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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
Commission file number 0-16855
HIGH EQUITY PARTNERS L.P. - SERIES 88
(Exact name of registrant as specified in its charter)
DELAWARE 13-3394723
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
411 West Putnam Avenue, Greenwich, CT 06830
(Address of principal executive offices)
(203) 862-7444
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check 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 [ ]
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
INDEX
Part I. Financial Information:
Balance Sheets--June 30, 1998 and December 31, 1997
Statements of Operations--Three and Six Months Ended June 30,
1998 and l997
Statement of Partners' Equity--Six Months Ended
June 30, 1998
Statements of Cash Flows-- Six Months Ended
June 30, 1998 and 1997
Notes to Financial Statements
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II. Other Information:
Legal Proceedings, Exhibits and Reports on Form 8-K
<PAGE>
<TABLE>
<CAPTION>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
BALANCE SHEETS
June 30, 1998 December 31, 1997
----------- -----------
<S> <C> <C>
ASSETS
Real estate-net ............................ $47,768,036 $48,282,393
Cash and cash equivalents .................. 6,289,422 6,540,252
Other assets ............................... 1,162,874 1,280,167
Receivables ................................ 287,683 194,041
----------- -----------
$55,508,015 $56,296,853
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Distributions payable ...................... $ 997,899 $ 997,899
Accounts payable and accrued expenses ...... 721,098 761,559
Due to affiliates .......................... 287,262 584,780
----------- -----------
2,006,259 2,344,238
----------- -----------
Commitments and contingencies
PARTNERS' EQUITY:
Limited partners' equity (371,766
units issued and outstanding) ......... 50,826,648 51,254,962
General partners' equity ................... 2,675,108 2,697,653
----------- -----------
53,501,756 53,952,615
----------- -----------
$55,508,015 $56,296,853
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
STATEMENTS OF OPERATIONS
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- -------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Rental Revenue .......................... $1,842,936 $3,544,391 $4,048,543 $5,586,244
---------- ---------- ---------- ----------
Costs and Expenses:
Operating expenses ............. 506,119 489,352 668,798 970,113
Depreciation and amortization .. 392,683 420,100 785,366 840,200
Partnership asset management fee 220,101 220,101 440,202 440,202
Administrative expenses ........ 350,923 204,949 686,677 413,716
Property management fee ........ 49,941 69,816 110,769 126,071
---------- ---------- ---------- ----------
1,519,767 1,404,318 2,691,812 2,790,302
---------- ---------- ---------- ----------
Income before interest and other income . 323,169 2,140,073 1,356,731 2,795,942
Interest income ................ 95,210 71,773 169,178 133,647
Other income ................... 18,180 7,415 19,030 13,015
---------- ---------- ---------- ----------
Net income .............................. $ 436,559 $2,219,261 $1,544,939 $2,942,604
========== ========== ========== ==========
Net income attributable to:
Limited partners ............... $ 414,731 $2,108,298 $1,467,692 $2,795,474
General partners ............... 21,828 110,963 77,247 147,130
---------- ---------- ---------- ----------
Net income .............................. $ 436,559 $2,219,261 $1,544,939 $2,942,604
========== ========== ========== ==========
Net income per unit of limited part-
nership interest (371,766 units
Outstanding) ................... $ 1.12 $ 5.67 $ 3.95 $ 7.52
========== ========== ========== ==========
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
STATEMENT OF PARTNERS' EQUITY
General Limited
Partners' Partners'
Equity Equity Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance, January 1, 1998 .................... $ 2,697,653 $ 51,254,962 $ 53,952,615
Net income for the six months
ended June 30, 1998 ......................... 77,247 1,467,692 1,544,939
Distributions as a return of capital for
the six months ended June 30, 1998
($5.10 per limited partnership unit) ........ (99,792) (1,896,006) (1,995,798)
------------ ------------ ------------
Balance, June 30, 1998 ...................... $ 2,675,108 $ 50,826,648 $ 53,501,756
============ ============ ============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
STATEMENTS OF CASH FLOWS
For the Six Months Ended
June 30,
-----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income ................................... $ 1,544,939 $ 2,942,604
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization ....... 785,366 840,200
Straight line adjustment for stepped
lease rentals .................. 52,206 24,418
Changes in assets and liabilities:
Accounts payable and accrued expenses (40,461) 126,349
Receivables ......................... (93,642) (61,998)
Due to affiliates ................... (297,518) (840,770)
