<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 $250
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For the fiscal year ended December 31, 1995
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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For the transition period from to
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Commission file number 33-17556
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IDS/SHURGARD INCOME GROWTH PARTNERS L.P.
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(Exact name of registrant as specified in its charter)
Washington 91-1393767
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(State of organization) (IRS Employer Identification No.)
1201 Third Avenue, Suite 2200, Seattle, Washington 98101
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (206) 624-8100
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
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(Title of class)
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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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
[ X ]
DOCUMENTS INCORPORATED BY REFERENCE
The Annual Report to Security Holders for the fiscal year ended December
31, 1995 are incorporated by reference into Part II and III of this Form 10-K.
<PAGE>
PART I
ITEM 1. BUSINESS.
GENERAL
IDS/Shurgard Income Growth Partners L.P. (the Partnership) was organized
under the laws of the State of Washington on September 29, 1987. The General
Partner is Shurgard Associates L.P. The Partnership will terminate December 31,
2030, unless terminated at an earlier date.
The business of the Partnership is to acquire, develop and operate storage
centers. The Partnership has completed the acquisition and development phase of
the business; currently its main focus is on the operation of the storage
centers. The principal investment objectives of the Partnership are to provide
the Limited Partners with regular quarterly cash distributions which, for
Taxable Limited Partners, are expected to be partially tax-sheltered; to obtain
long-term appreciation in the value of its properties; and to preserve and
protect the Limited Partners' capital. The Partnership began operations during
1988 and purchased seven existing storage centers and one development site. The
offering was closed in March 1989 with total proceeds raised through the sale of
limited partnership interests of approximately $37 million.
The Partnership is also a partner and 70% equity owner in Shurgard Joint
Partners II ("SJP II"), organized in the State of Washington. SJP II purchased
four existing storage centers during 1988. The remaining 30% interest was
originally owned by Shurgard Income Properties - Fund 18 Limited Partnership.
On March 1, 1994, Shurgard Income Properties - Fund 18 was merged into Shurgard
Storage Centers, Inc. (SSCI) as part of the consolidation of 17 Shurgard-
sponsored limited partnerships. As a result of the merger, SSCI succeeded to
all of Shurgard 18's interest in Shurgard Joint Partners II, and assumed its
obligation as a partner. The Partnership consented to SSCI's admission as a
successor partner in Shurgard Joint Partners II.
On March 24, 1995, Shurgard Incorporated was merged into SSCI (the Merger).
As a result of the Merger, SSCI assumed all of Shurgard Incorporated's rights
and obligations under the Management Services Agreement and will manage the
Partnership's properties on the terms set forth in the Management Services
Agreement.
For more information regarding the properties owned by the Partnership at
December 31, 1995, see Item 2 below.
SELF SERVICE STORAGE
Self service storage centers provide a low-cost alternative to warehousing
and other forms of storage. Storage customers vary from individuals and
professionals to small and large businesses. These customers rent an enclosed
space or "unit" to store various items, including household goods, recreation
vehicles, inventory and business records. Individual units are secured by the
customer's own lock and key and the property's security is maintained through a
computerized access system. Storage space is rented on a month-to-month basis
and the typical rental period for storage tenants is less than two years. This
short rental period makes it necessary for management to continually re-lease
available space in order to maximize property revenues. The primary technique
for renting available space is through advertisements placed in local Yellow
Pages and through signage at the property site.
<PAGE>
In addition, the Partnership may utilize various promotional programs to
stimulate rental activities at a particular facility or within specific market
areas.
The Partnership's storage centers are designed to offer high-quality
storage space for personal and business use at a competitive price. Rental
rates reflect the comparative quality of the center (security, accessibility and
appearance), as well as the superior service provided by on-site managers.
Because storage leases are short term, any adjustments in rental rates due to
inflation or other market factors can become effective promptly based on the
manager's analysis of demand and availability at the particular store.
While rental income from leased space constitutes the primary source of
revenue from the properties, additional revenue is generated from incidental
services and products available at the storage centers. Management believes
that providing such ancillary services will become increasingly important as
competition forces operators to seek to differentiate their product. The
Partnership currently receives additional revenue from storage supplies sales as
well as truck rental operations.
PROPERTY MANAGEMENT
The Partnership entered into a Management Services Agreement with Shurgard
Incorporated which was assumed by SSCI in the Merger, whereby SSCI manages the
Partnership's properties for a monthly fee of 6% of the gross revenues from
operations of storage centers, plus $75 per month per facility for rendering
advertising services. Since SSCI manages the centers, all on-site managers and
associate managers are employees of SSCI. As of February 6, 1996 there were 14
such employees on-site at the Partnership's storage centers and 6 such employees
on-site at the SJP II storage centers.
Under the Management Services Agreement, SSCI has granted the Partnership
the non-exclusive right to use the name, trademark and service mark "Shurgard"
in connection with the rental and operation of its properties. The Management
Services Agreement can be terminated without cause by the Partnership with sixty
days written notice. However, if the agreement is so terminated, all rights to
use the "Shurgard" name, trademark and service mark are also terminated and any
signs bearing the name "Shurgard" are to be removed at the Partnership's
expense. If the agreement is terminated by SSCI for reasons other than the
Partnership's breach thereof, or SSCI is terminated for cause, the Partnership
will maintain the right to use the "Shurgard" name, trademark, service mark and
related items until the properties are sold or otherwise disposed of. However,
such rights may not be passed on to any subsequent purchaser of a property.
