<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
-----------------------------------
For the Fiscal Year Ended December 31, 1995
Commission File Number 33-22857
--------
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-4166241
------------
9090 WILSHIRE BOULEVARD, SUITE 201, BEVERLY HILLS, CALIFORNIA 90211
Registrant's Telephone Number, Including Area Code (310) 278-2191
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or 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-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
<PAGE> 2
PART I.
ITEM 1. BUSINESS:
Century HillCreste Apartment Investors, L.P. (the "Partnership") is a
California limited partnership formed on June 6, 1988, with National
Partnership Investments Corp. ("NAPICO", or the "Managing General Partner") and
HillCreste Properties Inc. (the "Non-Managing General Partner") as the General
Partners. The business of the Partnership is conducted primarily by the
Managing General Partner as the Partnership has no employees of its own. The
Partnership issued 7,258,000 depository units (each depository unit being
entitled to the beneficial interest of a limited partnership interest) on
October 26, 1988 to investors (the "Limited Partners") for a total amount
raised of $72,580,000, through a public offering.
Concurrent with the issuance of the depository units, the Partnership purchased
a 315-unit luxury apartment complex in the Century City area of Los Angeles
(the "Property") from an affiliate of the Managing General Partner for a
purchase price of $68,548,000. In order to complete the purchase of the
Property, the seller, an affiliate of the Managing General Partner (the
"Seller") purchased a 10 percent special limited partnership interest in the
Partnership for $6,855,000. The Partnership Agreement provides that the 10
percent special limited partnership interest is subordinate to the other
Limited Partners' specified priority return in the case of distributions of
net cash flow from operations, plus the other Limited Partners' return of
capital in the case of net sales or refinancing distribution proceeds.
Casden Investment Corporation ("CIC"), an affiliate of the Seller, owns all of
the outstanding common stock of NAPICO. The current members of NAPICO's Board
of Directors are Charles H. Boxenbaum, Bruce E. Nelson, Alan I. Casden, Henry
C. Casden and Brian D. Goldberg. DA Group Holdings Inc. owns all of the stock
of HillCreste Properties, Inc.
Through January 31, 1995, an affiliate of the Managing General Partner, Mayer
Management Inc., managed the Property for a fee of 5 percent of the collected
revenues. On February 1, 1995, the fee was reduced to 3 percent. The fee
amounted to $181,375, $273,130 and $257,142 in 1995, 1994 and 1993,
respectively. On January 1, 1996, property management was transferred to an
unaffiliated property management agent, who manages the Property for a fee of
3% of rental revenues.
The Partnership is subject to all of the risks incident to ownership of real
estate and interests therein, many of which relate to the lack of liquidity for
this type of investment. These risks include, without limitation, changes in
general economic conditions, adverse local market conditions due to
over-building or a decrease in employment or neighborhood values, changes in
supply or demand of competing properties in the area, changes in interest rates
and the availability and terms of permanent mortgage funds which may render the
sale or refinancing of the Property difficult or unattractive, changes in real
estate and zoning laws, increases in real property tax rates, federal or local
economic or rent controls, and the occurrence of uninsured losses, such as
earthquakes, floods or riots (however, the Property is partially insured for
losses from earthquakes), or other factors beyond the control of the General
Partners. The lack of liquidity of real estate investments generally will
impair the ability of the Partnership to respond promptly to changing
circumstances. In addition, these risks are magnified as the Partnership has
only one rental property and is not able to spread these risks over different
geographic regions.
The Property suffered substantial damage as a result of the January 17, 1994
Northridge Earthquake. The repair work required as a result of the earthquake
damage was completed in 1995. Additionally, certain improvements are planned
to be made to the Property, including the privatization of certain streets and
alleys providing access to the Property and the installation of security
fencing with controlled entrances. See Item 7 below for more detailed
information.
The Partnership's principal objectives are to (i) provide quarterly cash
distributions, (ii) preserve and protect capital, and (iii) achieve long-term
appreciation in the value of the Property for distribution upon sale. In
addition, although the Partnership acquired the Property for an all-cash
purchase price, the Partnership may seek to obtain mortgage financing for the
Property. Such financing, if accomplished, could permit the Partnership to
distribute to the Limited Partners a substantial portion of their invested
capital. There can be no assurance that any of these objectives will be
achieved.
<PAGE> 3
The following is a schedule of the occupancy status of the Property as of
December 31, 1995:
<TABLE>
<CAPTION>
No. of Units Percentage of
Name & Location Units Occupied Total Units
- ------------------------- ------ -------- --------------
<S> <C> <C> <C>
HillCreste Apartments
Los Angeles, California 315 285 90%
</TABLE>
ITEM 2. PROPERTIES:
The Partnership holds an interest in one real estate property. See Item 1
above and Schedule XI for additional information pertaining to this Property.
ITEM 3. LEGAL PROCEEDINGS:
The Managing General Partner, NAPICO, is a plaintiff or defendant in several
lawsuits, which are unrelated to the Partnership. In addition, the Partnership
is involved in the actions described below, which in the opinion of management
and the Managing General Partner, will not result in any material liability to
the Partnership.
