SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d)
of Securities Exchange Act of 1934
Commission File
For the fiscal year ended December 31, 1996 Number 0-17461
SOUTHEASTERN INCOME PROPERTIES II LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
Virginia 54-1288787
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One International Place, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 330-8600
--------------
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 ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
Registrant's revenues for its most recent fiscal year were $4,127,699.
No market exists for the limited partnership interests of the Registrant, and,
therefore, no aggregate market value can be determined.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Location in Form 10-KSB Document
In Which Document is
Incorporated
Part I The Prospectus of the
Registrant dated November 17,
1987, filed with the
Commission as part of
Registrant's Registration
Statement on Form S-11
(Registration No. 33-17659).
The Information Statement Furnished
in Connection with Solicitation of
Consents, dated November 22, 1991,
filed with the Commission on October
17, 1991, (the "1991 Solicitation of
Consents").
Part II Pages 14-18 of the 1991
Solicitation of Consents.
Transitional Small Business Discloure Format: Yes ___ No X
<PAGE>
PART I
Item 1. Description of Business.
Southeastern Income Properties II Limited Partnership (the "Registrant")
was organized under the Virginia Uniform Limited Partnership Act on September
20, 1984 for the purpose of acquiring, owning, operating, and ultimately selling
existing residential apartment complexes located primarily in the southeastern
United States. The general partner of the Registrant is Winthrop Southeast
Limited Partnership, a Delaware limited partnership ("WSLP" or the "Managing
General Partner"), whose general partner is Eight Winthrop Properties, Inc., a
Delaware corporation ("Eight Winthrop"). (See "Change in Control.")
The Registrant was initially capitalized with a deemed contribution of
$200 from the Original General Partner and a cash contribution of $100 from SIP
II Assignor Corporation, a Virginia corporation (the "Assignor Limited
Partner"). On October 2, 1987, the Registrant filed a Registration Statement on
Form S-11 (Registration No. 33-17659, the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") with respect to the public
offering of assignee units of limited partnership interest ("Units") in the
Registrant. The Registration Statement, covering the offering of 50,000 Units at
a purchase price of $500 per Unit (an aggregate of $25,000,000), was declared
effective on or about January 29, 1988. The offering concluded on November 16,
1988, at which time 35,801 Units had been sold to limited partners (the "Limited
Partners"), for an aggregate of $17,883,780.
The Registrant's only business is acquiring, owning, operating and
ultimately selling residential apartment complexes. The Registrant's investment
objectives and policies are described on pages 31-40 under the caption,
"Investment Objectives and Policies," of the Registrant's Prospectus dated
November 17, 1987 as filed pursuant to Rule 424(b) on January 29, 1988 (the
"Prospectus"), which description is incorporated herein by this reference. WSLP
does not intend to change the business or the investment objectives of the
Registrant.
The Registrant invested $16,042,088 of the original offering proceeds
(net of sales commissions and sales and organizational costs, but including
acquisition fees and expenses) in four
<PAGE>
residential apartment properties. All four properties were acquired by the
Registrant directly. Three properties were purchased free and clear of mortgage
indebtedness, while the fourth, St. Michaels, was purchased subject to an
existing mortgage loan.
Employees
The Registrant does not have any employees.
Until March 18, 1996, management services were performed for the
Registrant at its properties by on-site personnel all of whom were employees of
Winthrop Management, an affiliate of the Managing General Partner, which
directly managed the Registrant's properties. All payroll and associated
expenses of such on-site personnel were fully reimbursed by the Registrant to
Winthrop Management. Pursuant to a management agreement, Winthrop Management
provided certain property management services to the Registrant in addition to
providing on-site management. Winthrop Management is a Massachusetts general
partnership whose managing general partner is First Winthrop Corporation, the
parent of Eight Winthrop.
On March 18, 1996, the Registrant appointed an unaffiliated management
company to assume management of its properties (see "Item 3, Legal
Proceedings"). The provisions of the new management agreement are substantially
similar to those of the Winthrop Management agreement. The term is for one year,
renewable annually.
Competition
The real estate business is highly competitive and the Registrant's
properties have active competition from similar properties in the vicinity
including, in certain instances, properties owned by affiliates of the
Registrant. Furthermore, various limited partnerships controlled by the Managing
General Partner and/or its affiliates are also engaged in business which may be
competitive with the Registrant. The Registrant is also competing for potential
buyers with respect to the ultimate sale of its properties. See "Item 6,
Management's Discussion and Analysis or Plan of Operation."
<PAGE>
Change in Control.
The original general partner of the Registrant was K-A Southeastern Income
Properties II Limited Partnership, a Virginia Limited Partnership (the "Original
General Partner"). The general partners of the Original General Partner were
Glade M. Knight, Ben T. Austin, III and Southeast Real Properties Corporation.
On February 12, 1992, WSLP was admitted as the general partner of the
Registrant, while the Original General Partner's interest in the Registrant was
converted to a special limited partnership interest. The substitution of WSLP as
the general partner, and the conversion of the status of the Original General
Partner to that of a limited partner, was previously approved by the limited
partners of the Registrant pursuant to the 1991 Solicitation of Consents. The
general partner of WSLP is Eight Winthrop, a Delaware corporation, which is
wholly-owned by First Winthrop Corporation, a Delaware corporation, which in
turn is wholly-owned by Winthrop Financial Associates, A Limited Partnership, a
Maryland limited partnership ("WFA").
Until December 22, 1994, Arthur J. Halleran, Jr. was the sole general
partner of Linnaeus Associates Limited Partnership ("Linnaeus"), which is the
sole general partner of WFA. On December 22, 1994, pursuant to an Investment
Agreement entered into among Nomura Asset Capital Corporation ("NACC"), Mr.
Halleran and certain other individuals who comprised the senior management of
WFA, the general partnership interest in Linnaeus was transferred to W.L.
Realty, L.P. ("W.L. Realty"). W.L. Realty is a Delaware limited partnership, the
general partner of which was, until July 18, 1995, A.I. Realty Company, LLC
("Realtyco"). The equity securities of Realtyco were held by certain employees
of NACC.
On July 18, 1995 Londonderry Acquisition II Limited Partnership, a
Delaware limited partnership ("Londonderry II"), an affiliate of Apollo Real
Estate Advisors, L.P. ("Apollo"), acquired, among other things, Realtyco's
general partner interest in W.L. Realty and a sixty four percent (64%) limited
partnership interest in W.L. Realty. WFA owns the remaining thirty-five percent
(35%) limited partnership interest.
