FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended September 30, 1996 Commission file number 000-20147
Realty Parking Properties II L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1710286
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
225 East Redwood Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (410) 727-4083
N/A
(Former Name, Former Address, and Former Fiscal Year,
if Changed Since Last Report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
<PAGE>
REALTY PARKING PROPERTIES II L.P.
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statement
Balance Sheets 1
Statements of Operations 2
Statements of Partners' Capital 3
Statements of Cash Flows 4
Notes to Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-8
Part II. Other Information
Item 1. through Item 6. 9
Signatures 10
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
Assets
<S> <C> <C>
Investment in real estate $ 31,498,654 $ 31,616,733
Cash and cash equivalents 712,312 367,930
Other assets
Accounts receivable 285,328 291,318
Financing costs, less accumulated amortization
of $13,500 and $9,000, respectively 16,503 21,003
Organization and start-up costs, less accumulated
amortization of $48,253 and $40,423, respectively 3,976 11,806
305,807 324,127
$ 32,516,773 $ 32,308,790
Liabilities and Partners' Capital
Accounts payable and prepaid rent $ 119,955 $ 39,541
Due to affiliates 70,249 197,594
Real estate taxes payable 282,500 282,500
Note payable 3,061,000 2,945,000
3,533,704 3,464,635
Partners' Capital
General Partner (19,605) (20,993)
Assignor Limited Partner
Assignment of limited partnership interests-
$25 stated value per unit, 1,392,760
units outstanding 29,001,651 28,864,130
Limited partnership interests-
$25 stated value per unit, 40 units outstanding 923 918
Subordinated Limited Partner 100 100
28,983,069 28,844,155
$ 32,516,773 $ 32,308,790
</TABLE>
See accompanying notes to financial statements
1
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1996 1995 1996 1995
Revenues
<S> <C> <C> <C> <C>
Parking lot rental $ 718,747 $ 682,028 $1,935,605 $1,742,026
Interest income 3,750 3,555 9,757 11,318
722,497 685,583 1,945,362 1,753,344
Expenses
Administrative, due to affiliate 17,836 16,883 60,100 59,890
Professional fees 5,815 10,415 25,700 37,637
Management fees, due to affiliate 56,435 69,331 178,080 179,275
Interest expense 72,359 68,685 212,794 202,963
Depreciation of properties 43,472 43,805 130,416 131,415
Amortization of organization
and start-up costs and financing costs 4,110 4,110 12,330 12,330
200,027 213,229 619,420 623,510
Net earnings $ 522,470 $ 472,354 $1,325,942 $1,129,834
Net earnings per unit of assignee
limited partnership interest $ 0.37 $ 0.34 $ 0.94 $ 0.80
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Partners' Capital
For the Nine Month's Ended September 30, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Assignor Limited Partner
Assignment
of Limited Limited Subordinated
Partnership Partnership Limited General
Interests Interests Partner Partner Total
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $ 28,864,130 $ 918 $ 100 $ (20,993) $ 28,844,155
Net earnings 1,312,645 38 - 13,259 1,325,942
Distributions to partners (1,175,124) (33) - (11,871) (1,187,028)
Balance at September 30, 1996$ 29,001,651 $ 923 $ 100 $ (19,605) $ 28,983,069
Balance at December 31, 1994 $ 28,983,677 $ 921 $ 100 $ (19,784) $ 28,964,914
Net earnings 1,118,504 32 - 11,298 1,129,834
Distributions to partners (1,175,124) (33) - (11,871) (1,187,028)
Balance at September 30, 1995$ 28,927,057 $ 920 $ 100 $ (20,357) $ 28,907,720
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
Sept. 30, 1996 Sept. 30, 1995
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 1,325,942 $ 1,129,834
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation 130,416 131,415
Amortization 12,330 12,330
Changes in assets and liabilities
Decrease (increase) in accounts receivable 5,990 (86,913)
Increase in accounts payable and prepaid rent 80,414 5,997
Decrease in real estate taxes payable - (39,249)
Increase (decrease) in due to affiliates (10,378) 15,096
Net cash provided by operating activities 1,544,714 1,168,510
Cash flows from investing activities -
additions to investment in real estate (129,304) (176,957)
Cash flows from financing activities
Proceeds from note borrowing 116,000 252,000
Distributions to partners (1,187,028) (1,187,028)
Net cash used in financing activities (1,071,028) (935,028)
Net increase in cash and cash equivalents 344,382 56,525
Cash and cash equivalents
Beginning of period 367,930 249,548
End of period $ 712,312 $ 306,073
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
September 30, 1996
(Unaudited)
Note 1 - The Fund and Basis of Preparation
The accompanying financial statements of Realty Parking Properties II
L.P. (the "Fund") do not include all of the information and note disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles. The unaudited interim financial statements
reflect all adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods presented. All such
adjustments are of a normal recurring nature. The unaudited interim financial
information should be read in conjunction with the financial statements
contained in the 1995 Annual Report.