HillCreste Properties Inc., a general partner of the Partnership, and certain
of its affiliates, on their own behalf and on behalf of the Partnership and
certain other partnerships with which they are associated (collectively, the
"Plaintiff Partnerships"), and NAPICO, and certain of its affiliates, have
entered into a Memorandum of Understanding dated August 11, 1995. In addition
to establishing certain Partnership controls, the Memorandum of Understanding
resolves and settles various management and control issues which were under
discussion for some time and various claims which were raised in a lawsuit
filed in the Los Angeles Superior Court on June 9, 1995 by HillCreste
Properties Inc., the Partnership and others against, among others, NAPICO ("the
Lawsuit"). All parties entered into the Memorandum of Understanding without
any admission of wrong doing or liability by any defendant as to any claim in
the Lawsuit, in a desire to avoid continued litigation that would be expensive,
time consuming and complex.
By virtue of the Memorandum of Understanding, the parties thereto have agreed,
among other things, that:
1. To compensate the Partnership and its Limited Partners for guarantee
and distribution payments that were not made on a timely basis in
1991, 1992 and 1993, the Partnership received and distributed pro
rata to the Limited Partners the sum of $135,000, which represented
interest, calculated at the rate of approximately 5% per annum, from
the due date of each such distribution to Limited Partners to the
date such distribution was actually made.
2. Casden Properties will pay to the Partnership $350,000, representing
the amount of a real estate tax rebate which had previously been
offset against amounts due from Casden Properties under the Guarantee
Agreement. Although the parties disagree about the appropriate
accounting treatment for this tax rebate, Casden Properties has agreed
to repay this rebate to the Partnership in two equal installments of
$175,000 each; the first such $175,000 payment was made concurrently
with the signing of the Memorandum of Understanding and the second
payment was to be made on February 11, 1996 but, as of April 9, 1996
was not yet made (see below).
3. An analysis was to be prepared of the books and records of the
Partnership including an analysis of the books and records of the
master disbursement account maintained by the Partnership's property
management company, Mayer Management, Inc. ("MMI"), an affiliate of
NAPICO. NAPICO agreed
<PAGE> 4
that it and its affiliates, including MMI, will pay to the
Partnership any amounts (with interest thereon) properly determined
to be owed to the Partnership as a result of the analysis.
4. Property management responsibility for the HillCreste property was
transferred to an independent property management company, Trammell
Crow Residential Services.
5. The Partnership will reimburse HillCreste Properties Inc. for
professional fees paid on behalf of the Partnership in connection
with issues raised in the Memorandum of Understanding, estimated at
$150,000 as of December 31, 1995.
6. The Partnership will employ an independent Cash Manager, designated
by HillCreste Properties Inc. and approved by NAPICO, to perform cash
management services, including maintenance of the Partnership's bank
accounts and reserves, payment of property management fees and other
accounts payable, payments to affiliates of NAPICO, and payment of
cash distributions to the Limited Partners. NAPICO has agreed to
prepare detailed annual budgets to be approved by HillCreste
Properties and thereafter used by the Cash Manager as a guide and
control over Partnership operations. The terms of the cash
management agreement have not yet been implemented.
7. The parties to the Memorandum of Understanding agreed to enter into a
formal Settlement Agreement and, concurrently therewith, (a) the
plaintiffs in the Lawsuit will execute a special release of the
defendants with respect to the allegations contained in the Lawsuit,
(b) the defendants in the Lawsuit will execute a special release of
each plaintiff in the Lawsuit that is a general partner of a
Plaintiff Partnership with respect to all claims which would have
been compulsory counterclaims thereunder, and (c) the defendants will
execute a special release of any claims, other than those regarding
specifically scheduled contractual relations, which any defendant may
have had against this Partnership or any of the other Plaintiff
Partnerships.
8. Upon the uncured breach of certain provisions of the Memorandum of
Understanding or upon a future breach of NAPICO's fiduciary duties,
HillCreste Properties Inc. could cause NAPICO to (i) surrender its
rights as Managing General Partner of the Partnership or (ii) resign
as the Managing General Partner of the Partnership and become a
limited partner thereof.
As of April 8, 1996, certain of the foregoing items enumerated above had yet to
be fully implemented. Among other items, Casden Properties has not yet paid
the second installment of $175,000 which was to be paid on February 11, 1996.
The parties have had discussions regarding their respective positions and have
agreed to participate in a settlement conference. If these matters cannot be
resolved by agreement, then the parties will submit their respective positions
to arbitration.
The staff of the Securities and Exchange Commission (the "Commission") informed
the Partnership and NAPICO in August, 1995 that it intends to recommend that
the Commission institute a civil action and/or administrative proceeding
against the Partnership, NAPICO and others that would be based, in part, on
allegations that certain of the Partnership's financial statements in 1991,
1992 and 1993 should have characterized certain current assets deposited in the
master disbursement account of the Partnership's property management company as
accounts receivable from a related party rather than as cash. The Partnership
and NAPICO strenuously disagree with the staff's contentions, which have not
yet been considered by the Commission. Moreover, in the opinion of NAPICO, any
action that might result from the staff's recommendation is not likely to have
a material adverse effect on the Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
<PAGE> 5
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED
SECURITY HOLDER MATTERS:
The limited partnership interests in the Partnership are not traded on a public
exchange. It is not anticipated that any public market will develop for the
purchase and sale of any partnership units. Limited partnership units may be
transferred only if certain requirements are satisfied. As of December 31,
1995, there were 6,670 registered holders of units in the Partnership.