<PAGE>
As a result of the foregoing acquisitions, Londonderry II is the sole
general partner of W.L. Realty which is the sole general partner of Linnaeus,
which in turn is the sole general partner of WFA. As a result of the foregoing,
effective July 18, 1995, Londonderry II became the controlling entity of the
General Partners. In connection with the transfer of control, the officers and
directors of WFA resigned and Londonderry II appointed new officers and
directors. See "Item 9, Directors, Executive Officers, Promoters and Control
Persons; compliance with Section 16(a) of the Exchange Act."
Item 2. Description of Properties.
The following table sets forth the location, number of units,
acquisition date, original acquisition cost and nature of interest held for the
Registrant's residential apartment properties. For a further description of the
properties, see pages 14 through 18 of the 1991 Solicitation of Consents which
is incorporated herein by reference.
<TABLE>
No. Partnership
of Acquisition Acquisition Nature
Property Name Location Units Date Cost of Title
<S> <C> <C> <C> <C> <C>
Hunter's Creek Charlottesville, VA 240 9/29/84 $ 7,585,054 Fee
Apts. Simple
Copper Croft Roanoke, VA 120 5/06/88 $ 3,065,019 Fee
Apts. Simple
The Greenbryre Charlotte, NC 174 3/07/89 $ 4,948,659 Fee
Apts. Simple
St. Michaels Newport News, VA 260 4/30/90 $ 4,986,773 Fee
Apts. Simple
- --------------------------------------------------------------------------------------------------------------------
TOTAL 794 $20,585,505
====================================================================================================================
</TABLE>
<PAGE>
The following table sets forth the mortgage balance as of December 31,
1996, the interest rate, the amortization period, the maturity date and the
principal balance due upon maturity.
<TABLE>
12/31/96 Mortgage
Mortgage Interest Amortization Maturity Balance
Property Name Balance Rate Period Date at Maturity
<S> <C> <C> <C> <C> <C>
Hunter's Creek $3,991,905 9.52% 30 yrs. 3/01/00 $3,832,712
Apts.
Copper Croft - - - - -
Apts.
The Greenbryre - - - - -
Apts.
St. Michaels $4,223,282 8.75% 30 yrs. 6/01/97 $4,152,088
Apts.
- --------------------------------------------------------------------------------------------------------------------
TOTAL $8,215,187 $7,984,800
====================================================================================================================
</TABLE>
The Mortgage loan for the St. Michaels property matures June 1, 1997.
The Registrant is seeking a buyer for the St. Michaels property. Although, the
Managing General Partner believes a buyer for the property will be identified
shortly, the Managing General Partner expects there will be no proceeds
available for distribution from the sale due to market deterioration, primarily
arising from the reduced military personal presence in the area. In the event
the Registrant is not successful in selling the property or obtaining an
extension to the existing mortgage loan, the property could be lost through
foreclosure.
The following table sets forth the average annual occupancy rate and
per unit average monthly rental rate at the Registrant's properties for the
years ended December 31, 1995 and 1996.
<TABLE>
Hunter's Creek Copper Croft Greenbryre St. Michaels
Average Average Average Average
Year Occupancy Rent/Unit Occupancy Rent/Unit Occupancy Rent/Unit Occupancy Rent/Unit
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 92.6% $511/mo 94.7% $435/mo 95.4% $526/mo 90.2% $399/mo
1996 78.9% $528/mo 94.9% $457/mo 91.7% $568/mo 75.2% $414/mo
</TABLE>
<PAGE>
Set forth below is a table showing the carrying value and accumulated
depreciation and federal tax basis of each of the Registrant's properties as of
December 31, 1996.
<TABLE>
Federal
Carrying Accumlated Tax
Property Name Value Depreciation Rate Method Basis
<S> <C> <C> <C> <C> <C>
Hunter's Creek $8,791,073 $2,960,884 5-30 yrs S/L $4,239,154
Apts.
Copper Croft $3,566,627 $1,035,441 5-30 yrs S/L $2,484,549
Apts.
The Greenbryre $5,809,322 $1,951,164 5-30 yrs S/L $3,800,473
Apts.
St. Michaels $6,015,713 $2,478,562 5-30 yrs S/L $4,363,800
Apts.
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL $24,182,735 $8,426,051 $14,887,980
===========================================================================================================================
</TABLE>
The following table sets forth the realty tax rate and realty taxes
paid for each Property in 1996.
Tax Taxes
Property Name Rate Paid
Hunter's Creek .72 $55,704
Apts.
Copper Croft 1.13 $41,270
Apts.
The Greenbryre 1.255 $57,724
Apts.
St. Michaels 1.30 $66,516
Apts.
- ---------------------------------------------------------------
TOTAL $221,214
===============================================================
As noted under "Item 1, Description of Business", the real estate industry
is highly competitive. All of the Properties of the Registrant are subject to
competition from other apartment complexes in the area. The Registrant maintains
property and liability insurance on its properties which the Registrant believes
to be adequate. The apartment leases for the Registrant's properties are for a
term of one year or less, and no tenant leases 10% or more of the available
rental space. Except for necessary capital expeditures, the Registrant has no
present intentions of investing any additional capital in the properties.
<PAGE>
Item 3. Legal Proceedings.
Except as disclosed below, the Registrant is not a party, nor are any
of its properties subject, to any material pending legal proceedings.
RTC Commercial Loan Trust 1995 - NP1A, a Delaware business trust,
Plaintiff v. Winthrop Management, a Massachusetts general partnership,
Defendant, United States District Court for the Eastern District of Virginia;
Case No. 3:96CV177.
This action arises in connection with the transfer of the general
partnership interest in 1992 from the Original General Partner to WSLP at which
time WLSP entered into certain agreements with Investors Savings Bank, F.S.B.
("ISB"), including the delivery of a promissory note to ISB, which was secured
by an assignment of rights of Winthrop Management in the management agreements
for the Registrant's properties, and the partnership interests acquired by WSLP.
(See the 1991 Solicitation of Consents which is incorporated by reference
herein.) The RTC Commercial Loan Trust 1995-NP1A (the "RTC Loan Trust") has
succeeded to the rights of ISB. In February 1996, the RTC Loan Trust filed an
action against Winthrop Management, alleging Winthrop Management was in default
under its obligations set forth in the security agreement, and sought to have a
receiver appointed to control Winthrop Management's management of the
properties. On March 15, 1996, the Registrant terminated Winthrop Management as
the managing agent for its properties effective March 18, 1996, and appointed an
unaffiliated managing agent to assume management of the properties. On March 20,
1996, the court appointed a receiver to assume the rights of Winthrop Management
under the management agreements, including the right to pursue the Registrant
for breach of contract. On March 21, 1996, the court stayed its own order
appointing the receiver pending a motion to dismiss for lack of jurisdiction,
and subsequently dismissed the case for lack of jurisdiction.
