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
For the fiscal year ended December 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ................... to .......................
Commission File Number
33-36336
INTERVEST MORTGAGE ASSOCIATES L.P.
(Exact name of Registrant as specified in its charter)
Delaware 13-3575243
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Rockefeller Plaza, New York, New York 10020-1903
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 757-7300
----------------------------
Securities Registered Pursuant to Section 12(b) of the Act:
None
(Title of Class)
Securities Registered Pursuant to Section 12(g) of the Act:
None
(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 the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of Regulation SK is not contained herein, and will not be contained, to the best
of Registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III to this Form 10-K or any amendment to this
Form 10-K (X) .
1
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
PART I
Pages
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<S> <C> <C> <C>
Item 1 Description of Business 3
Item 2 Properties 6
Item 3 Legal Proceedings 6
Item 4 Submission of Matters to a Vote of Security Holders 6
PART II
Item 5 Market for the Registrant's Units of Limited Partnership Interest ("Units") 6
Item 6 Selected Financial Data 6
Item 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations 7
Item 8 Financial Statements and Supplementary Data 9
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure 28
PART III
Item 10 Directors and Executive Officers of the Registrant 28
Item 11 Executive Compensation 28
Item 12 Security Ownership of Certain Beneficial Owners and Management 28
Item 13 Certain Relationships and Related Transactions 29
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K 29
SIGNATURES 30
Supplemental Information to be Furnished with Reports Filed Pursuant to Section 30
15(d) of the Act.
</TABLE>
2
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PART I
Item 1. Description of Business
Organization
The registrant, Intervest Mortgage Associates L.P. (the "Partnership") is a
Delaware limited partnership organized in June 1990. The Partnership's principal
executive offices are located at 10 Rockefeller Plaza, Suite 1015, New York, New
York 10020-1903, and its telephone number is 212-757-7300.
The General Partner is Intervest Funds Management Corporation (the "General
Partner"), a Delaware corporation which was incorporated in June 1990. All of
the stock of the General Partner is owned by Lowell S. Dansker and Lawrence G.
Bergman, who are also Special Limited Partners of the Partnership. The General
Partner manages and controls the affairs of the Partnership and has agreed to
pay all Partnership expenses.
During 1991, a public offering of $10,000,000 of units of limited partnership
interest was completed. The Partnership's objectives are to invest in mortgages,
which will preserve and protect the Partnership's capital and provide for
monthly distribution to unitholders at a floating annual interest rate on their
adjusted contributions equal to two percentage points over the prime rate of
Chase Manhattan Bank of New York, with a minimum rate of 9 1/2% and a maximum
rate of 15%.
The Partnership invests in mortgages secured by income-producing properties,
primarily residential apartment buildings. Mortgages generally will have
maturities ranging from one to seven years. Mortgage investments may include
first mortgages, junior mortgages and wraparound mortgages.
Present Business
Proceeds from the sale of the $10,000,000 of units were principally used to
acquire mortgages, which at December 31, 1996, had a carrying value of
$6,575,000. The balance is mostly invested in cash equivalents.
For financial statement reporting purposes, all mortgages sold to the
Partnership by affiliates have been recorded at the historical cost of the
affiliate, adjusted for a discount to reflect an appropriate market interest
rate at the date of acquisition.
Each of the Partnership's seven mortgages is a first mortgage lien on
multifamily residential apartment buildings. Five of the residential apartment
buildings are located in New York City, one is located in New Rochelle, New
York, a suburb of New York City, and one is located in East Orange, New Jersey.
Future Business Operations
The Partnership plans to engage in the real estate business, including the
acquisition and origination of additional mortgages in the future. Such
additional mortgages may be purchased from affiliates of the Partnership or from
unaffiliated parties. It is anticipated that such mortgages will be acquired or
originated by reinvesting a substantial part of the proceeds resulting from the
sale, repayment or prepayment of the present mortgage portfolio.
The Partnership's mortgage loans will include: (i) wraparound mortgage loans;
(ii) junior mortgage loans; (iii) interim mortgage loans; and (iv) first
mortgage loans.
The Partnership's mortgage loans will generally be secured by income-producing
properties. In determining whether to make mortgage loans, the Partnership will
analyze relevant real property and financial factors which may in certain cases
include such factors as the condition and use of the subject property, its
income-producing capacity and the quality, experience and creditworthiness of
the owner of the property. The Partnership's mortgage loans will generally not
be personal obligations of the borrower and will not be insured or guaranteed by
governmental agencies or otherwise.
3
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The Partnership may make both long- and short-term mortgage loans. The
Partnership anticipates its mortgage loans will typically mature within
approximately five years. However, the Partnership may also invest in mortgage
loans with shorter maturities and then reinvest the proceeds from such mortgage
loans in additional mortgage loans. The Partnership anticipates that generally
its mortgage loans will provide for balloon payments due at the time of their
maturity.
Mortgage Investment Policy
To the extent that proceeds from existing mortgages are available, the
Partnership anticipates that it will acquire or originate senior and junior
mortgages, primarily on multifamily residential properties located in the New
York metropolitan area. Such mortgages generally will not be insured by the
Federal Housing Administration or guaranteed by the Veterans Administration or
otherwise guaranteed or insured in any way. The Partnership requires that all
mortgaged properties be covered by property insurance in amounts deemed adequate
in the opinion of management.
In addition, prior to funding any mortgage, the Partnership will obtain a real
property appraisal prepared by an independent MAI appraiser and a mortgagee's or
owner's title insurance policy or commitment as to the priority of the mortgage
or the condition of title. The General Partner will generally rely on its own
independent analysis and not exclusively on appraisals in determining whether or
not to make a particular mortgage loan. The principal amount of each mortgage
made by the Partnership will not exceed, when added to the amount of any other
mortgages on the underlying property, 85% of the appraised value of the
underlying property.