Other assets ........................ (20,668) (51,847)
----------- -----------
Net cash provided by operating activities .... 1,930,222 2,978,956
----------- -----------
Cash Flows From Investing Activities:
Improvements to real estate .................. (185,254) (1,479)
----------- -----------
Cash Flows From Financing Activities:
Distributions to partners .................... (1,995,798) (1,482,175)
----------- -----------
(Decrease) Increase in Cash and Cash Equivalents ...... (250,830) 1,495,302
Cash and Cash Equivalents, Beginning of Year .......... 6,540,252 5,353,731
----------- -----------
Cash and Cash Equivalents, End of Quarter ............. $ 6,289,422 $ 6,849,033
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
NOTES TO FINANCIAL STATEMENTS
l. GENERAL
The accompanying financial statements, notes and discussions should be read
in conjunction with the financial statements, related notes and discussions
contained in the Partnership's annual report on Form l0-K for the year
ended December 3l, l997.
The financial information contained herein is unaudited; however, in the
opinion of management, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of such financial
information have been included.
2. SIGNIFICANT ACCOUNTING POLICIES
Impairment of Assets
The Partnership evaluates the recoverability of the net carrying value of
its real estate and related assets at least annually, and more often if
circumstances dictate. If this review indicates that the carrying value of
a property may not be recoverable, the Partnership estimates the future
cash flows expected to result from the use of the property and its eventual
disposition, generally over a five-year holding period. In performing this
review, management takes into account, among other things, the existing
occupancy, the expected leasing prospects of the property and the economic
situation in the region where the property is located.
If the sum of the expected future cash flows, undiscounted, is less than
the carrying amount of the property, the Partnership recognizes an
impairment loss, and reduces the carrying amount of the asset to its
estimated fair value. Fair value is the amount at which the asset could be
bought or sold in a current transaction between willing parties, that is,
other than in a forced or liquidation sale. Management estimates fair value
using discounted cash flows or market comparables, as most appropriate for
each property. Independent certified appraisers are utilized to assist
management, when warranted.
Impairment write-downs recorded by the Partnership do not affect the tax
basis of the assets and are not included in the determination of taxable
income or loss.
Because the expected cash flows used to evaluate the recoverability of the
assets and their fair values are based upon projections of future economic
events, such as property occupancy rates, rental rates, operating cost
inflation and market capitalization rates, the amounts ultimately realized
at disposition may differ materially from the net carrying values at the
balance sheet dates. The cash flows and market comparables used in this
process are based on good faith estimates and assumptions developed by
management. Unanticipated events and circumstances may occur and some
assumptions may not materialize; therefore, actual results may vary
materially from the estimates. The Partnership may in the future provide
additional write-downs, which could be material, in subsequent years if
real estate markets or local economic conditions change.
Certain reclassifications were made to the prior year financial statements
in order to conform them to the current period presentation.
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
NOTES TO FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Results of operations for the six months ended June 30, 1998 are not
necessarily indicative of the results to be expected for the entire year.
3. CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES
The Managing General Partner of the Partnership, Resources High Equity,
Inc., is a wholly-owned subsidiary of Presidio Capital Corp. ("Presidio").
Presidio AGP Corp., which is a wholly-owned subsidiary of Presidio, is the
Associate General Partner (together with the Managing General Partner, the
"General Partners"). The General Partners and affiliates of the General
Partners are also engaged in businesses related to the acquisition and
operation of real estate. Presidio is also the parent of other corporations
(and affiliated with other entities) that are or may in the future be
engaged in businesses that may be in competition with the Partnership.
Accordingly, conflicts of interest may arise between the Partnership and
such other businesses. Subject to the right of the limited partners under
the Limited Partnership Agreement, Presidio controls the Partnership
through its indirect ownership of the General Partners. Effective July
31,1998, Presidio is indirectly controlled by NorthStar Capital Investment
Corp., a Maryland corporation.