<PAGE>
COMPETITION
Management considers occupancy levels in the 90% range to be "full", and as
such they believe significant future occupancy gains will be difficult to
obtain. Management anticipates that future increases in revenues from storage
centers currently owned by the Partnership to continue to be primarily the
result of rental rate increases, as they have been in the last two years. To
the extent that the existing properties continue to operate profitably, this
will likely stimulate further development and result in greater competition
between the newly developed and existing properties. The Partnership seeks to
maximize revenues by adjusting rents to match demand more flexibly. Store
managers evaluate their store's rental rates, based on unit demand, unit
availability and competitors' rental rates. The Partnership trains its store
managers in revenue optimization and empowers them to adjust marginal rental
rates based on their "on the ground" analysis of demand and availability at
their particular store. In addition, the use of month-to-month leases, combined
with customer turnover, allows rents to be quickly adjusted to match current
demand in a flexible manner.
Entry into the self storage business through acquisition of existing
facilities is relatively easy for persons or institutions with the required
initial capital. Development of new self storage centers is more difficult,
however, due to zoning, environmental and other regulatory requirements.
Management has seen recent increases in storage development, but anticipates
that this development will not begin to affect industry occupancies until late
1996 or 1997. The Partnership competes with, among others, national and
regional storage operators and developers. Performance at any one location is
generally most influenced by competition within a five mile radius. The
primary factors upon which competition will be based are location, rental rates,
suitability of the property's design to prospective tenants' needs and the
manner in which the property is operated and marketed. The Partnership has
established itself within its markets as a quality operator, emphasizing
customer service and security.
Competition may be accentuated by any increase in availability of funds for
investment in real estate. Rising interest rates tend to decrease the
availability of funds and therefore can have a positive impact on competition.
The extent to which the Partnership is affected by competition will depend in
significant part on general market conditions.
DISPOSITION OF ASSETS
As originally stated, the Partnership plans to dispose of its interest
in its properties seven to nine years after acquisition or completion of the
properties' development, i.e., between now and 1999. However, as originally
indicated, the actual time of the sale depends on a variety of factors not
capable of prediction, including future property values, availability of
credit worthy purchasers, existing financing opportunities, operating results
and the Partnership's assessment of the respective merits of the continued
operation or disposition of the properties.
In connection with the merger of Shurgard Income Properties -- Fund 18 into
SSCI, SSCI granted the Partnership the right to sell its interest in Shurgard
Joint Partners II at any time in the future to either SSCI or, at SSCI's
request, to any wholly owned subsidiary thereof, at a price mutually agreeable
to the parties or, if no mutual agreement could be reached, at a price
determined through an appraisal process.
The Partnership is currently conducting discussions with an affiliated
party regarding the possible acquisition of an interest in, or a merger with,
the Partnership. Whether and when the Partnership will reach agreement
regarding this potential acquisition will depend on a number of factors. There
can be no assurance that any agreement will be reached, or if reached, that
the transactions contemplated thereby will be consummated.
<PAGE>
ITEM 2. PROPERTIES.
The following table lists each of the Partnership's storage centers at
December 31, 1995, the property location, the acquisition or completion date,
and the square foot occupancy at December 31, 1993, 1994 and 1995.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Property Location Rentable Acquisition/ Occupancy Occupancy Occupancy
Square Completion at Dec. 31 at Dec. 31 at Dec.31
Footage Date 1993 1994 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shurgard of S. Military Hwy. Virginia Beach, VA 48,275 6/88 * * *
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Shurgard of Midlothian Turnpike Richmond, VA 43,850 6/88 * * *
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Shurgard of Burke Washington, D.C. 31,876 6/88 * * *
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Shurgard of Margate Miami, FL 75,325 8/88 92 92 89
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Shurgard of Walnut Los Angeles, CA 96,377 8/88 83 82 78
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Shurgard of Ontario Los Angeles, CA 56,865 9/88 * * *
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Shurgard of Morgan Falls Atlanta, GA 75,591 9/90 95 95 93
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Shurgard of Factoria Square Bellevue, WA 69,995 1/90 95 96 97
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Shurgard of Canton** Detroit, MI 58,400 11/88 * * *
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Shurgard of Fraser** Detroit, MI 73,000 11/88 * * *
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Shurgard of Livonia** Detroit, MI 67,450 11/88 * * *
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Shurgard of Warren** Detroit, MI 68,150 11/88 * * *
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</TABLE>
* These properties are individually less than 10% of historical cost of
storage centers for the Partnership and Shurgard Joint Partners II. The
average occupancy of these projects was 86%, 87% and 89% for 1993, 1994 and
1995, respectively.
** Property owned by Shurgard Joint Partners II in which the Partnership has a
70% interest.
All of the properties were purchased from unaffiliated sellers and are held
in fee by the Partnership or Shurgard Joint Partners II.
ITEM 3. LEGAL PROCEEDINGS.
Shurgard Joint Partners filed quiet title actions as to the properties in
Fraser and Warren in the Circuit Court of Macomb County, Michigan on November 9,
1995 as Case No. 95-5190-CH, and as to the properties in Canton and Livonia in
the Circuit Court of Wayne County, Michigan on November 9, 1995 as Case No. 95-
533196-CH. Both suits are entitled Shurgard Joint Partners, II (Plaintiffs) vs.
Michigan Attic Partners '84 Limited Partnership, Your Attic Equity Partners,
Inc., George F. Field, Jac Le Goff and Thomas Niswonger, (Defendants). The
Partnership's exposure is not material and expects these actions to be resolved
in the near future.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a) Market information.
There is no established public market for the Partnership's units of
limited partnership interest.
Transfers of limited partner interests are restricted in certain
circumstances. Transfers which would result in the termination of the
Partnership under Section 708 of the Internal Revenue Code, transfers
of fractional units, and transfers which result in a limited partner
owning less than the minimum number of units are restricted. There is
a fee charged for transfers.
(b) Holders.
