<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
of the Securities Exchange Act of 1934
for the quarter ended March 31, 1997
Commission File Number
0-17669
-------
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
I.R.S. Employer Identification No. 04-2981989
----------
2335 North Bank Drive, Columbus, OH 43220
Registrant's Telephone Number, Including Area Code: (614) 451-9929
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
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
--- ---
1
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NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
A DELAWARE LIMITED PARTNERSHIP
March 31, 1997 FORM 10-Q
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION PAGE NO.
- ----------------------------- --------
Item 1. Unaudited Combined Financial Statements
Combined Balance Sheets.......................................3
Combined Statements of Operations ............................5
Combined Statements of Cash Flows.............................6
Notes to Combined Financial Statements........................7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations ..........................................8
PART II OTHER INFORMATION
- ---------------------------
Other Information.............................................12
Signatures....................................................13
2
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NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
COMBINED BALANCE SHEETS MARCH 31, 1997 (UNAUDITED) AND DECEMBER 31, 1996
(In Thousands)
<TABLE>
<CAPTION>
March 31 December 31
ASSETS 1997 1996
- --------------------------------------------- -------------------- --------------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 760 $ 1,313
Tenants' security deposits 453 446
Mortgage escrow deposits 758 620
Prepaid expenses and other assets 829 731
-------------------- --------------------
Total current assets 2,800 3,110
-------------------- --------------------
Assets limited as to use 5,370 5,146
-------------------- --------------------
Rental property:
Buildings and improvements (Note B) 76,065 75,900
Furniture and equipment 2,534 2,523
-------------------- --------------------
78,599 78,423
Less accumulated depreciation (21,079) (20,379)
-------------------- --------------------
57,520 58,044
Land 3,968 3,968
-------------------- --------------------
61,488 62,012
-------------------- --------------------
Prepaid land leases, less current
maturities 64 72
-------------------- --------------------
Total assets $ 69,722 $ 70,340
==================== ====================
</TABLE>
The accompanying notes are an integral
part of the combined financial statements.
3
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
COMBINED BALANCE SHEETS, CONTINUED
(In Thousands, except Investment Units)
<TABLE>
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL March 31, 1997 December 31, 1996
- ----------------------------------------------- ------------------- ---------------------
(Unaudited)
<S> <C> <C>
Liabilities not subject to compromise:
Current liabilities:
Accounts payable and accrued expenses $ 1,938 $ 1,944
Rents received in advance 62 36
Deposits held 479 461
Accrued interest on mortgage notes
payable 166 255
Current maturities of term debt 854 933
------------------- ---------------------
Total current liabilities 3,499 3,629
------------------- ---------------------
Term debt, less current maturities:
Mortgage notes payable 41,711 41,903
Promissory notes, including accrued
interest payable 25,507 24,893
------------------- ---------------------
67,218 66,796
------------------- ---------------------
Liabilities subject to compromise (Note C): 3,608 3,608
------------------- ---------------------
Partners' capital:
General Partners:
NHT, Inc. (9) (8)
Other Operating General Partners 5 14
Limited partners:
Issued and outstanding 1,014,668
investment units (4,599) (3,699)
------------------- ---------------------
(4,603) (3,693)
------------------- ---------------------
Total liabilities and partners' capital $ 69,722 $ 70,340
=================== =====================
</TABLE>
The accompanying notes are an integral
part of the combined financial statements.
4
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(In Thousands, except per Unit Amounts)
<TABLE>
<CAPTION>
1997 1996
----------------- ---------------
<S> <C> <C>
Rental revenues:
Rental revenues $ 3,111 $ 3,090
Other income 77 80
----------------- ---------------
Total revenues 3,188 3,170
----------------- ---------------
Rental expenses:
Administration 409 420
Operating and maintenance 750 668
Management fees 355 302
Utilities 517 512
Taxes and insurance 485 483
Depreciation and amortization 708 745
Impairment loss (Note B) - 2,300
----------------- ---------------
Total expenses 3,224 5,430
----------------- ---------------
Loss from operations (36) (2,260)
----------------- ---------------
Other revenues and (expenses):
Interest income 37 21
Interest expense (832) (912)
Partnership management fees (79) (75)
----------------- ---------------
Net loss $ (910) $ (3,226)
================= ===============
Net loss per limited partnership unit $ (0.90) $ (3.18)
================= ===============
</TABLE>
The accompanying notes are an integral
part of the combined financial statements.