Effective as of August 28, 1997, Presidio has a management agreement with
NorthStar Presidio Management Company LLC ("NorthStar Presidio"), an
affiliate of NorthStar Capital Investment Corp., pursuant to which,
NorthStar Presidio will provide the day-to-day management of Presidio and
its direct and indirect subsidiaries and affiliates. For the six months
ended June 30, 1998, reimbursable expense due NorthStar Presidio amounted
to $44,700.
The Partnership has a property management services agreement with Resources
Supervisory Management Corp. ("Resources Supervisory"), an affiliate of the
Managing General Partner, to perform certain functions relating to the
management of the properties of the Partnership. A portion of the property
management fees are paid to unaffiliated management companies which perform
certain management functions for certain properties. For the quarters ended
June 30, 1998 and 1997, Resources Supervisory was entitled to receive
$49,941 and $69,816, respectively, of which $32,780 and $28,029 was paid to
unaffiliated management companies, respectively, for on-site management and
the balance was retained by Resources Supervisory.
For the administration of the Partnership, the Managing General Partner is
entitled to receive reimbursement of expenses of a maximum of $200,000 per
year. For each of the quarters ended June 30, 1998 and 1997, the Managing
General Partner was entitled to receive $50,000.
For managing the affairs of the Partnership, the Managing General Partner
is entitled to receive an annual partnership asset management fee equal to
1.05% of the amount of original gross proceeds paid or allocable to the
acquisition of property by the Partnership. For each of the quarters ended
June 30, 1998 and 1997, the Managing General Partner was entitled to
receive $220,101.
The General Partners are allocated 5% of the net income of the Partnership,
which amounted to $21,828 and $110,963 for the quarters ended June 30, 1998
and 1997, respectively. They are also entitled to receive 5% of
distributions, which amounted to $49,896 for each of the quarters ended
June 30, 1998 and 1997, respectively.
During the liquidation stage of the Partnership, the Managing General
Partner or an affiliate may be entitled to receive certain fees, which are
subordinated to the limited partners receiving their original invested
capital and certain specified minimum returns on their investment. All fees
received by the General Partners are subject to certain limitations as set
forth in the Partnership Agreement.
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
NOTES TO FINANCIAL STATEMENTS
3. CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
From July 1996 through March 12, 1998, Millenium Funding IV Corp., a wholly
owned indirect subsidiary of Presidio, purchased 47,270 units of the
Partnership from various limited partners, which represent approximately
12.7% of the outstanding limited partnership units of the Partnership.
In connection with a tender offer for units of the Partnership made March
12, 1998 (the "Offer") by Olympia Investors, L.P. a Delaware limited
partnership controlled by Carl Ichan ("Olympia"), Olympia and Presidio
entered into an agreement, date March 6, 1998 (the "Agreement"). On July
28, 1998, Olympia announced that it had accepted for payment 15,826 units
properly tendered pursuant to the Offer. As a consequence of the
Agreemente, Presidio may be deemed to beneficially own the units owned by
Olympia.
4. REAL ESTATE
The following table is a summary of the Partnership's real estate as of:
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
------------ ------------
<S> <C> <C>
Land ......................... $ 8,040,238 $ 8,040,238
Buildings and improvements ... 53,524,153 53,338,898
------------ ------------
61,564,391 61,379,136
Less: Accumulated depreciation (13,796,355) (13,096,743)
------------ ------------
$ 47,768,036 $ 48,282,393
============ ============
</TABLE>
No write-downs for impairment were recorded for the six months ended June
30, 1998 or 1997.
5. DISTRIBUTIONS PAYABLE
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
------------- -----------------
<S> <C> <C>
Limited Partners ($2.55 per unit) ...... $948,003 $948,003
General Partners ....................... 49,896 49,896
-------- --------
$997,899 $997,899
======== ========
</TABLE>
Such distributions were paid in the quarters subsequent to June 30, 1998
and December 31, 1997, respectively.