As of February 6, 1996, there was one general partner and
approximately 5,750 limited partners in the Partnership.
(c) Distributions.
During the fiscal years ended December 31, 1994 and 1995, the
Partnership distributed $17.03 and $19.22 respectively, per $250 unit
of limited partnership interest. In February 1996, the Partnership
distributed $4.84 per unit of limited partnership interest. As of
December 31, 1995, total distributions of $17,484,766 are greater than
total earnings on a basis consistent with generally accepted
accounting principles by $5,900,850. Therefore, the partners'
original investment has been reduced by that amount for financial
reporting purposes.
ITEM 6. SELECTED FINANCIAL DATA.
The information called for by this item is incorporated by reference of the
Annual Report to Security Holders for the fiscal year ended December 31, 1995, a
copy of which is filed as Exhibit 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND THE
RESULTS OF OPERATIONS.
The information called for by this item is incorporated by reference of the
Annual Report to Security Holders for the fiscal year ended December 31, 1995, a
copy of which is filed as Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information called for by this item is incorporated by reference of the
Annual Report to Security Holders for the fiscal year ended December 31, 1995, a
copy of which is filed as Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The Partnership's General Partner is Shurgard Associates L.P., a Washington
limited partnership. Shurgard Associates L.P. is managed by the directors and
executive officers of Shurgard General Partner, Inc., the corporate General
Partner, and by the Individual General Partners. SSCI and IDS Partnership
Services Corporation (IPSC), a Minnesota corporation, are limited partners of
Shurgard Associates L.P. and as such, do not control the day-to-day affairs of
the General Partner or, through the General Partner, the Partnership.
Management of the operation of Partnership projects is performed by SSCI
pursuant to the Management Services Agreement.
The directors of Shurgard General Partner, Inc. have been elected to serve
until their successors are duly elected and qualified. As the sole shareholder
of Shurgard General Partner, Inc., Charles K. Barbo is in a position to control
the election of directors.
The directors and officers of Shurgard General Partner, Inc., are required
to devote only so much of their time to the Partnership's affairs as is
necessary or required for the effective conduct and operation of the
Partnership's business. The Individual General Partners devote their individual
time to the Partnership to the extent they deem advisable in view of the
participation of SSCI in Partnership affairs and such other factors as they
consider relevant.
The Individual General Partners of Shurgard Associates L.P. and the
executive officers, directors and certain key personnel of Shurgard General
Partner, Inc., and SSCI are as follows:
<TABLE>
<CAPTION>
Name Age Company Office and Date of Election
- ------------------- --- ---------------------------------- ------------------------------------------------------------------
<S> <C> <C> <C>
Charles K. Barbo 54 Shurgard Associates L.P. Individual General Partner (1987-present)
SSCI President, Chief Executive Officer, and Chairman of the Board
(March 1995-present)
Shurgard General Partner, Inc. President (1992-present), Chairman of the Board (1983-present)
Arthur W. Buerk 60 Shurgard Associates L.P. Individual General Partner (1987-present)
Shurgard General Partner, Inc. Director (1979-February 1996)
Donald B. Daniels 57 Shurgard General Partner, Inc. Vice President (1983-present), Director (1979-present)
Kristin H. Stred 37 SSCI Senior Vice President, Secretary and General Counsel (1994-present)
Shurgard General Partner, Inc. Secretary (1992-present)
Harrell L. Beck 39 SSCI Director, Senior Vice President, Chief Financial Officer and
Treasurer (1994-present)
Shurgard General Partner, Inc. Treasurer (1992-present)
Michael Rowe 39 SSCI Executice Vice President (1994-present)
Shurgard General Partner, Inc Vice President (1992-present)
Mark Hall 38 Shurgard General Partner, Inc Vice President (February 1996)
</TABLE>
<PAGE>
CHARLES K. BARBO has been involved as a principal in the real estate
investment industry since 1969. Mr. Barbo is one of the co-founders of Shurgard
Incorporated, which was organized in 1972 to provide property management
services for self service storage centers and other real estate and
commercial ventures. Mr. Barbo was also a co-founder of Shurgard General
Partner, Inc. Upon Mr. Buerk's resignation on January 1, 1992, Mr. Barbo
assumed the responsibilities of President of Shurgard Incorporated until March
24, 1995 and Shurgard General Partner, Inc. Mr. Barbo is also a general partner
in a number of other public real estate partnerships. On March 24, 1995,
Shurgard Incoporated merged into SSCI and Mr. Barbo was named the Chairman of
the Board, President and Chief Executive Officer of SSCI.
ARTHUR W. BUERK joined Shurgard Incorporated in 1977. During the ensuing
years, Mr. Buerk shared with Messrs. Barbo and Daniels (see below) the various
executive management functions within Shurgard Incorporated. Mr. Buerk served
as President of Shurgard Incorporated from 1979 to 1991 and Shurgard General
Partner, Inc. from 1983 to 1991. Effective January 1, 1992, Mr. Buerk resigned
as President of both Shurgard Incorporated and Shurgard General Partner, Inc. to
pursue other areas of interest. He served as a director of Shurgard General
Partner, Inc. until February, 1996 and, a director of Shurgard Incorporated
until March 24, 1995. Mr. Buerk remains a general partner of Shurgard
Associates L.P. and is also a general partner in a number of other public real
estate partnerships.
DONALD B. DANIELS has been involved in the real estate investment industry
since 1971 and in the self service storage industry since 1974. Mr. Daniels is
one of the co-founders of Shurgard Incorporated. He is a director of Shurgard
General Partner, Inc. and was a director of Shurgard Incorporated until March
24, 1995. Mr. Daniels is also a general partner in a number of other real
estate partnerships.