5
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP
AND ITS SUBSTANTIALLY WHOLLY-OWNED OPERATING PARTNERSHIPS
COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(In Thousands)
<TABLE>
<CAPTION>
1997 1996
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (910) $ (3,226)
Adjustments to reconcile net loss
to net cash (used for) provided by
operating activities:
Impairment loss - 2,300
Depreciation and amortization 708 745
Accrued interest on promissory notes 390 424
Changes in operating assets and liabilities:
Increase in deposits,
prepaids and other assets (243) (390)
(Decrease) Increase in accounts
payable and accrued expenses (6) 307
(Decrease) Increase in other current
liabilities (45) 21
---------------- ----------------
Cash (used for) provided by operations (106) 181
---------------- ----------------
Investing activities:
Additions to buildings, furniture and
equipment, net (176) (92)
Deposits to assets limited as
to use, net (224) (260)
---------------- ----------------
Cash used for investing
activities (400) (352)
---------------- ----------------
Financing Activities:
General partners cash distributions - (24)
Additions to term debt 224
Payments of term debt (271) (221)
---------------- ----------------
Net cash used for
financing activities (47) (245)
---------------- ----------------
Decrease in cash and cash
equivalents (553) (416)
Cash and cash equivalents beginning
of year 1,313 1,130
---------------- ----------------
Cash and cash equivalents end
of period $ 760 $ 714
================ ================
</TABLE>
The accompanying notes are an integral
part of the combined financial statements.
6
<PAGE>
NATIONAL HOUSING TRUST LIMITED PARTNERSHIP AND
ITS SUBSTANTIALLY WHOLLY OWNED OPERATING PARTNERSHIPS
(UNAUDITED)
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE A--BASIS OF PRESENTATION
The accompanying combined financial statements include the accounts of National
Housing Trust Limited Partnership (Investment Partnership) and the Operating
Partnerships in which it has acquired a significant limited partnership
interest.
The information furnished reflects all adjustments (all of which were of a
normal recurring nature) which are, in the opinion of management, necessary to
fairly present the combined financial position, results of operations, and cash
flows on a consistent basis.
The accompanying unaudited combined financial statements are presented in
accordance with the requirements for Form 10-Q and consequently do not include
all disclosures normally required by generally accepted accounting principles.
Reference should be made to the Partnership's 1996 Annual Report on Form 10-K
for additional disclosures including a summary of the Partnership's accounting
policies which are not significantly different.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
Management does not expect Statement 128 to impact the financial statements.
NOTE B--IMPAIRMENT OF LONG-LIVED ASSETS
The Investor Partnership has two Fort Worth, Texas Operating Partnerships which
had been in default of their mortgage obligations for their two properties with
mortgages held by HUD.
In November 1995, the General Partner was notified that the mortgage loans on
these two properties had been acquired from HUD by a Texas bank, which demanded
that the mortgages be brought current immediately. On March 14, 1996 the bank
notified the General Partner that the properties would be foreclosed upon if the
related mortgages were not paid in full by April 2, 1996. On March 26 and 28,
1996 the General Partner filed a petition for relief under Chapter 11 of the
Bankruptcy Code for each of the two Operating Partnerships.
In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of", which requires impairment losses to be recognized for
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows are not sufficient to recover the assets'
carrying amount. The impairment loss is measured by comparing the fair value of
the asset to its carrying amount. The Investment Partnership adopted Statement
121 in the first quarter of 1996. The fair value was based on the purchase price
of the mortgages of the two Operating Partnerships. The new impairment rules
resulted in the recognition of an impairment loss of $2.3 million related to the
two properties referred to above that was charged against operations in first
quarter 1996.
The December 31, 1996 financial statements for these two properties were audited
by other auditors who expressed uncertainty in their audit reports about the
ability of these two operating partnerships to continue as going concerns. The
bankruptcy hearing previously scheduled for April 10, 1997 has been rescheduled
for June 5, 1997. In the event these two properties are unable to successfully
reorganize as a result of the Chapter 11 filings, the related impact is not
expected to be material to the Investment Partnership which expects to continue
to operate as a going concern entity.
7
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Further, if the lender is successful in its foreclosure proceedings, the debt
and related accrued interest would be recorded as an extraordinary gain in the
period the foreclosure is consummated. A foreclosure or sale of the properties
would result in adverse tax consequences to the investors of the Investment
Partnership, including the recapture of a portion of the low income tax credits
allocated to these two properties as well as a reduction of tax credits in
future years.