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
NOTES TO FINANCIAL STATEMENTS
6. DUE TO AFFILIATES
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
------------- -----------------
<S> <C> <C>
Partnership asset management fee $ 220,101 $ 220,101
Reorganization & litigation cost reimbursement (Note 7) -- 215,000
Property management fee 17,161 99,679
Non-accountable expense reimbursement 50,000 50,000
---------- ---------
$ 287,262 $ 584,780
========== =========
</TABLE>
Such amounts were paid in the quarters subsequent to June 30, 1998 and December
31, 1997, respectively.
7. COMMITMENTS AND CONTINGENCIES
On or about May 11, 1993 High Equity Partners L.P. - Series 86 ("HEP-86"),
an affiliated partnership, was advised of the existence of an action (the
"California Action") in which a complaint (the "HEP Complaint") was filed
in the Superior Court for the State of California for the County of Los
Angeles (the "Court") on behalf of a purported class consisting of all of
the purchasers of limited partnership interests in the Partnership. On
April 7, 1994 the plaintiffs were granted leave to file an amended
complaint (the "Amended Complaint") on behalf of a class consisting of all
the purchasers of limited partnership interest in HEP-86, the Partnership,
and Integrated Resources High Equity Partners, Series 85 ("HEP-85"),
another affiliated partnership.
On November 30, 1995, after the Court preliminarily approved a settlement
of the California Action but ultimately declined to grant final approval
and after the Court granted motions to intervene, the original and
intervening plaintiffs filed a Consolidated Class and Derivative Action
Complaint (the "Consolidated Complaint") against the managing general
partner of HEP-85 and the Partnership and the Investment General Partner of
HEP-86; the Administrative General Partner of HEP-86 (the "General
Partners"); a subsidiary of the indirect corporate parent of the General
Partners; and the indirect corporate parent of the General Partners. The
Consolidated Complaint alleged various state law class and derivative
claims, including claims for breach of fiduciary duties; breach of
contract; unfair and fraudulent business practices under California Bus. &
Prof. Code Sec. 17200; negligence; dissolution, accounting and
receivership; fraud; and negligent misrepresentation. The Consolidated
Complaint alleged, among other things, that the General Partners caused a
waste of the HEP partnership assets by collecting management fees in lieu
of pursuing a strategy to maximize the value of the investments owned by
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
NOTES TO FINANCIAL STATEMENTS
7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
the limited partners; that the General Partners breached their duty of
loyalty and due care to the limited partners by expropriating management
fees from the partnerships without trying to run the HEP partnerships for
the purposes for which they are intended; that the General Partners acted
improperly to enrich themselves in their position of control over the HEP
partnerships and that their actions prevented non-affiliated entities from
making and completing tender offers to purchase units in the HEP
partnership; that by refusing to seek the sale of the HEP partnerships'
properties, the General Partners diminished the value of the limited
partners' equity in the HEP partnerships; that the General Partners took a
heavily overvalued partnership asset management fee; and that limited
partnership units were sold and marketed through the use of false and
misleading statements.
The Court entered an order on January 14, 1997 rejecting the settlement and
concluding that there had not been an adequate showing that the settlement
was fair and reasonable. On February 24, 1997, the Court granted the
request of one plaintiffs' law firm to withdraw as class counsel.
Thereafter, in June 1997, the plaintiffs again amended their complaint (the
"Second Amended Complaint"). The Second Amended Complaint asserts
substantially the same claims as the Consolidated Complaint, except that it
no longer contains causes of action for fraud, for negligent
misrepresentation, or for negligence. The defendants served answers denying
the allegations and asserting numerous affirmative defenses. In February
1998, the Court certified three plaintiff classes consisting of the current
unit holders in each of the three HEP partnerships. On March 11, 1998, the
Court stayed the California Action temporarily to permit the parties to
engage in renewed settlement discussions. On July 30, 1998, the Court
lifted the stay.
The Limited Partnership Agreement provides for indemnification of the
General Partners and their affiliates in certain circumstances. The
Partnership has agreed to reimburse the General Partners for their actual
costs incurred in defending this litigation and the costs of preparing
settlement materials. Through June 30, 1998, the Partnership paid the
General Partners a total of $1,039,511 for these costs.