RTC Commercial Loan Trust 1995-NP1A, Plaintiff v. Winthrop
Management, First Winthrop Corporation, Winthrop Southeast
Limited Partnership, Southeastern Income Properties, L.P.,
Southeastern Income Properties II, L.P. and Insignia Management
Corporation, Defendant, In the Circuit Court for the City of
Richmond, Virginia; At Law No. LB-1323-1.
<PAGE>
Upon dismissal of the above action in federal court for lack of federal
jurisdiction, in May 1996 the RTC Loan Trust filed a similar action in state
court, seeking to set aside transfers allegedly made to delay and hinder the RTC
Loan Trust, and a claim for in personam judgment against the defendants for such
transfers, and certain additional claims, including tortious interference with
contract, conspiracy to breach contract, breach of contract-the management
contracts and collection on the note. The defendants have filed their answer and
a demurrer (motion to dismiss) on certain of the counts. Discovery has been
conducted and the trial is scheduled to take place during the summer of 1997.
The Managing General Partner believes that the claims are without merit, and
will continue to vigorously defend the action.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during the period
covered by this report.
PART II
Item 5. Market Price for the Registrant's Common Equity and
Related Stockholder Matters.
The Registrant is a partnership and thus has no common stock. There is
currently no established public market in which the Units are traded, nor is it
anticipated that a public market will develop. Trading in the Units is sporadic
and occurs solely through private transactions.
As of March 15, 1997, there were 1,775 holders of 35,801 Units.
Distributions of $604,679 ($16.89 per Unit) and $273,162 ($7.63 per
Unit) were made to holders of the Units for the years ended December 31, 1995
and December 31, 1996, respectively. Amounts distributed resulted entirely from
cash generated from the operations of the properties owned by the Registrant.
See "Item 6, Management's Discussion and Analysis or Plan of Operation," for
information relating to the Registrant's future distributions.
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation.
Liquidity and Capital Resources
The Registrant receives rental income from its properties and is
responsible for operating expenses, administrative expenses, capital
improvements and debt service payments. The Registrant's properties are leased
to tenants who are subject to leases of up to one year.
During the year ended December 31, 1996, rental revenue and other
income from the Registrant's properties was sufficient to cover: (i) all
operating expenses and debt service of the properties; (ii) all administrative
costs of the Registrant; and (iii) cash distributions to partners totaling
$275,921. The Registrant utilized its remaining revenue to fund $280,768 of
capital improvements to the Registrant's properties, as well as increase its
unrestricted cash reserves. As of December 31, 1996, the Registrant's
unrestricted cash balance had increased to $647,080 from $627,142 at December
31, 1995.
The Registrant continued to make expenditures for capital improvements,
although such expenditures decreased to $280,768 in 1996 from $330,092 in 1995.
Capital improvements budgeted for 1997 total approximately $515,000 and include
exterior painting at Greenbryre and carpet, appliance and interior replacements
at all four properties.
It is expected that future rental revenue and other income from the
Registrant's properties will continue to be sufficient to cover all
administrative expenses of the Registrant and all operating expenses and debt
service of the properties, as well as necessary capital expenditures. As a
result of the continued capital improvements, it is expected that cash available
for distribution will remain limited. Future distribution levels will be
reviewed on a quarterly basis.
The ability of the Registrant's properties to improve operations may
affect the liquidity of the Registrant. Inflation and changing economic
conditions in the future could affect vacancy levels, rental payment defaults
and operating expenses of the Registrant's properties, and thus, could affect
the Registrant's revenue, net income and liquidity.
<PAGE>
At December 31, 1996, the Registrant has $647,080 of unrestricted cash
reserve. The Registrant has invested, and expects to continue to invest, such
amounts in money market instruments until required for partnership purposes. As
of December 31, 1996 the Registrant had $288,274 in reserves held by the
mortgage lender, the use of which is restricted for capital improvements to
Hunters Creek Apartments. Therefore, as of December 31, 1996, the Registrant has
total reserves of $935,354, which is expected to be sufficient to satisfy
working capital requirements of the Registrant. The Registrant, as required by
the Registrant's Partnership Agreement, must retain as working capital reserves
an amount equal to at least 1% of capital contributions of the Unit Holders.
The Registrant is in the process of reviewing the status of all the
properties with a view towards disposing of all its properties, depending on
property operations and market conditions. The mortgage loan on St. Michaels
matures June 1, 1997 and the property is being marketing for sale. Although the
Registrant believes a buyer for the property will be located, it expects there
will be no proceeds available for distribution from the sale of the property due
to market deterioration, primarily arising from the reduced military personal
presence in the area. In the event the property is not sold or the mortgage loan
extended or refinanced, the property could be lost through foreclosure.
Results of Operations
The Registrant's total revenue decreased by approximately 6.0% in 1996
compared to 1995. Rental income decreased by approximately 5.9%, to $3,732,898
in 1996 from $3,965,031 in 1995 primarily as a result of decreased occupancy at
Hunters Creek and St. Michaels. Overall average occupancy for the properties was
83.4% compared to 92.9% in 1995. Average rental rates at the properties
increased 4.9% to $489 per unit compared to $466 per unit in 1995. Other income
also decreased 6.9% or $27,395, primarily due to a $40,080 decline in furnished
unit income at St. Michaels as a result of the U.S. Navy vacating units at the
Property.
Expenses of operating the Registrant's properties increased by 14.6%,
to $2,597,734 in 1996 from $2,267,225 in 1995, due to increases in general and
administrative expenses, utilities, repairs and maintenance and taxes, which was
only partially
<PAGE>
offset by decreases in leasing and insurance expenses. General and
administrative expenses increased $88,054 as a result of increased legal and
eviction charges due to significant delinquencies. Utility expenses increased
$118,020; increased gas charges at St. Michaels of approximately $44,000 and
Hunter Creek of $18,000 as well as increased water and sewer charges of $40,000
at Copper Croft were the primary causes. Repairs and maintenance expenses
increased by $223,787 or 29.1% in 1996 compared to 1995 due to approximately
$100,000 in carpet and landscaping upgrades at Hunters Creek, various building
repairs of approximately $55,000 at Greenbryre and carpet repairs of
approximately $36,000 at Copper Croft. The increased tax expense is primarily
due to real estate charges at Greenbryre. Leasing expenses decreased by $88,361
in 1996 compared to the same period in 1995 primarily as a result of the savings
of $75,224 at St. Michaels due to lower furniture rentals required due to the
decrease in units rented by the U.S. Navy. Insurance expense decreased by
$32,689 in 1996 due to the decrease in group health insurance costs at all the
properties. Other expenses of the Registrant (including depreciation and
amortization, interest expenses and Registrant administrative expenses) remained
relatively constant.
