<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
[Fee Required]
For the fiscal year ended
December 31, 1997
or
[ ] Transition Report to Section 13 or 15(d) of the Securities
Exchange Act of 1934
[Fee Required]
For the transition period from _______to_______
Commission File Number
33-22908-A
NORTH BY NORTHEAST, LTD.
(Exact name of Registrant as specified in its charter)
Tennessee 62-1356792
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number.)
One Belle Meade Place, 4400 Harding Road, Suite 500, Nashville,
Tennessee 37205
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (615) 292-1040
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for at least the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is
not contained herein, and will not be contained, to the best of the
registrant's knowledge, in definitive proxy of information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
[X]
The aggregate sales price of the Units of Limited Partnership
Interest to non-affiliates was $1,875,000 as of February 28, 1998.
This does not reflect market value, but is the price at which these
Units of Limited Partnership Interest were sold to the public.
There is no current market for these Units.
DOCUMENTS INCORPORATED BY REFERENCE
Documents Incorporated by Reference in Part IV:
Prospectus of Registrant, dated September 1, 1988, as filed
pursuant to Rule 424(b) of the Securities and Exchange Commission.
<PAGE>
PART I
Item 1. Business
North by Northeast, Ltd. (the "Registrant"), is a Tennessee
limited partnership organized on June 27, 1988, pursuant to the
provisions of the Tennessee Uniform Limited Partnership Act,
Chapter 2, Title 61, Tennessee Code Annotated, as amended. The
general partner of Registrant is 222 North, Ltd., whose general
partners are 222 Partners, Inc., Steven D. Ezell, and Michael A.
Hartley.
The Registrant's primary business is to participate as a
general partner in North By Northeast Land Partners (the "Land
Partnership"), a general partnership formed with Reveille
Industrial #3 Limited Partnership ("Reveille"), a Trammell Crow
entity. The Land Partnership acquires, develops and disposes of
certain real properties near Indianapolis, Indiana (the
"Property"). In 1994, the Registrant also acquired a limited
partnership interest in Northeast Building IV, L.P., an
unaffiliated Indiana limited partnership. Northeast Building IV
purchased land and constructed, leased and sold a warehouse
building in 1995.
The Registrants' investment objectives are preservation of
capital and capital appreciation through investing in partnerships
that invest in real estate which will appreciate through the
passage of time, growth in the surrounding areas and the
development of the Properties prior to resale.
Financial Information About Industry Segment
The Registrant's activity, investment in partnerships that
invest in land, is within one industry segment and geographical
area. Therefore, financial data relating to the industry segment
and geographical area is included in Item 6 - Selected Financial
Data.
Narrative Description of Business
Due to the nature of the Registrant's business, the activity
of the Registrant revolves around the operations of the Land
Partnership.
North by Northeast Land Partners
As of December 31, 1997, the Land Partnership owned
approximately 8 acres of land (the "Property") in the Town of
Fishers, Hamilton County, Indiana, just outside the Indianapolis
city limits. The majority of the development of the Property was
completed in 1993. All other development on the Property pertained
to sales and included grading and other sitework and extending
roads and utilities.
Approximately 5 acres of the property are zoned for small
business use or warehouse use and 3 acres are zoned for commercial
use. The portion zoned for small business or warehouse use
continues to be surrounded by a significant amount of competition.
The largest competition for land sales and build-to-suit type sales
is Crosspointe, a 300 acre business park at the northwest corner of
Interstate 69 and 96th Street. In addition, Exit 5 Business Park,
two miles north of the Property has competitive land. Castleton
Business Park, one-half mile south of the Property, is the largest
competitor for leased space. The Land Partnership's Property
offers better access to purchasers and pricing is similar.
Wal-Mart and Sam's Wholesale continue to bring heavy traffic
to the area. The widening of 96th Street to five lanes by the Town
of Fishers has also attracted many potential buyers to the area.
There is little competition within the Castleton area for the
approximately 3 acres zoned for commercial use at North By
Northeast. While a few smaller parcels are available in the
vicinity of the Castleton Square Mall, approximately 1.5 miles
southeast of the property, the majority of the undeveloped land has
been absorbed by strip center development that has occurred over
the last ten years. Hence, large, zoned parcels of vacant land are
scarce. Approximately 30 acres across 96th Street are under
development for retail use and will be competition for the Land
Partnership.
The majority of the proceeds used to invest in the Land
Partnership were from a $4,719,375 participating mortgage note (the
"Lender Financing") from North Lenders, L.P. (the "Lender"), an
affiliated partnership sharing the same General Partner. The
principal balance accrued interest at a simple interest rate of 10%
per annum. The loan was retired in full on 12-31-97. The
Registrant was not required to make any payments with respect to
the Lender Financing, except upon the sale, exchange or
condemnation of all or any portion of the Property. From sale
proceeds, the Lender received a priority return of interest and
principal, and 50% of the "Net Revenues", if any. Net revenues, as
defined by the participating loan agreement, represent the
difference between cash proceeds earned and the following, in this
order: 1) accrued but unpaid interest and applicable principal
balances; 2) accrued preferred return (12%) on the net offering
proceeds of the Registrant; and 3) the applicable equity balance.
The Registrant has no employees. The Registrant's and the
Land Partnership's administration services are being provided under
a contractual agreement with Landmark Realty Services Corporation,
an affiliate of the general partner.
Item 2. Properties
As of December 31, 1997, the Land Partnership owned
approximately 8 acres of land in the Town of Fishers, Hamilton
County, Indiana, just outside the Indianapolis city limits. The
property lies at the intersection of Interstate 69 and 96th Street.