<PAGE> 6
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Rental revenues $ 5,394,552 $ 5,390,358 $ 5,109,914 $ 4,984,986 $ 5,413,821
Interest and other income 287,523 81,885 131,332 137,813 148,113
----------- ----------- ----------- ----------- -----------
Total revenues $ 5,682,075 $ 5,472,243 $ 5,241,246 $ 5,122,799 $ 5,561,934
=========== =========== =========== =========== ===========
Net income $ 2,498,336 $ 1,224,739 $ 1,848,761 $ 972,848 $ 1,376,911
=========== =========== =========== =========== ===========
Net income per limited
partner interest $ 0.34 $ 0.17 $ 0.25 $ 0.13 $ 0.19
=========== =========== =========== =========== ===========
Rental property owned at
cost less accumulated
depreciation $34,772,331 $35,660,385 $36,424,447 $41,001,958 $46,118,308
=========== =========== =========== =========== ===========
Total assets $37,684,178 $38,577,456 $41,344,209 $44,340,806 $50,114,552
=========== =========== =========== =========== ===========
</TABLE>
<PAGE> 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
CAPITAL RESOURCES AND LIQUIDITY
The Partnership raised proceeds of $72,580,000 from the sale of limited
partnership interests, pursuant to a public offering and received additional
capital contributions from the General Partners of $1,050 and from the special
limited partner of $6,855,000. Currently, the only sources of Partnership
income consist of income from rental operations at the Property and interest
earned on Partnership reserves.
In conjunction with the acquisition of the Property, the Partnership received a
guarantee from the Seller, (now an affiliate of the Managing General Partner),
which guarantee agreement (the "Guarantee Agreement") required the Seller to
make payments as provided in the Guarantee Agreement, if and when necessary,
in an amount sufficient to enable the Partnership to provide the Limited
Partners with minimum distributions through December 1993.
Pursuant to the Memorandum of Understanding entered into on August 11, 1995,
the Seller agreed to pay to the Partnership the sum of $350,000 in two equal
installments of $175,000 each; the first such $175,000 payment was made in
August 1995 and the second payment was to be made on February 11, 1996. These
payments represent the amount of a real estate tax refund received in 1994 for
overpayment of prior year taxes which had previously been offset against
amounts receivable from the Seller under the Guarantee Agreement. Because of
certain disagreements among the parties, the Seller has not yet paid the second
installment of $175,000.
Through December 31, 1995, the Seller has funded $12,955,998 directly to the
Partnership for distributions to the Limited Partners pursuant to the Guarantee
Agreement, which includes the $175,000 payment made in August 1995 referred to
above. Commencing in 1994, distributions to the partners are being made from
cash flow from operations. In addition, during 1995 the Partnership made a
special distribution to the limited partners in the amount of $135,000. (See
"Results of Operations" for further discussion.)
Approvals from the City of Los Angeles were obtained to "privatize" the streets
and alleys providing access to the Property and to construct wrought iron
security fencing with controlled entrances into the Property. The final
resolution vacating the streets and alleys was approved on December 31, 1994.
Landscape and architectural drawings have been prepared for the construction of
the perimeter fencing and related improvements, including a guardhouse at the
Ambassador Street entrance and a directory/trellis at the Peerless Street
location. These plans were approved and a building permit was issued by the
City of Los Angeles on June 20, 1995. This permit was to expire on December 20,
1995, however, a six month extension to June 20, 1996 was approved.
As a condition to its approval of the proposed "privatization", the City of Los
Angeles requires the construction of a storm drain and related improvements,
for which an improvement agreement and guarantee in the amount $158,000 has
been filed with the City of Los Angeles.
Presently, plans for the improvements are being bid out and other construction
coordination issues are being resolved. Thereafter, the work on the
improvements will commence.
RESULTS OF OPERATIONS
Occupancy averaged 94 percent for the year ended December 31, 1995, as compared
to an average of 96 percent for the year ended December 31, 1994, and an
average of 93 percent for 1993. The Property was 90 percent and 95 percent
occupied as of December 31, 1995 and 1994, respectively. The increase in
rental revenues in 1994 over 1993 is a result of increased occupancy partially
attributable to the shortage of rental units in the Los Angeles area as a
result of the Northridge Earthquake in January 1994. Rental revenues for 1995
were approximately equal to revenues for 1994, because the decrease in occupancy
for 1995 was offset by an increase in rental rates. Operating expenses
increased in the year ended December 31, 1995 compared to the same period in
1994 and 1993, primarily due to increased payroll incurred for additional
staffing needs required to meet the increased rental demand.
<PAGE> 8
In August 1995, the Seller made an additional payment of $135,000 to the
Partnership pursuant to the Memorandum of Understanding entered into on August
11, 1995, which amount represents interest on late payments to the Partnership
covering the period from the second quarter of 1991 to the fourth quarter of
1993 pursuant to the Guarantee Agreement. This is primarily the reason for the
increase in interest and other income in 1995.