<PAGE>
Item 7. Financial Statements.
Southeastern Income Properties II Limited Partnership
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENTS OF PARTNERS' CAPITAL
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS AND INDEPENDENT
AUDITORS' REPORT
SOUTHEASTERN INCOME PROPERTIES II LIMITED
PARTNERSHIP
DECEMBER 31, 1996 AND 1995
Southeastern Income Properties II Limited Partnership
INDEPENDENT AUDITORS' REPORT
To the Partners and Unit Holders of
Southeastern Income Properties II Limited Partnership
We have audited the accompanying balance sheets of Southeastern Income
Properties II Limited Partnership as of December 31, 1996 and 1995, and the
related statements of operations, partners' capital, and cash flows for the
years then ended. 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, the financial statements referred to above present fairly, in
all material respects, the financial position of Southeastern Income Properties
II Limited Partnership as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
/s/ Reznick Fedder & Silverman
Bethesda, Maryland
January 24, 1997
<PAGE>
<TABLE>
BALANCE SHEETS
ASSETS
1996 1995
---------------- -----------------
Investment in rental property
<S> <C> <C>
Land $ 2,664,225 $ 2,664,225
Building and building improvements 17,990,842 17,744,666
Personal property 3,527,668 3,493,076
---------------- -----------------
24,182,735 23,901,967
Less: accumulated depreciation 8,426,051 7,545,031
---------------- -----------------
15,756,684 16,356,936
---------------- -----------------
Cash and cash equivalents 647,080 627,142
Tenant security deposits - funded 162,055 237,327
Loan costs, net of accumulated amortization
of $200,346 and $160,571 88,389 128,164
Other assets 416,730 364,787
---------------- -----------------
1,314,254 1,357,420
---------------- - ----------------
Total assets $ 17,070,938 $ 17,714,356
================ =================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities applicable to investment in rental property
Mortgages payable $ 8,215,187 $ 8,318,589
Other liabilities
Accounts payable 32,825 91,185
Accrued interest payable 63,955 63,955
Rents deferred credits 17,923 26,919
Tenants security deposits 100,510 117,671
Other liabilities 64,684 38,791
---------------- -----------------
Total liabilities 8,495,084 8,657,110
---------------- -----------------
Partners' Capital
Limited partners' unit holders', 50,000 units authorized,
35,801 outstanding December 31, 1996 and 1995 9,973,010 10,420,822
Special Limited Partner (1,388,143) (1,356,646)
General partner (9,013) (6,930)
---------------- -----------------
Total partners' capital 8,575,854 9,057,246
---------------- -----------------
Total liabilities and partners' capital $ 17,070,938 $ 17,714,356
================ =================
See notes to financial statements
</TABLE>
<PAGE>
Southeastern Income Properties II Limited Partnership
STATEMENTS OF OPERATIONS
Years ended December 31, 1996 and 1995
<TABLE>
1996 1995
---------------- ---------------
Income
<S> <C> <C>
Rental $ 3,732,898 $ 3,965,031
Interest income 26,676 31,836
Other income 368,125 395,520
---------------- ---------------
4,127,699 4,392,387
---------------- ---------------
Expenses
Leasing 219,765 308,126
General and administrative 310,757 222,703
Management Fees 245,499 246,632
Utilities 402,779 284,759
Repairs and Maintenance 994,029 770,242
Insurance 139,409 172,098
Taxes 285,496 262,665
---------------- ---------------
Total operating expenses 2,597,734 2,267,225
Other expenses
Partnership expenses 59,474 64,702
Interest expense 755,167 763,125
Depreciation and amortization 920,795 905,241
---------------- ---------------
Total Expenses 4,333,170 4,000,293
---------------- ---------------
Net income (loss) $ (205,471) $ 392,094
================ ===============
Net income (loss) allocated to
General Partner $ (2,055) $ 3,921
---------------- ---------------
Net income (loss) allocated to
Limited Partners' Unit Holders' $ (174,650) $ 333,280
---------------- ---------------
Net income (loss) allocated to Special
Limited Partner (28,766) $ 54,893
---------------- ---------------
Net income (loss) allocated to each unit $ (4.88) $ 9.31
================ ===============
Weighted average number of units
outstanding - Limited Partners 35,801 35,801
================ ===============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
Southeastern Income Properties II Limited Partnership
STATEMENTS OF PARTNERS' CAPITAL (DEFICIENCY)
Years ended December 31, 1996 and 1995
Special Limited Total
General Limited Partners' Unit Partners'
Partner Partner Holders' Capital
----------------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Balance, December 31, 1994 $ (10,790) $ (1,405,492) $ 10,692,221 $ 9,275,939
Net income 3,921 54,893 333,280 392,094
Distributions including $16.89
per L/P Unit Holders (61) (6,047) (604,679) (610,787)
----------------- ---------------- ---------------- -----------------
Balance, December 31, 1995 (6,930) (1,356,646) 10,420,822 9,057,246
Net loss (2,055) (28,766) (174,650) (205,471)
Distributions including $7.65
per L/P Unit Holders (28) (2,731) (273,162) (275,921)
----------------- ---------------- ---------------- -----------------
Balance, December 31, 1996 $ (9,013)$ (1,388,143)$ 9,973,010 $ 8,575,854
================= ================ ================ =================
</TABLE>
<PAGE>
Southeastern Income Properties II Limited Partnership
STATEMENTS OF CASH FLOWS
Years ended December 31, 1996 and 1995
<TABLE>
1996 1995
---- ----
Cash flows from operating activities
<S> <C> <C>
Net income (loss) $ (205,471) $ 392,094
Adjustments to reconcile net income (loss) to net
cash provided by operating activities
Depreciation 881,020 865,467
Amortization 39,775 39,774
Decrease (increase) in tenant security deposits 75,272 (106,988)
(Increase) decrease in other assets (51,943) 14,827
Decrease in accounts payable (58,360) (40,328)
Increase in accrued interest payable - 3
(Decrease) increase in rents deferred credit (8,996) 7,202
(Decrease) increase in tenant security deposits (17,161) 8,853
Increase in other liabilities 25,893 7,186
---------------- -----------------
Net cash provided by operating activities 680,029 1,188,090
---------------- -----------------
Cash flows from investing activities
Investment in rental property (280,768) (330,092)
---------------- -----------------
Net cash used in investing activities (280,768) (330,092)
---------------- -----------------
Cash flows from financing activities
Distributions to partners (275,921) (610,787)
Payments on mortgages (103,402) (95,444)
---------------- -----------------
Net cash used in financing activities (379,323) (706,231)
---------------- -----------------
INCREASE IN CASH AND CASH EQUIVALENTS 19,938 151,767
Cash and cash equivalents, beginning 627,142 475,375
---------------- -----------------
Cash and cash equivalents, end $ 647,080 $ 627,142
================ =================
Supplemental disclosure of cash flow information
Cash paid during the year for interest $ 755,167 $ 763,122
================ =================
</TABLE>
See notes to financial statements
<PAGE>
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Southeastern Income Properties II Limited Partnership (the "Partnership")
was originally formed in September 1984 for the purpose of acquiring,
operating and ultimately selling a 240-unit apartment complex now known as
Hunters Creek Apartments, near Charlottesville, Virginia.
