SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-10547
MERIDIAN POINT REALTY TRUST VIII CO.
-------------------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
Missouri 94-3058019
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
655 Montgomery Street, Suite 800, San Francisco, California 94111
-------------------------------------------------------------------
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (415) 274-1808
NONE
- - --------------------------------------------------------------------------
(Former name, address and former fiscal year, if changed since last report)
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 the number of shares outstanding of the common and
preferred stock as of the latest practicable date:
Shares of Common Stock outstanding as of August 1, 1996: 1,609,937
Shares of Preferred Stock outstanding as of August 1, 1996: 5,273,927
<PAGE>
__________________________________________________________________________
PART I: FINANCIAL INFORMATION
__________________________________________________________________________
ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements should be
read in conjunction with the 1995 Form 10-K of the registrant (the
"Company"). These statements have been prepared in accordance with the
instructions of the Securities and Exchange Commission Form 10-Q and do not
include all the information and footnotes required by generally accepted
accounting principles for complete consolidated financial statements.
In the opinion of the Company's management, all material adjustments
of a normal and recurring nature considered necessary for a fair
presentation of results of operations for the interim periods have been
included. The results of consolidated operations for the three and six
month periods ended June 30, 1996 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1996.
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
CONSOLIDATED BALANCE SHEETS
June 30, 1996 and December 31, 1995
(Unaudited)
- - ------------------------------------------------------------------------------------------------
1996 1995
- - ------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investment in Real Estate:
Rental Properties, Net $81,810,508 $81,765,163
Less: Accumulated Depreciation (14,110,918) (12,987,770)
- - ------------------------------------------------------------------------------------------------
67,699,590 68,777,393
Other Assets:
Cash and Cash Equivalents 5,586,574 5,016,216
Receivables, Net of Reserves of $134,971 and $126,082 as of
June 30, 1996 and December 31, 1995, respectively 196,997 585,771
Notes Receivable From Affiliates 228,000 228,000
Capitalized Loan Costs, Net of Accumulated Amortization of
$817,374 and $765,089 as of June 30, 1996 and
December 31, 1995, respectively 161,204 213,489
Capitalized Lease Commissions, Net of Accumulated
Amortization of $286,947 and $308,514 as of June 30, 1996
and December 31, 1995, respectively 341,090 363,504
Other Assets, Net of Accumulated Amortization of $344,736 and
$1,031,863 as of June 30, 1996 and December 31, 1995,
respectively 1,188,861 1,309,952
- - ------------------------------------------------------------------------------------------------
Total Assets $75,402,316 $76,494,325
================================================================================================
Liabilities and Shareholders' Equity
Liabilities:
Mortgage Notes Payable $ 7,678,518 $ 7,782,168
Long-term Debt 23,803,439 24,259,396
Due to Affiliates 187,709 116,209
Accounts Payable 958,387 1,073,280
Prepaid Rent, Tenant Deposits and Other Liabilities 373,407 221,982
- - ------------------------------------------------------------------------------------------------
Total Liabilities 33,001,460 33,453,035
- - ------------------------------------------------------------------------------------------------
Shareholders' Equity:
Shares of Common and Preferred Stock, par value $0.001; an
aggregate of 50,000,000 Common and Preferred Shares
authorized; 1,609,937 Common Shares and 5,273,927 Preferred
Share issued and outstanding as of June 30, 1996 and
December 31, 1995, respectively 6,884 6,884
Paid-in Capital 65,389,820 65,389,820
Distributions in Excess of Income (22,995,848) (22,355,414)
- - ------------------------------------------------------------------------------------------------
Total Shareholders' Equity 42,400,856 43,041,290
- - ------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $75,402,316 $76,494,325
================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 1996 and 1995
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
- - -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Rentals from Real Estate Investments $2,238,121 $2,852,602 $4,542,793 $5,825,790
Interest and Other 62,308 90,830 104,275 161,934
- - -------------------------------------------------------------------------------------------------------
Total Revenues 2,300,429 2,943,432 4,647,068 5,987,724
- - -------------------------------------------------------------------------------------------------------
Expenses:
Interest and Amortization of Debt Premium 684,916 933,646 1,375,606 1,871,860
Property Taxes 110,899 332,797 579,603 760,350
Property Operating Costs 369,175 425,688 702,570 782,919
General and Administrative 218,595 307,926 448,365 556,963
Provision for Decrease in Net
