<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [Fee Required]
For the fiscal year ended December 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [No Fee Required]
For the transition period from to
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Commission file number 000-21722
WINDSOR PARK PROPERTIES 7, A CALIFORNIA LIMITED PARTNERSHIP
-----------------------------------------------------------
(Exact name of small business issuer in its charter)
California 33-0363181
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6430 South Quebec Street, Englewood, CO 80111
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (303) 741-3707
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
-------------------------------------
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $2,704,510
DOCUMENTS INCORPORATED BY REFERENCE: None
1
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TABLE OF CONTENTS
PART I
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Item 1. Description of Business 3
Item 2. Description of Properties 5
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Holders 7
PART II
Item 5. Market for the Partnership's Units and Related Security Holder Matters 7
Item 6. Management's Discussion and Analysis 8
Item 7. Financial Statements 11
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 25
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of The Exchange Act 26
Item 10. Executive Compensation 27
Item 11. Security Ownership of Certain Beneficial Owners and Management 27
Item 12. Certain Relationships and Related Transactions 28
Item 13. Exhibits and Reports on Form 8-K 29
SIGNATURES 30
</TABLE>
2
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PART I
Item 1. DESCRIPTION OF BUSINESS
Business Development
Windsor Park Properties 7, a California Limited Partnership (the Partnership),
was formed in June 1989 pursuant to the provisions of the California Uniform
Limited Partnership Act. The General Partners of the Partnership are The Windsor
Corporation, a California corporation ("The Windsor Corporation"), and John A.
Coseo, Jr. In September 1997, Chateau Communities, Inc. (Chateau), a publicly
held real estate investment trust, purchased all of the outstanding capital
stock of The Windsor Corporation for 101,239 common shares of Chateau, and
$750,000 in cash. Following the purchase of The Windsor Corporation Chateau
appointed a new Board of Directors and elected Steven G. Waite as the President
of The Windsor Corporation. The Partnership term is set to expire in December
2005; however, the Partnership may either be dissolved and liquidated earlier or
extended under certain circumstances. The Partnership may be extended at the
recommendation of the General Partners with approval of a majority of the
Limited Partners.
The Partnership was organized to acquire and hold existing manufactured home
communities for investment. Its principal investment objectives are to provide
to its Limited Partners: (i) distributions of cash from operations, (ii)
preservation, protection and eventual return of the Limited Partners'
investment, and (iii) realization of appreciation in the value of the properties
acquired.
The Partnership was funded through a public offering of 250,000 limited
partnership units (Units). A total of 159,332 Units were sold for gross proceeds
aggregating $15,933,200. The offering commenced in March 1990 and terminated in
January 1992. The net proceeds from the offering were originally expended for
the acquisition of undivided interests in four manufactured home communities
located in Florida, Washington and Indiana. The Partnership paid all cash for
the properties.
In February 1995, through a proxy vote of the limited partners, an amendment to
the Agreement of Limited Partnership was approved permitting the financing of
currently owned manufactured home communities and the reinvestment of financing
proceeds into newly acquired manufactured home communities to be purchased with
permanent mortgage financing. Overall Partnership mortgage financing will not
exceed 55% of the value of existing and newly acquired properties.
Subsequent to the approval of the financing and reinvestment proposal discussed
above, the Partnership obtained two loans collateralized by interests in
currently owned manufactured home communities. The proceeds from these loans
were used as partial consideration to purchase interests in six additional
manufactured home communities. The remaining consideration was obtained from
permanent mortgage financing.
In February 1997, the Partnership purchased a 26% interest in the Apache East
Estates and Denali Park Estates manufactured home communities located in
Phoenix, Arizona. The remaining interests in the communities were purchased by
affiliated entities. The Partnership's cost of its equity interest in the
communities was $570,400. In connection with the purchase, the joint venture
obtained a $3,040,000 loan, collateralized by the communities. The Partnership's
share of this loan is $790,400. In addition, the Partnership assumed a $500,000
note payable to the seller.
3
<PAGE> 4
The Partnership owns interests in the following manufactured home communities at
December 31, 1997:
<TABLE>
<CAPTION>
Date
Name of Property Ownership % Acquired Location
- ---------------- ----------- -------- --------
<S> <C> <C> <C>
Carefree Village 56% July 1990 Tampa, Florida
North Glen 100% October 1991 Westfield, Indiana
Kings & Queens 100% February 1992 Lakeland, Florida
The Hills 100% December 1992 Richland, Washington
Lucerne 100% June 1995 Winter Haven, Florida
Long Lake 60% June 1995 West Palm Beach, Florida
Garden Walk 69% August 1995 Palm Beach Gardens, Florida
Village Glen 100% October 1995 Melbourne, Florida
Apache East 26% February 1997 Phoenix, Arizona
Denali Park 26% February 1997 Phoenix, Arizona
</TABLE>
The above described ownership interests where the Partnership owns less than
100% of a property consist of ownership interests in joint ventures or limited
partnerships that own one or more manufactured home communities.
No further property financings or investment property acquisitions are planned
by the General Partners.
The overall occupancy of the ten communities owned by the Partnership at
December 31, 1997 was approximately 90%. The General Partners continue to
maintain the properties in good condition and promote them to improve occupancy.
Business of Issuer
The Partnership is currently in the business of managing, holding for
investment, and eventually selling the existing manufactured home communities.
Competitors of the Partnership include other public and private limited
partnerships, individuals, corporations, and other entities engaged in real
estate investment activities. Competition for such properties varies with
changes in the supply or demand for similar or competing properties in a given
area, changes in interest rates and the availability of mortgage funds, and
changes in tax, real estate, environmental, and zoning laws.
