrant partially
financed the acquisition of eight of its original properties with non-recourse
debt. Four properties were initially unleveraged. As of September 30, 1998, four
of the original twelve properties had either been sold or deeded back to the
lender, leaving the Registrant with four properties secured by debt and four
properties unleveraged. With the exception of the Cambridge facility, which is
operated by the Registrant and consequently not leased to a third party
operator, the initial term of the seven properties with long-term net leases are
due to expire in the years 2000 and 2001.
Potential sources of liquidity for Registrant include current holdings
of cash and cash equivalents, collection of outstanding receivables and/or
revenue participation related to various leased facilities, collection on
defaulted rent and/or damage settlements related to leases in default, new
mortgage financing on one or more of Registrant's unencumbered assets, and a
potential sale of one or more of the Registrant's assets.
As of September 30, 1998, Registrant had cash and cash equivalents
aggregating $11,627,412. The cash and cash equivalents will be used for working
capital and emergency reserves.
Registrant's general policy is to maintain sufficient cash and cash
equivalents to address disruptions of its lease revenues and to have adequate
additional funds for investment in existing assets for improvements. To the
extent that Registrant deems it necessary to take over the operations of any of
its facilities currently under long term net lease, such action would require
additional investment in working capital for operating reserves, capital
expenditures and related debt payments. As required by the Partnership Agreement
for Limited Partners to be paid their portion for federal income taxes, $250,000
and $325,000 in cash distributions were made in June 1993 and July 1997,
respectively. Future cash distributions will be dependent upon improved
operational income and successful refinancing on certain Registrant mortgages.
The Units are not publicly traded and as a result the liquidity of each Limited
11
<PAGE>
Partner's individual investment is limited. For the nine months ended September
30, 1998, the Registrant has repurchased 24,132 Units for a total amount of
$144,791.
12
<PAGE>
Results of Operations
- ---------------------
Discussion of Nine Months Ending September 30, 1998
---------------------------------------------------
Rental revenues for the nine months ended September 30, 1998, decreased
$9,649 from the comparable nine months ended September 30, 1997, due to
decreased revenue participation from leased facilities. Net patient services for
the nine months ended September 30, 1998, decreased $380,094 from the nine
months ended September 30, 1997, and was primarily due to a 1997 Medicare charge
of $108,423 and decreased ancillary revenues from the Cambridge facility.
Interest income for the nine months ended September 30, 1998 increased $128,738
from the nine months ended September 30, 1997 and was primarily due to
increasing cash available for investment.
Facility operating expenses for the nine months ended September 30,
1998 slightly decreased by $9,207 from the comparable 1997 period. Depreciation
for the nine months ended September 30, 1998, decreased $43,540 from the
comparable 1997 period. Lease default expense decreased $14,687 for the nine
months ended September 30, 1998 from the comparable 1997 period due to no legal
fees incurred on the resolution of defaulted leases. Administrative expenses,
including fees to the General Partner, decreased $98,050 for the nine months
ended September 30, 1998 in comparison to 1997 and is primarily due to decreased
administrative reimbursements. Bad debt expense for the nine months ended
September 30, 1998 slightly increased $1,939 from the comparable 1997 period.
Interest expense and amortization for the nine months ended September 30, 1998
decreased by $31,401 and $1,864, respectively, from the comparable 1997 period.
For the three months ended September 30, 1998 as compared with the
three months ended June 30, 1997, the Partnership's revenue was impacted by the
same shifts of revenue as discussed above with the exception of an increase of
$17,354 in rental revenue for the three months ended September 30, 1998 from the
comparable 1997 period. Similarly, a comparison of third quarter 1998 operating
expenses versus third quarter 1997 reflects the same variances as discussed
above with the exception of an increase of $54,018 in administrative and other
expenses for the three months ended September 30, 1998 from the comparable 1997
period.