On January 17, 1994, the rental property sustained damage due to the Northridge
Earthquake (Earthquake). As of December 31, 1994, $405,340 had been spent to
repair damage caused by the Earthquake. Substantially all of the repairs
($376,000) were performed on an emergency basis by Mayer Property Services,
Inc., an affiliate of the Managing General Partner, and the Seller upon the
instruction and authorization of the building's property management company,
Mayer Management, Inc. In 1995, the Partnership paid approximately $1,125,000
to an unaffiliated contractor to fully repair the remaining damage suffered by
the Property as a result of the Earthquake.
Based on a determination by the building's insurance carrier that the loss
suffered by the Property as a result of the Earthquake was $1,537,718, the
Partnership received in August 1994 a net insurance settlement in the amount of
$355,448. This amount was determined by reducing the gross amount of the
building's loss by: (a) the deductible provided for in the policy in the amount
of $1,071,808; (b) the $34,095 paid to the independent public adjuster that
processed the building's claim; and (c) the insurance company's holdback of
$76,367.
Since the investigation and recommendation of the staff of the Securities and
Exchange Commission (the "Commission") (see "Legal Proceedings" for further
discussion) concern the Partnership's financial statements and Commission
filings, a portion of the legal fees incurred in responding to the staff have
been allocated to and charged to the Partnership. These legal fees, in the
amount of $120,431 and $113,331 for 1995 and 1994, respectively, and the
accrual for $150,000 in professional fees in 1995 related to the Memorandum of
Understanding primarily account for the increase in general and administrative
expenses in 1995 and 1994, compared to 1993. In the opinion of the Managing
General Partner, any action that might result from the Commission staff's
investigation is not likely to have a material adverse effect on the
Partnership.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE:
Not applicable.
<PAGE> 9
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(a California Limited Partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORTS
DECEMBER 31, 1995
<PAGE> 10
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Century HillCreste Apartment Investors, L.P.
(A California limited partnership)
We have audited the accompanying balance sheets of Century HillCreste Apartment
Investors, L.P. (a Calfornia limited partnership) as of December 31, 1995 and
1994, and the related statements of income, partners' capital (deficiency) and
cash flows for the years then ended. Our audits also included the financial
statement schedule listed in the index at Item 14. These financial statements
and financial statement schedule are the responsibility of the management of the
Partnership. Our responsibility is to express an opinion on these financial
statements and financial statement schedule 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 Century HillCreste Apartment
Investors, L.P. as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 29, 1996
<PAGE> 11
CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
RENTAL PROPERTY (Notes 1, 2 and 3) $34,772,331 $35,660,385
CASH AND CASH EQUIVALENTS (Note 1) 2,738,045 2,425,486
RESTRICTED CASH (Notes 1 and 5) 158,700 158,700
OTHER ASSETS (Note 5) 15,102 332,885
----------- -----------
$37,684,178 $38,577,456
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES (Note 4) $ 359,359 $ 414,023
LIABILITY FOR EARTHQUAKE LOSS (Note 5) -- 1,091,723
DUE TO GENERAL PARTNERS (Note 4) 150,000 91,331
PREPAID RENT 46,965 22,732
SECURITY DEPOSITS 310,099 320,340
----------- -----------
866,423 1,940,149
COMMITMENTS AND CONTINGENCIES (Note 5)
PARTNERS' CAPITAL (Note 1) 36,817,755 36,637,307
----------- -----------
$37,684,178 $38,577,456
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 12
CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
REVENUES
Rental income $5,394,552 $5,390,358 $5,109,914
Interest and other income (Note 3) 287,523 81,885 131,332
---------- ---------- ----------
5,682,075 5,472,243 5,241,246
---------- ---------- ----------
EXPENSES
Operating (Note 4) 1,178,744 1,076,682 1,055,706
Property taxes 422,121 525,867 394,042
Management fee - related party (Note 4) 181,375 273,130 257,142
General and administrative (Note 4) 651,783 513,638 335,045
Depreciation 713,054 716,572 1,350,550
Provision for earthquake loss (Note 5) 36,662 1,141,615 --
---------- ---------- ----------
3,183,739 4,247,504 3,392,485
---------- ---------- ----------
NET INCOME $2,498,336 $1,224,739 $1,848,761
========== ========== ==========
NET INCOME PER LIMITED
PARTNERSHIP INTEREST $ 0.34 $ 0.17 $ 0.25
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 13
CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Special Limited
General Limited Partner
Partners Partners (Note 1) Total
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1993 $(217,343) $ 43,671,010 $ -- $ 43,453,667
DISTRIBUTIONS -- (4,885,727) -- (4,885,727)
NET INCOME FOR 1993 18,488 1,830,273 -- 1,848,761
--------- ------------ --------- ------------
BALANCE, DECEMBER 31, 1993 (198,855) 40,615,556 -- 40,416,701
DISTRIBUTIONS (98,899) (4,905,234) -- (5,004,133)
NET INCOME FOR 1994 12,247 1,212,492 -- 1,224,739
--------- ------------ --------- ------------
BALANCE, DECEMBER 31, 1994 (285,507) 36,922,814 -- 36,637,307
DISTRIBUTIONS (27,262) (2,290,626) (2,317,888)
NET INCOME FOR 1995 24,983 2,473,353 -- 2,498,336
--------- ------------ --------- ------------
BALANCE, DECEMBER 31, 1995 $(287,786) $ 37,105,541 $ -- $ 36,817,755
========= ============ ========= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 14
CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,498,336 $ 1,224,739 $ 1,848,761
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 713,054 716,572 1,350,550
Provision for earthquake loss 36,662 1,141,615 --
Decrease (increase) in other assets 317,783 324,066 (328,185)
Increase (decrease) in accounts payable and
accrued liabilities (54,664) (396,000) 33,343
Increase in due to general partners 58,669 91,331 --
Decrease in security deposits (10,241) (13,430) (6,825)
Increase (decrease) in prepaid rent 24,233 (30,465) 13,851
----------- ----------- -----------