The Partnership agreement (the "Agreement") has been amended several times.
Among the amendments were changes in the allocation of net loss between the
general and limited partners during the periods. The Agreement provided for
K-A Southeastern Income Properties II Limited Partnership ("K-A SIP II"), a
Virginia limited partnership, to be the general partner and for a public
offering of up to 50,000 assignee units of limited partnership interest
("Units") at $500 per unit. During 1988, the Partnership sold 35,801 Units.
The Partnership used a portion of the offering to repay all of the
mortgages payable related to Hunters Creek and to pay for a portion of the
cost of acquiring Coppercroft in Roanoke, Virginia, The Greenbyre in
Charlotte, North Carolina and St. Michaels in Newport News, Virginia (See
note C).
In early 1992, the Unit Holders approved certain changes in (and amendments
to ) the Partnership Agreement, which converted K-A SIP II to a special
limited partner and admitted Winthrop Southeast Limited Partnership
("WSLP") as the sole general partner, effective February 12, 1992. K-A SIP
II retained its current capital account and adjusted capital contribution
upon its conversion to special limited partner status. Under the revised
Agreement, taxable income and loss is to be allocated 85% to Unit Holders,
14% to K-A SIP II and 1% to WSLP. Federal tax regulations, however, limit
allocations of net losses due to considerations provided in Internal
Revenue Section 704 (b). As a result, the Partnership's 1996 federal tax
return reflects a reallocation of losses only to the limited partners and
WSLP. The revised Partnership Agreement also provides for K-A SIP II and
WSLP to receive .99% and .01%, respectively, and the Limited Partners to
receive the remaining 99%, of distributable cash from operations for five
years from the date WSLP became the Partnership's general partner and 88%
and 12%, respectively, thereafter, until the Unit Holders have received
their preferred return. After the Unit Holders have received a
noncompounded, noncumulative annual cost return equal to 10% of their
capital contributions, as adjusted for certain capital transactions, K-A
SIP II and WSLP will receive 14% and 1%, respectively, of distributable
cash from operations for five years from the date WSLP became the
Partnership's general partner and 12.32% and 2.68%, respectively,
thereafter. Winthrop Management ("Winthrop"), an affiliate of WSLP, served
as the management agent for the properties from August 1, 1991 through
March 17, 1996 and Insignia Management Corporation, currently serves as the
management agent for the properties effective March 18, 1996.
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Upon liquidation of the Partnership, after payment of, or adequate
provision for, the debts and obligations of the Partnership, the remaining
assets of the Partnership would be distributed to all partners and Unit
Holders with positive capital accounts in the proportion that the positive
balance in each Partner's or Unit Holder's capital account bore to the
aggregate of such positive balances, after taking into account all capital
account adjustments for the Partnership's taxable year during which such
liquidation occurred.
Investment in Rental Property
The investment in rental property is recorded at cost. Depreciation is
determined by the straight-line method over the estimated useful lives of
the various assets. Estimated useful lives are 27.5 to 30 years for
buildings and building improvements and 5 to 7 years for personal property.
Use of Estimates
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 assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
Loan Costs
Loan costs incurred in connection with obtaining financing are being
amortized over the terms of the loans.
Replacement Reserves
Replacement reserves are compressed of partnership funds held by the
Partnership's mortgage lenders, the use of which are limited to specific
capital or other costs, are included in other assets and total $288,274 in
1996 and $222,179 in 1995.
<PAGE>
Southeastern Income Properties II Limited Partnership
December 31, 1996 and 1995
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Rental Income
Rental income is recognized as rents become due. Rental payments received
in advance are deferred until earned. All leases between the Partnership
and the tenants of the property are operating leases.
Income Taxes
No provision or benefit for income taxes has been included in these
financial statements since taxable income and loss passes through to, and
is reportable by, the partners individually.
Net Income (Loss) Allocated to Each Unit
Net income (loss) allocable to each Limited Partner's Unit is computed
using the weighted average number of units outstanding in each year.
Cash Equivalents
For the purposes of the statement of cash flows, the Partnership considers
all highly liquid investments consisting of a money market fund to be cash
equivalents. The carrying amount as of December 31, 1996 and 1995 of $-0-
and $521,291, respectively, approximates fair value because of the short
maturity of this instrument.
NOTE B - REALIZATION OF ASSETS
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of
the Partnership as a going concern. The mortgage encumbering St. Michaels,
which has an outstanding principal balance of approximately $4.2 million as
of December 31, 1996, matures on June 1, 1997. The general partner is
actively marketing the project for sale. If St. Michaels is not sold prior
to maturity of the mortgage, and the Partnership is unable to obtain an
extension from its lenders, the project may go to foreclosure. The general
partner does not expect there will be any proceeds available for
distribution to limited partners from the sale of St. Michaels.
<PAGE>
Southeastern Income Properties II Limited Partnership
December 31, 1996 and 1995
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE B - REALIZATION OF ASSETS (Continued)
The three remaining properties in the Partnership will be selectively
marketed for sale over time, depending on market conditions and property
operations.
In view of these matters, the Partnership's ability to continue as a going
concern depends on the Partnership's ability to meet its financing
requirements through the sale or refinancing of the mortgage of St.
Michaels. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
NOTE C - INVESTMENT IN RENTAL PROPERTY
On September 29, 1984, the Partnership acquired Hunters Creek, a 240-unit
apartment complex near Charlottesville, Virginia. In connection with this
acquisition, the Partnership assumed a first deed of trust mortgage on the
project.
On May 6, 1988, the Partnership acquired Coppercroft, a 120-unit apartment
complex in Roanoke, Virginia. The total cost of the project, $2,830,000,
was funded from a portion of the proceeds from the public offering of the
Units.