Realizable Value -- -- -- 1,182,015
Depreciation and Amortization 622,251 738,996 1,265,069 1,507,328
- - -------------------------------------------------------------------------------------------------------
Total Expenses 2,005,836 2,739,053 4,371,213 6,661,435
- - -------------------------------------------------------------------------------------------------------
Net Income (Loss) Before Gain on
Sale of Property 294,593 204,379 275,855 (673,711)
Gain on Sale of Property -- 157,257 47,452 157,257
- - -------------------------------------------------------------------------------------------------------
Net Income (Loss) $ 294,593 $ 361,636 $ 323,307 ($ 516,454)
=======================================================================================================
Net Income (Loss) $ 294,593 $ 361,636 $ 323,307 ($ 516,454)
Less Preferred Distributions Declared (369,175) (738,349) (738,349) (738,349)
- - -------------------------------------------------------------------------------------------------------
Net Loss Available to
Common Shareholders ($ 74,582) ($ 376,713) ($ 415,042) ($1,254,803)
=======================================================================================================
Net Loss Per Common Share ($0.046) ($0.234) ($0.258) ($0.779)
=======================================================================================================
Preferred Distributions Paid Per Share $0.070 $0.140 $0.140 $0.140
=======================================================================================================
Common Distributions Paid Per Share $0.070 $0.140 $0.140 $0.140
=======================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
MERIDIAN POINT REALTY TRUST VIII CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1996 and 1995
(Unaudited)
1996 1995
- - ----------------------------------------------------------------------------------------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ 323,307 ($516,454)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided by Operating Activities:
Depreciation 1,127,518 1,338,608
Amortization - Other 137,551 168,720
Rent Adjustment -- 4,721
Provision for Decrease in Net Realizable Value -- 1,182,015
Gain on Sale of Property (47,452) (157,257)
Decrease in Accounts Receivable 388,774 167,433
Decrease in Accounts Payable (114,893) (231,665)
Net Change in Other Assets and Liabilities 285,063 12,284
- - ----------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 2,099,868 1,968,405
- - ----------------------------------------------------------------------------------------
Cash Flows From Investing Activities
Improvements to Existing Real Estate (45,345) (140,171)
Cash Received on Sale of Property 73,603 1,927,677
Leasing Commissions (34,420) --
- - ----------------------------------------------------------------------------------------
Net Cash Provided By (Used in) Investing Activities (6,162) 1,787,506
- - ----------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Principal Payments on Long-term Debt Facilities (455,957) (2,267,029)
Principal Payments on Mortgage Notes (103,650) (95,063)
Dividends Paid (963,741) (963,740)
- - ----------------------------------------------------------------------------------------
Net Cash Used in Financing Activities (1,523,348) (3,325,832)
- - ----------------------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents 570,358 430,079
Cash and Cash Equivalents, Beginning of Period 5,016,216 4,960,399
- - ----------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Period $5,586,574 $5,390,478
========================================================================================
Supplemental Schedule of Non-Cash Transactions
Transactions Related to Sale of Property:
Disposition of Property, Net $26,151 $1,774,563
Other Liabilities Written-off, net of Other Assets -- 4,143
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
MERIDIAN POINT REALTY TRUST VIII CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
1. General.
Meridian Point Realty Trust VIII Co. (the "Company") is a corporation
organized for the purpose of acquiring, operating, holding for investment
and ultimately selling income-producing commercial and industrial real
estate. The general purpose of the Company is to seek income that
qualifies under the REIT Provisions of the Internal Revenue Code. At such
time as it is in the best interest of the Company's shareholders to do so,
the Board of Directors intends to make investments in such a manner as to
comply with the requirements of the REIT Provisions of the Internal Revenue
Code with respect to the composition of the Company's investments and the
derivation of its income. The Company commenced operations on October 17,
1988.
2. Consolidation.
The consolidated financial statements include the Company and NASH-IND
Corporation, a wholly-owned corporate subsidiary of the Company. All
significant intercompany transactions and balances have been eliminated.
3. Statements of Cash Flows.
For purposes of the statements of cash flows, the Company considers
all short-term investments with a maturity of three months or less to be
cash equivalents.
Cash paid for interest was $686,478 and $939,377 for the three months
ended June 30, 1996 and 1995, respectively. For the six months ended June
30, 1996 and 1995, cash paid for interest was $1,378,700 and $1,874,211.
