SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-29987
Corporate Realty Income Trust I
(Exact name of registrant as specified in its charter)
Massachusetts 13-6931017
(State of organization) (I.R.S. Employer
identification No.)
388 Greenwich Street, 34th Floor, New York, New York 10013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 816-8237
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
<PAGE>
CORPORATE REALTY INCOME TRUST I
Index
Page No.
Part I Financial information 3
Balance Sheets --
March 31, 1996 and December 31, 1995 4
Statements of Income --
For the three months ended March 31, 1996 and 1995 5
Statements of Cash Flows --
For the three months ended March 31, 1996 and 1995 6
Notes to the Financial Statements 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II Other information 10
Signatures 11
<PAGE>
PART I. FINANCIAL INFORMATION
Item I. Financial Statements
The summarized financial information contained herein is unaudited; however, in
the opinion of management, all adjustments necessary for a fair presentation of
such financial information have been included.
<PAGE>
CORPORATE REALTY INCOME TRUST I
BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
ASSETS: (Unaudited)
<S> <C> <C>
Real estate, at cost:
Land $ 715,400 $ 715,400
Buildings 31,884,600 31,884,600
32,600,000 32,600,000
Less: accumulated depreciation 4,456,707 4,257,428
28,143,293 28,342,572
Cash and cash equivalents 884,448 531,435
Rent receivable - 206,510
Prepaid expenses 12,189 101,877
Deferred rent receivable 1,906,462 1,867,274
Deferred financing costs, net of
accumulated amortization of $126,446 in
1996 and $120,731 in 1995 99,712 105,427
----------- -----------
Total assets $31,046,104 $31,155,095
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY:
<S> <C> <C>
Liabilities:
Mortgage loans payable $15,454,396 $15,470,369
Accrued expenses 62,032 80,652
Due to affiliates 63,108 9,590
Dividends payable 353,772 353,772
----------- -----------
Total liabilities 15,933,308 15,914,383
----------- -----------
Shareholders' equity:
Shares of beneficial interest $.10 par value;
20,000,000 shares authorized; 1,010,776
shares issued and outstanding 101,078 101,078
Additional paid-in-capital 15,011,718 15,139,634
Retained earnings - -
----------- -----------
Total shareholder's equity 15,112,796 15,240,712
----------- -----------
Total liabilities and shareholders' equity $31,046,104 $31,155,095
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CORPORATE REALTY INCOME TRUST I
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Income:
Rental $ 855,817 $ 855,817
Dividend and interest 4,125 5,540
----------- -----------
859,942 861,357
----------- -----------
Expenses:
Interest 352,426 361,698
Depreciation 199,279 199,278
General and administrative 38,863 34,565
Annual advisor fee 43,518 42,217
----------- -----------
634,086 637,758
----------- -----------
Net income $ 225,856 $ 223,599
=========== ===========
Net income per share $ .22 $ .22
=========== ===========
Dividend per share $ .35 $ .35
=========== ===========
</TABLE>
See accompanying notes to financial statements
<PAGE>
CORPORATE REALTY INCOME TRUST I
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 225,856 $ 223,599
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of
deferred financing costs 204,994 204,911
Interest accrued into the balance
of the mortgage payable - 24,486
Changes in assets and liabilities:
Decrease in rent receivable 206,510 -
Decrease (increase) in prepaid expenses 89,688 (28,847)
(Decrease) increase in accrued expenses (18,620) 517
Increase in deferred rent receivable (39,188) (73,042)
Increase (decrease) in amount due to affiliate 53,518 (50,932)
Increase in financing costs - (2,463)
----------- -----------
Total adjustments 496,902 74,630
----------- -----------
Net cash provided by operating activities 722,758 298,229
----------- -----------
Cash flows from financing activities:
Principal payments on mortgage (15,973) (14,531)
Dividends paid to shareholders (353,772) (353,772)
----------- -----------
Net cash used in financing activities (369,745) (368,303)
----------- -----------
Net increase (decrease) in cash and cash equivalents 353,013 (70,074)
Cash and cash equivalents at beginning of period 531,435 766,945
----------- -----------
Cash and cash equivalents at end of period $ 884,448 $ 696,871
=========== ===========
</TABLE>
Supplemental disclosure of cash flow information:
Cash paid for interest during the three months ended March 31, 1996 and 1995
amounted to $209,503 and $360,264, respectively.
Non-cash transactions:
Dividends declared and unpaid as of March 31, 1996 and 1995 amounted to
$353,772.
See accompanying notes to financial statements.