KRISTIN H. STRED joined Shurgard Incorporated in 1992. She served as
General Counsel and Secretary of Shurgard Incorporated until March 24, 1995 and
currently serves as Secretary of Shurgard General Partner, Inc. Ms. Stred
served as a corporate attorney in the broadcasting and aerospace industries from
1987 to 1992. On March 24, 1995, Ms. Stred was named Senior Vice President of
SSCI. She also serves as Secretary and General Counsel of SSCI.
HARRELL BECK joined Shurgard Incorporated in April 1986 as the Eastern
Regional Operations Manager and, in 1990, he became the Chief Financial Officer.
Mr. Beck served as Treasurer of Shurgard Incorporated from 1992 until March 24,
1995. He currently serves as Director, Treasurer and CFO of SSCI as well as
Treasurer of Shurgard General Partner, Inc. On March 24, 1995, Mr. Beck was
named Senior Vice President of SSCI.
MICHAEL ROWE came to Shurgard Incorporated as Controller in 1982. In 1983,
he became a Vice President and, in 1987, was named Director of Operations of
Shurgard Incorporated. Mr. Rowe served as Treasurer of Shurgard Incorporated
from 1983 to 1992 and Executive Vice President from 1993 until March 24, 1995.
Mr. Rowe currently serves as Executive Vice President of SSCI and Vice President
to Shurgard General Partner, Inc.
MARK HALL joined Shurgard Incorporated in 1985 as Corporate Controller.
In 1987 he became the South Western Regional Operations Manager. Prior to
joining Shurgard Incorporated, Mr. Hall worked for Touch Ross & Co. where he
was employed for approximately four years, during which time he provided
services primarily to clients in the real estate and service industries. He
has a Bachelor of Arts degree in Business Administration from the
<PAGE>
University of Washington. Mr. Hall currently serves as Vice President of Real
Estate Services for SSCI and Vice President of Shurgard General Partner, Inc.
Pursuant to Articles 16 and 17 of the Agreement of Limited Partnership, a
copy of which is filed as an exhibit to the Partnership's Registration
Statement, each of the general partners continues to serve until (i) death,
insanity, insolvency, bankruptcy or dissolution, (ii) withdrawal with the
consent of the other general partners (if any) and a majority vote of the
limited partners, or (iii) removal by a majority vote of the limited partners.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
Number of Capacities
Persons in in which Cash
Group Served Compensation
---------- ---------- ------------
1 General Partner 150,000*
*The General Partner has a 5% interest in cash distributions made by the
Partnership, which is disproportionate to its share of the capital of the
Partnership, which is .003%. This amount represents the portion of cash
distributions made to the General Partner during the fiscal year ended
December 31, 1995 which is in excess of what a proportionate share of
distributions would have been.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) Security ownership of certain beneficial owners as of
February 6, 1996:
None owning more than 5% of the Partnership's voting securities.
(b) Security ownership of management as of February 6, 1996:
Security ownership in Shurgard Associates L.P. as of February 6, 1996
was as follows:
<TABLE>
<CAPTION>
Title of Name of Percent
Class Beneficial Owner of Class
-------- ------------------------------------- --------
<S> <C> <C>
General Shurgard General Partner, Inc.(1,2) .2%
Partners' Charles K. Barbo(2) 9.9%
Interest Arthur W. Buerk(2) 9.9%
SSCI(3,4) 40.0%
IDS Partnership Services Corporation(3) 40.0%
------
100.0%
------
------
</TABLE>
(1) Charles K. Barbo owns 100% of the stock of Shurgard General
Partner, Inc.
(2) Owner is a General Partner of Shurgard Associates L.P.
(3) Owner is a Limited Partner of Shurgard Associates L.P.
(4) On March 24, 1995, these interests were transferred from Shurgard
Incorporated to SSCI as a result of the Merger. Although SSCI
acquired through the Merger Shurgard Incorporated's interest in
the General Partner, substantially all of the appreciation in the
value of that interest during the next five years will inure to
the benefit of the former shareholders of Shurgard Incorporated
in the form of additional shares of SSCI. As a consequence, most
of the future benefits to be derived from the interest in the
General Partner (except current operating cash flow and
appreciation after five years), if any, will be received by the
shareholders of Shurgard Incorporated (including members of
management of SSCI) and not by SSCI or its shareholders.
(c) Changes in control: On March 24, 1995, Shurgard Incorporated
was merged into SSCI. As a result of the Merger, SSCI will perform
all the duties previously performed by Shurgard Incorporated,
including supervision of the operation of the Partnership projects.
For the directors, executive officers, key personnel of SSCI and
description of the circumstances under which the General Partner may
be removed, see Item 10 of this Form 10-K.
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Partnership agreement provides a fee payable to SSCI for property
management services equal to 6% of gross revenues from self service storage
operations for day-to-day professional property management services. The
monthly fee for management services will be reduced to 3% if leasing services
are performed by a party other than SSCI. Payments to SSCI for such management
totaled $387,904 for the year ended December 31, 1995.
Note D of the Annual Report to Security Holders for the year ended
December 31, 1995, a copy of which is included as Exhibit 13, is incorporated
by reference. In addition, Shurgard Incorporated will receive fees from the
Partnership as specified in the Agreement of Limited Partnership, reference
to which is made as Exhibit 3(a), and in the Management Services Agreement,
reference to which is made as Exhibit 10(a), both of which documents are
incorporated by reference. SSCI will succeed Shurgard Incorporated with
respect to these agreements. On March 24, 1995 as a result of the merger of
Shurgard Incorporated with SSCI, the shareholders of Shurgard Incorporated
received shares of SSCI. The following persons owned approximately the
designated percentages of SSCI's outstanding common stock.