An independent advisor has been retained to issue letters of opinion that each
proposed mortgage to an affiliated borrower is fair and at least as favorable to
the Partnership as a loan to an unaffiliated borrower in similar circumstances.
Temporary Investment by Affiliates on Behalf of the Partnership
An affiliate of the Partnership may make a mortgage loan or purchase a mortgage
in its own name and temporarily hold such investment for the purpose of
facilitating the making of an investment of the Partnership, provided that any
such investment is acquired by the Partnership at a cost no greater than the
cost of such investment to the affiliate plus carrying costs and provided there
is no other benefit to the affiliate arising out of such transaction.
Certain Characteristics of the Partnership's Mortgage Investments
Mortgages typically provide for periodic payments of interest and, in some
cases, principal during the term of the mortgage, with the remaining principal
balance and any accrued interest due at the maturity date. The mortgages owned
by the Partnership provide for monthly payments of interest and balloon payments
at maturity, which means that a substantial part or all of the original
principal of the mortgage is due in one lump sum payment at maturity. The
property on which the mortgage is a lien provides the security for the mortgage.
If the net revenue from the property is not sufficient to make all debt service
payments due on mortgages on the property, or if at maturity or the due date of
any balloon payment the owner of the property fails to raise the funds to make
the payment (by refinancing, sale or otherwise), the Partnership could sustain a
loss on its investment in the mortgage. To the extent that the aggregate net
revenues from the Partnership's mortgage investments are insufficient to pay the
monthly distributions to the unitholders, the General Partner has agreed to pay
the Partnership any shortfall.
With respect to any wraparound mortgages which may be originated by the
Partnership in the future, such wraparound mortgages are generally negotiated
and structured on an individual, case by case basis, and may be structured to
include any or all of the following provisions:
4
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(i) The Partnership may lend money to a real property owner who would be
obligated to repay the senior underlying mortgage debt as well as the new
wraparound indebtedness owed to the Partnership.
(ii) The Partnership may legally assume the obligation to make the
payments due on the senior underlying mortgage debt.
(iii) The real property owner-debtor may agree to make payments to the
Partnership in satisfaction of both the senior underlying mortgage debt and the
new wraparound indebtedness owed to the Partnership.
(iv) The Partnership may receive a mortgage on the real property to secure
repayment of the total amount of indebtedness (wraparound indebtedness and the
senior underlying mortgage indebtedness).
The mortgages owned by the Partnership are first mortgages. In all cases, in the
opinion of management, the current value of the underlying property
collateralizing the mortgage loan is in excess of the stated amount of the
mortgage loan. Therefore, in the opinion of management of the Partnership, each
property on which a mortgage owned by the Partnership is a lien constitutes
adequate collateral for the related mortgage loan. Accordingly, in the event the
owner of a property fails to make required debt service payments, management
believes that, based upon current value, upon a foreclosure of the mortgage and
sale of the property, the Partnership would recover its entire investment.
However, there can be no assurance that the current value of the underlying
property will be maintained.
Loan Loss Experience
For financial reporting purposes, the Partnership considers a loan as delinquent
or non-performing when it is contractually past due 90 days or more as to
principal or interest payments. To date, the Partnership has not experienced any
defaults or delinquencies in its mortgage portfolio. The Partnership evaluates
its portfolio of mortgage loans on an individual basis, comparing the amount at
which the investment is carried to its estimated net realizable value. Since the
Partnership has not experienced any defaults or delinquencies, no allowance for
loan losses is presently maintained.
Tax Accounting Treatment of Payments Received on Mortgages
The Partnership derives substantially all of its cash flow from debt service
payments which it receives on mortgages owned by it. The tax accounting
treatment of such debt service payments, as income or return of capital, depends
on the particular mortgage. In the case of mortgages which pay interest only,
the entire debt service payment prior to maturity received by the Partnership is
treated as income and the repayment of principal is generally considered a
return of capital. In the case of mortgages which include amortization of
principal in the debt service payment received by the Partnership, the amount
representing amortization of principal is generally treated as a return of
capital for tax accounting purposes.
Financial Accounting Treatment of Payments Received on Mortgages
For financial reporting purposes, the Partnership's basis in certain mortgages
is less than the face amount outstanding. This difference is attributable to
discounts recorded by the Partnership to reflect a market rate of interest at
the date the loans were acquired. These discounts will be amortized over the
lives of the mortgages.
Effect of Government Regulation
Investment in mortgages on real properties presently may be impacted by
government regulation in several ways. Residential properties may be subject to
rent control and rent stabilization laws. As a consequence, the owner of the
property may be restricted in its ability to raise the rents on apartments. If
real estate taxes, fuel costs and maintenance of and repairs to the property
were to increase substantially, and such increases are not offset by increases
in rental income, the ability of the owner of the property to make the payments
due on the mortgage as and when they are due might be adversely affected.
5
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Laws and regulations relating to asbestos have been adopted in many
jurisdictions, including New York City, which require that whenever any work is
undertaken in a property in an area in which asbestos is present, the asbestos
must be removed or encapsulated in accordance with such applicable local and
federal laws and regulations. The cost of asbestos removal or encapsulation may
be substantial, and if there were not sufficient cash flow from the property,
after debt service on mortgages, to fund the required work, and the owner of the
property fails to fund such work from other sources, the value of the property
could be adversely affected, with consequent impairment of the security for the
mortgage.
Laws regulating the storage, disposal and clean up of hazardous or toxic
substances at real property have been adopted at the federal, state and local
levels. Such laws may impose a lien on the real property superior to any
mortgages on the property. In the event such a lien were imposed on any property
which serves as security for a mortgage owned by the Partnership, the security
for such mortgage could be impaired.