Partnership profitability depends in part on maximizing occupancy and rental
rates in its manufactured home communities. Rents and occupancy rates are
affected by both changes in general economic conditions and changes in local
conditions such as levels of employment, supply of other comparable units or
competitive housing alternatives, zoning laws and the availability and cost of
energy and transportation.
All of the properties are located in or near large urban areas. Accordingly,
they compete for rentals not only with the other manufactured home communities
but with apartments and any other form of low-cost housing that might exist.
The Partnership's profitability also depends on the minimization of both
property and partnership administration expenses. Expenses are affected by
changes in general economic trends and changes in local conditions such as
prevailing wages, utility rates, insurance costs, and real estate taxation
practices.
The Partnership has no employees. Partnership administrative services are
provided by The Windsor Corporation, which is reimbursed for costs incurred on
behalf of the Partnership. An independent property management company employs
all of the properties' on-site personnel and is reimbursed by the Partnership
for such costs.
4
<PAGE> 5
Item 2. DESCRIPTION OF PROPERTIES
The Partnership owns interests in ten properties at December 31, 1997. The
Partnership operates the properties as manufactured home communities, renting
space to manufactured home tenants on a month-to-month basis. The properties
compete for rentals with other manufactured home communities and apartments in
their local markets. All of the properties are encumbered. It is the General
Partners' opinion that the properties are in good condition and are adequately
insured.
<TABLE>
<CAPTION>
Carefree Village North Glen Kings & Queens The Hills
---------------- ---------- -------------- ---------
Tampa, Westfield, Lakeland, Richland,
Location Florida Indiana Florida Washington
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Percentage of Ownership 56% 100% 100% 100%
Date Acquired 7/90 10/91 2/92 12/92
Acreage 58 38 19 52
Number of Spaces 406 289 107 223
Monthly Rents (1) $ 263 $ 215 $ 205 $ 210
Occupancy Level:
December 31, 1997 86% 100% 98% 97%
Real Estate Taxes $ 125,200 $ 29,200 $ 20,000 $ 31,200
Federal Tax Basis (3) $ 2,982,700 $ 3,423,000 $ 1,034,800 $ 2,420,400
Mortgage Information:
Balance payable $ 3,479,800 $ 4,620,000 (2) (2)
Interest rate 8.97% 8.97% (2) (2)
Amortization period -- -- (2) (2)
Maturity date 6/02 6/02 (2) (2)
Balance due at maturity $ 3,479,800 $ 4,620,000 (2) (2)
</TABLE>
5
<PAGE> 6
Item 2. DESCRIPTION OF PROPERTIES (continued)
<TABLE>
<CAPTION>
Long Lake
Garden Walk Village
Village Glen ----------- ------- Lucerne
------------ Palm Beach West Palm -------
Tampa, Gardens, Beach, Winter Haven,
Location Florida Florida Florida Florida
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Percentage of Ownership 100% 69% 60% 100%
Date Acquired 10/95 8/95 6/95 6/95
Acreage 27 71 19 14
Number of Spaces 143 484 134 140
Monthly Rents (1) $ 248 $ 351 $ 356 $ 212
Occupancy Level:
December 31, 1996 97% 90% 81% 98%
Real Estate Taxes $ 53,400 $ 255,100 $ 67,100 $ 26,000
Federal Tax Basis (3) $ 2,258,100 $ 6,018,400 $ 1,858,600 $ 1,811,200
Mortgage Information:
Balance payable $ 1,500,000 $ 5,700,000 $ 1,600,000 $ 1,100,000
Interest rate 8.82% 8.97% 8.97% 8.97%
Amortization period -- -- -- --
Maturity date 8/02 8/02 6/02 6/02
Balance due at maturity $ 1,500,000 $ 5,700,000 $ 1,600,000 $ 1,100,000
</TABLE>
<TABLE>
<CAPTION>
Apache East Denali Park
----------- -----------
Phoenix, Phoenix,
Location Arizona Arizona
- -------------------------------------------------------------------------------
<S> <C> <C>
Percentage of Ownership 26% 26%
Date Acquired 2/97 2/97
Acreage 16 33
Number of Spaces 123 162
Monthly Rents (1) $ 220 $ 202
Occupancy Level:
December 31, 1996 81% 81%
Real Estate Taxes $ 17,400 $ 23,600
Federal Tax Basis (3) $ 582,900 $ 752,100
Mortgage Information:
Balance payable $3,040,000 (4)
Interest rate 8.38% (4)
Amortization period 24 years (4)
Maturity date 3/06 (4)
Balance due at maturity $2,583,200 (4)
</TABLE>
(1) Average rental rates in effect on December 31, 1997.
(2) Same mortgage note payable as North Glen.
(3) For income tax purposes, the properties and their components are
depreciated using both straight-line and accelerated methods over
useful lives ranging from 5 to 40 years.
(4) Same mortgage note payable as Apache East.
6
<PAGE> 7
Item 3. LEGAL PROCEEDINGS
There are no pending legal proceedings, other than ordinary routine litigation
incidental to the business, to which the Partnership is a party or of which any
of its properties is the subject.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to security holders for a vote during the fourth
quarter of the fiscal year covered by this report.
PART II
Item 5. MARKET FOR THE PARTNERSHIP'S UNITS AND RELATED SECURITY HOLDER
MATTERS
A public market for the Partnership's units does not exist and is not likely to
develop. As of December 31, 1997, there were approximately 1,800 persons holding
an aggregate of 156,641 units.