4. Rentals From Real Estate Investments.
Certain of the Company's leases require lessees to pay all or a
portion of real estate taxes, insurance, and operating costs ("Expense
Recaptures"). Expense Recaptures for the prior year which are overbilled
are refunded to the lessees. Expense Recaptures of ($24,667) and $343,490
were included in (or reduced from) Rentals from Real Estate Investments for
the three months ended June 30, 1996 and 1995, respectively. Expense
Recaptures for the six months ended June 30, 1996 and 1995 totaled $168,158
and $760,127, respectively.
5. Investments in Real Estate and Depreciation Methods.
Investments in Real Estate are stated at the lower of depreciated cost
or net realizable value. Net realizable value for financial reporting
purposes: (i) is evaluated and identified quarterly by the Company on a
property by property basis using undiscounted cashflows; (ii) is measured
by comparing the Company's estimate of fair value based upon either sales
comparables or the net cash expected to be generated by the property
(comprised of the forecasted operations for the property based upon
historical results, together with management's estimates of the property's
future occupancy, lease rates and capital improvement requirements), less
estimated carrying costs (including interest) throughout the anticipated
holding period, plus the estimated cash proceeds from the ultimate
disposition of the property; and (iii) is not necessarily an indication of
the property's current value of the amount that will be realized upon the
ultimate disposition of the property. To the extent net realizable value
is less than carrying value, a Provision for Decrease in Net Realizable
Value is recorded. Net realizable value is not necessarily an indication
of the property's current value or the amount that will be realized on its
disposition. As of June 30, 1996 and December 31, 1995, the Company had
recognized a cumulative Provision for Decrease in Net Realizable Value of
$5,167,000.
Depreciation and amortization have been calculated under the straight-
line method, based upon the estimated useful lives of the assets. Property
and property additions are depreciated over 35 years. Expenditures for
maintenance, repairs, and improvements which do not materially prolong the
normal useful life of an asset are charged to operations as incurred.
Leasing commissions and tenant improvements are amortized under the
straight-line method over the term of the related lease.
6. Long-Term Debt Facility.
As of June 30, 1996 and December 31, 1995, there was outstanding under
a facility with an insurance company $23,803,439 and $24,259,396,
respectively. This facility has provided the Company with financing for
property acquisitions, capital improvements, and general operating needs.
Interest and Principal Maturities
Under the insurance company facility, there are outstanding five
advances totaling $23,803,439 at June 30, 1996. These advances bear fixed
interest rates for periods ranging from six months to three years. Under
the existing facility agreements, the various advances and the
corresponding interest rate contracts mature on the dates specified below.
<TABLE>
Advance and
Notional Amount Interest Maturity
as of 6/30/96 Rate Date
-----------------------------------------------
<S> <C> <C>
$ 3,555,640 7.81% December 1996
6,000,318 8.87% June 1997
11,420,266 8.87% June 1997
2,827,215 8.80% May 1988
-----------
$23,803,439
===========
</TABLE>
7. Disposition of Property.
On May 25, 1995, the Company sold the Kroger property located in
Jackson, Mississippi. The selling price of $2,000,000 was paid entirely in
cash. The Company received net proceeds of $1,927,677, after deductions
for closing costs and prorated items totaling $72,323. In connection with
the sale, the Company recognized a gain on sale of property of $157,257 in
the three months ended June 30, 1995. The property had been previously
written down to its net realizable value.
In 1996 the Company sold all of its personal property for $73,603
resulting in a gain on sale of $47,452.
8. Net Income (Loss) Per Common Share.
Net income (loss) per common share is determined by dividing net
income, after deduction of preferred stock dividends, by the weighted
average number of shares of common stock outstanding during the year.
Weighted average common shares outstanding for the three months ended June
30, 1996 and 1995 was 1,609,937.
9. Income Taxes.
The Company intends to qualify and elect to be treated as a real
estate investment trust ("REIT") for the year ending December 31, 1996. As
such, the Company should be allowed a deduction for dividends paid to
shareholders if the Company satisfies certain income, asset and
distribution requirements. Accordingly, no provision for federal income
taxes has been made in the accompanying Consolidated Statements of
Operations for the three and six months ended June 30, 1996 and 1995.
10. Declaration of Dividends.
Under the Company's articles of incorporation, the Board cannot
declare any dividends on common shares until it had first declared
dividends on the preferred shares' annual preference amount as computed
under those articles.
The preferred shares generally have a non-cumulative preferential
right to such current dividends as are declared each year by the Board up
to an amount equal to the lesser of (a) 6% of the aggregate adjusted stated
value of preferred shares, (b) earnings and profits for the prior year, or
(c) the amount legally available for distribution by the Company.