During 1989, the Property was annexed by the Town of Fishers and
zoned for interstate business allowing for the intended
development.
Item 3. Legal Proceedings
Registrant is not a party to, nor is any of Land Partnership's
property the subject of, any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
The security holders of Registrant did not vote on any matter
during the fiscal year covered by this report.
PART II
Item 5. Market for Registrant's Units of Limited Partnership
Interest and Related Security Holder Matters
There is no established market for the units and it is not
anticipated that any will exist in the future. As of February 28,
1998, there were 154 holders of record of the 1,875 units of
limited partnership interest.
In 1997, 1996, and 1995, $221,386, $199,999 and $1.6 million
respectively, were paid to the Lender as accrued interest
and applicable principal in accordance with the Lender Financing.
In 1995, $988,870 was distributed to the partners of the
Registrant. In 1996 and 1997, there were no distributions.
There are no material restrictions upon Registrant's present
or future ability to make distributions in accordance with the
provisions of Registrant's Limited Partnership Agreement, other
than available resources.
<PAGE>
Item 6. Selected Financial Data
For the Year Ended
December 31,
1997 1996 1995 1994 1993
Total revenues $ 59,936 4,775 687,924 1,242,420 602,688
Net earnings(loss) 20,583 (30,822) 11,477 748,885 267,559
Net earnings (loss)
per limited
partner unit - (16.44) - 370.15 142.70
Total assets 223,849 303,741 503,952 2,467,183 4,995,825
Notes payable
to affiliate - 183,889 346,678 1,325,513 2,863,565
Distributions - - 988,870 1,451,734 189,394
Distributions per
limited partner
unit - - 385 745 -
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Due to the nature of the Registrant, the majority of its
activity on a regular basis is to accrue interest payable on the
Lender Financing and to reflect the activity of the investments in
the Land Partnership and Northeast Building IV.
Sales
In 1997, the Land Partnership sold approximately 2 acres for
$250,000. The Land Partnership distributed $110,000 to The
Registrant. The Registrant then made a $100,000 principal payment
on the Lender Financing and paid all accrued interest through the
sale date. An additional principal payment of $83,889 was paid at
year end from borrowed funds, therefore retiring the loan in full.
There were no land sales at the Land Partnership in 1996.
In 1995, the Land Partnership sold approximately 20 acres for
$3,209,564. Approximately $300,000 was retained for development
and operating expenses and the remaining $2.5 million in net
proceeds were distributed to the partners. Also in 1995, Northeast
Building IV sold its land and building, and the Registrant received
approximately $485,000, resulting in a $174,000 gain on its
original $310,000 investment.
These Land and Building partnership distributions enabled the
Registrant to make interest and principal payments on the Lender
Financing of $1.6 million and to distribute approximately
$1 million to its partners in 1995.
Analysis of Operations
Overall operations of the Registrant remained comparable to
prior years except for the fluctuations in equity in income of
partnerships and interest expense. The equity in income of
partnerships is directly related to land sales at the Land
Partnership and the involvement in 1995 of Northeast
Building IV. Please refer to Item 14 and the separate Financial
Statements of the Land Partnership.
Interest expense includes interest accrued on the principal
balance and additional interest, if any, as defined in Item 1. The
Registrant paid additional interest of $17,835 and $622,696 in
1997 and 1995 respectively. No additional interest was paid in
1996. Accrued interest expense has declined through the years due
to the reduction in principal balances.
Financial Position and Liquidity
At February 28, 1998, the Registrant had $32,279 in cash and
cash equivalents to meet its 1998 operational needs which are
expected to remain comparable to 1997. Therefore, the General
Partner believes that the present cash balance will be sufficient
to cover the operating expenses for 1998.
We have considered the impact of the Year 2000 issues on our
computer systems and applications and developed a remediation plan.
We expect the cost of upgrading computers and software to be
immaterial to the Partnership.
Item 8. Financial Statements and Supplementary Data
The Financial Statements required by Item 8 are filed at the
end of this Report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Registrant does not have any directors or officers. 222
North, Ltd. is the general partner. Steven D. Ezell, Michael A.
Hartley and 222 Partners, Inc. are the general partners of the
general partner and as such have general responsibility and
ultimate authority in matters affecting Registrant's business.
The General Partners of 222 North, Ltd. are as follows:
Steven D. Ezell
Steven D. Ezell, age 45, is a general partner of 222 North,
Ltd. He is the President and sole shareholder of 222 Partners,
Inc. He has been an officer of 222 Partners, Inc. from September
17, 1986 through the current period. Mr. Ezell is President and
50% owner of Landmark Realty Services Corporation. For the prior
four years, Mr. Ezell was involved in property acquisitions for
Dean Witter Realty Inc. in New York City, most recently as Senior
Vice President. Steven D. Ezell is the son of W. Gerald Ezell.
Michael A. Hartley
Michael A. Hartley, age 38, is a general partner of 222 North,
Ltd. He is the Secretary/Treasurer and a Vice President of 222
Partners, Inc. He has been an officer of 222 Partners, Inc. from
September 17, 1986 through the current period. Mr. Hartley is Vice
President and 50% owner of Landmark Realty Services Corporation.
Prior to joining Landmark in 1986, Mr. Hartley was Vice President
of Dean Witter Realty Inc., a New York- based real estate
investment firm.