NOTE C--LIABILITIES SUBJECT TO COMPROMISE
On March 26 and 28, 1996, the two Fort Worth, Texas Operating Partnerships (see
Note B) filed petitions for relief under Chapter 11 of the Bankruptcy Code in
the Northern District of Texas, Fort Worth Division.
Under Chapter 11, certain claims (including the mortgage notes payable) against
each of the Operating Partnerships in existence prior to the filing are
automatically stayed while the Operating Partnerships continues business
operations as a debtor-in-possession. The claims have been reflected in the
accompanying balance sheet as "liabilities subject to compromise". Additional
claims may arise subsequent to the filing date resulting from various sources,
including a determination of allowed claims by the bankruptcy court. These
additional claims will be reflected as "liabilities subject to compromise" when
the likelihood of the claim is probable and the allowed claim can be reasonably
estimated.
As of the date of this report, the Operating Partnerships have submitted their
proposed Plans of Reorganization. It is indeterminable at this time what impact,
if any, the Plans of Reorganization will have on the Operating Partnerships.
Management believes that a Plan, once filed and approved, will allow each of the
Operating Partnerships to continue as a going concern; but there can be no
assurance that the court will approve such a plan.
Liabilities subject to compromise consist of the following as of March 31, 1997:
<TABLE>
<S> <C>
Mortgage notes payable $2,742,000
Accrued interest mortgage notes payable 381,000
Promissory notes 353,000
Accounts payable and accrued expenses 132,000
----------
$3,608,000
==========
</TABLE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
- -------
In 1988, the Investment Partnership raised $20,293,000 in gross proceeds through
a public offering. Upon paying the selling, offering and organization expenses
of the offering the Investment Partnership had $17,249,000 in net proceeds. Of
the net proceeds, $260,000 was deposited in the Investment Partnership reserve
and $16,989,000 was invested in 31 Operating Partnerships. The 31 Operating
Partnerships that were acquired own low-income housing developments (the
"Properties") that were eligible for the low-income housing tax credit. One of
the Properties was also eligible for the historic rehabilitation tax credit.
The 31 acquisitions occurred from October 1988 through March 1990.
Each Operating Partnership's Property qualifies for the low-income housing tax
credit (LIHTC). The LIHTC was created by the 1986 Tax Reform Act and is governed
by Section 42 of the Internal Revenue
8
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Code. The Investment Partnership serves as a conduit of the Operating
Partnerships' tax credits, passive losses, portfolio income and other tax
information to the holders of Units of limited partnership interest in the
Investment Partnership (the "Unit holders"). The tax credits are allocated to
the Unit holders for 10 years after a property has been placed in service and
rented up. The tax credits were first allocated to Unit holders in 1988 and are
anticipated to continue until 2001. In addition, in order for a Property to
qualify for the tax credits, the Property must be utilized as a low-income
property for 15 years before it can be sold. The General Partner anticipates the
Properties to be sold between the years 2003 through 2008.
The Investment Partnership elected a special option available in 1990 to
accelerate the LIHTC for individuals who had an interest in the Investment
Partnership before October 26, 1990. Qualifying Unit holders received a tax
credit of 150% of the credit otherwise allowable for the first tax year ending
December 31, 1990. The remaining tax credit available for 1991 and subsequent
tax years is being reduced on a pro rata basis by the amount of the 1990
increased credit. Non-qualifying Unit holders will receive the original
unaccelerated tax credit for the remaining qualifying tax years of their
investment.
Properties
- ----------
Two properties located in Ft. Worth, Texas have experienced cash flow
difficulties and a decline in value (See Footnotes B and C of the Combined
Financial Statements). During 1993, the General Partner resolved a dispute with
a former Managing General Partner who had not made mortgage payments on one of
the properties and failed to comply with its Operating Deficit Guarantee. An
agreement completed in May 1993 ordered the former Managing General Partner to
make a lump sum payment of $20,000 and continue to pay an additional amount
totaling $40,000 over 36 months. All these payments have been received.