Cash distributions to limited partners paid since December 31, 1995 are as
follows:
<TABLE>
<CAPTION>
Per $1,000
Date Paid Amount (1) Invested (2)
- --------- ---------- ------------
<S> <C> <C>
December 1997 $99,600 $6.25
November 1997 $99,600 $6.25
October 1997 $98,700 $6.19
September 1997 $98,700 $6.19
August 1997 $98,700 $6.19
July 1997 $98,700 $6.19
June 1997 $98,700 $6.19
May 1997 $98,700 $6.19
April 1997 $98,700 $6.19
March 1997 $98,700 $6.19
February 1997 $98,700 $6.19
January 1997 $98,700 $6.19
- --------------------------------------------------------------------------------
December 1996 $98,700 $6.19
November 1996 $98,700 $6.19
October 1996 $98,700 $6.19
September 1996 $98,700 $6.19
August 1996 $95,500 $5.99
July 1996 $95,500 $5.99
June 1996 $95,500 $5.99
May 1996 $95,500 $5.99
April 1996 $95,500 $5.99
March 1996 $95,500 $5.99
February 1996 $95,500 $5.99
January 1996 $95,500 $5.99
</TABLE>
(1) Amounts exclude General Partner participation.
(2) Computed based on $15,933,200 original investment.
7
<PAGE> 8
Cash distributions paid to the General Partners since December 31, 1995 were
$23,600. The General Partners expect that the Partnership will make cash
distributions in the future.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with the financial
statements and Notes thereto included elsewhere in this Annual Report. Certain
statements in this discussion constitute "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the partnership or industry to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.
Liquidity and Capital Resources
The Partnership's primary sources of cash during the years ended December 31,
1997 and 1996 were from the operations of its investment properties and cash
distributions from joint ventures and limited partnerships. The Partnership's
primary uses of cash during the same period were for the purchases of interests
in investment properties, debt service and cash distributions to partners.
In February 1995, through a proxy vote of the limited partners, an amendment to
the Agreement of Limited Partnership was approved permitting the financing of
currently owned manufactured home communities and the reinvestment of financing
proceeds into newly acquired manufactured home communities to be purchased with
permanent mortgage financing. Overall Partnership mortgage financing will not
exceed 55% of the value of existing and newly acquired properties.
Subsequent to the approval of the financing and reinvestment proposal discussed
above, the Partnership obtained two loans collateralized by interests in
currently owned manufactured home communities. The proceeds from these loans
were used as partial consideration to purchase interests in six additional
manufactured home communities.
The remaining consideration was obtained from permanent mortgage financing.
All of the Partnership's loans, except the Village Glen loan, are payable in
monthly interest only installments bearing interest at 90 day LIBOR plus 2.95%
(8.97% at December 31, 1997) and are due in 2002. The Partnership and the
affiliated entities are contingently liable for the full amounts of the loans
obtained jointly. In March 1996, the Village Glen loan, which originally had the
same terms as the other Partnership loans, was converted to a fixed rate loan
bearing interest at 8.82%. All other terms remained the same.
In February 1997, the Partnership purchased a 26% interest in the Apache East
Estates and Denali Park Estates manufactured home communities located in
Phoenix, Arizona. The remaining interests in the communities were purchased by
affiliated entities. The Partnership's cost of its equity interest in the
communities was $570,400. In connection with the purchase, the joint venture
obtained a $3,040,000 loan, collateralized by the communities. The Partnership's
share of this loan is $790,400. In addition, the Partnership assumed a $500,000
note payable to the seller. The $3,040,000 loan initially bears interest at
8.375%. In March 2000 and March 2003, the interest rate adjusts to the yield on
the 3 year Treasury Note plus 2.2%. The loan is due in March 2006. The $500,000
loan bears interest at 8% and is due in February 1998.
8
<PAGE> 9
At December 31, 1997, the Partnership's total mortgage debt, including its
proportionate share of joint venture debt, was $14,852,100, consisting of
$1,500,000 of fixed rate debt and $13,352,100 of variable rate debt. The average
rate of interest on the fixed and variable rate debt was 8.8% and 8.9%,
respectively, at December 31, 1997.
In February 1997, the Partnership received a $370,000 payment on the note
receivable from general partners. The proceed were used to paydown the $500,000
note payable to the seller of the Apache East and Denali Park communities.
The future sources of cash for the Partnership will be provided from property
operations, cash reserves, and ultimately from the sale of property. The future
uses of cash will be for Partnership administration, capital expenditures, cash
distributions to partners and debt service. The General Partners believe that
the future sources of cash are sufficient to meet the working capital
requirements of the Partnership for the foreseeable future.
Results of Operations
The Partnership realized net income of $197,800 and $353,400 for the years ended
December 31, 1997 and 1996, respectively. Net income per limited partnership
unit was $1.24 in 1997 compared to $2.21 in 1996.
The overall occupancy of the Partnership's five wholly owned properties was 98%
at December 31, 1997 comparable to 98% at December 31, 1996. Recent rent
increases implemented at wholly owned properties include $10 and $13 per month
at North Glen effective July 1997 and July 1996, respectively; $9 and $10 per
month at Kings and Queens and Village Glen, respectively, effective January
1997; and $12 per month at Lucerne effective March 1997.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of the Carefree Village, the Long Lake Village and Garden Walk
communities and since there purchase, the Apache and Denali Park communities.
Equity in earnings of joint ventures decreased from $264,600 in 1996 to $156,300
in 1997. The overall occupancy of the Partnership's five joint venture
properties decreased from 89% at December 31, 1996 to 84% at December 31, 1997.