Ownership
of
Person Relationship to Partnership SSCI(1)
- --------------------- --------------------------- ---------
Charles K. Barbo Individual General Partner
of Shurgard Associates L.P.
President and Chairman of the Board of
Shurgard General Partner, Inc. 3.1%
Arthur W. Buerk Individual General Partner of
Shurgard Associates L.P. 2.2%
Donald B. Daniels Director and Vice President of
Shurgard General Partner, Inc. *
As shareholders of SSCI these individuals may benefit indirectly from the
transactions disclosed in this item.
(1) As a result of the Merger, Shurgard Incorporated shareholders were
entitled to receive additional SSCI shares based on (i) the extent to
which, during the five years following the closing of the Merger, SSCI
realized value as a result of certain transactions relating to, among
others, SSCI's interest in the General Partner and (ii) the value, at the
end of five years or in the event of a change of control, of any remaining
interests in the General Partner as determined by independent appraisal.
The ownership percentages in SSCI above do not reflect theses additional
shares.
* Mr. Daniels owns less than 1% of SSCI.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND
REPORTS ON FORM 8-K.
(a) 1. Financial statements:
The following financial statements of IDS/Shurgard Income Growth
Partners L.P. and Shurgard Joint Partners II are incorporated by
reference in Part II and are filed as Exhibit 13:
Consolidated balance sheets - December 31, 1995 and 1994
Consolidated statements of earnings - Three years ended December 31,
1995
Consolidated statements of partners' equity (deficit) - Three years
ended December 31, 1995
Consolidated statements of cash flows - Three years ended
December 31, 1995
Notes to consolidated financial statements - Three years ended
December 31, 1995
Independent auditors' report
2. All schedules are omitted because either they are not applicable or
the required information is shown in the financial statements or
notes thereto.
3. Exhibits:
All exhibits to this report are listed in the Exhibit Index.
(b) Reports on Form 8-K:
None.
<PAGE>
SIGNATURES
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.
Date: March 28, 1996 IDS/SHURGARD INCOME GROWTH PARTNERS L.P.
By: Shurgard Associates L.P., General Partner
By: Shurgard General Partner, Inc. General Partner
By: HARRELL BECK
------------------------------------------
Harrell Beck, Treasurer
By: CHARLES K. BARBO
------------------------------------------
Charles K. Barbo, General Partner
By: ARTHUR W. BUERK
------------------------------------------
Arthur W. Buerk, General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
CHARLES K. BARBO President, Chairman of the Board and March 28, 1996
- ---------------------- Director of Shurgard General
Charles K. Barbo Partner, Inc. (principal executive
officer)
ARTHUR W. BUERK General Partner March 28, 1996
- ----------------------
Arthur W. Buerk
HARRELL BECK Treasurer of Shurgard General March 28, 1996
- ---------------------- Partner, Inc. (principal financial
Harrell Beck officer and principal accounting
officer)
<PAGE>
EXHIBIT INDEX
EXHIBIT REFERENCE
- --------------------------------------------------------------------------------
3. Articles of incorporation and by-laws: Filed as Exhibit 3 to Form S-11
(a) Agreement of Limited Partnership for Registration No. 33-17556
4. Instruments defining the rights of See Exhibit 3(a), above
security holders, including indentures
10. Material contracts: Filed as Exhibit 10(a) to
(a) Management Services Agreement Form S-11 for Registration
No. 33-17556
13. Annual report to security holders
21. Subsidiaries of the registrant See Item 1 of this Form 10-K
27. Financial Data Schedule
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
REVENUE: Partnership performance increased over the past two years as a
result of significant increases in revenue and earnings. Earnings rose 13% from
1994 to 1995 and 22% from 1993 to 1994. Rental revenue also rose $469,000 in
1995 after a $533,000 increase in 1994. Current year revenue increased due to a
slight increase in average occupancies and a 7.5% increase in average rental
rates. Additionally, all the stores within the joint partnership, in which the
Partnership owns 70% interest, had significant revenue gains, with 1995
averaging 13.7% over 1994. Revenue gains from 1993 to 1994 were primarily the
result of stable occupancies and a 9.5% increase in average rental rates.
Average occupancy has increased slightly, averaging 88% at December 31, 1993 and
1994 to 89% at December 31, 1995. With rental rates and average occupancy
increasing during 1995, the Partnership seeks to maximize revenues by adjusting
rents to match demand. Store managers evaluate their store's rental rates,
based on unit demand, unit availability and competitors' rental rates. The
Partnership trains its store managers in revenue optimization and empowers them
to adjust marginal rental rates based on their "on the ground" analysis of
demand and availability at their particular store. In addition, the use of
month-to-month leases, combined with customer turnover, allows rents to be
quickly adjusted to match current demand in a flexible manner.
EXPENSES: Operating expenses increased $110,000 in 1995 and $58,000 in
1994. The majority of the 1995 increase is due to 1) the increased personnel
costs resulting from additional hours worked by managers, 2) an increase in
landscaping expense during the spring and summer months at Canton, Fraser and
Warren storage centers and 3) repairs made to the air conditioning units at the
Margate storage center. In 1994, operating expenses increased due to 1) higher
utility usage from a colder than normal winter in the south, 2) additional phone
lines installed for modem communications, and 3) increased repair and
maintenance at Livonia and Morgan Falls due to snow removal and landscaping.
Interest expense increased $33,000 in 1995 after remaining stable in 1994.
The majority of the change in 1995 reflects the rise in the interest rate from
7.75% at December 1994 to 9.25% at December 1995.
Real estate taxes decreased $25,000 in 1995 after an $11,300 drop in 1994.