On March 7, 1989, the Partnership acquired The Greenbyre, a 174-unit
apartment complex in Charlotte, North Carolina. The total cost of the
project, $4,650,000, was funded from a portion of the proceeds from the
public offering of the Units.
On April 30, 1990, the Partnership acquired St. Michaels, a 260-unit
apartment complex in Newport News, Virginia. In connection with this
acquisition, the Partnership assumed the first deed of trust mortgage with
an outstanding balance of $4,543,417 and paid the remainder of the
$5,000,000 purchase price from a portion of the proceeds of the public
offering of Units.
NOTE D - MORTGAGES PAYABLE
During 1989, the Partnership acquired St. Michaels by assuming a mortgage
with an outstanding balance of $4,543,417. During 1992, the Partnership
renegotiated the terms of the mortgage. The existing mortgage with a
balance of $4,223,282 at December 31, 1996 and $4,294,476 at December 31,
1995 is payable in monthly installments totaling $37,013 of principal and
interest at 8.75% per annum, through June 1, 1997 with a balloon payment of
$4,152,088.
<PAGE>
Southeastern Income Properties II Limited Partnership
December 31, 1996 and 1995
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE D - MORTGAGES PAYABLE (Continued)
During 1993, the Partnership refinanced Hunters Creek by obtaining a
$4,100,000 mortgage. The mortgage balance is $3,991,905 at December 31,
1996 and $4,024,113 at December 31, 1995 and is payable in installments of
principal and interest at 9.52% per annum, totaling $34,535 through March
1, 2000 with a balloon payment of $3,832,712.
Based on the interest rates of loans with similar maturities currently
available to the partnership, the estimated fair value of the mortgages
payable approximates fair value.
The apartment projects, as referred to above, are pledged as collateral for
the mortgages.
The liability of the partnership under the mortgages is limited to the
underlying value of the real estate collateral, plus other amounts
deposited with the lender.
Aggregate maturities of the mortgages payable for the years following
December 31, 1996 are as follows:
<TABLE>
<S> <C>
December 31, 1997 $4,259,212
December 31, 1998 39,504
December 31, 1999 43,434
December 31, 2000 3,873,037
</TABLE>
NOTE E - RELATED-PARTY TRANSACTIONS
The Partnership has incurred management fees, accounting fees and investor
servicing fees as expenses resulting from transactions with WSLP and
Winthrop Management. The investor servicing fees for 1995 and part of 1996
were paid to First Winthrop Corporation.
<TABLE>
1996 1995
---------------- -----------------
<S> <C> <C>
Management fees $ 63,608$ 213,494
Investor servicing fees 32,650 33,138
Accounting fees 7,940 23,820
---------------- -----------------
$ 104,198$ 270,452
================ =================
</TABLE>
<PAGE>
Southeastern Income Properties II Limited Partnership
December 31, 1996 and 1995
NOTES TO FINANCIAL STATEMENTS - CONTINUED
NOTE E - RELATED-PARTY TRANSACTIONS (Continued)
The accounting fees were included in general and administrative expenses
and the management and investor servicing fees are included in management
fees on the statements of operations.
The Partnership entered into a management agreement with Winthrop which
provides for a management fee of 5% of gross revenues. On March 18, 1996,
the Partnership entered into new management with an unaffiliated third
party, Insignia Management Corporation, under the same terms as the
management agreement with Winthrop. Management fees charged to operations
and paid to Insignia during 1996 was $149,241.
NOTE F - INCOME TAXES AND PARTNERS' CAPITAL
The following is the reconciliation of the income (loss) and partners'
capital for federal income tax purposes with the net income (loss) and
partners' capital for financial statement purposes.
<TABLE>
1996 1995
---------------- ----------------
Net income (loss) for financial statement
<S> <C> <C>
purposes $ (205,471) $ 392,094
Excess of tax depreciation over
depreciation for book purposes (152,831) (268,665)
Other (8,996) 7,204
---------------- ----------------
Income (loss) for federal income tax purposes (367,298) 130,633
================ ================
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
1996 1995
---------------- ----------------
Partners' capital for financial statement
<S> <C> <C>
purposes $ 8,575,854 $ 9,057,246
Cumulative effect of
Excess of depreciation for federal
income tax purposes (2,544,257) (2,391,426)
Provision for investment property
writedown 823,414 823,414
Other 17,155 26,919
Offering costs 1,706,304 1,706,304
Adjustment of fixed assets for federal
income tax purposes in connection
with recapitalization of the Partnership (1,478,434) (1,478,434)
Section 734 step-up 2,179,679 2,179,679
----------------- ----------------
Partners' capital for federal income tax
purposes $ 9,279,715 $ 9,923,702
================= ================
The difference between investment in rental property for tax purposes and
financial statement purposes for 1996 and 1995 is as follows:
1996 1995
---------------- ----------------
Investment in rental property as reported $ 15,756,684 $ 16,356,936
Investment in rental property for tax purposes 14,887,980 15,641,063
---------------- ----------------
$ 868,704 $ 715,873
================ ================
</TABLE>
NOTE G - CONCENTRATION OF CREDIT RISK
At December 31, 1996, the Partnership had bank deposits in excess of
federally insured limits totaling of $571,282.
<PAGE>
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
None.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.
(a) Identification of Directors and Executive Officers.
The Registrant has no officers or directors. The Managing General
Partner manages and controls substantially all of the Registrant's affairs and
has general responsibility and ultimate authority in all matters affecting its
business. As of March 1, 1997, the names of the directors and executive officers
of Eight Winthrop, the general partner of the Managing General Partner, and the
position held by each of them, are as follows:
Has served as a
Director and/or
Officer of the Managing
Name Positions Held General Partner since
Michael L. Ashner Chief Executive January 1996
Officer and
Director
Richard J. McCready Chief Operating July 1995
Officer and
President
Jeffrey Furber Executive Vice July 1995
President
and Clerk
Edward Williams Chief Financial April 1996
Officer,
Vice President
and Treasurer
Peter Braverman Senior Vice January 1996
President
Michael L. Ashner, age 45, has been the Chief Executive Officer of Winthrop
Financial Associates, A Limited Partnership ("WFA") since January 15, 1996. From
June 1994 until January 1996, Mr. Ashner was a Director, President and
Co-chairman of National Property Investors, Inc., a real estate investment
company ("NPI"). Mr. Ashner was also a Director and executive officer of NPI
Property Management Corporation ("NPI Management") from April 1984 until January
1996. In addition, since 1981 Mr. Ashner has been President of Exeter Capital
Corporation, a firm which has organized and administered real estate limited
partnerships.
