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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED MARCH 31, 1998
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Commission File Number 1-9648
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NATIONAL REALTY, L.P.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 75-2163175
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
10670 North Central Expressway, Suite 300, Dallas, Texas 75231
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(Address of Principal Executive Office) (Zip Code)
(214) 692-4700
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(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 [ ]
Units of Limited Partner Interest 6,323,438
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(Class) (Outstanding at April 30, 1998)
1
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This form 10-Q/A amends the Registrant's quarterly report on Form 10-Q for the
quarter ended March 31, 1998 as follows:
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - page 14.
Introduction
National Realty, L.P. ("National Realty") is a Delaware limited partnership
formed on January 29, 1987, the business of which consists primarily of owning
and operating through National Operating, L.P., also a Delaware limited
partnership (the "Operating Partnership"), a portfolio of real estate. Most of
the Operating Partnership's properties were acquired in transactions consummated
on September 18, 1987, pursuant to which National Realty acquired all of the
assets, and assumed all of the liabilities, of 35 public and private limited
partnerships. National Realty and the Operating Partnership operate as an
economic unit and, unless the context otherwise requires, all references herein
to the "Partnership" shall constitute references to National Realty and the
Operating Partnership as a unit.
In November 1992, the Operating Partnership, in conjunction with a refinancing
of 52 of its apartment properties and a wraparound note receivable, transferred
such assets to Garden Capital, L.P. ("GCLP"), a Delaware limited partnership in
which the Operating Partnership holds a 99.3% limited partner interest.
Liquidity and Capital Resources
Cash and cash equivalents aggregated $10.8 million at March 31, 1998 compared to
$17.2 million at December 31, 1997. The principal reasons for this decrease in
cash are discussed in the paragraphs below.
The Managing General Partner of the Partnership's General Partner has discretion
in determining methods of obtaining funds for the Partnership's operations. The
Partnership's governing documents place no limitation on the amount of leverage
that the Partnership may incur either in the aggregate or with respect to any
particular property or other investment. At March 31, 1998, the aggregate
loan-to-value ratio of the Partnership's real estate portfolio was 44.8%,
computed on the basis of the ratio of total property-related debt to aggregate
appraised values as of December 31, 1997, as compared with a loan-to-value ratio
of 43.4% at December 31, 1997.
The Partnership's principal sources of cash flow have been and will continue to
be from property operations and externally generated funds. Externally generated
funds include borrowings, proceeds from the sale of Partnership properties and
other assets and proceeds from the issuance of debt secured by Partnership
properties or mortgage notes receivable. The Partnership expects that its cash
on hand, cash flow from property operations together with externally generated
funds will be sufficient to meet the Partnership's various cash needs in 1998,
including, but not limited to the payment of distributions, debt service
obligations coming due and property maintenance and improvements, as more fully
discussed in the paragraphs below.
The partnership's net cash flow from property operations (rents collected less
payments for property operating expenses) decreased from $11.4 million for the
three months ended March 31, 1997 to $10.8 million for the three months ended
March 31, 1998. The decrease is primarily due to the sale of one apartment
complex and three commercial properties in 1997.
Interest collected increased from $601,000 for the three months ended March 31,
1997 to $1.0 million for the three months ended March 31, 1998. The increase was
primarily due to loans funded in late 1997 or in 1998.
Interest paid increased from $7.2 million for the three months ended March 31,
1997 to $7.7 million for the three months ended March 31, 1998. An increase of
$547,000 was due to borrowing in 1997 and 1998, secured by notes receivable and
four previously unencumbered shopping centers. An increase of $144,000 was due
to a loan on which payments were not being made in 1997, pending modification
which occurred in 1998. These increases were partially offset by decreases of
$155,000 due to loans secured by notes receivable being paid off and $110,000
due to properties sold in 1997.
General and administrative expenses paid increased from $2.6 million for the
three months ended March 31, 1997 to $3.8 million for the three months ended
March 31, 1998. The increase was primarily due to accruals for payroll and other
expenses at December 31, 1997.
In November 1992, in conjunction with the transfer of the net assets of 52
apartment complexes and a wraparound note receivable to GCLP, such
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NATIONAL REALTY, L.P.
Signature Page
Pursuant to the requirements of Section 13 or 15(d) 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 REALTY, L.P.
By its General Partner:
SYNTEK ASSET MANAGEMENT, L.P.
By its Managing General Partner:
SYNTEK ASSET MANAGEMENT, INC.
Date: January 25, 1999 By: /s/ Randall M. Paulson
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Randall M. Paulson
President
Date: January 25, 1999 By: /s/ Thomas A. Holland
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Thomas A. Holland
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