Due to the nonpayment of the two properties' mortgages by the former Managing
General Partner, the U.S. Department of Housing and Urban Development (HUD)
assumed the mortgages. In September 1995, HUD auctioned off the mortgage loans
for these properties. The General Partner bid on the mortgage loans, but a Texas
bank was the successful bidder. Due to HUD disclosure policies, the General
Partner did not learn who bought the mortgages until November 9, 1995. With
respect to one property, the bank demanded by letter received November 13, 1995,
that the loan be brought current by December 4, 1995 and threatened to foreclose
if payment was not received by that date. The Operating Partnerships did not
have sufficient capital to bring the mortgages current. By letter proposal on
November 22, 1995, the General Partner commenced negotiation with the bank
seeking a consensual agreement to restructure the debt. The bank responded with
a counter proposal on February 22, 1996. The General Partner evaluated the
bank's proposal, found it unworkable, and responded with a counter proposal on
March 14, 1996. The General Partner received notice later that same day, by
letter dated March 12, 1996, that the bank accelerated the maturity of the
indebtedness under the Notes, demanded payment in full and gave notice that if
the indebtedness is not paid in full, the bank would cause the trustee under the
deeds of trust securing the Notes to conduct a foreclosure sale on
April 2, 1996. The consequences of foreclosure would include a recapture of a
portion of the tax credits previously received by the investors and the
reduction of tax credits in future years. A foreclosure in 1997 could result in
a reduction of an investor's return from approximately 14% to approximately 10%
in 1997 and to approximately 13% each year thereafter through the year 2000. The
General Partner will employ all actions to minimize the effect to the investors.
As part of its strategy, the General Partner filed on March 26, 1996 for
Trinidad Apartments Limited Partnership and on March 28, 1996 for Springchase
Apartments Limited Partnership in the Northern District of Texas, Fort Worth
Division, Case #496-41284 and Case #496-4136 respectively, petitions for relief
under Chapter 11 to enable the Operating Partnerships to reorganize. The hearing
previously scheduled for April 10, 1997 has been rescheduled for June 5, 1997.
However, there can be no assurance as to the outcome at this time.
As of March 31, 1997, average occupancy of the Properties was 96%.
Results of Operations
- ---------------------
The March 31, 1997, net loss of $910,000 decreased 71.8% from the March 31,
1996, net loss of $3,226,000. The reasons for the difference are discussed
below.
9
<PAGE>
An impairment loss of $2,300,000 was recorded in first quarter 1996 for the two
Fort Worth, Texas properties as required by FAS 121 (see Note B).
Total revenue increased $18,000 or .6% when comparing the quarters ended
March 31, 1997 and 1996.
Total rental expenses exclusive of depreciation and impairment loss for the
quarter ended March 31, 1997 and 1996 are $2,516,000 and $2,385,000,
respectively. The $131,000 (5.5%) increase in rental expenses between 1997 and
1996 was due primarily to a $82,000 (12.3%) increase in operating and
maintenance expense and a $53,000 (17.5%) increase in management fee expense.
The operating and maintenance expense increase is primarily related to an
increase in repairs and maintenance in the current year first quarter as
compared to the prior year first quarter. The management fee increase is
primarily related to the payment of incentive management fees for five of the
properties in first quarter 1997.
To date, inflation has not had a significant impact on the Partnerships'
combined operations. However, rent levels of the Properties are generally
limited by the requirements of the low-income housing tax credit and are subject
to strict governmental regulation. In the event of significant inflation, the
Operating Partnerships may be unable to increase rents sufficiently to
compensate for increases in expenses. Due to the proposed changes in HUD
programs future increases in subsidy income may be limited. Overall, the
Properties are in good physical condition after taking into account the planned
repairs and maintenance discussed above, are producing positive cash flow and
the managing general partners and management companies are consistently seeking
means to improve operational results.
Capital Resources and Liquidity
- -------------------------------
Liquidity is defined as an Operating Partnership's ability to meet its current
and long-term financial obligations. If a Property were to lose its governmental
rent, interest subsidy or mortgage insurance, the Operating Partnership holding
such Property might be unable to fund expenses on an ongoing basis.
Liquidity shortfalls might be covered by new federal governmental subsidy
programs, by state and local agencies, by funds from the Investment Partnership
reserve, or general partner operating deficit guarantees, although there is no
assurance that such sources would be available or, if available, sufficient to
cover any liquidity shortfall. A liquidity shortfall, for whatever reason, might
result in a sale, refinancing, or foreclosure of the property, any one of which
could have material adverse tax consequences to a Unit holder, including a
partial recapture of previously allocated low-income housing tax credits.
The programs of the U.S. Department of Housing and Urban Development (HUD) are
subject to being restructured, and the Clinton Administration and various
members of Congress have proposed a variety of program modifications. Most
proposals call for restructuring debt on assisted housing to reflect current
market values and reducing subsidized rents accordingly. In addition, many
proposals call for the conversion of subsidies from project-based subsidies to
tenant-based subsidies.