<PAGE>
Richard J. McCready, age 38, is the President and Chief Operating Officer
of WFA and its subsidiaries. Mr. McCready previously served as a Managing
Director, Vice President and Clerk of WFA and a Director, Vice President and
Clerk of the Managing General Partner and all other subsidiaries of WFA. Mr.
McCready joined the Winthrop organization in 1990.
Jeffrey Furber, age 37, has been the Executive Vice President of WFA
and the President of Winthrop Management since January 1996. Mr. Furber served
as a Managing Director of WFA from January 1991 to December 1995 and as a Vice
President from June 1984 until December 1990.
Edward V. Williams, age 56, has been the Chief Financial Officer of WFA
since April 1996. From June 1991 through March 1996, Mr. Williams was Controller
of NPI and NPI Management. Prior to 1991, Mr. Williams held other real estate
related positions including Treasurer of Johnstown American Companies and Senior
Manager at Price Waterhouse.
Peter Braverman, age 45, has been a Senior Vice President of WFA since
January 1996. From June 1995 until January 1996, Mr. Braverman was a Vice
President of NPI and NPI Management. From June 1991 until March 1994, Mr.
Braverman was President of the Braverman Group, a firm specializing in
management consulting for the real estate and construction industries. From 1988
to 1991, Mr. Braverman was a Vice President and Assistant Secretary of Fischbach
Corporation, a publicly traded, international real estate and construction firm.
One or more of the above persons are also directors or officers of a
general partner (or general partner of a general partner) of the following
limited partnerships which either have a class of securities registered pursuant
to Section 12(g) of the Securities and Exchange Act of 1934, or are subject to
the reporting requirements of Section 15(d) of such Act: Winthrop Partners 79
Limited Partnership; Winthrop Partners 80 Limited Partnership; Winthrop Partners
81 Limited Partnership; Winthrop Residential Associates I, A Limited
Partnership; Winthrop Residential Associates II, A Limited Partnership; Winthrop
Residential Associates III, A Limited Partnership; 1626 New York Associates
Limited Partnership; 1999 Broadway Associates Limited Partnership; Indian River
Citrus Investors Limited Partnership; Nantucket Island Associates Limited
Partnership; One Financial Place Limited Partnership; Presidential Associates I
Limited Partnership; Riverside Park Associates Limited Partnership; Springhill
Lake Investors Limited Partnership; Twelve AMH Associates Limited Partnership;
Winthrop California Investors Limited Partnership; Winthrop Growth Investors I
Limited Partnership; Winthrop Interim Partners I, A Limited Partnership;
Southeastern Income Properties Limited Partnership; Winthrop Miami Associates
Limited Partnership; and Winthrop Apartment Investors Limited Partnership.
Each director and officer of Eight Winthrop will hold office until the
next annual meeting of the stockholders of Eight Winthrop and until his
successor is elected and qualified.
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Registrant under Rule 16a-3(e) during the Registrant's most
recent fiscal year and Forms 5 and amendments thereto furnished to the
Registrant with respect to its most recent fiscal year, the Registrant is not
aware of any director, officer or beneficial owner of more than ten percent of
the units of limited partnership interest in the Registrant that failed to file
on a timely basis, as disclosed in the above Forms, reports required by section
16(a) of the Exchange Act during the most recent fiscal year or prior fiscal
years.
(b) Identification of Certain Significant Employees. None.
(c) Family Relationships. None.
(d) Involvement in Certain Legal Proceedings. None.
Item 10. Executive Compensation.
The Registrant is not required to and did not pay any compensation to
the officers or directors of Eight Winthrop. Eight Winthrop does not presently
pay any compensation to any of its officers and directors (See "Item 12, Certain
Relationships and Related Transactions").
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners.
No person or group is known by the Registrant to be the beneficial
owner of more than 5% of the outstanding Units as of March 15, 1997. Under the
Registrant's partnership agreement, the voting rights of the Limited Partners
are limited and, in some circumstances, are subject to the prior receipt of
certain opinions of counsel or judicial decisions.
(b) Security Ownership of Management.
As of March 15, 1997, no officers, directors or partners of WFA, WSLP
or Eight Winthrop own any Units of the Registrant.
(c) Changes in Control.
As of March 15, 1997, there exists no arrangement known to the
Registrant the operation of which may at a subsequent date result in a change in
control of the Registrant, other than the following:
In connection with the withdrawal of the Original General Partner and the
substitution of WSLP as the Managing General Partner, WSLP entered into certain
loan arrangements with ISB, including the pledge of its general partnership
interest. In the event the RTC Loan Trust, successor in interest to ISB, was
successful in enforcing its remedies under the security agreement, the RTC Loan
Trust may claim an interest in the general partnership interest of the
Registrant. WSLP disputes the validity of the security interest, and would
vigorously defend any action, and raise, among other meritorious defenses, the
fact that the transfer of the general partnership interest requires the consent
of a majority of Unit holders.
<PAGE>
Item 12. Certain Relationships and Related Transactions.
Under the Registrant's partnership agreement, the general partners and
their affiliates are entitled to receive various fees, commissions, cash
distributions, allocations of taxable income or loss and expense reimbursements
from the Registrant.
The following table sets forth the amounts of the fees, commissions and
cash distributions which the Registrant paid to or accrued for the account of
the Managing General Partner and its affiliates for the years ended December 31,
1995, and 1996:
<TABLE>
Recipient Type of Compensation 1995 1996
<S> <C> <C> <C>
WSLP Cash Distribution (1) $ 61 $ 28
Winthrop Management Property Management Fee (2) 213,494 63,608
First Winthrop Corp. Investor Servicing Fee (3) 33,138 32,650
Winthrop Management Accounting Services Fee (4) 23,820 7,940
TOTAL: $270,513 $104,226
- ----------------
</TABLE>
(1) Equal to .01% of cash flow distributed to all partners of the Registrant.
(2) Equal to 5.0% of gross collected revenues of the Registrant's properties.
(3) Equal to 1.0% of gross collected revenues of the Registrant's properties.
(4) Equal to $2.50 per apartment unit per month.
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits - The Exhibits listed in the accompanying Index to
Exhibits are filed as part of this Annual Report and incorporated in this Annual
Report as set forth in said index.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the last quarter covered by
this report.
<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.