The 1995 decrease is due to tax refunds received as a result of successful real
estate tax appeals for the Fraser, Margate and Ontario storage centers. The
1994 decrease was largely due to levy decreases in the Michigan districts. The
Partnership does not expect to be able to continue to decrease real estate taxes
in the future.
Administrative expenses rose $36,000 in 1995 after a slight increase in
1994. The 1995 increase is primarily due to the increase in printing costs for
the Partnership's quarterly and annual reports.
LIQUIDITY AND CAPITAL RESOURCES
CASH FROM OPERATIONS: Cash from operations increased by $338,800 from 1993
to 1994 and $408,500 from 1994 to 1995, reflecting the increase in earnings.
Management believes that cash balances and cash flow from operations will be
adequate to support the future operating needs of the Partnership.
INVESTING ACTIVITIES: Investments in storage centers have been $99,000,
$137,000, and $119,000 during 1995, 1994 and 1993, respectively. The majority
of improvements in 1995 included building improvements at the Ontario and Canton
storage centers as well as pavement upgrades at the Warren and Canton storage
centers. Improvements completed during 1994 were security upgrades at South
Military Highway, Walnut and Ontario centers and pavement work at the Canton and
Warren centers. In 1993, investments were for pavement work at Canton and
Livonia centers and security equipment at the
<PAGE>
Midlothian Turnpike center. Planned improvements for 1996 total approximately
$63,300 and are expected to be funded from operations and cash reserves.
FINANCING ACTIVITIES: On December 6, 1995, the Partnership repaid its
seven-year note payable to the bank of $1,418,201 with cash accumulated from
operations. During 1995, 1994 and 1993, the Partnership had made principal
payments on this note of $33,000, $45,000, and $41,000, respectively. The
Partnership now has no outstanding long-term debt.
DISTRIBUTIONS TO PARTNERS: The average annual distribution rates were
7.69%, 6.81%, and 6.06% for 1995, 1994 and 1993, respectively. Distributions
are expected to continue on a quarterly basis and will reflect the Partnership's
future operating results and cash position.
POTENTIAL TRANSACTION: The Partnership is currently conducting discussions
with an affiliated party regarding the possible acquisition of an interest in,
or a merger with, the Partnership. Whether and when the Partnership will reach
agreement regarding this potential acquisition will depend on a number of
factors. There can be no assurance that any agreement will be reached, or if
reached, that the transactions contemplated thereby will be consummated.
<TABLE>
<CAPTION>
SELECTED FINANCIAL INFORMATION
AT OR FOR THE YEAR ENDED DECEMBER 31,
1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Rental Revenue $ 6,465,170 $ 5,995,824 $ 5,462,738 $ 4,853,259 $ 4,153,611
- ----------------------------------------------------------------------------------------------------------------------------------
Interest Income $ 107,234 $ 60,204 $ 28,570 $ 23,577 $ 19,938
- ----------------------------------------------------------------------------------------------------------------------------------
Earnings $ 2,502,504 $ 2,223,709 $ 1,820,725 $ 1,488,299 $ 866,967
- ----------------------------------------------------------------------------------------------------------------------------------
Earnings per Unit of Limited
- ----------------------------------------------------------------------------------------------------------------------------------
Partnership Interest $ 16.04 $ 14.25 $ 11.67 $ 9.54 $ 5.56
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions to
- ----------------------------------------------------------------------------------------------------------------------------------
Limited Partners $ 2,848,260 $ 2,524,069 $ 2,246,190 $ 2,223,033 $ 2,223,033
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions per Unit of
- ----------------------------------------------------------------------------------------------------------------------------------
Limited Partnership Interest $ 19.22 $ 17.03 $ 15.16 $ 15.00 $ 15.00
- ----------------------------------------------------------------------------------------------------------------------------------
Total Assets $ 29,738,680 $ 31,947,580 $ 32,278,171 $ 32,942,812 $ 32,419,372
- ----------------------------------------------------------------------------------------------------------------------------------
Note Payable $ -- $ 1,451,399 $ 1,495,986 $ 1,537,082 $ --
- ----------------------------------------------------------------------------------------------------------------------------------
Partners' Equity $ 26,892,179 $ 27,387,844 $ 27,821,050 $ 28,364,734 $ 29,216,470
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------------------
Cash and cash equivalents $ 668,672 $ 1,877,311
- ------------------------------------------------------------------------------------------------------
Storage centers, net 28,760,097 29,770,641
- ------------------------------------------------------------------------------------------------------
Other assets 294,954 280,497
- ------------------------------------------------------------------------------------------------------
Amortizable assets, less accumulated amortization
- ------------------------------------------------------------------------------------------------------
of $1,154,322 and $1,150,148 14,957 19,131
- ------------------------------------------------------------------------------------------------------
Total Assets $ 29,738,680 $ 31,947,580
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' EQUITY (DEFICIT):
- ------------------------------------------------------------------------------------------------------
Liabilities:
- ------------------------------------------------------------------------------------------------------
Accounts payable $ 105,669 $ 59,496
- ------------------------------------------------------------------------------------------------------
Other accrued expenses 44,953 40,790
- ------------------------------------------------------------------------------------------------------
Due to affiliates 39,082 40,208
- ------------------------------------------------------------------------------------------------------
Unearned rent and tenant deposits 174,935 172,231
- ------------------------------------------------------------------------------------------------------
Note payable 1,451,399
- ------------------------------------------------------------------------------------------------------
Total Liabilities 364,639 1,764,124
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Minority interest in joint partnership 2,481,862 2,795,612
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Partners' equity (deficit):
- ------------------------------------------------------------------------------------------------------
Limited partners 27,186,240 27,657,121
- ------------------------------------------------------------------------------------------------------
General partner (294,061) (269,277)
- ------------------------------------------------------------------------------------------------------
Total Partners' Equity 26,892,179 27,387,844
- ------------------------------------------------------------------------------------------------------
Total Liabilities and Partners' Equity $ 29,738,680 $ 31,947,580
- ------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE:
- ------------------------------------------------------------------------------------------------------------------------
Rental $ 6,465,170 $ 5,995,824 $ 5,462,738
- ------------------------------------------------------------------------------------------------------------------------
Interest income 107,234 60,204 28,570
