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, 1997
___ 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, 37th 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
The number of shares of beneficial interest of the Registrant outstanding as of
May 12, 1997 is 1,010,776 shares.
<PAGE>
CORPORATE REALTY INCOME TRUST I
Index
Page No.
Part I Financial information 3
Balance Sheets --
March 31, 1997 and December 31, 1996 4
Statements of Income --
For the three months ended March 31, 1997 and 1996 5
Statements of Cash Flows --
For the three months ended March 31, 1997 and 1996 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, 1997 and December 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
1997 1996
ASSETS: (Unaudited)
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 5,253,820 5,054,542
27,346,180 27,545,458
Cash and cash equivalents 861,829 834,489
Rent receivable 10,928 -
Prepaid expenses 98,935 102,525
Deferred rent receivable 2,056,897 2,020,078
Deferred financing costs, net of
accumulated amortization of $149,310 in
1997 and $143,594 in 1996 76,848 82,564
Total assets $30,451,617 $30,585,114
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Mortgage loans payable $15,386,588 $15,404,146
Accrued expenses 48,626 78,436
Due to affiliates 54,390 13,941
Dividends payable 353,772 353,772
Total liabilities 15,843,376 15,850,295
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 14,507,163 14,633,741
Retained earnings - -
Total shareholder's equity 14 ,608,241 14,734,819
Total liabilities and shareholders' equity $30,451,617 $30,585,114
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CORPORATE REALTY INCOME TRUST I
STATEMENTS OF INCOME
For the three months ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
<S> <S> <S>
1997 1996
Income:
Rental $ 855,817 $ 855,817
Dividend and interest 6,893 4,125
862,710 859,942
Expenses:
Interest 350,829 352,426
Depreciation 199,278 199,279
General and administrative 41,479 38,863
Annual advisor fee 43,930 43,518
635,516 634,086
Net income $ 227,194 $ 225,856
Net income per share $ .23 $ .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, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
1997 1996
Cash flows from operating activities:
Net income$ 227,194$ 225,856
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of
deferred financing costs 204,994 204,994
Changes in assets and liabilities:
(Increase) decrease in rent receivable (10,928) 206,510
Decrease in prepaid expenses 3,590 89,688
Decrease in accrued expenses (29,810) (18,620)
Increase in deferred rent receivable (36,819) (39,188)
Increase in amount due to affiliate 40,449 53,518
Total adjustments 171,476 496,902
Net cash provided by operating activities 398,670 722,758
Cash flows from financing activities:
Principal payments on mortgage (17,558) (15,973)
Dividends paid to shareholders (353,772) (353,772)
Net cash used in financing activities (371,330) (369,745)
Net increase in cash and cash equivalents 27,340 353,013
Cash and cash equivalents at beginning of period 834,489 531,435
Cash and cash equivalents at end of period $ 861,829 $ 884,448
</TABLE>
Supplemental disclosure of cash flow information:
Cash paid for interest during the three months ended March 31, 1997 and 1996
amounted to $353,030 and $241,961, respectively.
Non-cash transactions:
Dividends declared and unpaid as of March 31, 1997 and 1996 amounted to
$353,772.
See accompanying notes to financial statements.
<PAGE>
CORPORATE REALTY INCOME TRUST I
NOTES TO FINANCIAL STATEMENTS
March 31, 1997
(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, 1996.
The amount of net income per share was calculated using the number of
shares outstanding of 1,010,776 for the periods ended March 31, 1997 and 1996.
Dividends declared as of March 31, 1997 and 1996 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, 1997 and 1996.
1997 1996
Rental income received $818,998 $816,629
Deferred rent 36,819 39,188
Rental income recognized $855,817 $855,817
<PAGE>
CORPORATE REALTY INCOME TRUST I
NOTES TO FINANCIAL STATEMENTS (Cont'd)
March 31, 1997
(Unaudited)
3. Transactions with Affiliates
The Company maintains an interest-bearing customer account with Smith
Barney Inc. For the three months ended March 31, 1997 and 1996, the Company
earned interest on this account of $6,893 and $4,125, respectively. For
purposes of these financial statements, the Company considers this account to
be cash.
The Company incurred expenses of $11,000 for the three months ended March
31, 1997 for administrative services performed by Corporate Realty Advisors,
Inc. (the "Advisor") which was unpaid at March 31, 1997. The Advisor earned
$43,930 of the annual advisor fee for the three months ended March 31, 1997,
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, 1997
Liquidity and Capital Resources
At March 31, 1997, the Company had cash of approximately $862,000 which was
invested in an interest bearing account, and prepaid expenses and receivables
totalling approximately $110,000. Of these amounts, approximately $515,000
represented a working capital reserve, $353,772 was reserved to pay the
quarterly dividend in May 1997 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 $15,386,588, maturing at various dates in
approximately three to five 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, 1997 approximated that of
the corresponding period in 1996. 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, 1997 and
1996.
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter in which this report
is filed.
<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, 1997 By: /s/ James C. Cowles
James C. Cowles
Chairman, President, and Treasurer
Dated: May 13, 1997 By: /s/ Valerie A. St. John
Valerie A. St. John
Controller
<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 FINANCIAL STATEMENTS FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
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-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 861,829
<SECURITIES> 0
<RECEIVABLES> 10,928
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 971,692
<PP&E> 32,600,000
<DEPRECIATION> 5,253,820
<TOTAL-ASSETS> 30,451,617
<CURRENT-LIABILITIES> 456,788
<BONDS> 0
0
0
<COMMON> 101,078
<OTHER-SE> 14,507,163
<TOTAL-LIABILITY-AND-EQUITY> 30,451,617
<SALES> 855,817
<TOTAL-REVENUES> 862,710
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 284,687
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 350,829
<INCOME-PRETAX> 227,194
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 227,194
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