The General Partners believe that each of the claims asserted in the Second
Amended Complaint is meritless and intend to continue to vigorously defend
the California Action. It is impossible at this time to predict what the
defense of the California Action will cost, the Partnership's financial
exposure as a result of the indemnification agreement discussed above, and
whether the costs of defending could adversely affect the Managing General
Partner's ability to perform its obligations to the Partnership.
On February 6,1998, Everest Investors 8, LLC ("Everest") commenced an
action in the Superior Court of the State of California for the County of
Los Angeles (Case No. BC 185554), against, among others, the HEP
partnerships, Resources Pension Shares 5 LP (an affiliated partnership),
the general partners of each of the partnerships, and DCC Securities Corp.
In the action, Everest alleged, among other things, that the partnerships
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
NOTES TO FINANCIAL STATEMENTS
7. COMMITMENTS AND CONTINGENCIES (CONTINUED)
and the general partners breached the provisions of the applicable
partnership agreements by refusing to recognize transfers to Everest of
limited partnership units purportedly acquired pursuant to tender offers
that had been made by Everest (the "Everest Tender Units"). Everest sought
injunctive relief (a) directing the recognition of transfers to Everest of
the Everest Tender Units and the admission of Everest as a limited partner
with respect to the Everest Tender Units and (b) enjoining the transfer of
the Everest Tender Units to any either party. Everest seeks damages,
including punitive damages, for alleged breach of contract, defamation and
intentional interference with contractual relations. Everest's motion for a
temporary restraining order was denied on February 6, 1998. A hearing on
Everest's application for a preliminary injunction had been scheduled for
February 26, however, on February 20, 1998, Everest asked the Court to take
its application off calendar. The defendants served answers denying the
allegations and asserting numerous affirmative defenses.
On March 27, 1998, Everest commenced an action in the United States
District Court for the Central District of California against, among
others, the general partners of the HEP Partnerships. In the action,
Everest alleged, among other things, various violations of the Williams Act
Section 14(d) of the Securities Exchange Act of 1934 in connection with the
general partners' refusal to recognize transfers to Everest of limited
partnership units purportedly acquired pursuant to the Everest tender
offers and the letters sent by the general partners to the limited partners
advising them of the general partners' determination that the Everest
tender offers violated applicable securities laws.
On March 30, 1998, the Partnership commenced an action in the United States
District Court for the Southern District of New York against Everest to
obtain injunctive and declaratory relief with respect to a tender offer for
limited partnership units in the Partnership that was commenced by Everest
on or about March 18, 1998. In the action, the Partnership alleges that in
conducting that tender offer, Everest violated sections 14(d) and 14(e) of
the Securities Exchange Act of 1934 (the Williams Act) and the rules and
regulations promulgated thereunder.
During the quarter ended June 30, 1998, the litigations involving the
Partnership and Everest were discontinued with prejudice.
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Working capital reserves are temporarily invested in short-term instruments and
together with operating cash flow are expected to be sufficient to fund
anticipated capital improvements to the Partnership's properties. As of June 30,
1998, total working capital reserves amounted to approximately $3,979,000. The
Partnership intends to distribute to its partners less than all of its future
cash flow from operations in order to assure adequate working capital reserves
for capital improvements and capitalized lease procurement costs.
During the six months ended June 30, 1998, cash and cash equivalents decreased
$250,830 as a result of capital expenditures and distributions to partners in
excess of cash flows from operations. The Partnership's primary source of funds
is cash flow from the operation of its properties, (principally rents received
from tenants) which amounted to $1,930,222 for the six months ended June 30,
1998. The Partnership used $185,254 for capital expenditures related to capital
and tenant improvements to the properties and $1,995,798 for distributions to
partners for the six months ended June 30, 1998.