- ------------------------------------------------------------------------------------------------------------------------
Total Revenue 6,572,404 6,056,028 5,491,308
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------------------------------------------
Operating 1,493,285 1,383,594 1,325,571
- ------------------------------------------------------------------------------------------------------------------------
Property management fees 387,904 359,655 327,766
- ------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization 1,113,748 1,260,049 1,119,109
- ------------------------------------------------------------------------------------------------------------------------
Real estate taxes 465,662 490,913 502,219
- ------------------------------------------------------------------------------------------------------------------------
Interest 130,022 96,731 94,915
- ------------------------------------------------------------------------------------------------------------------------
Administrative 215,529 179,596 172,236
- ------------------------------------------------------------------------------------------------------------------------
Total Expenses 3,806,150 3,636,538 3,541,816
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Minority interest in joint partnership earnings (263,750) (195,781) (128,767)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Earnings $ 2,502,504 $ 2,223,709 $ 1,820,725
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Earnings per unit of limited partnership interest $ 16.04 $ 14.25 $ 11.67
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Distributions per unit of limited partnership interest $ 19.22 $ 17.03 $ 15.16
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Limited Partners General Partner Total
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, January 1, 1993 $ 28,585,167 $ (220,433) $ 28,364,734
- ------------------------------------------------------------------------------------------------------------------------
Distributions (2,246,190) (118,219) (2,364,409)
- ------------------------------------------------------------------------------------------------------------------------
Earnings 1,729,689 91,036 1,820,725
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1993 28,068,666 (247,616) 27,821,050
- ------------------------------------------------------------------------------------------------------------------------
Distributions (2,524,069) (132,846) (2,656,915)
- ------------------------------------------------------------------------------------------------------------------------
Earnings 2,112,524 111,185 2,223,709
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1994 27,657,121 (269,277) 27,387,844
- ------------------------------------------------------------------------------------------------------------------------
Distributions (2,848,260) (149,909) (2,998,169)
- ------------------------------------------------------------------------------------------------------------------------
Earnings 2,377,379 125,125 2,502,504
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1995 $ 27,186,240 $ (294,061) $ 26,892,179
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
- ------------------------------------------------------------------------------------------------------------------------
Earnings $ 2,502,504 $ 2,223,709 $ 1,820,725
- ------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile earnings
- ------------------------------------------------------------------------------------------------------------------------
to net cash provided by operating activities:
- ------------------------------------------------------------------------------------------------------------------------
Minority interest in joint partnership earnings 263,750 195,781 128,767
- ------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization 1,113,748 1,126,049 1,119,109
- ------------------------------------------------------------------------------------------------------------------------
Changes in operating accounts:
- ------------------------------------------------------------------------------------------------------------------------
Other assets (14,457) (62,984) 85,209
- ------------------------------------------------------------------------------------------------------------------------
Accounts payable 46,173 14,142 (3,626)
- ------------------------------------------------------------------------------------------------------------------------
Other accrued expenses 4,163 (5,805) 10,837
- ------------------------------------------------------------------------------------------------------------------------
Due to affiliates (1,126) 12,689 (4,786)
- ------------------------------------------------------------------------------------------------------------------------
Unearned rent and tenant deposits 2,704 5,395 13,947
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 3,917,459 3,508,976 3,170,182
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
- ------------------------------------------------------------------------------------------------------------------------
Proceeds from grant of easements 7,599
- ------------------------------------------------------------------------------------------------------------------------
Improvements to storage centers (99,030) (136,846) (118,994)
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (99,030) (136,846) (111,395)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
- ------------------------------------------------------------------------------------------------------------------------
Payments on note payable (1,451,399) (44,587) (41,096)
- ------------------------------------------------------------------------------------------------------------------------
Distributions to partners (2,998,169) (2,656,915) (2,364,409)
- ------------------------------------------------------------------------------------------------------------------------
Distributions to minority partners in joint partnership (577,500) (75,000) (225,000)
- ------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (5,027,068) (2,776,502) (2,630,505)
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents (1,208,639) 595,628 428,282
- ------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year 1,877,311 1,281,683 853,401
- ------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 668,672 $ 1,877,311 $ 1,281,683
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
- ------------------------------------------------------------------------------------------------------------------------
Cash paid during period for interest $ 130,022 $ 96,731 $ 94,915
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL: IDS/Shurgard Income Growth Partners L.P. (the Partnership) was
organized under the laws of the State of Washington on September 29, 1987, to
serve as a vehicle for investments in and ownership of, a professionally
managed, real estate portfolio consisting of self storage properties which
provide month-to-month leases for business and personal use. The Partnership
will terminate December 31, 2030, unless terminated at an earlier date. The
general partner is Shurgard Associates L.P., a Washington limited partnership.
As of December 31, 1995, there were approximately 5,750 limited partners in
the Partnership. There were 148,202 units of limited partnership interest
outstanding at a contribution of $250 per unit.
CONSOLIDATED FINANCIAL STATEMENTS: In 1988 the Partnership and Shurgard
Income Properties -- Fund 18 ("Shurgard 18"), an affiliated partnership, formed
a joint venture, Shurgard Joint Partners II ("SJP II"), which purchased four
self storage facilities located in Detroit, Michigan. The Partnership
contributed 70% of the funds needed for the organization of SJP II with Shurgard
18 contributing the remaining 30%.