<PAGE>
CORPORATE REALTY INCOME TRUST I
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
(Unaudited)
1. GENERAL
The accompanying financial statements and related notes of Corporate
Realty Income Trust I (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial reporting and
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, certain information and footnote disclosures normally included
in financial statements prepared under generally accepted accounting principles
have been condensed or omitted pursuant to such regulations. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of the Company's financial
position, results of operations and cash flows have been included. These
financial statements should be read in conjunction with the Company's Form 10-K
for the year ended December 31, 1995.
The amount of net income per share was calculated using the number of
shares outstanding of 1,010,776 for the three monhths ended March 31, 1996 and
1995. Dividends declared as of March 31, 1996 and 1995 amounted to $.35 per
share.
2. RENTAL INCOME
In accordance with the Financial Accounting Standards Board Statement
No. 13, "Accounting for Leases," the Company recognizes rental income on a
straight-line basis over the fixed term of the lease period. Rental income is
net of the rent due to Circuit City under the terms of the ground lease.
Deferred rent receivable represents unbilled future rentals. The following
reconciles rental income received to rental income recognized for the three
months ended March 31, 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Rental income received $846,629 $782,775
Deferred rent 39,188 73,042
-------- ---------
Rental income recognized $855,817 $855,817
======== =========
</TABLE>
<PAGE>
CORPORATE REALTY INCOME TRUST I
NOTES TO FINANCIAL STATEMENTS (CONT'D)
MARCH 31, 1996
(Unaudited)
3. TRANSACTIONS WITH AFFILIATES
The Company maintains an interest-bearing customer account with Smith
Barney Inc. For the three months ended March 31, 1996 and 1995, the Company
earned interest on this account of $4,125 and $5,540, respectively. For
purposes of these financial statements, the Company considers this account to
be cash.
The Company incurred expenses of $10,000 for the three months ended March
31, 1996 for administrative services performed by the Advisor which was unpaid
at March 31, 1996. The Advisor earned $43,518 of the annual advisor fee for
the three months ended March 31, 1996, which was unpaid as of such date.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996
Liquidity and Capital Resources
At March 31, 1996, the Company had cash of approximately $884,000 which was
invested in an interest bearing account. Of this amount, approximately
$418,000 represented a working capital reserve, $353,772 was reserved to pay
the quarterly dividend in May 1996 and the balance was reserved for operations.
The Company expects sufficient cash flow to be generated from operations to
meet its current operating and debt service requirements on a short-term and
long-term basis. The Company's only significant liabilities are mortgages
aggregating approximately $15,454,396, maturing at various dates in
approximately four to six years. The Company anticipates satisfying these
mortgages with the proceeds of refinancings or sales of the underlying
properties.
Results of Operations
Net income for the three months ended March 31, 1996 approximated that of
the corresponding period in 1995. However, actual rental income received
increased due to the increase in rental income from the Circuit City building
which became effective March 1, 1995. The Company completed the property
acquisition stage of its life cycle in 1992 and has been in the portfolio
management stage since the beginning of 1993. As a result, rental income and
related expenses are comparable for the quarters ended March 31, 1996 and 1995.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K with the Commission on
January 6, 1996 to report (i) under Item 4, Changes in the
Company's Certifying Accountant, that Kenneth Leventhal & Company,
the Company's independent accountants, merged with and into Ernst
& Young, LLP and that the Board of Trustees of the Company
approved the engagment of the E&Y Kenneth Leventhal Real Estate
Group of Ernst & Young, LLP as the principal accountants to audit
the Company's financial statements, and (ii) under Item 5, Other
Events, that James C. Cowles had been elected by the Board of
Trustees as the Chairman, President and Treasurer of the
Company to succeed Thomas J. A. Lavin, who had previously resigned
as Trustee, Chief Executive Officer, President and Treasurer of
the Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CORPORATE REALTY INCOME TRUST I
(Registrant)
Dated: May 13, 1996 By: /s/
James C. Cowles
Chairman, President, and Treasurer
Dated: May 13, 1996 By: /s/
Valerie A. St. John
Controller
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27.1
FINANCIAL DATA SCHEDULE
CORPORATE REALTY INCOME TRUST I
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTERLY PERIOD ENDED MARCH
31, 1996 AS REPORTED ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 884,448
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 896,637
<PP&E> 32,600,000
<DEPRECIATION> 4,456,707
<TOTAL-ASSETS> 31,046,104
<CURRENT-LIABILITIES> 478,912
<BONDS> 0
0
0
<COMMON> 101,078
<OTHER-SE> 15,011,718
<TOTAL-LIABILITY-AND-EQUITY> 31,046,104
<SALES> 855,817
<TOTAL-REVENUES> 859,942
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 281,660
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 352,426
<INCOME-PRETAX> 225,856
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 225,856
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