The overall decrease in occupancy is due primarily to Long Lake Village, where
occupancy decreased from 87% at December 31, 1996 to 81% at December 31, 1997.
The decrease is also attributable to the losses recorded at Apache East and
Denali Park in 1997.
Interest income decreased from $81,700 in 1996 to $40,400 in 1997 due mainly to
lower cash balances maintained by the Partnership.
9
<PAGE> 10
Interest expense increased from $658,800 in 1996 to $693,700 in 1997 due to the
loan obtained by the partnership in February 1997, as discussed previously.
General and administrative expenses decreased slightly from $109,600 in 1996 to
$106,400 in 1997.
New Accounting Standards
In 1997, the Partnership adopted SFAS No. 128, "Earnings Per Share." This
accounting standard specifies new computation, presentation and disclosure
requirements for earnings per share to be applied retroactively. Among other
things, SFAS No. 128 requires presentation of basic and diluted earnings per
share on the face of the income statement. The adoption of SFAS 128 had no
effect on the per unit results reported.
Year 2000 Compliance
The Partnership is currently engaged in a review with its software vendors to
ensure all systems are modified for year 2000 compliance. Since all systems are
owned and maintained by third party vendors, the Partnership believes that the
additional cost for compliance will not be material to future results of
operations, financial condition or cash flows of the Partnership.
10
<PAGE> 11
Item 7. FINANCIAL STATEMENTS
The following financial statements are filed as a part of this report:
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants 12
Balance Sheet as of December 31, 1997 14
Statements of Operations for the years ended
December 31, 1997 and 1996 15
Statements of Partners' Equity for the years
ended December 31, 1997 and 1996 16
Statements of Cash Flows for the years ended
December 31, 1997 and 1996 17
Notes to Financial Statements 18
</TABLE>
11
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Windsor Park Properties 7
(A California Limited Partnership)
Englewood, Colorado
We have audited the accompanying balance sheet of Windsor Park Properties 7, a
California Limited Partnership, (the Partnership) as of December 31, 1997 and
the related statements of operations, partners' equity and cash flows for the
year ended December 31, 1997. These financial statements are the responsibility
of the General Partners. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit 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 audit provides 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 Windsor Park Properties 7 as of
December 31, 1997 and the results of its operations and its cash flows for the
year ended December 31, 1997 in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Denver, Colorado
March 30, 1998
12
<PAGE> 13
REPORT OF INDEPENDENT ACCOUNTANTS
The Partners
Windsor Park Properties 7
(A California Limited Partnership)
Escondido, California
We have audited the accompanying statements of operations, partners' equity and
cash flows of Windsor Park Properties 7 (the Partnership) for the year ended
December 31, 1996. 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the results of operations of Windsor Park Properties 7 and its cash
flows for the year ended December 31, 1996 in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Costa Mesa, California
February 28, 1997
13
<PAGE> 14
WINDSOR PARK PROPERTIES 7
(A California Limited Partnership)
BALANCE SHEET
<TABLE>
<CAPTION>
December 31, 1997
-----------------
<S> <C>
ASSETS
Property held for investment, net $ 11,259,400
Investments in joint ventures and limited partnerships 5,203,800
Cash and cash equivalents 478,700
Note receivable from general partners
Deferred financing costs, net 196,000
Other assets 59,200
---------------
Total Assets $ 17,197,100
===============
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Mortgage notes payable $ 7,420,000
Accounts payable 24,700
Accrued expenses 60,000
Due to General Partners and affiliates 98,700
Tenant deposits and other liabilities 115,200
---------------
Total Liabilities 7,718,600
---------------
Partners' equity:
Limited partners 9,518,700
General partners (40,200)
---------------
9,478,500
---------------
Total Liabilities and Partners' Equity $ 17,197,100
===============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE> 15
WINDSOR PARK PROPERTIES 7
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For The Year Ended December 31,
-------------------------------
1997 1996
------------- -------------
<S> <C> <C>
REVENUES
Rent and utilities $ 2,475,500 $ 2,358,200
Equity in earnings of joint ventures and limited partnerships 156,300 264,400
Interest 40,400 81,700
Other 32,300 23,700
------------- -------------
2,704,500 2,728,000
------------- -------------
COSTS AND EXPENSES
Property operating 1,105,600 1,024,100
Interest 693,700 658,800
Depreciation and amortization 601,000 582,100
General and administrative:
Related parties 70,000 73,700
Other 36,400 35,900
------------- -------------
2,506,700 2,374,600
------------- -------------
Net income $ 197,800 $ 353,400
============= =============
Net income - general partners $ 2,000 $ 3,500
============= =============
Net income - limited partners $ 195,800 $ 349,900
============= =============
Basic and dilutive earnings per limited partnership unit $ 1.24 $ 2.21
============= =============
</TABLE>
See accompanying notes to financial statements.
15
<PAGE> 16
WINDSOR PARK PROPERTIES 7
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
General Partners Limited Partners Total
---------------- ---------------- ---------------
<S> <C> <C> <C>
Balance at December 31, 1995 $ (22,100) $ 11,427,900 $ 11,405,800
Cash distributions (11,700) (1,158,800) (1,170,500)
Net income 3,500 349,900 353,400
Repurchase of limited partnership
Units -- (16,500) (16,500)
--------------- --------------- ---------------
Balance at December 31, 1996 (30,300) 10,602,500 10,572,200
--------------- --------------- ---------------
Cash distributions (11,900) (1,186,200) (1,198,100)
Net income 2,000 195,800 197,800
Repurchase of limited partnership
Units -- (93,400) (93,400)
--------------- --------------- ---------------
Balance at December 31, 1996 $ (40,200) $ 9,518,700 $ 9,478,500
=============== =============== ===============
</TABLE>
See accompanying notes to financial statements.