The Partnership expects to continue to utilize a portion of its cash flow from
operations and its reserves to pay for various capital and tenant improvements
to the properties and leasing commissions. Capital and tenant improvements and
leasing commissions may in the future exceed the Partnership's cash flow from
operations. In that event, the Partnership would utilize the remaining working
capital reserves, reduce distributions, or sell one or more properties. Except
as discussed above, management is not aware of any other trends, events,
commitments, or uncertainties that will have a significant impact on liquidity.
RESULTS OF OPERATIONS
The Partnership experienced a decrease in net income for the three and six
months ended June 30, 1998 compared to the same periods in 1997 primarily due to
a decrease in rental revenues. During the three months ended June 30, 1998,
costs and expenses increased, however, for the entire six month period ended
June 30, 1998, costs and expenses decreased as compared to the same period in
1997. For the three and six months ended June 30, 1998, interest income and
other income increased as compared to the same periods in the prior year.
Rental revenue decreased during the three and six months ended June 30, 1998 as
compared to the same periods in the prior year, primarily due to the April, 1997
receipt of $1.5 million pursuant to the bankruptcy settlement of Handy Andy, the
former sole tenant at Melrose II.
Costs and expenses increased during the three months ended June 30, 1998 and
decreased during the six months ended June 30, 1998 as compared to the same
periods in 1997. Operating expenses increased slightly during the second quarter
of 1998 compared to the same period in 1997 due to higher tenant related
professional fees incurred at various properties. Operating costs decreased,
however, during the six months ended June 30, 1998 primarily due to lower repair
and maintenance costs at Sunrise due to the receipt of insurance proceeds in
February, 1998, offsetting previously incurred costs. Depreciation and
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
amortization expenses decreased slightly during the three and six months ended
June 30, 1998 as certain capitalized leasing commissions became fully amortized
during 1998. Administrative expenses increased for the three and six months
ended June 30, 1998 compared to the same periods in 1997 due to higher legal and
accounting fees related to ongoing litigation and a possible reorganization of
the Partnership. Property management fees decreased during the three and six
months ended June 30, 1998 due to the decrease in revenues, as previously
discussed.
Interest income increased due to higher cash balances during the three and six
months ended June 30, 1998 as compared to the same periods in 1997. Other income
increased during the three and six months ended June 30, 1998 as compared to
1997 due to increased ownership transfers.
Inflation is not expected to have a material impact on the Partnership's
operations or financial position.
Legal Proceedings
The Partnership is a party to certain litigation. See Note 7 to financial
statements for a description thereof.
Forward-looking Statements
When used in this quarterly report on Form 10-Q, the words "believes,"
"anticipates," "expects" and similar expressions are intended to identify
forward-looking statements. Statements looking forward in time are included in
this quarterly report on Form 10-Q pursuant to the "safe harbor" provision of
the Private Securities Litigation Reform Act of 1995. Such statements are
subject to certain risks and uncertainties which would cause actual results to
differ materially, including, but not limited to, those set forth in
"management's discussion and analysis of financial condition and results of
operations." Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The company
undertakes no obligation to publicly revise these forward-looking statements to
reflect events or circumstances occurring after the date hereof or to reflect
the occurrence of unanticipated events.
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
PART II. - OTHER INFORMATION
Item 1 - Legal Proceedings
(a) See Management's Discussion and Analysis of Financial
Condition and Results of Operations and Notes to Financial
Statements - Note 7 which is herein incorporated by
reference.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits: There were no exhibits filed.
(b) Reports on Form 8-K: None
<PAGE>
HIGH EQUITY PARTNERS L.P. - SERIES 88-FORM 10-Q - JUNE 30, 1998
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.
High Equity Partners L.P. - Series 88
By: Resources High Equity, Inc.
Managing General Partner
Dated: August 12, 1998 By: /S/ Richard Sabella
--------------------
Richard Sabella
President
(Duly Authorized Officer)
Dated: August 12, 1998 By: /S/ Lawrence Schachter
-----------------------
Lawrence Schachter
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary information extracted from the financial
statements of the June 30, 1998 Form 10-Q of High Equity Partners L.P.-Series
88 and is qualified in its entirety by reference to such financial statemens.
</LEGEND>
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<PERIOD-END> JUN-30-1998
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0
0
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