222 Partners Inc.
222 Partners, Inc. was formed in September, 1986 and serves as
general partner for several other real estate investment limited
partnerships. Steven D. Ezell is the sole shareholder of 222
Partners, Inc. The directors of 222 Partners, Inc. are W. Gerald
Ezell, Steven D. Ezell, and Michael A. Hartley. All officers are
elected by the Board of Directors and serve until their successors
are elected and qualified.
Other directors of 222 Partners, Inc. are as follows:
W. Gerald Ezell, age 67, serves on the Board of Directors of
222 Partners, Inc. Until November, 1985, Mr. Ezell had been, for
over 20 years, an agency manager for Fidelity Mutual Life Insurance
Company and a registered securities principal of Capital Analysts
Incorporated, a wholly owned subsidiary of Fidelity Mutual Life
Insurance Company.
<PAGE>
Item 11. Executive Compensation
During 1997, Registrant was not required to and did not pay
remuneration to any executives, partners of the general partner or
any affiliates, except as set forth in Item 13 of this report,
"Certain Relationships and Related Transactions."
The general partner does participate in the profits, losses
and distributions of the Registrant as set forth in the Partnership
Agreement.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
As of February 28, 1998 no person or "group" (as that term is
used in Section 13(d) (3) of the Securities Exchange Act of 1934)
was known by the Registrant to beneficially own more than five
percent of the units of Registrant.
As of the above date, the Registrant knew of no officers or
directors of 222 Partners, Inc. that beneficially owned any of the
units of the Registrant.
There are no arrangements known by the Registrant, the
operation of which may, at a subsequent date, result in a change in
control of the Registrant.
Item 13. Certain Relationships and Related Transactions
No affiliated entities have, for the year ended December 31,
1997, earned or received compensation or payments for services from
the Registrant in excess of $60,000. For a list of all
transactions paid to affiliates for the Registrant and the Land
Partnership see Note 2 to the Financial Statements.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) (1) Financial Statements
Independent Auditors' Report F-1
Financial Statements
Balance Sheets F-2
Statements of Operations F-3
Statements of Partners' Equity F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
(3) Exhibits
3 Amended and Restated Certificate and Agreement of
Limited Partnership, incorporated by reference to
Exhibit A1 to the Prospectus of Registrant dated
September 1, 1988 filed pursuant to Rule 424 (b)
of the Securities and Exchange Commission.
10A Loan Agreement by and among North By Northeast,
Ltd. and North Lenders, L.P., incorporated by
reference to Exhibit 10.1 to Registrant's Form S-
18 Registration Statement as filed on July 19,
1988.
10B Deed of Trust and Security Agreement by and among
North Lenders, L.P. and the Registrant,
incorporated by reference to exhibit 10.2 of the
Registrant's Form S-18 Registration Statement as
filed on July 19, 1988.
10C Participating Mortgage Note of North By Northeast,
Ltd. to North Lenders, L.P., incorporated by
reference to Exhibit 10.3 to Registrant's Form S-
18 Registration Statement as filed on July 19,
1988.
22 Subsidiaries-Registrant has no subsidiaries.
27 Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last
quarter of 1997.
(c) See Exhibits listed in Item 14(a) (3) above.
(d) Financial Statements of subsidiaries not consolidated.
North By Northeast Land Partners
Independent Auditors' Report M-1
Balance Sheets M-2
Statements of Earnings M-3
Statements in Partners' Equity M-4
Statements of Cash Flows M-5
Notes to Financial Statements M-6
All other Schedules have been omitted because they are
inapplicable, not required or the information is included in the
Financial Statements or notes thereto.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
NORTH BY NORTHEAST, LTD.
By: 222 North, Ltd.
General Partner
DATE: March 31, 1998 By: /s/ Steven D. Ezell
General Partner
DATE: March 31, 1998 By: /s/ Michael A. Hartley
General Partner
By: 222 Partners, Inc.
General Partner
DATE: March 31, 1998 By: /s/ Michael A. Hartley
Secretary/Treasurer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
NORTH BY NORTHEAST, LTD.
By: 222 North, Ltd.
General Partner
DATE: March 31, 1998 By: /s/ Steven D. Ezell
General Partner
DATE: March 31, 1998 By: /s/ Michael A. Hartley
General Partner
By: 222 Partners, Inc.
General Partner
DATE: March 31, 1998 By: /s/ Michael A. Hartley
Secretary/Treasurer
Supplement Information to be Furnished with Reports filed
Pursuant to Section 15(d) of the Act by Registrant Which Have Not
Registered Securities Pursuant to Section 12 of the Act:
No annual report or proxy material has been sent to security
holders.
<PAGE>
Independent Auditors' Report
The Partners
North By Northeast, Ltd.:
We have audited the accompanying balance sheets of North By
Northeast, Ltd. (a limited partnership) as of December 31, 1997 and
1996, and the related statements of operations, partners' equity,
and cash flows for each of the years in the three-year period ended
December 31, 1997. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of North
By Northeast, Ltd. at December 31, 1997 and 1996, and the results
of its operations and its cash flows for each of the years in the
three-year period ended December 31, 1997, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Nashville, Tennessee
January 30, 1998
F-1
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NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Balance Sheets
December 31, 1997 and 1996
Assets 1997 1996
Cash and cash equivalents (note 4) $ 279 29,358
Investment in land partnership
(note 3) 223,570 274,383
Total assets $ 223,849 303,741
Liabilities and Partners' Equity
Liabilities:
Note payable to affiliate (note 4) $ - 183,889
Accounts payable to affiliate(note 2) 88,000 -
Accrued interest payable to
affiliate (note 4) - 4,586
Total liabilities 88,000 188,475
Partners' equity:
Limited partners (1,875 units
outstanding) 370,784 370,784
General partner (234,935) (255,518)
Total Partners' equity 135,849 115,266
Commitment(note 3)
Total liabilities and
partners' equity $ 223,849 303,741
See accompanying notes to financial statements.