Item 2. Properties
None.
Item 3. Legal Proceedings
The Partnership is not engaged in any litigation, nor does it presently know of
any threatened or pending litigation in which it is contemplated that the
Partnership will be made a party.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for the Registrant's Units of Limited Partnership Interest
("Units")
There is no established trading market for the Units.
Item 6. Selected Financial Data
<TABLE>
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Income Statement Data
Year Ended December 31,
1996 1995 1994 1993 1992
------------ ------------ -------------- ------------- --------
<S> <C> <C> <C> <C> <C>
Revenue:
Interest income......................................$1,218,000 $1,209,000 $1,190,000 $1,130,000 $1,035,000
Gain on early repayment of
discounted mortgages....................... 47,000 9,000
Other income...................................... 2,000 17,000
---------- -----------
.....................................................$1,267,000 $1,235,000 $1,190,000 $1,130,000 $1,035,000
Expenses:
General and administrative........................ 3,000 6,000 5,000 5,000 3,000
------------ ------------ ------------ ------------ ------------
Net income...........................................$1,264,000 $1,229,000 $1,185,000 $1,125,000 $1,032,000
========== ========== ========== ========== ==========
</TABLE>
6
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Balance Sheet Data
<TABLE>
<CAPTION>
December 31,
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------- --------
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents...............................$ 5,730,000 $ 6,566,000 $ 3,726,000 $ 1,002,000 $ 1,368,000
Mortgages receivable..................................... 6,575,000 5,542,000 7,578,000 10,195,000 9,489,000
Total assets.............................................12,386,000 12,177,000 11,418,000 11,289,000 10,903,000
Partner's Capital........................................10,104,000 10,045,000 10,039,000 10,190,000 10,084,000
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources:
The Partnership is engaged in the real estate business, including the
originating and purchase of real estate mortgage loans, consisting of first
mortgages, junior mortgages, wraparound mortgages and interim mortgage loans.
The Partnership's current investment policy emphasizes the investment in
mortgage loans on income producing properties. The majority of the Partnership's
loans are expected to mature within approximately five years.
The Partnership's liquidity is managed to ensure that sufficient funds are
available to preserve and protect the Partnership's capital and to provide for
monthly distributions to unitholders at a floating annual rate based on their
adjusted capital contributions equal to two percentage points over the prime
rate of Chase Manhattan Bank, New York with a minimum rate of 9 1/2% and a
maximum of 15%.
Results of Operations:
Year ended December 31, 1996 and 1995
For the year ended December 31, 1996 interest income was $1,218,000 as compared
to $1,209,000 for the same period a year ago. The increase of $9,000 resulted
mainly from an increase in mortgages receivable in the fourth quarter 1996, an
offset in part by a decrease in interest rate subsequent to July 1995.
Year ended December 31, 1995 and 1994
For the year ended December 31, 1995 interest income was $1,209,000 as compared
to $1,190,000 for the same period a year ago. The increase of $19,000 resulted
mainly from an increase in interest rates in 1995.
Since the Partnership is engaged in the real estate business, its results of
operations are affected by general economic trends in real estate markets, as
well as by trends in the general economy and the movement of interest rates.
Since the properties underlying the Partnership's mortgages are concentrated in
the New York City area, the economic condition in that area can also have an
impact on the Partnership's operations.
The rental housing market in New York City remains stable and the Partnership
expects that such properties will continue to appreciate in value with little or
no reduction in occupancy rates. The Partnership's mortgage portfolio is
composed predominantly of mortgages on multi-family residential properties, most
of which are subject to applicable rent control and rent stabilization statutes
and regulations. In both cases, any increases in rent are subject to specific
limitations. As such, properties of the nature of those constituting the most
significant portion of the Partnership's mortgage portfolio are not affected by
the general movement of real estate values in the same manner as other
income-producing properties.
7
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Impact of Inflation:
Inflation has not had an effect on the Partnership's objectives of making
monthly distributions to unitholders from interest received from its mortgage
portfolio. Since certain mortgages bear interest at a fixed rate, rising
interest rates as a result of inflation may require the Partnership to rely on
the guarantee of the General Partner to pay to the Partnership a sufficient
amount to make the monthly distributions to the unitholders.
Business:
The Partnership is engaged in the real estate business and has historically
invested primarily in real estate mortgage loans secured by income producing
real property. It is anticipated that a substantial portion of the loans to be
made by the Partnership will be loans with terms of approximately five years.
Such transactions typically require an understanding of the underlying real
estate transaction and rapid processing and funding as a principal basis for
competing in the making of these loans. The Partnership does not finance new
construction.
At December 31, 1996, five of the seven Partnership loans were secured by
properties located in the greater New York metropolitan area.
Competition:
The Company competes for acceptable investments with real estate investment
trusts, commercial banks, insurance companies, savings and loan associations,
pension funds and mortgage banking firms, many of which have greater resources
with which to compete for desirable mortgage loans.
8
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Item 8. Financial Statements and Supplementary Data
<TABLE>
<CAPTION>
INTERVEST MORTGAGE ASSOCIATES L.P.: Page
<S> <C>
Report of Independent Auditors -- 1996, 1995 and 1994........................................................... 11
Balance Sheets as of December 31, 1996 and 1995................................................................. 12
Statements of Operations for the years ended December 31, 1996, 1995 and 1994................................... 13
Statements of Partners' Capital for the years ended December 31, 1996, 1995 and 1994............................ 14
Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994................................... 15
Notes to Financial Statements................................................................................... 16
Schedule IV -- Mortgage Loans on Real Estate -- December 31, 1996............................................... 20
</TABLE>
Other financial statement schedules and inapplicable periods with respect to
schedules listed above are omitted because the conditions requiring their filing
do not exist or the information required thereby is included in the financial
statements filed, including the notes thereto.