Note 2 - Cash and Cash Equivalents
The Fund considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. Cash and cash
equivalents consist of cash and a money market account and are stated at cost,
which approximates market value, at September 30, 1996 and December 31, 1995.
Note 3 - Investment in Real Estate
Investment in real estate is stated at the lower of net realizable
value or cost, net of accumulated depreciation, and includes the purchase price,
improvements and all costs of acquisition of parking sites acquired, and is
summarized as follows:
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
<S> <C> <C>
Land $26,356,120 $26,347,870
Building 5,583,530 5,579,443
31,939,650 31,927,313
Less: accumulated depreciation (440,996) (310,580)
Total $31,498,654 $31,616,733
</TABLE>
Depreciation of the garage structures is computed using the
straight-line method over 31.5 years for property placed in service prior to
January 1, 1994 and 39 years for property placed in service after January 1,
1994.
Note 4 - Related Party Transactions
The general partner earned an asset-based management fee of $56,435 and
$178,080 for advising the Fund and managing its investments during the three and
nine months ended September 30, 1996, respectively, and $69,331 and $179,275
during the three and nine months ended September 30, 1995, respectively. This
fee is equal to 0.75% of the Fund's capital contributions invested in properties
and 0.5% of capital contributions temporarily held awaiting investment in
properties. Additionally, the general partner will be reimbursed for certain
costs incurred relating to administrative services and expenses of the Fund
totaling $13,814 and $54,296 during the three and nine months ended September
30, 1996, respectively, and $15,540 and $63,140 during the three and nine months
ended September 30, 1995, respectively.
The Fund paid Allright Corporation $116,967 during the quarter ended
June 30, 1996 for improvements made to a certain property in 1995, and $1,894
during the quarter ended September 30, 1996 for improvements made to a certain
property during that quarter.
-5-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
September 30, 1996
(Unaudited)
Note 5 - Note payable
On July 18, 1994 the Fund closed on its $5.6 million line of credit
agreement with a bank. Borrowings under the credit agreement bear interest on
the outstanding principal amount at the bank's prime rate (8.25% at September
30, 1996) plus 1% per annum. The principal balance at September 30, 1996 was
$3,061,000 and is due and payable no later than July 17, 1997. Interest incurred
on the outstanding principal balance totaled $72,359 and $212,794 for the three
and nine months ended September 30, 1996, respectively, and $68,685 and $202,963
for the three and nine months ended September 30, 1995, respectively.
Note 6 - Leases
The Fund generally leases the properties to Central and to Allright for
a period of ten years with an option to extend the leases for two additional
terms of five years. The minimum rents are 6.0% of certain acquisition costs in
the first year, 6.5% in the second year and 7.0% thereafter. The other terms of
the leases contain provisions with respect to Percentage Rents above minimum
returns and early termination of the leases in the event the properties are sold
by the Fund. Percentage rent is calculated and recorded at the end of each
property's lease year in accordance with lease terms and may not necessarily
reflect the period in which it is earned. Certain leases vary from the terms
outlined above in order to accommodate specific circumstances of an acquired
property. A more detailed discussion of the leases is contained in the 1995
Annual Report.
Note 7 - Net Earnings Per Unit of Assignee Limited Partnership Interest
Net earnings per unit of assignee limited partnership interest as
disclosed on the Statements of Operations is based upon 1,392,760 units
outstanding.
Note 8 - Subsequent Events
On November 12, 1996 the Fund will make a cash distribution totaling
$439,640 of which 99% is allocated to Unitholders. This distribution is derived
from funds provided by operations during the quarter ended September 30, 1996.