F-2
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NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Statements of Operations
Years ended December 31, 1997, 1996 and 1995
1997 1996 1995
Revenues:
Equity in income of
partnerships (note 3) $ 59,187 2,909 509,134
Gain on sale of partnership
(note 3) - - 174,382
Interest income 749 1,866 4,408
Other income - - -
Total revenues 59,936 4,775 687,924
Expenses:
Legal and accounting
(note 2) 5,975 4,467 8,186
General and administrative 467 520 1,598
Interest expense (note 4) 32,911 30,610 666,663
Total expenses 39,353 35,597 676,447
Net earnings
(loss) $ 20,583 (30,822) 11,477
Net earnings (loss) allocated to:
General partner $ 20,583 - 11,477
Limited partners $ - (30,822) -
Net loss per
limited partner unit $ - (16.44) -
Weighted average
units outstanding 1,875 1,875 1,875
See accompanying notes to financial statements.
F-3
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NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Statements of Partners' Equity
Years ended December 31, 1997, 1996 and 1995
Limited General
partners partner Total
Units Amounts
Balance at
December 31, 1994 1,875 $ 1,123,481 - 1,123,481
Distributions
to partners (note 5) - (721,875) (266,995) (988,870)
Net earnings - - 11,477 11,477
_______ _______ _______ _______
Balance at
December 31, 1995 1,875 401,606 (255,518) 146,088
Net loss - (30,822) - (30,822)
_______ _______ _______ _______
Balance at
December 31, 1996 1, 875 370,784 (255,518) 115,266
Net earnings - - 20,583 20,583
------- ------- ------- --------
Balance at
December 31, 1997 1,875 $ 370,784 (234,935) 135,849
See accompanying notes to financial statements.
F-4
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NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Statements of Cash Flows
Years ended December 31, 1997, 1996 and 1995
1997 1996 1995
Cash flows from operating activities:
Net earnings (loss) $ 20,583 (30,822) 11,477
Adjustments to reconcile
net earnings (loss) to
net cash provided (used)
by operating activities:
Equity in income
of partnerships (59,187) (2,909) (509,134)
Gain on sale of
partnership - - (174,382)
Decrease in accrued
interest payable
to affiliate (4,586) (6,601) (6,972)
Increase (decrease) in
accounts payable to
affiliates 88,000 - (31)
Net cash provided (used)
by operating activities 44,810 (40,332) (679,042)
Cash flows from investing
activities - distributions
from partnerships 110,000 190,000 2,636,018
Cash flows from financing activities:
Distributions to partners - - (988,870)
Payment of notes payable
to affiliates (183,889) (162,789) (978,835)
Net cash used by
financing activities (183,889) (162,789) (1,967,705)
Net decrease in
cash and cash
equivalents (29,079) (13,121) (10,729)
Cash and cash equivalents
at beginning of year 29,358 42,479 53,208
Cash and cash equivalents
at end of year $ 279 29,358 42,479
See accompanying notes to financial statements.
F-5
<PAGE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Statements of Cash Flows, Continued
Years ended December 31, 1997, 1996 and 1995
Supplemental Disclosures of Cash Flow Information:
1997 1996 1995
Cash paid during the
year for interest $ 37,497 37,210 673,635
<PAGE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Notes to Financial Statements
December 31, 1997 and 1996
(1) Summary of Significant Accounting Policies
(a) Organization
North by Northeast, Ltd. (the Partnership) was
organized on June 27, 1988 to participate as a
general partner in North By Northeast Land
Partners (the Land Partnership) and other
affiliated partnerships. On October 18, 1988, the
Land Partnership acquired an undeveloped tract of
land in Indianapolis, Indiana for the purpose of
developing and selling parcels of real estate.
The general partner is 222 North, Ltd., whose
general partners are 222 Partners, Inc., Steven D.
Ezell and Michael A. Hartley. The Partnership
prepares financial statements and Federal income
tax returns on the accrual method and includes
only those assets, liabilities and results of
operations which relate to the business of the
Partnership. In the event that the Partnership
has short-term cash deficiencies, the General
Partner can defer the collection of fees for
certain related party expenses or grant interest-
free loans from related parties until cash becomes
available.
(b) Estimates
Management of the Partnership has made estimates and
assumptions to prepare these financial statements in
accordance with generally accepted accounting principles.
Actual results could differ from those estimates.
(c) Cash and Cash Equivalents
The Partnership considers all short-term investments with
original maturities of three months or less at the date of
purchase to be cash equivalents.
Cash belonging to the Partnership is combined in an account
with funds from other partnerships related to the general
partner.
(d) Investment in Partnerships
Investment in North by Northeast Land Partners (Land
Partnership) is accounted for using the equity method.
Accordingly, the Partnership's investment has been adjusted
to reflect its proportionate share of profits, losses, and
distributions. Interest incurred on notes payable
attributable to investment in the Land Partnership was
capitalized when the Land Partnership was actively
developing its land. Subsequent interest is
F-6
<PAGE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
expensed as the development project is substantially
complete. Capitalized interest is amortized as land
parcels are sold on the basis of the relative sales value
of the parcels.
Investment in Northeast Building IV, L.P. was accounted for
using the cost method and was sold in 1995.