Public Law 104-204, effective October 1, 1996, provided that HUD generally will
renew Section 8 rental assistance contracts that expire in fiscal year 1997
(October 1, 1996 through September 30, 1997) for one year so long as the
subsidized rents on the properties do not exceed 120% of HUD-published Fair
Market Rents (FMRs) for the market areas in which the properties are located.
With respect to most properties with rents in excess of 120% of FMRs and Section
8 contracts that expire in fiscal year 1997, Congress authorized a demonstration
program to initiate restructuring of the loans and rent subsidies. The Operating
Partnerships own 14 properties whose Section 8 contracts expire in 1997, of
which two have rents in excess of 120% of FMRs. The General Partner anticipates
that HUD will renew for one year the section 8 contracts for the 12 properties
with rents at or below 120% of FMRs, and assuming agreement by the general
partners of the respective Operating Partnerships, the General Partner currently
anticipates submitting proposals to participate in the demonstration with
respect to the two properties with Section 8 contracts with rents in excess of
120% of FMRs that expire in fiscal year 1997. In addition, two other
10
<PAGE>
properties owned by Operating Partnerships have Section 8 contracts with rents
in excess of 120% of FMRs that expire after fiscal year 1997.
The ramifications of these proposed changes could affect demand for and cash
flow of many of the Properties, as well as potentially create debt forgiveness
taxable income. The General Partner is monitoring and preparing for the
potential impact of the proposed restructuring of HUD programs. The General
Partner is unable to predict with certainty the impact of HUD program
restructuring on the Operating Partnerships, but it is possible that a
restructuring could have a material adverse effect on one or more of the
Properties, which in turn could have a material adverse effect on the Investment
Partnership.
At March 31, 1997 assets limited as to use were $5,370,000. The assets were
composed of the Investment Partnership reserve of $384,000 and Operating
Partnership reserves of $4,986,000. The Investment Partnership reserves are
available to fund repairs and maintenance as well as operational expenses, while
the reserves maintained by an Operating Partnership are typically available only
for the Property owned by such Operating Partnership. Historically, the
Investment Partnership reserve has been available to fund obligations of the
Investment Partnership, including the management fee payable by the Investment
Partnership to the General Partner. In 1996 the General Partner deferred payment
of $195,000 of its Management Fee due to a reduced level of the Investment
Partnership Reserve. In light of the current level, the General Partner is again
considering deferring payment of a portion of its fee in 1997 to maintain an
appropriate level of Investment Partnership reserve. There can be no assurance,
however, that the Investment Partnership reserve will be sufficient to satisfy
the liquidity requirements of any given Operating Partnership in the event that
the reserves of such Operating Partnership are insufficient for this purpose.
The deposits and withdrawals from the Operating Partnership reserves are
generally regulated by a governing federal, state or local agency.
Low-income housing projects frequently generate limited cash flow and,
therefore, the potential of cash flow deficits exist. The General Partner does
not anticipate that the Investment Partnership will distribute cash to Unit
holders in circumstances other than refinancing or disposition of its
investments in the Operating Partnerships.
11
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<TABLE>
<CAPTION>
PART II. OTHER INFORMATION
- ---------------------------
<S> <C>
ITEM 1. LEGAL PROCEEDINGS
None
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
</TABLE>
12
<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
National Housing Trust Limited Partnership
------------------------------------------
(Registrant)
Date May 8, 1997 By /s/ Charles R. Santer
------------ ------------------------------------
Charles R. Santer
President, NHT, Inc.
Date May 8, 1997 By /s/ Susan E. Basting
------------ ------------------------------------
Susan E. Basting
Treasurer, NHT, Inc.
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 760,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,800,000
<PP&E> 78,599,000
<DEPRECIATION> 21,079,000
<TOTAL-ASSETS> 69,722,000
<CURRENT-LIABILITIES> 3,499,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (4,603,000)
<TOTAL-LIABILITY-AND-EQUITY> 69,722,000
<SALES> 3,111,000
<TOTAL-REVENUES> 3,188,000
<CGS> 0
<TOTAL-COSTS> 3,224,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 832,000
<INCOME-PRETAX> (910,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (910,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (910,000)
<EPS-PRIMARY> (0.90)
<EPS-DILUTED> (0.90)
</TABLE>