Net cash provided by operating activities 3,583,832 3,058,428 2,911,495
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Redemption of short term investments -- 1,451,600 --
Increase in restricted cash -- (158,700) --
Payments received pursuant to the minimum
distribution guarantee 175,000 2,992,712 1,105,317
Insurance proceeds for earthquake loss -- 355,448 --
Earthquake loss payments (1,128,385) (405,340) --
----------- ----------- -----------
Net cash provided (used in) by investing activities (953,385) 4,235,720 1,105,317
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (2,317,888) (5,004,133) (4,885,727)
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 312,559 2,290,015 (868,915)
CASH AND CASH EQUIVALENTS, beginning of year 2,425,486 135,471 1,004,386
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, end of year $ 2,738,045 $ 2,425,486 $ 135,471
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Reduction in rental property resulting from
minimum distribution guarantee receivable $ -- $ -- $ 2,945,222
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 15
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(a California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Century HillCreste Apartment Investors, L.P. (the "Partnership"), a
California limited partnership, was formed on June 6, 1988, with
National Partnership Investments Corp. (the "Managing General
Partner"), and HillCreste Properties Inc. (the "Non-Managing General
Partner") as the general partners. On October 26, 1988, the Partnership
issued to investors (the "Limited Partners") 7,258,000 depositary units
(each depositary unit being entitled to the beneficial interest of a
limited partnership interest), for a total amount raised of
$72,580,000, through a public offering.
Concurrent with the issuance of the depositary units, the Partnership
purchased a 315-unit apartment complex in the Century City area of Los
Angeles, California (the "Property") from Casden Properties (the
"Seller"). To complete the purchase of the Property, the Seller
purchased a 10% special limited partnership interest in the Partnership
for $6,855,000.
Among other things, the Partnership Agreement provides that the 10%
special limited partnership interest be subordinate to the other
Limited Partners' specified priority return in the case of
distributions of net cash flow from operations, plus the other Limited
Partners' return of capital in the case of net sales or refinancing
distribution proceeds.
Casden Investment Corporation, an affiliate of the Seller, owns 100% of
the outstanding common stock of NAPICO. DA Group Holdings Inc. owns
100% of the stock of HillCreste Properties Inc.
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 reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Depreciation
Depreciation is reported using the straight-line method over the
estimated useful lives of the buildings and equipment as follows:
Buildings 35 years
Furniture and equipment 5 years
Minimum Distribution Guarantee
The minimum distribution guarantee payments from the Seller have been
reflected as a reduction in the carrying amount of the Property.
For its contribution of $6,855,000, the Seller has rights to receive an
allocation of the Partnership's net cash from operations after the
Limited Partners receive a specified priority return.
5
<PAGE> 16
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(a California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity of three months or less.
Restricted Cash
Restricted cash consists of bank certificates of deposits assigned to
the City of Los Angeles in lieu of purchasing a subdivision improvement
bond to effectuate the privatization of city streets located within the
Property's perimeter (see Note 5).
Income Taxes
No provision has been made for income taxes in the accompanying
financial statements since such taxes, if any, are the liability of the
partners.
Net Income Per Limited Partner Unit
Net income per limited partner unit was computed by dividing the
Limited Partners' share of net income (99%) by the number of limited
partner units outstanding during the year. The number of limited
partner units was 7,258,000 for all years presented.
Reclassifications
Certain reclassifications have been made to the 1994 financial
statements to conform to the 1995 presentation.
2. RENTAL PROPERTY
At December 31, 1995 and 1994, rental property consists of the
following:
<TABLE>
<CAPTION>
1995 1994
----------- ----------
<S> <C> <C>
Land $16,175,000 $16,175,000
Buildings 24,869,402 25,044,402
Furniture and equipment 3,870,000 3,870,000
------------ -----------
44,914,402 45,089,402
Less: Accumulated depreciation 10,142,071 9,429,017
----------- -----------
$34,772,331 $35,660,385
=========== ===========
</TABLE>
6
<PAGE> 17
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(a California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
3. MINIMUM DISTRIBUTION GUARANTEE RECEIVABLE FROM PARTNER
The Minimum Distribution Guarantee Agreement (the "Guarantee
Agreement") required the Seller, who is also the Special Limited
Partner, to make payments to the Partnership, if and when necessary, in
an amount sufficient to enable the Partnership to provide the Limited
Partners with distributions sufficient to achieve a minimum annual
return upon the Limited Partners' investment in the Partnership,
through December 31, 1993, as follows:
<TABLE>
<CAPTION>
Years Ended December 31, Annual Return on Investment
------------------------ ---------------------------
<S> <C>
1988 8.0%
1989 8.0%
1990 8.5%
1991 9.0%
1992 9.0%
1993 9.0%
</TABLE>
Pursuant to the Memorandum of Understanding entered into on August 11,
1995, the Seller agreed to pay to the Partnership, the sum of $350,000
in two equal installments of $175,000 each; the first such $175,000
payment was made in August 1995 and the second payment was to be made
on February 11, 1996 (but has not yet been made). These payments
represent the amount of a real estate tax refund received in 1994 for
overpayment of prior year taxes which had previously been offset
against amounts receivable from the Seller under the Guarantee
Agreement. Because certain disputes have arisen among the parties, the
Seller has not yet paid the second installment of $175,000, which is
not reflected in the accompanying financial statements.