16
<PAGE> 17
WINDSOR PARK PROPERTIES 7
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For The Year Ended December 31,
----------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 197,800 $ 353,400
Adjustments to reconcile net income to net cash
Provided by operating activities:
Depreciation and amortization 601,000 582,100
Equity in earnings of joint ventures and
limited partnerships (156,300) (264,400)
Joint ventures' and limited partnerships
cash distributions 156,300 264,400
Loss (gain) on sale of property held for investment
And other assets (2,900) 5,600
Amortization of deferred financing costs 42,400 42,500
Changes in operating assets and liabilities:
Other assets 17,200 37,200
Accounts payable (1,500) (6,800)
Due to General Partners and affiliates 98,700
Accrued expenses (58,400) 15,200
Tenant deposits and other liabilities (10,500) 900
-------------- --------------
Net cash provided by operating activities 883,800 1,030,100
-------------- --------------
Cash flows from investing activities:
Increase in property held for investment (172,700) (329,000)
Joint ventures' and limited partnerships
cash distributions 283,400 173,300
Proceeds from sale of property held for investment
and other assets 28,200 97,400
Proceeds from Note receivable from general partners 653,300 34,800
Investments in joint ventures and limited partnerships (116,900)
-------------- --------------
Net cash Provided by (used in) investing activities 675,300 (23,500)
-------------- --------------
Cash flows from financing activities:
Cash Distributions (1,198,100) (1,168,300)
Repurchase of limited partnership units (93,400) (16,500)
Payment of deferred financing costs -- (500)
Payment of mortgage note payable (300,000)
-------------- --------------
Net cash used in financing activities (1,591,500) (1,185,300)
-------------- --------------
Net decrease in cash and cash equivalents (32,400) (178,700)
Cash and cash equivalents at beginning of year 511,100 689,800
-------------- --------------
Cash and cash equivalents at end of year $ 478,700 $ 511,100
============== ==============
</TABLE>
See accompanying notes to financial statements.
17
<PAGE> 18
WINDSOR PARK PROPERTIES 7
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Partnership
Windsor Park Properties 7, A California Limited Partnership (the Partnership),
was formed in June 1989 for the purpose of acquiring and holding existing
manufactured home communities for investment. The General Partners of the
Partnership are The Windsor Corporation ("TWC"), a California corporation, and
John A. Coseo, Jr. In September 1997, Chateau Communities, Inc. (Chateau), a
publicly held real estate investment trust, purchased 100% of the shares of the
Windsor Corporation.
The Partnership was funded through a public offering of 250,000 limited
partnership units at $100 per unit, which commenced in March 1990 and terminated
in January 1992. The Partnership term is set to expire on December 31, 2005;
however, the Partnership may either be dissolved earlier or extended under
certain circumstances. The Partnership may be extended at the recommendation of
the General Partners with approval of a majority of the Limited Partners.
The following is a summary of the Partnership's significant accounting policies:
Property Held for Investment
Property held for investment is recorded at the lower of cost or net realizable
value and depreciated over various estimated useful lives (building and
improvements - 5 to 20 years; fixtures and equipment - 3 to 5 years) using the
straight-line method. When assets are sold or otherwise disposed of, the cost
and related accumulated depreciation are removed from the accounts, and any gain
or loss is included in net income. Repairs and maintenance are charged to
operations as incurred.
In 1996, the Partnership adopted Statement of Financial Accounting Standards No.
121 (SFAS 121), "Accounting for the Impairment of Long-Lived Assets and Assets
to be Disposed of." SFAS 121 requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate that their
carrying value may not be recoverable. The adoption of SFAS 121 had no effect on
reported results in 1996.
For the years ended December 31, 1997 and 1996, permanent impairment conditions
did not exist at the Partnership's property.
Investments In Joint Ventures and Limited Partnerships
The investments in joint ventures are accounted for utilizing the equity method
as the properties are subject to joint control requiring approval or mutual
agreement of the investees. The investment in Limited Partnerships is also
accounted for utilizing the equity method as the Limited Partners have
significant rights.
18
<PAGE> 19
Financing Costs
Financing costs are amortized to interest expense over the life of the note
utilizing a method, which approximates the effective interest method.
Income Taxes
Under provisions of the Internal Revenue Code and the California Revenue and
Taxation Code, partnerships are generally not subject to income taxes. The tax
effect of any income or loss accrues to the individual partners.
Basic and Dilutive Earnings per Limited Partnership Unit
Basic and dilutive earnings per limited partnership unit is calculated based on
the weighted average number of limited partnership units outstanding during the
year and the net income allocated, which is the same as income available, to the
limited partners. Basic and dilutive earnings per limited partnership unit are
the same, as the Partnership has no dilutive securities. The weighted average
number of limited partnership units outstanding during the years ended December
31, 1997 and 1996 was 157,469 and 158,026, respectively.
In 1997, the Partnership adopted Statement of Financial Accounting Standards No.
128 (SFAS 128), "Earnings Per Share." This accounting standard specifies new
computation, presentation, and disclosure requirements for earnings per share to
be applied retroactively. Among other things, SFAS 128 requires presentation of
basic and diluted earnings per share on the face of the income statement. The
adoption of SFAS 128 had no effect on the per unit results previously reported.
Statements of Cash Flows
For purposes of the statements of cash flows, the Partnership considers all
highly-liquid investments purchased with an original maturity of three months or
less to be cash equivalents.