Holders of Units will receive a cash distribution of $.31 per $25 unit.
-6-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At September 30, 1996, the Fund had a working capital position that
included cash and cash equivalents of $712,312 and accounts payable and prepaid
rent of $119,955. Cash and cash equivalents increased $178,601 during the third
quarter of 1996. This increase represents the net effect of $576,171 in cash
provided by operating activities, capital expenditures of $1,894 and
distributions to investors of $395,676.
On July 18, 1995 the Fund closed on a $5.6 million line of credit to be
used as necessary to complete the Fund's acquisition program, to supplement
working capital reserves and to make distributions to partners. Borrowings under
the credit agreement bear interest at the bank's prime rate (8.25% at September
30, 1996) plus 1% per annum and all borrowings are due and payable no later than
July 17, 1997. The Fund pays down the line of credit as operating cash becomes
available, in order to minimize interest expense, and draws against the line of
credit as operating cash needs arise. At September 30, 1996 the balance due on
the note payable was $3,061,000.
The Fund has substantially completed all major capital improvements
contemplated for its facilities.
On November 12, 1996, the Fund will make a distribution to investors of
$439,640. This distribution is derived from cash provided by operating
activities during the quarter ended September 30,1996.
Results of Operations
The Fund leases its facilities to parking operators under terms that
typically include a minimum rent calculated as a percentage of certain
acquisition costs. In addition, lessees are typically obligated to pay
percentage rent, calculated as a percentage of gross parking revenues.
During the third quarter and first nine months of 1996, parking lot
rental income increased $36,719 and $193,579, respectively, as compared to the
same periods in 1995. Percentage rents totaled $201,748 and $403,484 for the
third quarter and first nine months of 1996, respectively. This compares to
$196,242 and $288,715 realized during the same periods, respectively, in 1995.
Minimum rental income also increased due to the scheduled increases in minimum
rents for several facilities.
Several of the Fund's facilities experienced strong gains in gross
operating receipts, an important performance measure that serves as the basis
for calculating percentage rents payable to the Fund. Eight of the Fund's twelve
facilities experienced gross receipt gains, as compared to the same period in
1995 and aggregate gross receipts for the Fund's facilities were up 19% over the
prior year.
The lessee of the Atlanta facility, located near Atlanta's Olympic
Centennial Park, leased the facility to an Olympic retail vendor during the two
weeks of the Olympic festivities. The rents from this use totaled $598,406,
resulting in an extraordinary increase over the facility's normal monthly gross
parking revenues of approximately $65,000. The Fund owns 2/3 of this facility
and contemplates that July's extraordinary results will contribute to a large
increase in percentage rents, which will be reflected in calender year 1997,
when received.
The Fund's expenses decreased 6% and 1% during the third quarter and
first nine months of 1996, respectively, when compared to the same periods in
1995, due mainly to lower professional fees.
The Fund, in accordance with its original investment strategy,
continues to examine opportunities for disposition of its facilities. It is
anticipated that the highest level returns will be obtained from property sales
to buyers who desire the site for a near term development project. The Fund is
particularly alert for such opportunities
-7-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (continued)
and is currently negotiating with several parties who desire to purchase the
Seattle property for the development of a mid- rise office building. At the
present stage of negotiations, there can be no assurances that the sale of this
property will be consummated.
The Fund had previously noted the possible sale of its Dallas Metro
garage. The proposed buyer of this facility recently withdrew his purchase
offer.
-8-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities
Inapplicable
Item 3. Defaults upon Senior Securities
Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders
Inapplicable
Item 5. Other Information
Inapplicable
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits: None
b) Reports on Form 8-K: None
-9-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
REALTY PARKING PROPERTIES II L.P.
DATE: 11/8/96 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company II, Inc.
General Partner
DATE: 11/8/96 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company II, Inc.
General Partner
-10-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with legend, if applicable)
</LEGEND>
<CIK> 871014
<NAME> Realty Parking Properties II L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 712,312
<SECURITIES> 0
<RECEIVABLES> 285,328
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 997,640
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,516,773
<CURRENT-LIABILITIES> 472,704
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 32,516,773
<SALES> 0
<TOTAL-REVENUES> 1,945,362
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 406,626
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 212,794
<INCOME-PRETAX> 1,325,942
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,325,942
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,325,942
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