9
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<TABLE>
<CAPTION>
INTERVEST FUNDS MANAGEMENT CORPORATION: Pages
<S> <C>
Report of Independent Auditors -- 1996, 1995 and 1994........................................................... 22
Balance Sheets as of December 31, 1996 and 1995................................................................. 23
Statements of Operations for the years ended December 31, 1996, 1995 and 1994................................... 24
Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994................................... 25
Notes to Financial Statements................................................................................... 26
</TABLE>
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` REPORT OF INDEPENDENT AUDITORS
To the Partners
Intervest Mortgage Associates L.P.
New York, New York
We have audited the accompanying balance sheets of Intervest Mortgage
Associates L.P. (a Delaware limited partnership) as at December 31, 1996 and
December 31, 1995, and the related statements of operations, partners' capital
and cash flows for each of the years in the three-year period ended December 31,
1996 and Schedule IV. These financial statements and related schedule are the
responsibility of the Company'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 and related schedule
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 enumerated above present
fairly, in all material respects, the financial position of Intervest Mortgage
Associates L.P. at December 31, 1996 and December 31, 1995, and the results of
its operations and its cash flows for each of the years in the three-year period
ended December 31, 1996 in conformity with generally accepted accounting
principles. Further, it is our opinion that the schedule referred to above
presents fairly, in all material respects, the information set forth therein in
compliance with the applicable accounting regulation of the Securities and
Exchange Commission.
New York, New York
January 22, 1997
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INTERVEST MORTGAGE ASSOCIATES L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
------------
A S S E T S 1996 1995
----------- ------ -----
<S> <C> <C>
Cash and cash equivalents . . . . . . . . . $ 5,730,000 $ 6,566,000
Mortgages receivable, including due from
affiliates of $1,300,000 in 1996 and
1995 (Note C) . . . . . . . . . . . . . . 6,575,000 5,542,000
Interest receivable . . . . . . . . . . . . 81,000 69,000
----------- -----------
T O T A L . . . . . . . . . . . . $12,386,000 $12,177,000
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Distributions payable (Note F) . . . . . . . $ 2,101,000 $ 1,738,000
Escrow deposits payable . . . . . . . . . . 173,000 367,000
Deferred fee income . . . . . . . . . . . . 8,000 27,000
----------- -----------
Total liabilities . . . . . . . . 2,282,000 2,132,000
Partners' capital . . . . . . . . . . . . . 10,104,000 10,045,000
----------- -----------
T O T A L . . . . . . . . . . . . $12,386,000 $12,177,000
=========== ===========
</TABLE>
The accompanying notes to
financial statements are an
integral part hereof.
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<PAGE>
INTERVEST MORTGAGE ASSOCIATES L.P.
STATEMENTS OF OPERATIONS
Year Ended December 31,
------------------------
1996 1995 1994
---- ---- ----
Revenue:
Interest income, includes
$241,000, $294,000 and
$371,000, from affiliates
(Note G) . . . . . . . . . $1,218,000 $1,209,000 $1,190,000
---------- ---------- ----------
Gain on early repayment of
discounted mortgages
(Note C) . . . . . . . . . 47,000 9,000
Other income . . . . . . . . 2,000 17,000
---------- ---------- ----------
1,267,000 1,235,000 1,190,000
Expenses:
General and administrative . 3,000 6,000 5,000
---------- ---------- ----------
NET INCOME . . . . . . . . . . . $1,264,000 $1,229,000 $1,185,000
========== ========== ==========
The accompanying notes to
financial statements are an
integral part hereof.
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<PAGE>
<TABLE>
<CAPTION>
INTERVEST MORTGAGE ASSOCIATES L.P.
STATEMENTS OF PARTNERS' CAPITAL
Special Limited
General Limited Partners
Total Partner Partners (Unitholders)
----- ------- -------- -------------
Balances, January 1,
<S> <C> <C> <C> <C>
1994 . . . . . . . $ 10,190,000 $ 186,600 $ 3,400 $ 10,000,000
Partnership expenses
paid by the
general partner
(Note D) . . . . . 5,000 5,000
Net income . . . . . 1,185,000 112,400 1,100 1,071,500
Distributions
(Note E) . . . . . (1,341,000) (266,800) (2,700) (1,071,500)
----------- --------- ------- -----------
Balances,
December 31, 1994 10,039,000 37,200 1,800 10,000,000
Partnership expenses
paid by the
general partner
(Note D) . . . . . 6,000 6,000
Net income . . . . . 1,229,000 1,229,000
Distributions
(Note E) . . . . . (1,229,000) (1,229,000)
----------- --------- ------- -----------
Balances,
December 31, 1995 10,045,000 43,200 1,800 10,000,000
Partnership expenses
paid by the
general partner
(Note D) . . . . . 3,000 3,000
Net income. . . . . . 1,264,000 55,400 600 1,208,000
Distributions
(Note E) . . . . . (1,208,000) (1,208,000)
----------- --------- ------- -----------
BALANCES,
DECEMBER 31, 1996. $10,104,000 $ 101,600 $ 2,400 $10,000,000
=========== ========= ======= ===========
</TABLE>
The accompanying notes to
financial statements are an
integral part hereof.