SOUTHEASTERN INCOME PROPERTIES II
LIMITED PARTNERSHIP
By: Winthrop Southeastern Limited
Partnership,
Its General Partner
By: Eight Winthrop
Properties, Inc.,
Its General Partner
By: /s/ Michael L. Ashner
Michael L. Ashner
Chief Executive Officer
Date: March 28, 1996
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/Name Title Date
/s/ Michael L. Ashner Chief Executive March 28, 1996
Michael L. Ashner Officer and Director
/s/ Edward Williams Chief Financial Officer March 28, 1996
Edward Williams
<PAGE>
Index to Exhibits
Exhibit
Number Document
2.1 Agreement and Addendum to Agreement by and among Glade
M. Knight ("Knight"), Ben T. Austin, III ("Austin"),
Winthrop Southeast Limited Partnership ("WSLP") and
Investors Savings Bank, F.S.B. ("ISB") (the
"Agreement") dated as of August 8, 1991 and effective
as of August 16, 1991. [The exhibits to the Agreement
have been omitted from the Agreement and are listed in
the Agreement.] (Exhibit 2.1)(5)
2.2 Supplemental Agreement by and among WSLP, Knight, and
ISB (the "Knight Agreement") dated as of August 8, 1991
and effective as of August 16, 1991. [The exhibits to
the Knight Agreement have been omitted from the Knight
Agreement and are listed in the Knight Agreement.]
(Exhibit 2.2)(5)
2.3 Supplemental Agreement and Addendum to Supplemental
Agreement by and among WSLP, Austin and ISB dated as of
August 8, 1991 and effective as of August 16, 1991.
(Exhibit 2.3)(5)
2.4 Employment Agreement by and between WSLP and Austin
dated as of August 8, 1991 and effective as of August
16, 1991. (Exhibit 2.4)(5)
2.5 Supplemental Agreement by and between WSLP and ISB
dated as of August 8, 1991 and effective as of August
16, 1991. (Exhibit 2.5)(5)
3.1 Amended and Restated Agreement of Limited Partnership
of Southeastern Income Properties II Limited
Partnership. (Exhibit 3.1)(2)
3.2 First Amendment to Amended and Restated Agreement of
Limited Partnership of Southeastern Income Properties
II Limited Partnership. (Exhibit 3.9)(1)
3.3 Second Amendment to Amended and Restated Agreement of
Limited Partnership of Southeastern Income Properties
II Limited Partnership. (Exhibit 3.10)(1)
<PAGE>
3.4 Third Amendment to the Amended and Restated Agreement
of Limited Partnership of Southeastern Income
Properties II Limited Partnership. (Exhibit 3.11)(1)
3.5 Fourth Amendment to the Amended and Restated Agreement
of Limited Partnership of Southeastern Income
Properties II Limited Partnership. (Exhibit 3.12)(1)
3.6 Fifth Amendment to the Amended and Restated Agreement
of Limited Partnership of Southeastern Income
Properties II Limited Partnership. (Exhibit 3.6)(3)
3.7 Sixth Amendment to the Amended and Restated Agreement
of Limited Partnership of Southeastern Income
Properties II Limited Partnership. (Exhibit 3.7)(3)
3.8 Seventh Amendment to the Amended and Restated Agreement
of Limited Partnership of Southeastern Income
Properties II Limited Partnership. (Exhibit 3.8)(7)
3.9 Articles of Incorporation of SIP II Assignor
Corporation. (Exhibit 3.6)(1)
3.10 Bylaws of SIP II Assignor Corporation. (Exhibit 3.7)(1)
10.1 Apartment Management Agreement (for the Hunters Creek
Apartments). (Exhibit 10.1)(2)
10.2 Apartment Management Agreement (for the Copper Croft
Apartments). (Exhibit 10.6)(1)
10.3 Apartment Management Agreement (for The Greenbryre at
Charlotte) (incorporated by reference to Exhibit 10.4
filed with the Commission in the Registrant's current
report on Form 8-K dated March 17, 1989).
10.4 Apartment Management Agreement, dated February 12, 1992
between the Registrant and Winthrop Management (for
Copper Croft Apartments). (Exhibit 10.4)(6)
10.5 Apartment Management Agreement, dated February 12, 1992
between the Registrant and Winthrop Management (for
Hunters Creek Apartments). (Exhibit 10.5)(6)
<PAGE>
10.6 Apartment Management Agreement, dated February 12, 1992
between the Registrant and Winthrop Management (for The
Greenbryre Apartments). (Exhibit 10.6)(6)
10.7 Apartment Management Agreement, dated February 12, 1992
between the Registrant and Winthrop Management (for St.
Michaels Apartments). (Exhibit 10.7)(6)
10.8 Properties Acquisition Agreement between Southeastern
Income Properties II Limited Partnership and Knight
Austin Corporation. (Exhibit 10.2)(2)
10.9 Real Estate Consulting Agreement between Southeastern
Income Properties II Limited Partnership and WFS Realty
Corporation. (Exhibit 10.3)(2)
10.10 Repair Supervisory Contract. (Exhibit 10.6)(4)
10.11 Supervisory Insurance Adjustment Contract. (Exhibit
10.7)(4)
10.12 Mortgage Brokerage and Consulting Agreement. (Exhibit
10.8)(4)
- ----------------------------------
(1) Incorporated by reference to the exhibit shown in
parentheses filed with the Commission in the Registrant's
registration statement on Form S-11 (Registration No. 33-
17659).
(2) Incorporated by reference to the exhibit shown in
parentheses filed with the Commission in the Registrant's
1987 Annual Report.
(3) Incorporated by reference to the exhibit shown in
parentheses filed with the Commission in the Registrant's
1988 Annual Report.
(4) Incorporated by reference to the exhibit shown in
parentheses filed with the Commission in the Registrant's
1989 Annual Report.
<PAGE>
(5) Incorporated by reference to the exhibit shown in parentheses filed
with the Commission in the Registrant's Current Report on Form 8-K on
September 3, 1991.
(6) Incorporated by reference to the exhibit shown in
parentheses filed with the Commission in the Registrant's
1991 Annual Report.
(7) Incorporated by reference to the exhibit shown in parentheses filed
with the Commission in the Registrant's 1992 Annual Report filed on
Form 10-K.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial
information extracted from audited financial
statements for the one year period ending
December 31, 1996 and is qualified in its
entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000822983
<NAME> SOUTHEASTERN INCOME PROPERTIES II LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 647,080
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 809,135
<PP&E> 24,182,735
<DEPRECIATION> (8,426,051)
<TOTAL-ASSETS> 17,070,938
<CURRENT-LIABILITIES> 279,897
<BONDS> 0
<COMMON> 0
0
0
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<TOTAL-LIABILITY-AND-EQUITY> 17,070,938
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<TOTAL-REVENUES> 4,127,699
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,578,003
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 755,167
<INCOME-PRETAX> (205,471)
<INCOME-TAX> (205,471)
<INCOME-CONTINUING> (205,471)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (205,471)
<EPS-PRIMARY> (4.88)
<EPS-DILUTED> (4.88)
</TABLE>