Through December 31, 1995, the Seller has funded a total of $12,955,998
directly to the Partnership for distributions to the Limited Partners
pursuant to the Guarantee Agreement, which includes the $175,000 paid
in August 1995, referred to above. The period covered by the Guarantee
Agreement expired on December 31, 1993. Except with respect to the
payments made or to be made pursuant to the Memorandum of
Understanding, commencing in 1994, distributions, if any, to the
Partners are made from cash flow from operations. The minimum
distribution guarantee payments from the Seller have been reflected as
a reduction in the Partnership's basis in the Property.
In addition, in August 1995, the Seller made an additional payment of
$135,000 to the Partnership pursuant to the Memorandum of Understanding
entered into on August 11, 1995, which amount represents interest on
late payments to the Partnership covering the period from the second
quarter of 1991 to the fourth quarter of 1993 pursuant to the Guarantee
Agreement.
4. FEES PAID TO MANAGING GENERAL PARTNER AND AFFILIATES
In accordance with the Partnership Agreement, certain fees and
reimbursements are paid to the general partners and their affiliates as
follows:
a. A partnership management fee of $50,000 annually is paid to the
Managing General Partner. This fee is included in general and
administrative expenses for 1995, 1994 and 1993.
7
<PAGE> 18
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(a California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
4. FEES PAID TO MANAGING GENERAL PARTNERS AND AFFILIATES (CONTINUED)
b. Prior to February 1, 1995, a property management fee equal to
5% of collected revenues was paid to an affiliate of the
Managing General Partner. Effective February 1, 1995, the
property management fee was reduced to 3%. On January 1, 1996,
property management was transferred to an unaffiliated agent,
who manages the property for a fee of 3% of rental revenues.
The property management fees paid to the affiliate for the
years ended December 31, 1995, 1994 and 1993 were $181,375,
$273,130 and $257,142, respectively. Additionally, the
Partnership paid approximately $41,700, $21,200 and $53,500 for
the years ended December 31, 1995, 1994 and 1993, respectively,
to an affiliate of the Managing General Partner for maintenance
services.
c. Through December 1990, partnership expense reimbursements, not
to exceed $50,000 annually, were paid to the Non-Managing
General Partner. The 1990 reimbursement has been accrued and is
included in accounts payable and accrued liabilities at
December 31, 1995 and 1994. The Non-Managing General Partner
has requested reimbursement for expenses for 1991 through 1995,
however, the Managing General Partner is disputing such
reimbursements and none have been paid or accrued.
d. Payments in the amount of approximately $376,000 were made to
an affiliate of the Managing General Partner, in connection
with earthquake related repairs during the year ended December
31, 1994 (see Note 5). These amounts were included in the
provision for earthquake damage.
e. 1% of distributions (as defined in the Partnership Agreement)
is payable quarterly to the Managing General Partner. The fees
paid for the years ended December 31, 1995, 1994 and 1993 were
$27,262, $98,899 and $0, respectively.
f. The Partnership is obligated to pay certain fees to the
Managing General Partner or its affiliates upon sale of the
Property. The payment of such fees is subordinated to certain
preferred returns to the Limited Partners.
At December 31, 1995, $150,000 was estimated as due to the Non-Managing
General Partner for reimbursement of professional fees paid on behalf
of the Partnership in connection with issues raised in the Memorandum
of Understanding. At December 31, 1994, approximately $91,000 was due
the Managing General Partner for reimbursement of professional fees
paid on behalf of the Partnership. This amount was paid in 1995.
5. COMMITMENTS AND CONTINGENCIES
a. On January 17, 1994, the Property sustained damage due to the
earthquake in the Los Angeles area (the "Northridge
Earthquake"). For the years ended December 31, 1995 and 1994,
approximately $37,000, and $1,142,000, respectively, has been
provided for repairing the damage caused by the Northridge
Earthquake.
Based on a determination by the building's insurance carrier
that the loss suffered by the Property as a result of the
Northridge Earthquake was $1,537,718, the Partnership received
in August 1994 a net insurance settlement in the amount of
$355,448. This amount was determined by reducing the gross
amount of the loss by: (a) the deductible provided for in the
policy in the amount of $1,071,808; (b) the $34,095 paid to the
independent public adjuster that processed the building's
claim; and (c) the insurance company's holdback of $76,367. The
insurance settlement of $355,448 has been offset against the
provision for earthquake loss.