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
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Revenue Recognition
Rental income is recognized when earned and due from residents. The leases
entered into by residents for the rental of a site are generally for terms not
longer than one year and renewable upon the consent of both parties or, in some
instances, as provided by statute.
19
<PAGE> 20
NOTE 2. PARTNERSHIP AGREEMENT
In accordance with the Partnership Agreement, the maximum liability of the
Limited Partners is the amount of their capital contributions. The number of
limited partnership units outstanding at December 31, 1997 and 1996 was 156,641
and 157,865, respectively, which represented capital contributions of
$15,664,100 and $15,786,500, respectively. During the years ended December 31,
1997 and 1996, the Partnership repurchased 1,224 units and 275 units,
respectively, for $93,400 and $16,500, respectively. The General Partners owned
91 units at both December 31, 1997 and 1996.
The General Partners are entitled to receive from the Partnership various fees
and compensation which are summarized as follows:
Operational Stage
The profits, losses and cash distributions of the Partnership during the
operational stage are allocated 99% to the Limited Partners and 1% to the
General Partners. During the years ended December 31, 1997 and 1996, the General
Partners received cash distributions from operations of $11,900 and $11,700,
respectively.
TWC receives a management fee which is based on a percent of actual gross
receipts collected from the operations of the properties. TWC receives 2.5% each
for Lucerne and Village Glen communities. For the years ended December 31, 1997
and 1996, the amounts paid to TWC was $18,700 and $18,100, respectively.
The Partnership reimburses TWC for certain direct expenses, and employee,
executive and administrative time which are incurred on the Partnership's
behalf. The Partnership was charged $82,000 and $91,200 for such costs during
the years ended December 31, 1997 and 1996, respectively. These costs are
included in property operating and general and administrative expenses in the
accompanying statements of operations. As of December 31, 1997, the partnership
owed TWC $9,100.
Liquidation Stage
During the Partnership's liquidation stage, the total compensation paid to all
persons for the sale of Partnership properties is limited to competitive real
estate commissions, not to exceed 6% of the contract price for the sale of the
property. The General Partners may receive up to one-half of the competitive
real estate commission, not to exceed 3%, if they provide a substantial amount
of services in the sales effort. The General Partners' commission is
subordinated to the Limited Partners receiving a 6% cumulative, non-compounded,
annual return on their original invested capital.
The General Partners also receive 15% of profits, losses and cash distributions
from the sale or financing of Partnership properties after the Limited Partners
have received a 9% cumulative, non-compounded, annual return on their original
invested capital.
20
<PAGE> 21
NOTE 3. PROPERTY HELD FOR INVESTMENT
Property held for investment consists of five manufactured home communities
summarized as follows:
<TABLE>
<CAPTION>
Name of Property Date Acquired Location
- ---------------- ------------- --------
<S> <C> <C>
North Glen October 4, 1991 Westfield, Indiana
Kings & Queens February 4, 1992 Lakeland, Florida
The Hills December 24, 1992 Richland, Washington
Lucerne June 23, 1995 Winter Haven, Florida
Village Glen October 3, 1995 Melbourne, Florida
</TABLE>
<TABLE>
<CAPTION>
December 31, 1997
-----------------
<S> <C>
Land $ 2,734,100
Buildings and improvements 10,847,800
Fixtures and equipment 187,800
---------------
13,769,700
Less accumulated depreciation (2,510,300)
---------------
$ 11,259,400
===============
</TABLE>
NOTE 4. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
The Partnership's investments in joint ventures and limited partnerships consist
of interests in five manufactured home communities summarized as follows:
<TABLE>
<CAPTION>
Ownership
Name of Property Percentage Date Acquired Location
- ---------------- ---------- ------------- --------
<S> <C> <C> <C>
Carefree Village 56% July 31, 1990 Tampa, Florida
Long Lake Village 60% June 30, 1995 West Palm Beach, Florida
Garden Walk 69% August 15, 1995 Palm Beach Gardens, Florida
Apache East 26% February 18, 1997 Phoenix, Arizona
Denali Park 26% February 18, 1997 Phoenix, Arizona
</TABLE>
The remaining interests in the communities are owned by affiliated entities.
In February 1997, the Partnership purchased a 26% interest in the Apache East
Estates and Denali Park Estates manufactured home communities located in
Phoenix, Arizona. The remaining interests in the communities were purchased by
affiliated entities. The Partnership's cost of its equity interest in the
communities was $570,400. In connection with the purchase, the limited
partnership obtained a $3,040,000 loan, collateralized by the communities. The
Partnership's share of this loan is $790,400. In addition, the Partnership
assumed a $500,000 note payable to the seller.
21
<PAGE> 22
The combined condensed financial position and results of operations of the joint
ventures and limited partnerships (including Apache East and Denali Park since
their purchase) are as follows:
<TABLE>
<CAPTION>
December 31, 1997
-----------------
<S> <C>
Financial Position
Property held for investment, net $ 22,717,900
Cash 188,700
Other assets 664,000
---------------
Total assets $ 23,570,600
===============
Mortgage notes payable $ 13,819,800
Accounts payable 66,500
Other liabilities 101,900
---------------
Total liabilities 13,988,200
Partners' equity 9,582,400
---------------
$ 23,570,600
===============
</TABLE>
22
<PAGE> 23
<TABLE>
<CAPTION>
For the Year Ended December 31
-------------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
Results of Operations
Property revenues $ 4,163,400 $ 3,675,900
-------------- --------------
Expenses:
Property operating 2,101,500 1,767,400
Interest 1,200,700 970,700
Depreciation 715,900 539,100
-------------- --------------
4,018,100 3,277,200
-------------- --------------
Net Income $ 145,300 $ 398,700
============== ==============
</TABLE>
NOTE 5. NOTE RECEIVABLE FROM GENERAL PARTNERS
Through September, 1997, the Partnership had a note receivable from General
Partners which represented excess organization and offering costs incurred by
the Partnership and bore interest at the current partnership distribution rate
(7.5% at December 31, 1997) or local bank money market rates, if higher. The
note was due on demand but in no event later than the termination of the
Partnership. The General Partners paid the note in September 1997. The note was
collateralized by an equitable lien on securities owned by TWC and all proceeds
from real estate commissions payable to the General Partners from the sale of
Partnership properties. The note was also personally guaranteed by John A.