On March 1, 1994, Shurgard 18 was merged into Shurgard Storage Centers,
Inc. ("SSCI") as part of the consolidation of 17 Shurgard-sponsored limited
partnerships. As a result of the merger, SSCI succeeded to all of Shurgard 18's
interest in SJP II, and assumed its obligations as a partner. The Partnership
consented to SSCI's admission as a successor partner in SJP II. SSCI granted to
the Partnership the right to sell its interest in SJP II at any time in the
future to either SSCI or, at SSCI's request, to any wholly owned subsidiary
thereof, at a price mutually agreeable to the parties or, if no mutual agreement
could be reached, at a price determined through an appraisal process.
The Partnership and SSCI receive cash distributions from SJP II ($1,347,500
to the Partnership in 1995) and are allocated all income, gain, loss and credit
in proportion to their respective capital contributions to SJP II.
The consolidated financial statements include the accounts of the
Partnership and SJP II. All material, interpartnership transactions and
balances have been eliminated. The minority partner's interests in the joint
partnership are shown separately on the accompanying financial statements.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results can differ from those estimates.
CASH EQUIVALENTS: Cash equivalents consist of money market instruments
with original maturities of 90 days or less.
STORAGE CENTERS: Storage centers, including land, buildings and equipment,
are recorded at cost. Depreciation on buildings and equipment is recorded on a
straight-line basis over their estimated useful lives which range from three to
thirty years.
AMORTIZABLE ASSETS: Amortizable assets, which consist primarily of non-
compete covenants and loan costs, are amortized over their expected useful lives
of two to five years.
RENTAL REVENUE: Rental revenue is recognized as earned under accrual
accounting principles.
TAXES ON INCOME: The consolidated financial statements do not reflect a
provision for Federal income taxes because such taxes, including a proportionate
interest in any SJP II taxes, are the responsibility of the individual partners.
<PAGE>
LITIGATION: The Partnership has a policy of accruing for probable losses,
which if any, could be material to the future financial position or results of
operations at December 31, 1995. There are currently no known probable
losses, therefore, no such accruals have been made.
EARNINGS PER UNIT OF LIMITED PARTNERSHIP INTEREST: Earnings per unit of
limited partnership interest is based on earnings allocated to the limited
partners divided by the number of limited partnership units outstanding during
the year (148,202 units for each of the three years ended December 31, 1995).
DISTRIBUTIONS PER UNIT OF LIMITED PARTNERSHIP INTEREST: Distributions per
unit of limited partnership interest is based on the total amount distributed to
limited partners divided by the number of limited partnership units outstanding
during the year (148,202 units for each of the three years ended December 31,
1995).
VALUATION OF LONG LIVED ASSETS: The Partnership, using its best
estimates based on reasonable and supportable assumptions and projections,
reviews storage centers and other assets for impairment whenever events or
changes in circumstances have indicated that the carrying amounts of its
assets might not be recoverable. Impaired assets are reported at the lower
of cost or fair value. At December 31, 1995, no assets had been written down.
RECLASSIFICATION: Certain items in the 1993 and 1994 financial statements
have been reclassified to conform with the current year presentation.
NOTE B -- STORAGE CENTERS
Storage centers consist of the following --
<TABLE>
<CAPTION>
DECEMBER 31,
1995 1994
-----------------------------------------------------------------
<S> <C> <C>
Land $ 6,429,852 $ 6,429,852
-----------------------------------------------------------------
Buildings 28,463,189 28,390,139
-----------------------------------------------------------------
Equipment 1,200,005 1,174,025
-----------------------------------------------------------------
36,093,046 35,994,016
-----------------------------------------------------------------
-----------------------------------------------------------------
Less accumulated depreciation (7,332,949) (6,223,375)
-----------------------------------------------------------------
$ 28,760,097 $ 29,770,641
</TABLE>
NOTE C -- NOTE PAYABLE
At December 31, 1994, the Partnership held a seven year note payable to a
commercial bank bearing interest at 7.75%. On December 6, 1995, the Partnership
repaid the balance of this note.
<PAGE>
NOTE D -- TRANSACTIONS WITH AFFILIATES
In connection with the management of both the storage centers and the
Partnership, the Partnership has paid or accrued a monthly management fee
equal to 6% of the properties gross revenue to Shurgard Storage Centers,
Inc., an affiliate of the general partner. On March 24, 1995 the Management
Company of Shurgard Incorporated merged with Shurgard Storage Centers Inc.
Prior to the merger date such fees were paid to the Management Company of
Shurgard Incorporated.
<PAGE>
INDEPENDENT AUDITORS' REPORT
General Partners and Limited Partners
IDS/Shurgard Income Growth Partners L.P.
Seattle, Washington
We have audited the accompanying consolidated balance sheets of
IDS/Shurgard Income Growth Partners L.P. and subsidiary as of December 31, 1995
and 1994, and the related consolidated statements of earnings, partners' equity
(deficit), and cash flows for each of the three years in the period ended
December 31, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of IDS/Shurgard Income Growth
Partners L.P. and subsidiary as of December 31, 1995 and 1994, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1995 in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
Seattle, Washington
March 1, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 668,672
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 36,093,046
<DEPRECIATION> 7,332,949
<TOTAL-ASSETS> 29,738,680
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 26,892,179
<TOTAL-LIABILITY-AND-EQUITY> 29,738,680
<SALES> 0
<TOTAL-REVENUES> 6,572,404
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,676,128
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 130,022
<INCOME-PRETAX> 2,502,504
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,502,504
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,502,504
<EPS-PRIMARY> 16.04
<EPS-DILUTED> 16.04
</TABLE>