8
<PAGE> 19
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(a California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
5. COMMITMENTS AND CONTINGENCIES (CONTINUED)
b. Approvals from the City of Los Angeles were obtained to
"privatize" the streets and alleys providing access to the
Property and to construct wrought iron security fencing with
controlled entrances into the Property. The final resolution
vacating the streets and alleys was approved on December 31,
1994. Landscape and architectural drawings have been prepared
for the construction of the perimeter fencing and related
improvements, including a guardhouse at the Ambassador Street
entrance and a directory/trellis at the Peerless Street
location. These plans were approved and a building permit was
issued by the City of Los Angeles on June 20, 1995. This permit
was to expire on December 20, 1995, however, a six month
extension to June 20, 1996 was approved.
As a condition to its approval of the proposed "privatization",
the City of Los Angeles requires the construction of a storm
drain and related improvements, for which an improvement
agreement and guarantee in the amount $158,000 has been filed
with the City of Los Angeles.
Presently, plans for the improvements are being bid out and
other construction coordination issues are being resolved.
Thereafter, the work on the improvements will commence.
c. The Managing General Partner of the Partnership is a plaintiff
in various lawsuits and has also been named as a defendant in
other lawsuits arising from transactions in the ordinary course
of business. In the opinion of management and the Managing
General Partner, the claims will not result in any material
liability to the Partnership.
6. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments. The carrying amount of assets
and liabilities reported on the balance sheets that require such
disclosure approximates fair value due to their short-term maturity.
9
<PAGE> 20
SCHEDULE III
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
NOTES: 1. Rental property is stated at cost. Depreciation is provided for
on the straight-line method over the estimated useful lives of
the assets. Substantially all of the apartments are leased on a
month-to-month basis.
2. The total cost of land, buildings, and equipment for federal
income tax purposes at December 31, 1995 is approximately
$51,053,790.
3. Investment in rental property:
<TABLE>
<CAPTION>
Buildings,
Furniture
and
Land Equipment Total
----- ----------- -------
<S> <C> <C> <C>
Balance, January 1, 1993 $16,175,000 $32,188,853 $48,363,853
Less: minimum distribution
guarantee amounts funded
and accrued in 1993 - (3,226,961 (3,226,961)
----------- ----------- -----------
Balance, December 31, 1993 16,175,000 28,961,892 45,136,892
Less: minimum distribution
guarantee amounts funded
in 1994 - (47,490 (47,490)
----------- ----------- -----------
Balance, December 31, 1994 16,175,000 28,914,402 45,089,402
Less: minimum distribution
guarantee amounts funded
in 1995 - (175,000 (175,000)
----------- ----------- -----------
Balance, December 31, 1995 $16,175,000 $28,739,402 $44,914,402
=========== =========== ===========
</TABLE>
<PAGE> 21
SCHEDULE III
(Continued)
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Buildings,
Furniture
and
Equipment
---------
<S> <C>
Accumulated Depreciation:
- -------------------------
Balance, January 1, 1993 $ 7,361,895
Provision for the year ended
December 31, 1993 1,350,550
-----------
Balance, December 31, 1993 8,712,445
Provision for the year ended
December 31, 1994 716,572
-----------
Balance, December 31, 1994 9,429,017
Provision for the year ended
December 31, 1995 713,054
-----------
Balance, December 31, 1995 $10,142,071
===========
</TABLE>
<PAGE> 22
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P. (the "Partnership") has no
directors or executive officers of its own.
National Partnership Investments Corp. ("NAPICO" or the "Managing General
Partner") is a wholly-owned subsidiary of Casden Investment Corporation, an
affiliate of The Casden Company. The following biographical information is
presented for the directors and executive officers of NAPICO with principal
responsibility for the Partnership's affairs.
CHARLES H. BOXENBAUM, 66, Chairman of the Board of Directors and Chief
Executive Officer of NAPICO.
Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was
a real estate broker with the Beverly Hills firm of Carl Rhodes Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate
Association, National Institute of Real Estate Brokers, Appraisal Institute,
various mortgage banking seminars, and the North American Property Forum held
in London, England. In 1963, he was the winner of the Snyder Award, the
highest annual award offered by the National Association of Real Estate Boards
for Best Exchange. He is one of the founders and a past director of the First
Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member of
the Board of Directors of the National Housing Council. Mr. Boxenbaum received
his Bachelor of Arts degree from the University of Chicago.
BRUCE E. NELSON, 44, President and a director of NAPICO.
Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved
in the identification, analysis, and negotiation of real estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his
Bachelor of Arts degree from the University of Wisconsin and is a graduate of
the University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.
ALAN I. CASDEN, 50, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Corp. Prior to that,
he was the president and chairman of Mayer Group, Inc., which he joined in
1975. He is also chairman of Mayer Management, Inc., a real estate management
firm. Mr. Casden has been involved in approximately $3 billion of real estate
financings and sales and has been responsible for the development and
construction of more than 12,000 apartment units and 5,000 single-family homes
and condominiums.
<PAGE> 23
Mr. Casden is a member of the American Institute of Certified Public
Accountants and of the California Society of Certified Public Accountants. Mr.
Casden is a member of the advisory board of the National Multi-Family Housing
Conference, the Multi-Family Housing Council, and the President's Council of
the California Building Industry Association. He also serves on the advisory
board to the School of Accounting of the University of Southern California. He
holds a Bachelor of Science degree from the University of Southern California.