On March 12, 1996, the Board of Directors (the "Board") declared
dividends in the amount of $0.07 per preferred share and $0.07 per common
share, payable on March 29, 1996 to shareholders of record on March 19,
1996.
On June 14, 1996, the Board declared dividends in the amount of $0.07
per preferred share and $0.07 per common share, payable on June 28, 1996 to
shareholders of record on June 21, 1996.
11. Management Agreement.
Effective December 1, 1995, the Company terminated the Amended and
Restated Employee Leasing Agreement with Meridian Point Properties, Inc.
("MPP") of San Francisco, California and entered into a management
agreement with TIS Financial Services, Inc. ("TIS") of San Francisco,
California. Under the new management agreement, the Company retained TIS
to manage its assets, properties and investments in addition to performing
administrative services for the Company. The agreement expires on November
30, 1996 and is on a month-to-month basis thereafter. The Company pays a
base management fee to TIS for services rendered under the agreement a base
management fee calculated on an annual basis to be an amount equal to 0.75%
of the Company's Average Invested Assets, as defined in the agreement.
This agreement requires that TIS pay the employment expenses of its
personnel.
Under the new management agreement with TIS, the Company accrued
$333,441 as the estimated management fee for the six months ended June 30,
1996. For the three months ended June 30, 1996, the accrual of estimated
TIS management fee was $188,432. All of these amounts are included in
Property Operating Costs. During the three months ended June 30, 1995, the
Company accrued $153,765 payable to MPP as its share of allocated overhead
costs. Of this amount, $96,215 is included in Property Operating Costs and
$57,550 in General and Administrative. During the six months ended June
30, 1995, the Company accrued $320,251 payable to MPP as its share of
allocated overhead costs. Of this amount, $202,318 is included in Property
Operating Costs and $117,933 in General and Administrative.
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The Company owns a diversified portfolio of real estate equity
interests consisting of income-producing industrial and commercial real
estate. The following discussion should be read in conjunction with the
Company's Consolidated Balance Sheets and Consolidated Statements of
Operations, Shareholders' Equity, and Cash Flows and the notes thereto
included on pages 2 through 8 of this report. Unless otherwise defined in
this report, or unless the context otherwise requires, the capitalized
words or phrases referred to in this section either: (a) describe
accounting terms that are used as line items in such financial statements,
or (b) have the meanings ascribed to them in such financial statements and
the notes thereto.
Liquidity and Capital Resources.
The Company's main sources of liquidity are: (i) cash flows from
operating activities, (ii) cash reserves, and (iii) net proceeds from the
sale of the Company's real properties. A summary of the Company's
historical cash flows is as follows:
<TABLE>
For the Six Months Ended June 30,
---------------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows provided by (used in):
Operating activities $2,099,868 $1,968,405
Investing activities (6,162) 1,787,506
Financing activities (1,523,348) (3,325,832)
</TABLE>
In addition to cash flows and net income, management and industry
analysts generally consider Funds From Operations to be one additional
measure of the performance of an equity Real Estate Investment Trust (REIT)
because, together with net income and cash flows, Funds From Operations
provides investors with an additional basis to evaluate the ability of the
Company to incur and service debt and to fund acquisitions and other
capital expenditures. However, Funds From Operations does not measure
whether cash flow is sufficient to fund all of the Company's cash needs
including principal amortization, capital improvements, and distributions
to shareholders. Funds From Operations also does not represent cash
generated from operating, investing or financing activities as determined
in accordance with generally accepted accounting principles. Funds From
Operations should not be considered as an alternative to net income as an
indicator of the Company's operating performance or as an alternative to
cash flow as a measure of liquidity. Funds From Operations represents net
income (loss) adjusted for depreciation on real property and amortization
of tenant improvement costs and lease commissions, gains from the sale of
property and net realizable value (NRV) provisions. A reconciliation of
the Company's net income (loss) to Funds From Operations is as follows:
<TABLE>
For the Six Months Ended June 30,
---------------------------------
1996 1995
---- ----
<S> <C> <C>
Net income (loss) $ 323,307 ($516,454)
Reconciling items:
Depreciation and amortization 1,265,069 1,507,328
Gain on sales of property (47,452) (157,257)
---------- ----------
Funds from operations, including NRV provision 1,540,924 833,617
NRV provision -- 1,182,015
---------- ----------
Funds from operations, excluding NRV provision $1,540,924 $2,015,632
========== ==========
</TABLE>
The decrease in Funds From Operations, excluding NRV provision, of
$474,708 for the six months ended June 30, 1996 as compared with the same
period in 1995 is primarily due to the sales in May and July 1995 of the
Kroger property, located in Jackson, Mississippi, and the Tropicana
Marketplace, located in Las Vegas, Nevada. (See "Material Changes in
Results of Operations".)