Cash and cash equivalents as of September 30, 1998 increased $905,294
over the balance at December 31, 1997. Cash increased by $60,904 for the nine
months ending September 30, 1998 in comparison to 1997 is primarily due to
improved operating cash flow. Net accounts receivable of $977,623 at September
30, 1998 reflected an increase of $197,594 over 1997 year-end balances and is
due to delayed collection of Medicaid and Medicare claims from the Cambridge
facility. Accounts payable, accrued expenses, and facility accounts payable
balances decreased $165,233 at September 30, 1998, from December 31, 1997 and is
primarily due to the decrease in accrued Medicare liabilities on the Cambridge
facility.
The following is a brief discussion of the status of Registrant's
properties:
Cedarbrook, Cane Creek, Crenshaw Creek and Sandy Brook facilities.
Rebound, Inc. (a subsidiary of HealthSouth Corporation) leases the Cedarbrook,
Cane Creek, Crenshaw Creek and Sandy Brook properties pursuant to a master lease
with the Registrant.
Due to low occupancy of the Sandybrook facility, it was closed in 1994
and at this time the lessee has not provided any information on when it might
13
<PAGE>
reopen. Rental payments in March and April 1995 were discontinued by HealthSouth
causing an interruption in the master lease. Registrant met with HealthSouth and
those payments were subsequently made in the second quarter of 1995. Subsequent
to that time period, all payments have been made on a timely basis. In February
1997, the Registrant was notified by HealthSouth of the closing of the
Cedarbrook facility due to the low occupancy. At this time, the Registrant
cannot determine when this facility might reopen. HealthSouth has continued to
make lease payments on a timely basis.
Two recourse loans, Cedarbrook and Cane Creek, were due in January 1996
in the aggregate amount of approximately $2,400,000. Both of these notes were
callable by the lenders at any time between January 1, 1993 and November 30,
1995; however, the lenders agreed not to exercise their call rights prior to
maturity on January 31, 1996 as long as the Partnership remained in compliance
with the loan agreements. One of the lenders agreed to extend the maturity date
of its note to December 1, 2001, pending completion of final loan documents. On
March 21, 1997, the other lender agreed not to exercise its call rights until
June 30, 1997. The Partnership is currently negotiating the extension of this
note until December 1, 2001. The Partnership continues to make its loan payments
under those two loans.
Cambridge facility. The lessee of the Cambridge facility, Nursing
Centers of America-Cambridge ("NCAC"), filed a voluntary petition under Chapter
11 of the Federal Bankruptcy Code in February of 1992. Registrant commenced
litigation against NCAC seeking full payment of future rentals under the lease
of NCAC.
On August 1, 1996, the United States Bankruptcy Court approved the
transfer of the operations of NCA Cambridge Nursing Home to Cambridge LLC, a
subsidiary of the Registrant, thereby releasing the operations of the facility
from the jurisdiction of the United States Bankruptcy Court. A Registrant's
subsidiary now operates this property.
Trinity Hills, McCurdy, and Hearthstone facilities. The Trinity Hills
and Hearthstone lessees are current in their lease obligations to the
Registrant. In addition, the Registrant believes it likely that two of the
above-stated lessees will pay additional rental amounts to the Registrant during
future years based upon increased revenues at those facilities. However, there
can be no assurance of such increased revenue. Two of these facilities appear to
be generating cash flow sufficient to fund their lease obligations, but Trinity
Hills is, at this time, not generating sufficient cash flow to fund its lease
obligations from property operations. However, the lessee at Trinity Hills
continues to fund the deficits and its lease payments. Registrant believes that
the lessee of the McCurdy facility is not in compliance with all the obligations
set forth in the lease between the parties. If such a default is found to be
upheld, the Partnership may have to take back operational control of this
facility.
Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Registrant's
computer programs or hardware that have date-sensitive software or embedded
chips may recognize the year 2000 as a date other than the year 2000. This could
result in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Based on ongoing assessments, the Registrant has developed a program to modify
or replace significant portions of its software and certain hardware, which are
generally PC-based systems, so that those systems will properly utilize dates
beyond December 31, 1999. The Registrant expects to substantially complete
software reprogramming and software and hardware replacement no later than
December 31, 1998, with 100% completion targeted for September 30, 1999. The
Registrant presently believes that these modifications and replacements of
existing software and certain hardware will mitigate the Year 2000 Issue.