HENRY C. CASDEN, 52, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden
Company, as well as a director of NAPICO since February 1988. He became
secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of
counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould.
From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm
of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly
Hills law firm of Fink & Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BRIAN D. GOLDBERG, 32, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
SHAWN HORWITZ, 36, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President for approximately one year of Star Sub
Shops, Inc., a corporation engaged in the business of selling fast food
franchises, was an audit manager in the real estate industry group for
Altschuler, Melvoin & Glasser for six years, and was an auditor with Arthur
Young & Co. for three years.
Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.
BOB SCHAFER, 54, Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years.
Mr. Schafer is a member of the California Society of Certified Public
Accountants. He holds a Bachelor of Science degree in accounting from Woodbury
University, Burbank, California.
<PAGE> 24
PATRICIA W. TOY, 66, Senior Vice President - Communications and Assistant
Secretary
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 35, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr.
Walther worked in the San Francisco law firm of Browne and Kahn which
specialized in construction litigation. Mr. Walther received his Bachelor of
Arts Degree in Political Science from the University of California, Santa
Barbara and is a graduate of the University of California, Davis, School of
Law. He is a member of the State Bar of Hawaii.
<PAGE> 25
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS:
In accordance with the Partnership Agreement, certain fees and reimbursements
are paid to the general partners and their affiliates as follows:
(a) A partnership management fee of $50,000 annually is paid to the Managing
General Partner. This fee is included in general and administrative
expenses for 1995, 1994 and 1993.
(b) A property management fee equal to 3% (5% prior to February 1, 1995) of
collected revenues was paid to an affiliate of the Managing General
Partner. The property management fees for the years ended December 31,
1995, 1994 and 1993 were $181,375, $273,130 and $257,142, respectively.
On January 1, 1996, property management was transferred to an
unaffiliated agent, who manages the property for a fee of 3% of rental
revenues. Additionally, the Partnership paid approximately $41,700,
$21,200 and $53,500 for the years ended December 31, 1995, 1994 and
1993, respectively, to an affiliate of the Managing General Partner for
maintenance services.
(c) Payments in the amount of approximately $376,000 were made to an
affiliate of the Managing General Partner, in connection with earthquake
related repairs during the year ended December 31, 1994. These amounts
have been included in provision for earthquake damage for the year ended
December 31, 1994.
(d) 1% of distributions (as defined in the Partnership Agreement) is payable
quarterly to the Managing General Partner.
(e) In addition, the Partnership is obligated to pay fees to the Managing
General Partner or its affiliates upon sale of the Property based upon
the form of such sale. The payment of such fees are subordinated to
certain preferred returns to the Limited Partners.
At December 31, 1995, $150,000 was estimated or due to the Non-Managing General
Partner for reimbursement of professional fees paid on behalf of the
Partnership in connection with issues raised in the Memorandum of
Understanding.
At December 31, 1994, approximately $91,000 was due the Managing General
Partner for reimbursement of expenses paid on behalf of the Partnership. This
amount was paid in 1995.
ITEM 12. SECURITY OF OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
(a) Security of Ownership of Certain Beneficial Owners
The General Partners own all of the outstanding general partnership
interests of the Partnership; no person is known to own beneficially
in excess of 5% of the outstanding limited partnership interests.
<PAGE> 26
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has no officers, directors, or employees of its own. All of
its affairs are managed by the Managing General Partner. The transactions with
the Managing General Partner are primarily in the form of fees paid by the
Partnership to the General Partners or their affiliates for services rendered
to the Partnership, as discussed in Item 11 and in the notes to the
accompanying financial statements.
PART IV.
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORTS ON FORM 8-K:
FINANCIAL STATEMENTS
Reports of Independent Public Accountants.
Balance Sheets as of December 31, 1995 and 1994.
Statements of Income for the years ended December 31, 1995, 1994 and 1993.
Statements of Partners' Capital (Deficiency) for the years ended December 31,
1995, 1994 and 1993.
Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993.
Notes to Financial Statements.
FINANCIAL STATEMENT SCHEDULE:
Schedule III - Real Estate and Accumulated Depreciation, December 31, 1995.
The remaining schedules are omitted because any required information is
included in the financial statements and notes thereto, or they are not
applicable or not required.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not
incorporated. The Partnership Agreement was filed with Form S-11
Registration #33-22857 incorporated herein by reference.
(10) Material contracts: The registrant is not party to any material
contracts, other than the Amended and Restated Certificate and Agreement
of Limited Partnership dated September 8, 1988 and the contracts
representing the Partnership's acquisition of its apartment project as
previously filed at the Securities Exchange Commission, File #33-22857
which is hereby incorporated by reference.
REPORTS ON FORM 8-K
A report on Form 8-K dated January 30, 1995, was filed with the Securities and
Exchange Commission. This Form 8-K disclosed a change in the registrant's
independent public accountant for the year ending December 31, 1994.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 2,738,045
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,753,147
<PP&E> 44,914,402
<DEPRECIATION> 10,142,071
<TOTAL-ASSETS> 37,683,178
<CURRENT-LIABILITIES> 359,359
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 36,817,755
<TOTAL-LIABILITY-AND-EQUITY> 37,684,178
<SALES> 0
<TOTAL-REVENUES> 5,682,075
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,183,739
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,498,336
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,498,336
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,498,336
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