The Company's principal applications of its cash resources are (i)
operating expenses related to real estate operations, general and
administrative expenses, interest expense, and legal costs, (ii) capital
improvements, and (iii) principal payments under its long-term debt
facilities and mortgage notes payable. During the first three months of
1996, Funds From Operations were sufficient to fully fund the Company's
cash needs. The Company considers its ability to generate cash from
operations adequate to meet its presently foreseeable cash requirements.
However, (i) unanticipated decreases in revenues and/or unanticipated
increases in expenses, (ii) an unanticipated decrease in property values
resulting in additional required principal payments, or (iii) renegotiation
of the Company's debt facility on terms unfavorable to the Company (see
Note 6 to the Company's financial statements) could adversely affect cash
flow and cause the Company to make use of other sources of liquidity.
Funds From Operations may be affected in the future by changes in
rental rates and occupancy levels. As of June 30, 1996, the Company's
properties were 93% occupied. During 1996, leases covering approximately
13% of the Company's leased space are scheduled to expire.
As of June 30, 1996, the Company had cash and cash equivalents of
approximately $5.6 million.
Based on management's estimates of the values as of December 31, 1995,
the Company is in compliance with all covenants contained in the loan
agreement for its facility. The lender, however, has complete discretion
regarding valuations and is currently reviewing management's estimates of
value. If the lender were to calculate a loan-to-value ratio greater than
55%, the Company would have to make an Excess Cash payment, and the
Company's dividends could be restricted. (See Note 6 to the Company's
financial statements.)
During the six months ended June 30, 1995, the Company determined that
a soil settlement problem at the 1033 East Maricopa property in Phoenix,
Arizona was more serious than previously expected. Outside consultants
have indicated that if the soil under the building continues to settle, a
portion of the building may become uninhabitable within a year. As a
result, the Company is investigating its options with respect to
rehabilitating some portion of the building. In addition, the Company has
filed a lawsuit against the entity from which it purchased the property as
well as various third party consultants. The Company has not provided for
any valuation reserves or any accruals to rectify the settlement problem as
such amounts are not currently determinable.
Capital expenditures for the six months ended June 30, 1996 and 1995
totaled $45,345 and $140,171, respectively.
During the six months ended June 30, 1996 and the six months ended
June 30, 1995, distributions totaling $963,741 were made to shareholders.
On June 14, 1996, the Board of Directors (the "Board") declared
dividends in the amount of $0.07 per preferred share and $0.07 per common
share, payable on June 28, 1996 to shareholders of record on June 21, 1996.
On March 12, 1996, the Board declared dividends in the amount of $0.07 per
preferred share and $0.07 per common share, payable on March 29, 1996 to
shareholders of record on March 19, 1996.
On April 28, 1995, the Board declared dividends in the amount of $0.07
per preferred share and $0.07 per common share, payable on May 15, 1995 to
shareholders of record on May 4, 1995. On June 7, 1995, the Board declared
dividends for the second quarter in the same amounts payable June 30, 1995
to shareholders of record on June 20, 1995.
Material Changes in Results of Operations.
Rentals from Real Estate Investments totaled $4,542,793 and $5,825,790
for the six months ended June 30, 1996 and 1995, respectively. The
decrease of $1,282,997 in 1996 is primarily due to the sale in 1995 of two
of the Company's rental properties and a decrease of $591,969 in Expense
Recaptures in 1996 as compared to 1995.
Compared to the same period in 1995, Interest and Other revenue
decreased by $57,659 to $104,275 for the six month period ended June 30,
1996. The decrease is primarily due to decreases in the Company's average
cash balances available for investment. Prior year funds available for
investment increased as a result of the suspension of dividend payments
during the first nine months of 1994 and the two preceding years. (See
Note 10 to the Company's financial statements.)
Interest and Amortization of Debt Premium for the six months ended
June 30, 1996 decreased by $496,254 as compared to the comparable prior
year period because of principal paydowns on the mortgage notes payable and
long-term debt facility. The average debt outstanding during the six
months ended June 30, 1996 was $31,761,761 as compared to $43,550,413
during the comparable prior year period.