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<PAGE>
INTERVEST MORTGAGE ASSOCIATES L.P.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1996 1995 1994
------ ------ -----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . $ 1,264,000 $ 1,229,000 $ 1,185,000
Adjustments to reconcile net income to
net cash provided by operating
activities:
Amortization of discount on
mortgages receivable . . . . . . (17,000) (18,000) (18,000)
Gain on early repayment of
discounted mortgages . . . . . . (47,000) (9,000)
Expenses paid by general partner . 3,000 6,000 5,000
(Increase) decrease in interest
receivable . . . . . . . . . . . (12,000) 45,000 (22,000)
(Decrease) increase in deferred fee
income . . . . . . . . . . . . . (19,000) 26,000 (14,000)
------------ ------------ ------------
Net cash provided by operating
activities . . . . . . . . . . 1,172,000 1,279,000 1,136,000
------------ ------------ ------------
Cash flows from investing activities:
Collection of mortgages receivable . . 9,118,000 3,884,000 3,292,000
Mortgages receivable acquired . . . . . (10,087,000) (1,821,000) (657,000)
(Decrease) increase in escrow deposits
payable . . . . . . . . . . . . . . . (194,000) 303,000 (20,000)
------------ ------------ ------------
Net cash (used in) provided by
investing activities . . . . . (1,163,000) 2,366,000 2,615,000
------------ ------------ ------------
Cash flows from financing activities:
Partners' distributions . . . . . . . . (845,000) (805,000) (987,000)
Decrease in due to general partner . . (40,000)
------------ ------------ ------------
Net cash (used in) financing
activities . . . . . . . . . . (845,000) (805,000) (1,027,000)
------------ ------------ ------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . . (836,000) 2,840,000 2,724,000
Cash and cash equivalents at beginning of
the period . . . . . . . . . . . . . . 6,566,000 3,726,000 1,002,000
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF THE
PERIOD . . . . . . . . . . . . . . . . $ 5,730,000 $ 6,566,000 $ 3,726,000
============ ============ ============
</TABLE>
The accompanying notes to
financial statements are an
integral part hereof.
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<PAGE>
INTERVEST MORTGAGE ASSOCIATES L.P.
NOTES TO FINANCIAL STATEMENTS
(NOTE A) - Organization and Business:
Intervest Mortgage Associates L.P., a Delaware limited partnership (the
"Partnership"), was formed for the primary purpose of investing in mortgages on
improved income-producing real properties. The Partnership will continue until
December 31, 1999, unless terminated sooner in accordance with the provisions of
the partnership agreement.
The special limited partners, Lowell S. Dansker and Lawrence G. Bergman
each own 50% of the common stock of Intervest Funds Management Corporation, the
general partner.
(NOTE B) - Significant Accounting Policies:
Cash equivalents:
The Partnership considers all highly liquid instruments purchased with
an original maturity of three months or less to be cash equivalents.
(NOTE C) - Mortgages Receivable:
Mortgages receivable consist of first mortgages on residential
properties.
Interest rates on mortgages range from 9 1/2% to 15%. Certain mortgages
have been discounted utilizing rates ranging from 11% to 16 1/2%.
During 1996 and 1995, mortgages were paid in full prior to their
maturity date. This resulted in the recognition of a gain, which represents the
balance of the unamortized discount applicable to these mortgages.
(continued)
- 16 -
<PAGE>
INTERVEST MORTGAGE ASSOCIATES L.P.
NOTES TO FINANCIAL STATEMENTS
(NOTE C) - Mortgages Receivable: (continued)
Annual maturities of mortgages receivable during the next five years
are summarized as follows:
Year Ending
December 31,
1997 . . . . . . . . . . . . . $1,526,000
1998 . . . . . . . . . . . . . 652,000
1999 . . . . . . . . . . . . . 2,985,000
2000 . . . . . . . . . . . . . 84,000
2001 . . . . . . . . . . . . . 84,000
Thereafter . . . . . . . . . . 1,337,000
----------
6,668,000
Less unearned discount . . . . 93,000
------
T o t a l. . . . . . $6,575,000
==========
The Partnership evaluates its portfolio of mortgage loans on an
individual basis, comparing the amount at which the investment is carried to its
estimated net realizable value. At December 31, 1996 and at December 31, 1995,
no allowance was required.
(NOTE D) - Duties and Obligations of the General Partner:
As more fully described in the partnership agreement, the General
Partner has agreed, among other things, to:
(1) Manage and control the business of the Partnership;
(2) Pay all organization costs and operating expenses of the
Partnership and the expenses in connection with the public offering. Operating
expenses for 1996, 1995 and 1994 have been reflected in the financial statements
of the Partnership;
(3) Pay to the Partnership any shortfall with respect to cash
distributions due to unitholders;
(4) Repurchase each year, on a noncumulative basis, a maximum of 10% of
units outstanding as of January 1 of each year if requested by the unitholders;
and
(continued)
- 17 -
<PAGE>
INTERVEST MORTGAGE ASSOCIATES L.P.
NOTES TO FINANCIAL STATEMENTS
(NOTE D) - Duties and Obligations of the General Partner: (continued)
(5) Maintain a net worth of at least 10% of the adjusted contribution
of the unitholders, but in no event less than $500,000. At December 31, 1996 and
December 31, 1995, the audited financial statements of the general partner
showed a net worth of $1,134,000 and $1,085,000, respectively, including notes
receivable from stockholders of $1,000,000.
(NOTE E) - Allocation of Income, Losses and Distributions:
As more fully described in the partnership agreement, income, losses
and distributions are to be allocated as follows:
(1) Net income and operating cash distributions, first to unitholders
in an amount equal to their investment return (equal to 2% above prime rate of
Chase Manhattan Bank, subject to a minimum rate of 9 1/2% and a maximum rate of
15% per annum) and then to the general partner (99%) and special limited
partners (1%).
(2) Net loss, other than from a disposition, as defined, 99% to the
general partner and 1% to the special limited partners.
(3) Net loss from a disposition, to unitholders to the extent of their
positive capital account balances and then to the general partner and special
limited partners.
(4) Disposition proceeds will generally be distributed to unitholders
until each has received an amount equal to his original invested capital and
then to the general partner and special limited partners.