However, if such modifications and replacements are not completed timely, the
Year 2000 Issue could have a material impact on the operations of the
Registrant.
The Registrant has assessed its exposure to operating equipment, and such
exposure is not significant due to the nature of the Registrant's business.
The Registrant is not aware of any external agent with a Year 2000 Issue that
would materially impact the Registrant's results of operations, liquidity, or
capital resources. However, the Registrant has no means of determining whether
or ensuring that external agents will be Year 2000 ready. The inability of
external agents to complete their Year 2000 resolution process in a timely
fashion could materially impact the Registrant.
Management of the Registrant believes it has an effective program in place to
resolve the Year 2000 Issue in a timely manner. As noted above, the Registrant
has completed most but not all necessary phases of its Year 2000 program. In the
event that the Registrant does not complete the current program or any
additional phases, the Registrant could incur disruptions to its operations. In
addition, disruptions in the economy generally resulting from Year 2000 Issues
could also materially adversely affect the Registrant. The Registrant could be
subject to litigation for computer systems failure. The amount of potential
liability and lost revenue cannot be reasonably estimated at this time.
The Registrant currently has no contingency plans in place in the event it does
not complete all phases of its Year 2000 program. The Registrant plans to
evaluate the status of completion in early 1999 and determine whether such a
plan is necessary.
14
<PAGE>
New Developments
- ----------------
An appraisal has been conducted on this Partnership and based on this
appraisal, we believe we are close to optimizing the value of this Partnership
at approximately $24 million. Based on the appraisal, as well as the General
Partner's duty to further the best interests of the Partnership, the General
Partner is currently evaluating options, which could include the potential
merger of the assets of the Partnership. Such a merger could result in the
termination of the Partnership.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
Not applicable.
15
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
Registrant was previously engaged in litigation in an attempt to
recover damages from defaulting lessees and their guarantors. Such actions
involve claims against a prior operator of the Diablo/Tamarack facility.
Registrant settled with the alleged defaulting guarantor of this facility for
$60,000 plus 10% interest - payable in installments of $10,000 per year plus
interest over five years.
On June 17, 1998, Registrant filed a lawsuit in Dallas County against
the lessee of the McCurdy facility. The complaint sought a declaratory judgment
affirming that the lessee of the McCurdy facility ("lessee") cannot exercise its
option to purchase the McCurdy facility until the end of its term in October
2001. The lessee had threatened to exercise this option immediately (subject to
a final determination of value). The lessee sought to dismiss this Dallas County
action based on jurisdictional grounds and this dismissal was granted on
November 6, 1998. On November 6, 1998, the Registrant was informed that the
lessee filed a complaint for declaratory judgment in Evansville, Indiana seeking
to exercise its option to purchase the McCurdy facility. The Registrant intends
to vigorously challenge this action.
Item 2. Changes in Securities
---------------------
None.
Item 3. Defaults Upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 5. Other Information
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
None.
16
<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.
HEALTHCARE PROPERTIES, L.P.
By: CAPITAL REALTY GROUP SENIOR HOUSING, INC.
General Partner
By: /s/ Robert Lankford
----------------------
Robert Lankford
President
Date: November 12, 1998
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Sheet for Healthcare Properties, L.P.
</LEGEND>
<CIK> 0000814458
<NAME> Healthcare Properties, L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 11,627,412
<SECURITIES> 0
<RECEIVABLES> 1,343,665
<ALLOWANCES> (346,042)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 34,123,002
<DEPRECIATION> (14,197,432)
<TOTAL-ASSETS> 32,902,259
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 25,877,055
<TOTAL-LIABILITY-AND-EQUITY> 32,902,259
<SALES> 0
<TOTAL-REVENUES> 6,878,592
<CGS> 0
<TOTAL-COSTS> 5,488,705
<OTHER-EXPENSES> 78,750
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 481,250
<INCOME-PRETAX> 829,887
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 829,887
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