(e) Income Taxes
No provision has or will be made for Federal or state
income taxes since such taxes are the personal
responsibility of the partners. Annually, the partners
receive, from the Partnership, IRS Form K-1's which provide
them with their share of taxable income or losses,
deductions, and other tax information. There are no
differences in the book and tax basis of the Partnership's
assets and liabilities.
(f) Partnership Allocations
Net profits, losses and distributions of cash flow of the
Partnership are allocated to the partners in accordance
with the Partnership agreement as follows:
Net profits are allocated first to any partner with a
negative balance in their capital account, determined at
the end of the taxable year as if the Partnership had
distributed cash flow, in proportion to the negative
capital balance account of all partners until no partner's
capital account is negative. Net profit allocations are
then made to the limited partners up to the difference
between their capital account balances and the sum of their
adjusted capital contributions (capital balance, net of
cumulative cash distributions in excess of preferred
returns - 12% annual cumulative return on capital
contributed). Any remaining net profit allocations are
then made to the limited partners until the taxable year in
which cumulative profits to the limited partners equal
their adjusted capital contribution plus an unpaid
preferred return (12% annual cumulative return on capital
contributed). Net profits are then allocated to the
general partner until the ratio of the general partner's
capital account balance to the capital account balances, in
<PAGE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
excess of adjusted capital contributions and unpaid
preferred return, of all limited partners is 27% to 73%.
Thereafter, profits are generally allocated 27% to the
general partner and 73% to the limited partners. Net
losses are allocated to the partners in proportion to their
positive capital accounts.
Partnership distributions are allocated 99% to the limited
partners and 1% to the general partner in an amount equal
to their preferred return (12% annual cumulative return on
capital contributed), 99% to the limited partners and 1% to
the general partner until the limited partners have
received an amount equal to their adjusted capital
contributions, and then 73% to the limited partners and 27%
to the general partner.
(2) Related Party Transactions
The general partner and its affiliates have been actively
involved in managing the investments in partnerships.
Affiliates of the general partner receive fees or
commissions for performing certain services. Compensation
paid for these services during 1997, 1996 and 1995 is as
follows:
1997 1996 1995
Accounting fees $ - 1,600 1,500
The accounts payable to affiliates at December 31,
1997 represents two demand notes payable to North
by Northeast Land Partners, and 222 North, L.P. in
the amounts of $35,000 and $53,000, respectively.
Both notes are non-interest bearing and are
payable on demand.
(3) Investment in Land Partnership
The Partnership has a 50% ownership interest in North By
Northeast Land Partners, a general partnership. The
remaining 50% is owned by an unrelated affiliate of
Trammell Crow Company. Pursuant to the partnership
agreement, the Trammell Crow affiliate will provide
development supervision for the acquisition of land and
construction of improvements. At December 31, 1997,
development on the land is substantially complete.
<PAGE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Notes to Financial Statements
(3) Investment in Land Partnership (continued)
Summarized information at December 31, 1997 and 1996 and
for the years ended December 31, 1997, 1996, and 1995, is
presented below (in thousands):
Assets 1997 1996
Cash and cash equivalents $ 41 231
Restricted cash 1 1
Accounts receivable affiliate 35 -
Land and improvements held for investment 499 642
Total assets $ 576 874
Liabilities and
Partners' Equity
Accounts payable $ - 7
Partners' equity 576 867
Total liabilities and
partners' equity $ 576 874
Operations for the Year
1997 1996 1995
Revenues:
Gain on sale of land
and improvements $ 88 - 1,097
Other 76 83 363
Total revenues 164 83 1,460
Operating expenses 46 77 97
Net earnings $ 118 6 1,363
Cash Flows for the Year
1997 1996 1995
Cash provided (used) by:
Operating activities $ 220 (65) 2,816
Investing activities - 54 (4)
Financing activities (410) (190) (2,561)
Net (decrease) increase in cash
and cash equivalents $ (190) (201) 251
<PAGE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Notes to Financial Statements
(3) Investment in Land Partnership (continued)
A summary of activity in the Partnership's
investment account and a reconciliation of the
partner's equity account on the books of the Land
Partnership and the Partnership's investment
account follows (in thousands):
1997 1996 1995
Balances, beginning of year $ 224 411 1,862
Net earnings allocated
to Partnership 60 3 687
Distributions (110) (190) (2,138)
Balance end of year $ 174 224 411
Capitalized construction
period interest at year end 50 50 50
Investment in North by
Northeast Land Partners $ 224 274 461
The Partnership is committed to contribute an additional
$254,862 to the Land Partnership. However, due to retained
proceeds from property sales, management of the Land
Partnership does not anticipate a need for these funds.
In 1995, the Partnership's interest in Northeast Building
IV, L.P. was sold for net proceeds of $485,330 resulting in
a gain of $174,382.
<PAGE>
NORTH BY NORTHEAST, LTD.
(A Limited Partnership)
Notes to Financial Statements
(4) Note Payable to Affiliate
The note payable to affiliate at December 31, 1996, represents
a long-term note payable to North Lenders, L.P., an affiliate
sharing the same general partner. The note was repaid in
1997.
(5) Distributions
For the year ended December 31, 1995, the
Partnership made distributions totaling $988,870.
Of this amount, $721,875 ($385 per unit) was
allocated to the limited partners. Distributions
to the general partner were $266,995 for the year
ended December 31, 1995. There were no
distributions in 1997 or 1996.
(6) Fair Value of Financial Instruments
At December 31, 1997 and 1996, the Partnership had
financial instruments including cash and cash
equivalents, accrued interest payable, accounts
payable to affiliate, and a note payable. The
carrying amounts of cash and cash equivalents,
accrued interest payable, and accounts payable to
affiliate approximate their estimated fair value
because of the short maturity of those financial
instruments.