Property Operating Costs for the six months ended June 30, 1996 were
$80,349 less than in the comparable period of the prior year. The decrease
is primarily the result of the 1995 property sales. However, the 1996
amount includes the entire management fee paid to TIS Financial Services,
Inc. whereas, in 1995, only a portion of the fee paid to MPP was included
in this category.
Property Taxes totaled $579,603 and $760,350 for the six months ended
June 30, 1996 and 1995, respectively. The decrease of $180,747 is
primarily due to a decrease in the assessed values of the Company's
properties with a consequent reduction in property taxes and the sale in
1995 of two of the Company's rental properties.
Compared to the same period in 1995, General and Administrative costs
decreased by $108,598 to $448,365 for the six month period ended June 30,
1996. This decrease is primarily due to the exclusion of any portion of
management fees paid to TIS Financial Services, Inc. from general and
administrative costs (see Note 11 to the Company's consolidated financial
statements) as compared to the amounts paid in 1995 to Meridian Point
Properties ("MPP") for costs incurred by MPP in conducting the Company's
daily operations, offset by increases in professional fees incurred in
connection with the Company's termination of the employee leasing agreement
with MPP and the review and evaluation of strategic business plans for the
Company.
During the six months ended June 30, 1995, the Company recognized a
Provision for Decrease in Net Realizable Value totaling $1,182,015 in
connection with the pending sale of the Tropicana property.
Included in Net Income are the non-cash expenses of Depreciation and
Amortization. For the six months ended June 30, 1996 and 1995, these
expenses totaled $1,265,069 and $1,507,328, respectively. The decrease of
$242,259 during 1996, compared to 1995, is primarily due to the sale of two
of the Company's rental properties in 1995.
On May 25, 1995, the Company sold the Kroger property. In connection
with this sale, the Company recognized a Gain on Sale of Property totaling
$157,257. The property had previously been written down to its net
realizable value.
During the six months ended June 30, 1996, the Company sold all of its
personal property at a gain of $47,452.
<PAGE>
___________________________________________________________________________
PART II: OTHER INFORMATION
___________________________________________________________________________
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings which the Company or
any partnership in which the Company has an interest is a party, or to
which any of the assets of the Company or any such partnership is
subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Registrant's Annual Meeting of Shareholders was held on June 14, 1996.
With respect to the election of seven directors to serve under the
next annual meeting of shareholders, the results were as follows:
<TABLE>
Director For Withheld
----------------------------------------------------------
<S> <C> <C>
Christopher J. Doherty 5,122,197 108,694
Peter O. Hanson 5,123,474 163,828
Lorraine O. Legg 5,121,863 167,050
S. Michael Lucash 5,123,074 164,628
Lawrence P. Morris 5,123,074 164,628
Homer McK. Rees 5,123,074 164,628
Micolyn M. Yalonis 5,123,574 163,628
</TABLE>
With respect to a proposal to amend the Company's By-Laws related to
investment policy which will allow the Company to reinvest proceeds from
the sale of property into the purchase of new property, the results were
3,015,800 shares in favor, 1,775,924 shares against and 104,934 shares
abstaining.
With respect to a proposal to ratify and approve the selection of
Arthur Andersen LLP as the Trust's independent accounts to examine the
financial statements of the Trust for the year ending December 31, 1996,
the results were 5,118,874 shares in favor, 33,371 shares against and
85,805 shares abstaining.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: None
(b) No reports on Form 8-K were filed during the quarter
ended June 30, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
REGISTRANT
MERIDIAN POINT REALTY TRUST VIII CO.
August 10, 1996 By: /s/ Lorraine O. Legg
----------------------
Lorraine O. Legg,
President and
Chief Executive Officer
(Principal Executive Officer)
August 10, 1996 By: /s/ John E. Castello
----------------------
John E. Castello,
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1996 AND THE CONDENSED CONSOLIDATED
STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 5,586,574
<SECURITIES> 0
<RECEIVABLES> 559,968
<ALLOWANCES> 134,971
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 81,810,508
<DEPRECIATION> 14,110,918
<TOTAL-ASSETS> 75,402,316
<CURRENT-LIABILITIES> 1,519,503
<BONDS> 0
<COMMON> 1,610
0
5,274
<OTHER-SE> 42,393,972
<TOTAL-LIABILITY-AND-EQUITY> 75,402,316
<SALES> 0
<TOTAL-REVENUES> 4,694,520
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,995,607
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,375,606
<INCOME-PRETAX> 323,307
<INCOME-TAX> 0
<INCOME-CONTINUING> 323,307
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 323,307
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