Coseo, Jr., General Partner. During the years ended December 31, 1997 and 1996,
the Partnership earned interest of $18,700 and $49,300, respectively, from the
note.
NOTE 6. MORTGAGE NOTES PAYABLE
Mortgage notes payable consist of the following at December 31, 1997:
<TABLE>
<S> <C>
Notes payable, collateralized by property held for investment, payable in
monthly interest only installments bearing interest at 90-day LIBOR plus 2.95%
(8.97% at December 31, 1997),
due in 2002 $ 5,720,000
Note payable, collateralized by property held for investment, payable in monthly
interest only installments bearing interest
at a fixed rate of 8.82%, due in 2002 1,500,000
Note payable collateralized by property held for investment, principal and accrued interest
(8% per annum) due and payable in February 1998 200,000
-------------
$ 7,420,000
=============
</TABLE>
In March 1996, the $1,500,000 mortgage note payable was converted from a
variable rate loan bearing interest at 90-day LIBOR plus 2.95% to a fixed rate
note bearing interest at 8.82%.
23
<PAGE> 24
NOTE 7. DISTRIBUTIONS TO LIMITED PARTNERS
Distributions to limited partners in excess of net income allocated to limited
partners are considered a return of capital. A breakdown of cash distributions
to the Limited Partners for the years ended December 31, 1997 and 1996 follows:
<TABLE>
<CAPTION>
1997 1996
----------------------------- -----------------------------
Per Per
Amount Unit Amount Unit
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net income
- Limited Partners $ 195,800 $ 1.24 $ 349,900 $ 2.21
Return of capital 990,400 6.29 808,900 5.12
------------ ------------ ------------ ------------
$ 1,186,200 $ 7.53 $ 1,158,800 $ 7.33
============ ============ ============ ============
</TABLE>
NOTE 8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of cash equivalents, accounts payable, accrued expenses and
other liabilities approximate fair value because of the short maturity of the
financial instruments. The General Partners believe the carrying value of the
mortgage notes payable approximates fair value based upon interest rates
available for the issuance of debt with similar terms and maturities. The note
receivable from general partners bears interest at the current Partnership
distribution rate.
NOTE 9. CONTINGENCIES
The Partnership, as an owner of real estate, is subject to various environmental
laws. Compliance by the Partnership with existing laws has not had a material
effect on the results of operations, financial condition or cash flows of the
Partnership, nor does management believe it will have a material impact in the
future.
NOTE 10. RELATED PARTY TRANSACTION
Chateau and/or its predecessor have been providing property management services
to the Partnership since 1992. For this service, Chateau is paid a property
management fee, which is based on a percentage of actual gross receipts of the
properties. The total management fees paid to Chateau were $111,300 and $100,100
for the years ended December 31, 1997 and 1996, respectively. In addition
certain direct expenses are paid by Chateau on behalf of the Partnership and
then reimbursed by the Partnership. These amounts were $263,900 and $242,300 for
the years ended December 31, 1997 and 1996, respectively.
24
<PAGE> 25
NOTE 11. SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest (none capitalized) $ 653,200 $ 621,600
============ ============
</TABLE>
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no disagreements over accounting or financial disclosure with the
independent accountants for the Partnership.
25
<PAGE> 26
PART III
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The general partners of the Partnership are The Windsor Corporation, and John A.
Coseo, Jr.
In July 1994, The Windsor Corporation merged into Windsor Group, Inc., a
majority-owned subsidiary. In conjunction with the merger, Windsor Group, Inc.
changed its name to The Windsor Corporation, hereafter, ("The Windsor
Corporation").
These utilities were incorporated in 1977 and 1992, respectively, to engage in
the real estate syndication business. Historically, they have concentrated
solely on the acquisition, management, and sale of fully-developed manufactured
home communities through the investment programs which they sponsor.
The executive officers of The Windsor Corporation do not receive direct
compensation from the Partnership in these capacities and are only required to
spend such time on the Partnership's affairs as is deemed necessary. Substantial
amounts of these officers' time is spent on matters unrelated to the
Partnership.
The names, ages, and nature of the positions held by the directors and executive
officers of The Windsor Corporation follow:
<TABLE>
<CAPTION>
Name Age Office
------------------------ ------- -----------------------
<S> <C> <C>
Steven G. Waite 43 President and Director
Gary P. McDaniel 52 Director
C.G. Kellogg 54 Director
</TABLE>
A brief background of the general partners, directors and certain executive
officers of The Windsor Corporation follows.
Steven G. Waite (43) joined The Windsor Corporation in August 1997 as President.
Since 1991, until his involvement with Windsor, Mr. Waite served as Vice
President/General Manager of the Communities Division at Clayton Homes. He was
responsible for the original start up of this division, and subsequently built
it into a successful and profitable area of Clayton Homes, expanding from eight
communities to 67 communities. In addition, Mr. Waite has over eight years of
experience in the manufactured home community-lending arena. He earned a
Bachelor of Arts degree from the University of Colorado and a Master of Business
Administration from the University of Alabama. Mr. Waite is active in the
Manufactured Housing Institute.