The determination of the estimated fair value of
the note payable to affiliate was not practicable
as the note agreement does not provide for a
predictable cash payment stream.<PAGE>
Independent Auditors' Report
The Partners
North By Northeast Land Partners:
We have audited the accompanying balance sheets of North By
Northeast Land Partners (a general partnership) as of December 31,
1997 and 1996, and the related statements of earnings, partners'
equity, and cash flows for each of the years in the three-year
period ended December 31, 1997. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of North
By Northeast Land Partners at December 31, 1997 and 1996, and the
results of its operations and its cash flows for each of the years
in the three-year period ended December 31, 1997, in conformity
with generally accepted accounting principles.
As discussed in Note 1, the Partnership adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" on January 1, 1996.
KPMG Peat Marwick LLP
Nashville, Tennessee
January 30, 1998
M-1
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Balance Sheets
December 31, 1997 and 1996
Assets 1997 1996
Cash and cash equivalents (note 3) $ 41,168 230,840
Restricted cash (note 1) 1,000 1,000
Accounts receivable-affiliate (note 2) 35,000 -
Land and improvements held for investment
(note 3) 499,079 642,533
Total Assets $ 576,247 874,373
Liabilities and Partners' equity
Liabilities:
Accounts payable (note 2) $ 400 6,900
Total liabilities 400 6,900
Partners' equity:
North by Northeast, Ltd. 173,079 223,892
Reveille Industrial #3, L.P. 402,768 643,581
Total partners' equity 575,847 867,473
Commitments (note 2)
Total liabilities and
partners' equity $ 576,247 874,373
See accompanying notes to financial statements.
M-2
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Statements of Earnings
Years ended December 31, 1997, 1996 and 1995
1997 1996 1995
Revenues:
Sales of land and
improvements $ 250,000 - 3,209,564
Cost of land and
improvements sold (132,297) - (1,759,379)
Selling expenses (note 2) (29,557) - (353,843)
Gain on sale of land and
improvements 88,146 - 1,096,342
Other income:
Inducement fee (note 3) - - 253,805
Common area maintenance
income 10,923 50,628 73,650
Interest 2,992 20,209 28,262
Miscellaneous 61,699 12,355 7,714
Total other income 75,614 83,192 363,431
Total revenues 163,760 83,192 1,459,773
Expenses:
Partnership administration
fee (note 2) 6,000 6,000 6,000
Legal and accounting
(note 2) 19,166 29,606 19,418
Property management fees
(note 2) 6,000 6,000 6,000
Other land management fees
(note 2) 6,973 26,187 51,927
General and administrative
expenses 501 885 5,914
Property taxes 6,746 8,695 7,630
Total expenses 45,386 77,373 96,889
Net earnings $ 118,374 5,819 1,362,884
Net earnings allocated to:
North by Northeast,
Ltd. $ 59,187 2,910 687,284
Reveille Industrial
#3, L.P. $ 59,187 2,909 675,600
See accompanying notes to financial statements.
M-3
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Statements of Partners' Equity
Years ended December 31, 1997, 1996 and 1995
North By Reveille
Northeast, Industrial
Ltd. #3,L.P. Total
Balance at
December 31, 1994 $ 1,861,781 388,372 2,250,153
Distributions to partners (2,138,083) (423,300) (2,561,383)
Net earnings 687,284 675,600 1,362,884
Balance at
December 31, 1995 410,982 640,672 1,051,654
Distributions to partners (190,000) - (190,000)
Net earnings 2,910 2,909 5,819
Balance at
December 31, 1996 223,892 643,581 867,473
Distributions to partners (110,000) (300,000) (410,000)
Net earnings 59,187 59,187 118,374
--------- -------- -------
Balance at
December 31, 1997 $ 173,079 402,768 575,847
See accompanying notes to financial statements.
M-4
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Statements of Cash Flows
Years ended December 31, 1997, 1996 and 1995
1997 1996 1995
Cash flows from operating activities:
Net earnings $ 118,374 5,819 1,362,884
Adjustments to reconcile
net earnings to net cash
provided (used) by operating
activities:
Cost of land and
improvements sold 132,297 - 1,759,379
Cost of land
improvements - (44,610) (247,599)
Refund of escrow
deposits 11,157 - -
Decrease (increase) in
restricted cash - 26,539 (27,539)
(Increase) decrease in
accounts receivable (35,000) - 2,769
Decrease in
accounts payable (6,500) (52,360) (33,683)
Net cash provided (used)
by operating
activities 220,328 (64,612) 2,816,211
Cash flows from investing activities-
decrease (increase) in certificate
of deposit - 53,576 (4,152)
Cash flows from financing
activities - distributions
to partners (410,000) (190,000) (2,561,383)
Net (decrease) increase
in cash and cash
equivalents (189,672) (201,036) 250,676
Cash and cash equivalents
at beginning of year 230,840 431,876 181,200
Cash and cash equivalents
at end of year $ 41,168 230,840 431,876
Supplemental Disclosure of Noncash Financing and Investing
Activities:
During 1995, the Partnership distributed to North by Northeast,
Ltd. an interest in a limited partnership investment received in a
sale of land and improvements held for investment. The limited
partnership had an estimated value of $310,948 which was the
partnership's basis in the investment.
See accompanying notes to financial statements.