(NOTE F) - Distribution Accrual Plan:
Under the partnership agreement, unitholders can elect to have the
Partnership retain distributions they are entitled to receive. Such retained
amounts will earn interest at Chase Manhattan Bank's prime rate, compounded
monthly, with a floor of 9 1/2% and a ceiling of 15%.
(NOTE G) - Related Parties:
[1] During 1995 and 1994, the Partnership received payments of
mortgages in the amounts of $2,000,000 and $850,000, respectively, due from
affiliates.
(continued)
- 18 -
<PAGE>
INTERVEST MORTGAGE ASSOCIATES L.P.
NOTES TO FINANCIAL STATEMENTS
(NOTE G) - Related Parties: (continued)
[2] Under the terms of the partnership agreement, the Partnership will
invest in mortgages on improved income-producing real properties owned by either
unaffiliated or affiliated borrowers. If the property owner is an affiliated
entity, certain conditions must be met before the investment can be made by the
Partnership.
(NOTE H) - Income Taxes:
The Partnership will not be required to provide for, or pay, any
federal income taxes. Income tax liabilities and/or benefits that arise from its
operations will be passed directly to the individual partners. The Partnership
may be subject to state and local taxes in jurisdictions in which it operates.
(NOTE I) - Unit Repurchase Rights:
Beginning January 1, 1999, or at an earlier date, in the event the
Partnership is to be terminated, the General Partner will have the right to
purchase all Units from the unitholders.
- 19 -
<PAGE>
<TABLE>
<CAPTION>
INTERVEST MORTGAGE ASSOCIATES L. P.
SCHEDULE IV--MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1996
ORIGINAL
EFFECTIVE ACTUAL FINAL FACE CARRYING PRE-
INTEREST INTEREST MATURITY PRIOR AMOUNT OF AMOUNT OF PAYMENT
DESCRIPTION RATE RATE DATE PERIODIC PAYMENT TERMS LIEN MORTGAGE MORTGAGES PENALTY
----------- ---- ---- ---- ---------------------- ---- -------- -----------------
RESIDENTIAL FIRST MORTGAGES,
RENTAL APARTMENT BUILDINGS:
<S> <C> <C> <C> <C> <C> <C>
BRONX, NEW YORK 13.00 13.00 07/01/12 INTEREST ONLY MONTHLY $800,000 $ 800,000 (D)
NEW YORK, NEW YORK 11.60 10.00 03/01/05 (B) 950,000 840,000 (E)
NEW ROCHELLE, NEW YORK 10.25 10.25 (A) 10/01/99 (C) 1,300,000 1,300,000 (F)
BRONX, NEW YORK 16.50 15.00 03/31/98 PRIN. AND INTEREST MONTHLY 670,000 542,000 (G)
EAST ORANGE, NEW JERSEY 16.40 14.25 11/08/99 PRIN. AND INTEREST MONTHLY 650,000 643,000 (H)
NEW YORK, NEW YORK 13.25 13.25 04/15/99 (C) 1,050,000 1,050,000 (I)
NEW YORK, NEW YORK 13.00 13.00 05/01/97 (C) 1,400,000 1,400,000 (F)
-- ---------- ----------
$0 $6,820,000 $6,575,000
== ========== ==========
(A) INTEREST AT FLUCTUATING CHASE MANHATTAN BANK PRIME RATE PLUS 2% WITH A
FLOOR AND A CEILING.
(B) INTEREST MONTHLY, ADDITIONAL PRINCIPAL PAYMENT DUE ON EVERY MARCH 1.
(C) INTEREST MONTHLY, PRINCIPAL AT MATURITY.
(D) NOT PREPAYALE.
(E) 1% FEE REQUIRED, IF PREPAID PRIOR TO 3/2/2004.
(F) NO PREPAYMENT PENALTY.
(G) 1% PAYOFF PREMIUM IS REQIORED.
(H) NOT PREPAYABLE PRIOR TO 7/8/1998, AND ONE MONTH'S (31 DAYS) INTEREST IS
REQUIRED.
(I) NOT PREPAYABLE UNTIL 4/15/97, 1% PREPAYMENT PREMIUM NOT REQUIRED (IF
AFTER MARCH 15, 1999).
(J) NO MORTGAGE LOAN IS DELINQUENT AS TO PRINCIPAL AND/OR INTEREST.
</TABLE>
20
<PAGE>
SCHEDULE IV--MORTGAGES LOANS ON REAL ESTATE--continued
The following summary reconciles mortgages receivable at their carrying values:
<TABLE>
<CAPTION>
Year Ended December 31
----------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of period ........... $5,542,000 $ 7,578,000 $10,195,000
Additions during period:
Mortgages acquired ............................... 10,087,000 1,821,000 657,000
----------- ----------- -----------
15,629,000 9,399,000 10,852,000
Deductions during period:
Collections of principal, net
of amortization of discounts ................... 9,054,000 3,857,000 3,274,000
----------- ----------- -----------
BALANCE AT CLOSE OF PERIOD ................ $ 6,575,000 $ 5,542,000 $ 7,578,000
=========== =========== ===========
</TABLE>
21
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Intervest Funds Management Corporation
New York, New York
We have audited the accompanying balance sheets of Intervest Funds
Management Corporation as at December 31, 1996 and December 31, 1995, and the
related statements of operations and cash flows for each of the years in the
three-year period ended December 31, 1996. These financial statements are the
responsibility of the Company'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 enumerated above present
fairly, in all material respects, the financial position of Intervest Funds
Management Corporation at December 31, 1996 and December 31, 1995, and the
results of its operations and its cash flows for the years in the three-year
period ended December 31, 1996 in conformity with generally accepted accounting
principles.