26
<PAGE> 27
Gary P. McDaniel (52), a director of The Windsor Corporation has been Chief
Executive Officer and a director of Chateau Communities, Inc. ("Chateau") since
February 1997. He served as the Chairman of the Board, President and Chief
Executive Officer for ROC Communities, Inc., which was merged with Chateau in
1997. Since 1993 he has been an executive and shareholder of ROC and its
predecessors since 1979, and has been active in the manufactured home industry
since 1972. Mr. McDaniel is also a Trustee of Windsor Real Estate Investment
Trust 8, which is advised by The Windsor Corporation. Mr. McDaniel has been
active in several state and national manufactured home associations, including
associations in Florida and Colorado. In 1996, he was named "Industry Person of
the Year" by the National Manufactured Housing Industry Association. Mr.
McDaniel is on the Board of Directors of the Manufactured Housing Institute. He
is a graduate of the University of Wyoming and served as a Captain in the United
States Air Force.
C.G. ("Jeff") Kellogg (54) has been President and a director of Chateau since
its inception and was Chief Executive Officer of Chateau from its inception to
February 1997. For the five years preceding the formation of Chateau, Mr.
Kellogg was President and Chief Operating Officer of Chateau Estates. He is
extremely active in local and national industry associations, often in
leadership positions. Mr. Kellogg is a past President of the Michigan
Manufactured Housing Association and served on the Manufactured Housing
Institute's Community Operations Committee. He is a graduate of Michigan
Technological University with a B.S. in Civil Engineering.
John A. Coseo, Jr. (58), the other general partner of the Partnership was the
founder of The Windsor Corporation in 1977 and has been actively involved in all
facets of the manufactured housing business since that time. Mr. Coseo resigned
from his positions as a director and executive officer of the Windsor
Corporation in 1997. From 1979 to the present, Mr. Coseo has acted as general
partner or advisor in the acquisition and management of 56 manufactured home
communities throughout the United States. Mr. Coseo is a general partner of
seven limited partnerships which have registered their securities under the
Securities and Exchange Act of 1934.
Item 10. EXECUTIVE COMPENSATION
The Partnership has not paid and does not propose to pay any remuneration or
retirement benefits to John A. Coseo, Jr. or the directors or executive officers
of The Windsor Corporation. Refer to Item 12 (Certain Relationships and Related
Transactions) for cash distributions and expense reimbursements paid to The
Windsor Corporation by the Partnership.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
No person is known by the Partnership to be the beneficial owner of
more than 5% of the limited partnership units.
(b) Security Ownership of Management
27
<PAGE> 28
The following table presents certain information regarding the number
of Units owned, directly or indirectly, by (i) each General Partner and
(ii) all General Partners as a group as of December 31, 1997:
<TABLE>
<CAPTION>
Amount and Nature of Percent of Class
Title of Class Beneficial Owner Beneficial Ownership
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Units of Limited John A. Coseo, Jr.,
Partnership Interest a General Partner 91 .058%
---- -----
Units of Limited All General Partners as
Partnership Interest a group 91 .058%
==== =====
</TABLE>
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following table reflects all compensation accrued or paid to the General
Partners during the years ended December 31, 1997 and 1996.
<TABLE>
<CAPTION>
Form of Compensation and Entity Receiving 1997 1996
------------------ ---------------
<S> <C> <C>
Expense reimbursement - The Windsor Corporation $ 82,000 $ 91,200
Property management fee - The Windsor Corporation $ 18.700 $ 18,100
Cash distributions - The Windsor Corporation $ 11,900 $ 11,700
</TABLE>
28
<PAGE> 29
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits and Index of Exhibits
(3) - Certificate and Agreement of Limited Partnership filed
as Exhibit A to Registration Statement No. 33-23183 and
incorporated herein by reference.
(27) - Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the last
quarter of the period covered by this Form 10-KSB.
29
<PAGE> 30
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 on this 31st day of
March, 1998.
WINDSOR PARK PROPERTIES 7
A California Limited Partnership
By: THE WINDSOR CORPORATION
By: /s/ Steven G. Waite
-------------------------------------
STEVEN G. WAITE
President
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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
President of The Windsor Corporation, a March 26, 1998
/s/ Steven G. Waite general partner
- ------------------------
STEVEN G. WAITE
/s/Gary P. McDaniel Director of The Windsor Corporation, March 31, 1998
- ------------------------ a general partner
GARY P. MCDANIEL
/s/C.G. Kellogg Director of The Windsor Corporation, March 31, 1998
- ------------------------ a general partner
C.G. KELLOGG
/s/John A. Coseo, Jr. General Partner March 31, 1998
- ------------------------
JOHN A. COSEO, JR.
</TABLE>
30
<PAGE> 31
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
(3) - Certificate and Agreement of Limited Partnership filed
as Exhibit A to Registration Statement No. 33-23183 and
incorporated herein by reference.
(27) - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 478,700
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 13,769,700
<DEPRECIATION> 2,510,300
<TOTAL-ASSETS> 17,197,100
<CURRENT-LIABILITIES> 298,600
<BONDS> 7,420,000
0
0
<COMMON> 0
<OTHER-SE> 9,478,600
<TOTAL-LIABILITY-AND-EQUITY> 17,197,100
<SALES> 0
<TOTAL-REVENUES> 2,704,500
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,813,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 693,700
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 197,800
<EPS-PRIMARY> 1.24
<EPS-DILUTED> 1.24
</TABLE>