M-5
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Notes to Financial Statements
December 31, 1997 and 1996
(1) Summary of Significant Accounting Policies
(a) Organization
North by Northeast Land Partners (the Partnership) was
organized by North by Northeast, Ltd. and Reveille Industrial
#3 Limited Partnership (RILP), an affiliate of Trammell Crow
Company (Trammell Crow), each acting as general partners and
each owning 50% of the partnership. The Partnership was
organized on October 18, 1988 for the purpose of acquiring,
developing and selling parcels of real estate near
Indianapolis, Indiana. The Partnership prepares financial
statements and Federal income tax returns on the accrual
method and includes only those assets, liabilities, and
results of operations which relate to the Partnership.
(b) Estimates
Management of the Partnership has made estimates and
assumptions to prepare these financial statements in
accordance with generally accepted accounting principles.
Actual results could differ from those estimates.
(c) Cash and Cash Equivalents
The Partnership considers all short-term investments with
original maturities of three months or less at the date of
purchase to be cash equivalents.
Cash belonging to the Partnership is combined in an account
with funds from other partnerships related to the general
partner.
(d) Restricted Cash
At December 31, 1997 and 1996, the partnership has restricted
cash balances of $1,000, representing retainage on land
improvements made to land sold.
M-6
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
(e) Land and Improvements Held for Investment
The Partnership acquired a tract of undeveloped land
representing approximately 169 acres. Land and improvements
held for investment is recorded at acquisition cost plus
certain carrying costs. Insurance and property taxes are
capitalized as carrying costs of the property during the
development stage of the property. Insurance and property
taxes are charged to expense once development is complete.
Approximately 8 and 10 acres remain at December 31, 1997 and
1996, respectively.
The Partnership adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of" on January 1, 1996. SFAS No. 121 requires
that long-lived assets to be disposed of be reported at the
lower of the carrying amount or fair value less estimated
costs to sell. The fair value of the assets can be determined
externally, using appraisals, or internally using discounted
future net cash flows. If such assets are considered
impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceeds the
fair value of the assets less estimated costs to sell.
Impairment is recognized through the establishment of an
allowance for impairment with a corresponding charge to
operations. Losses upon the sale of the assets are charged to
the allowance. Based upon management's analysis, the
Partnership's land and improvements held for investment does
not meet the definition of impairment under SFAS No. 121.
Accordingly, land and improvements held for investment is
recorded at cost with no allowance for impairment necessary.
The adoption of SFAS No. 121 did not have an impact on the
Partnership's financial position, results of operation, or
liquidity.
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
(f) Income Recognition
Income from sales of land and improvements held for investment
is generally recorded on the accrual basis when the buyer's
financial commitment is sufficient to provide economic
substance to the transaction, and when other criteria of SFAS
No. 66 "Accounting for Sales of Real Estate" are satisfied.
For sales of real estate where both cost recovery is
reasonably certain and the collectibility of the contract
price is reasonably assured, but the transaction does not meet
the remaining requirements to be recorded on the accrual
basis, profit is deferred and recognized under the installment
method, which recognizes profit as collections of principal
are received. If developments subsequent to the adoption of
the installment method occur which cause the transaction to
meet the requirements of the full accrual method, the
remaining deferred profit is recognized at that time. Any
losses on sales of real estate are recognized at the time of
the sale.
(g) Income Taxes
No provision has been made in the financial statements for
Federal income taxes, since such taxes are the responsibility
of the partners. The partnership is subject to a 6% state tax
on certain interest income. For the years ended December 31,
1997, 1996, and 1995, the Partnership had no state income tax
expense. Annually, the partners receive, from the
partnership, IRS Form K-1's which provides them with their
respective share of taxable income (or losses), deductions,
and other tax related information. At December 31, 1997 and
1996, there were no differences in the book and tax bases of
the Partnership's assets and liabilities.
(h) Partnership Allocations
Net profits, losses and distributions of cash flow of the
Partnership are allocated in accordance with the Partnership
agreement as follows:
Net profits are first allocated to the partners to offset any
cumulative net losses allocated to the partners, then to
offset any reductions to capital account balances caused by
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
prior allocations of losses. Any remaining profits are then
allocated to North by Northeast, Ltd. until the cumulative net
profits allocated to North by Northeast, Ltd. are equal to the
sum of its Preferred Return (11% of the outstanding balances
of Phase I development contributions), 10% of Phase I
development contributions, and any amounts distributed to
North by Northeast, Ltd. commencing on the date hereof and
ending on a date 90 days following the close of the fiscal
year. Any remaining profits are allocated to the partners in
proportion to their ownership interests.
Net losses are allocated first among the partners until the
cumulative losses allocated are equal to the cumulative
profits allocated to date, then among the partners in
proportion to their positive account balances. Any remaining
losses are allocated among the partners in proportion to their
ownership interests.
Partnership distributions from the cash proceeds from sales to
an affiliated venture are allocated first to pay any currently
required installments or payments of outstanding liabilities
and expenses of the Partnership which are not assumed by a
single partner or a purchaser of the project, if applicable,
and upon which either the Partnership or any partner has
personal liability, excluding capital loans, then to repay
capital loans, then to fund the construction reserve fund with
25% of cash proceeds from such sale until such fund is equal
to the total amount designated for the construction reserve
fund. Then distributions are allocated to North by Northeast,
Ltd. until North by Northeast, Ltd. has received an amount
equal to its preferred return, to the extent unpaid, then to
North by Northeast, Ltd. until North by Northeast, Ltd. has
received 110% of the sum of the then outstanding Phase I
Development Contribution. Any remaining cash distribution is
to be used to fund construction shortfall loans, together with
any interest thereon. Any remaining proceeds shall then be
divided between the partners in proportion to their ownership
interests.