New York, New York
January 22, 1997
- 22 -
<PAGE>
<TABLE>
<CAPTION>
INTERVEST FUNDS MANAGEMENT CORPORATION
BALANCE SHEETS
December 31,
------------
A S S E T S 1996 1995
----------- ------ -----
<S> <C> <C>
Cash and cash equivalents . . . . . . . . . . $ 32,000 $ 7,000
Investment in partnership (Notes A and C) . . 102,000 73,000
Prepaid taxes . . . . . . . . . . . . . . . . 5,000
----------- -----------
T O T A L . . . . . . . . . . . . . $ 134,000 $ 85,000
=========== ===========
Commitments and contingent liabilities (Note C)
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized
3,000 shares; issued and outstanding
20 shares . . . . . . . . . . . . . . . . . $ 20 $ 20
Additional paid-in capital . . . . . . . . . . 1,907,980 1,907,980
Deficit . . . . . . . . . . . . . . . . . . . (774,000) (823,000)
----------- -----------
1,134,000 1,085,000
Less notes receivable - stockholders
(Note C) . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
----------- -----------
T O T A L . . . . . . . . . . . . . $ 134,000 $ 85,000
=========== ===========
</TABLE>
The accompanying notes to
financial statements are an
integral part hereof.
- 23 -
<PAGE>
INTERVEST FUNDS MANAGEMENT CORPORATION
STATEMENTS OF OPERATIONS
Year Ended December 31,
------------------------
1996 1995 1994
------ ------ -----
Revenue:
Interest income . . . . . . . . . $ 1,000 $ 1,000 $ 1,000
--------- --------- ---------
Expenses:
General and administrative . . . . 3,000 3,000 2,000
Payment to partnership (Note C) . 14,000
--------- --------- ---------
T o t a l . . . . . . . . . 3,000 17,000 2,000
--------- --------- ---------
Operating (loss) . . . . . . . . . . (2,000) (16,000) (1,000)
Equity in income of partnership . . . 56,000 112,000
State and City (taxes) benefit
(Note B[2]) . . . . . . . . . . . (5,000) 1,000 (8,000)
--------- --------- ---------
NET INCOME (LOSS) . . . . . . . . . . 49,000 (15,000) 103,000
Deficit at beginning of period . . . (823,000) (808,000) (911,000)
--------- --------- ---------
DEFICIT AT END OF PERIOD . . . . . . $(774,000) $(823,000) $(808,000)
========= ========= =========
The accompanying notes to
financial statements are an
integral part hereof.
- 24 -
<PAGE>
<TABLE>
<CAPTION>
INTERVEST FUNDS MANAGEMENT CORPORATION
STATEMENTS OF CASH FLOWS
Year Ended December 31,
-----------------------
1996 1995 1994
---- ---- ----
Cash flows from operating activities:
<S> <C> <C> <C>
Net income (loss) . . . . . . . . . . . . . . . $ 49,000 $ (15,000) $ 103,000
Adjustments to reconcile net income (loss) to
net cash (used in) operating activities:
Equity in income of partnership . . . . . . (56,000) (112,000)
Decrease (increase) in prepaid taxes . . . 5,000 (4,000)
(Decrease) in taxes payable . . . . . . . . (12,000)
--------- --------- ---------
Net cash (used in) operating
activities . . . . . . . . . . . . . . (2,000) (19,000) (21,000)
--------- --------- ---------
Cash flows from investing activities:
Distributions from partnership . . . . . . . . 267,000
Decrease in due from partnership . . . . . . . 40,000
Purchase of units of limited partnership . . . (30,000)
Sale of units of limited partnership . . . . . 30,000
Expenses paid on behalf of partnership . . . . (3,000) (6,000) (5,000)
--------- --------- ---------
Net cash provided by (used in)
investing activities . . . . . . . . . 27,000 (36,000) 302,000
--------- --------- ---------
Cash flows from financing activities:
Distributions to stockholders . . . . . . . . . (252,000)
Capital contributions . . . . . . . . . . . . . 15,000
--------- ---------
Net cash provided by (used in)
financing activities . . . . . . . . . 15,000 (252,000)
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS . . . . . . . . . . . . . . . . . . 25,000 (40,000) 29,000
Cash and cash equivalents at beginning of the
period . . . . . . . . . . . . . . . . . . . . 7,000 47,000 18,000
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD . . $ 32,000 $ 7,000 $ 47,000
========= ========== =========
</TABLE>
The accompanying notes to
financial statements are an
integral part hereof.
- 25 -
<PAGE>
INTERVEST FUNDS MANAGEMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
(NOTE A) - Organization:
Intervest Funds Management Corporation (the "Company"), a Delaware
corporation, was formed by Lowell S. Dansker and Lawrence G. Bergman, who each
own 50% of the Company's issued and outstanding common shares. The Company is
the general partner and its stockholders are special limited partners in a
limited partnership, Intervest Mortgage Associates L.P. (the "Partnership").
(NOTE B) - Significant Accounting Policies:
[1] Cash equivalents:
The Company considers all highly liquid instruments purchased
with an original maturity of three months or less to be cash equivalents.
[2] Income taxes:
The Company has elected to be treated as an S corporation for
federal income tax purposes and for state and local jurisdictions which permit
such election. As a result, income is generally taxed directly to the
stockholders for such purposes.
(NOTE C) - The Partnership:
The Partnership invests in mortgages on improved income-producing real
properties owned by either unaffiliated or affiliated borrowers. The Partnership
has sold 1,000 units of limited partnership interest at $10,000 per unit. Each
unitholder is generally entitled to a return on his investment equal to 2% above
the prime rate of Chase Manhattan Bank subject to a minimum rate of 9 1/2% and a
maximum rate of 15% per annum.