Partnership distributions from the cash proceeds from sales to
a third-party venture are allocated as follows: 1)Out of the
portion of the proceeds of such sale equivalent to the
purchase price which would have been received had such
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
installments or payments of outstanding liabilities and
expenses of the Partnership which are not assumed by a single
partner or a purchaser of the project, if applicable, and upon
which either the Partnership or any partner has personal
liability, excluding capital loans, then to repay capital
loans, then to fund the construction reserve fund with the 25%
of cash proceeds from such sale until such fund is equal to
the total amount designated for the construction reserve fund.
Then distributions are allocated to North by Northeast, Ltd.
until North by Northeast, Ltd. has received an amount equal to
its preferred return, to the extent unpaid, then to North by
Northeast, Ltd. until North by Northeast, Ltd. has received
110% of the sum of the then outstanding Phase I Development
Contribution. Any remaining cash distribution is to be used
to fund construction shortfall loans, together with any
interest thereon. Any remaining proceeds shall then be
divided between the partners in proportion to their ownership
interests. 2) That portion of the proceeds from a sale to a
third-party venture which is equal to the third-party price
differential shall be distributed to North by Northeast, Ltd.
(and shall not apply toward the reduction of any preferred
return or return of Phase I Development Contribution). 3)
That portion of the proceeds from a sale to a third-party
venture which is in excess of the minimum purchase price for
the parcel sold as set forth in the closing schedule shall be
divided between the partners in proportion to their ownership
interests (and shall not apply toward the reduction of any
capital loan, preferred return, return of Phase I Development
Contribution, or Construction Shortfall loan).
(i) Reclassifications
Certain prior year amounts have been reclassified to conform
with the current year presentation.
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Notes to Financial Statements
(2) Related Party Transactions
The general partners and their affiliates have been actively
involved in managing the Partnership. Affiliates of the general
partners receive fees and commissions for performing certain
services. Expenses incurred for these services during 1997, 1996
and 1995 are as follows:
Payee Nature of Compensation 1997 1996 1995
Landmark Realty
Services
Corp. Administration fees $ 6,000 6,000 6,000
Property management fees 6,000 6,000 6,000
Sales commissions 2,500 - 45,852
Accounting fees 2,900 - 800
Year-end accounts payable 400 400 400
Trammell Crow
Company
RILP) Sales commissions 7,500 - 98,556
Development fees 1,786 6,780 7,270
Management fees - - 56,387
The Partnership has a receivable from North by Northeast, Ltd. for
$35,000 as of December 31, 1997. The receivable is non-interest
bearing and is payable on demand.
(3) Land and Improvements Held for Investment
The components of land and improvements held for investment
at December 31, are as follows:
1997 1996
Land and carrying costs $ 267,258 342,370
Land improvements 231,821 300,163
$ 499,079 642,533
The aggregate cost for Federal income tax purposes for land
and improvements held for investment was $499,079 and $642,533 at
December 31, 1997 and 1996, respectively.
(Continued)
<PAGE>
NORTH BY NORTHEAST LAND PARTNERS
(A General Partnership)
Notes to Financial Statements
(3) Land and Improvements Held for Investment (continued)
During the year ended December 31, 1995, one of the landowners
in the Partnership's development requested a change in its land
purchase contract to allow for additional outparcels. Management
of the Partnership negotiated and the Partnership received a fee of
$253,805 as consideration for allowing this change.
(4) Fair Value of Financial Instruments
At December 31, 1997 and 1996, the Partnership had financial
instruments including cash and cash equivalents, restricted cash,
accounts receivable and accounts payable. The carrying amounts of
these financial instruments approximate their fair value because of
the short maturity of such instruments.
(5) Subsequent Event
On January 23, 1998, the Partnership sold 2.17 acres of
land for gross sales proceeds of $255,000. These proceeds will be
retained to meet operating expenses.
<PAGE>
Exhibits filed to Item 14(a) (3):
NORTH BY NORTHEAST, LTD.
(A Tennessee Limited Partnership)
Exhibit Index
Exhibit
3 Amended and Restated Certificate and Agreement of Limited
Partnership, incorporated by reference to Exhibit A1 to
the Prospectus of Registrant dated September 1, 1988
filed pursuant to Rule 424 (b) of the Securities and
Exchange Commission.
10A Loan Agreement by and among North By Northeast, Ltd. and
North Lenders, L.P., incorporated by reference to Exhibit
10.1 to Registrant's Form S-18 Registration Statement as
filed on July 19, 1988.
10B Deed of Trust and Security Agreement by and among North
Lenders, L.P. and the Registrant, incorporated by
reference to Exhibit 10.2 of the Registrant's Form S-18
Registration Statement as filed on July 19, 1988.
10C Participating Mortgage Note of North By Northeast, Ltd.
to North Lenders, L.P., incorporated by reference to
Exhibit 10.3 to Registrant's Form S-18 Registration
Statement as filed on July 19, 1988.
22 Subsidiaries-Registrant has no subsidiaries.
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000835954
<NAME> NORTH BY NORTHEAST, LTD.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 279
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 223,849
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 135,849
<TOTAL-LIABILITY-AND-EQUITY> 223,849
<SALES> 0
<TOTAL-REVENUES> 59,936
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,442
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,911
<INCOME-PRETAX> (20,583)
<INCOME-TAX> 0
<INCOME-CONTINUING> (20,583)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,583)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