The Company, as general partner, has agreed, among other things to:
[1] Manage and control the business of the Partnership;
[2] Pay all operating costs of the Partnership;
[3] Pay to the Partnership any shortfall with respect to cash
distributions due to the unitholders described above;
[4] Repurchase each year on a noncumulative basis, a maximum of 10% of
units outstanding as of January 1 of each year if requested by the unitholders,
and
(continued)
- 26 -
<PAGE>
INTERVEST FUNDS MANAGEMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
(NOTE C) - The Partnership: (continued)
[5] Maintain a net worth of at least 10% of the adjusted contribution
of the unitholders, but in no event less than $500,000. Notes receivable were
contributed to capital by the stockholders to maintain a net worth of at least
10% of the adjusted contribution of the unitholders. The notes will become
interest-bearing at a defined rate only for the period from the date payment is
demanded by the Company until such payment is made.
In addition, the Company has paid all organization costs and expenses
of the Partnership in connection with the sale of the units of limited
partnership interest.
As more fully described in the partnership agreement, income, losses
and distributions are to be allocated as follows:
(1) Net income and operating cash distributions, first to unitholders
in an amount equal to their investment return and then to the general partner
(99%) and special limited partners (1%).
(2) Net loss, other than from a disposition, as defined, 99% to the
general partner and 1% to the special limited partners.
(3) Net loss from a disposition, to unitholders to the extent of their
positive capital account balances and then to the general partner and special
limited partners.
(4) Disposition proceeds will generally be distributed to unitholders
until each has received an amount equal to his original invested capital and
then to the general partner and special limited partners.
(NOTE D) - Unit Repurchase Rights:
Beginning January 1, 1999 or at an earlier date, in the event the
Partnership is to be terminated, the Company will have the right to purchase all
units from the unitholders.
- 27 -
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
The General Partner of the Partnership, Intervest Funds Management Corporation,
is wholly owned by Lowell S. Dansker and Lawrence G. Bergman. The Partnership
will be managed by the General Partner, which was incorporated in Delaware on
June 13, 1990. It has an office located at 10 Rockefeller Plaza, New York, New
York 10020-1903 (telephone: 212-757-7300).
The current directors and executive officers of the General Partner are as
follows:
Lowell S. Dansker, age 46, serves as a Director, and as Co-Chairman, President
and Treasurer of the General Partner. Mr. Dansker received a Bachelor of Science
in Business Administration from Babson College, a law degree from the University
of Akron School of Law, and is admitted to practice as an attorney in New York,
Ohio, Florida and the District of Columbia.
Lawrence G. Bergman, age 52, serves as a Director, and as Co-Chairman, Vice
President and Secretary of the General Partner. Mr. Bergman received a Bachelor
of Science degree and a Master of Engineering (Electrical) degree from Cornell
University, and a Master of Science in Engineering and a Ph.D degree from The
Johns Hopkins University.
For more than the past fifteen years, Mr. Dansker and Mr. Bergman have been
actively involved in the ownership and operation of real estate and mortgages
primarily through 100% family owned partnerships, corporations and family
trusts.
Mr. Bergman, his wife, Mr. Dansker and Mr. Dansker's father are the sole owners,
partners and trustees, respectively, of such family corporations, partnerships
and trusts. Mr. Dansker and Mrs. Bergman are brother and sister.
Item 11. Executive Compensation
Pursuant to the terms of the partnership agreement, $112,400 was credited to the
capital account of the General Partner during 1994. No other compensation of any
kind was paid to or accrued by the Partnership for any executive officer or
director of the General Partner.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information concerning the ownership of common
stock of the General Partner.
28
<PAGE>
Amount of Percent
Name and Address of Beneficial Owner Beneficial Ownership of Class
- ------------------------------------ ---------------------------------
Lowell S. Dansker........................ 10 shares 50.0%
360 West 55th Street,
New York, New York 10019
Lawrence G. Bergman................... 10 shares 50.0%
201 East 62nd Street
New York, New York 10021
Item 13. Certain Relationships and Related Transactions
During 1994 and 1995, the partnership received payments of mortgages in the
amounts of $850,000 and $2,000,000, respectively, due from affiliates.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (1) Financial Statements:
See Item 8 "Financial Statements and Supplementary Data"
(a) (2) Financial Statement Schedules:
See Item 8 "Financial Statements and Supplementary Data"
(a) (3) Exhibits:
4 Certificate of Limited Partnership and Certificate of Amendment to
Certificate of Limited Partnership. (1)
10.1 Form of Escrow Agreement. (1)
10.2 Form of Independent Advisor Agreement. (1)
25 Power of Attorney. (1)
(b) Reports on Form 8-K
None
(1) Incorporated by reference to Registrant's Registration Statement as
amended on Form S-11 (File No. 33- 36336), declared effective on
November 20, 1990.
29
<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.
INTERVEST MORTGAGE ASSOCIATES L.P.
By: INTERVEST FUNDS MANAGEMENT CORPORATION
General Partner
Dated: March 25, 1997 By: /S/ Lawrence G. Bergman
-----------------------
Lawrence G. Bergman
Executive Vice 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.
Signatures
President, Co-Chairman,
Treasurer and Director
of Intervest Funds
/S/ Lowell S. Dansker Management Corporation
Lowell S. Dansker (Principal Executive Officer)
Dated: March 25, 1997
Executive Vice President,
Co-Chairman, Secretary
/S/ Lawrence G. Bergman and Director of Intervest
Lawrence G. Bergman Funds Management Corporation
Dated: March 25, 1997 (Principal Operating Officer)
Supplemental Information to be Furnished with Reports Filled Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act:
The annual report to Unitholders has not as yet been distributed.
When the annual report has been distributed to the Unitholders, four copies will
be sent to the Commission.
30
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains information extracted from form 10-K at December 31,
1996, and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,730
<SECURITIES> 0
<RECEIVABLES> 6,575
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,386
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12,386
<SALES> 0
<TOTAL-REVENUES> 1,267
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,264
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,264
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
