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 June 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 June 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>
June 30, December 31,
1996 1995
Assets
<S> <C> <C>
Investment in real estate $31,540,232 $ 31,616,733
Cash and cash equivalents 533,711 367,930
Other assets
Accounts receivable 287,659 291,318
Financing costs, less accumulated amortization
of $10,500 and $9,000, respectively 18,003 21,003
Organization and start-up costs, less accumulated
amortization of $43,033 and $40,423, respectively 6,586 11,806
312,248 324,127
$32,386,191 $ 32,308,790
Liabilities and Partners' Capital
Accounts payable and prepaid rent $ 106,463 $ 39,541
Due to affiliates 79,954 197,594
Real estate taxes payable 282,500 282,500
Note payable 3,061,000 2,945,000
3,529,917 3,464,635
Partners' Capital
General Partner (20,872) (20,993)
Assignor Limited Partner
Assignment of limited partnership interests-
$25 stated value per unit, 1,392,760
units outstanding 28,876,127 28,864,130
Limited partnership interests-
$25 stated value per unit, 40 units outstanding 919 918
Subordinated Limited Partner 100 100
28,856,274 28,844,155
</TABLE>
See accompanying notes to financial statements
1
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
Revenues
<S> <C> <C> <C> <C>
Parking lot rental $630,023 $587,137 $1,216,858 $1,059,998
Interest income 3,195 3,700 6,007 7,763
633,218 590,837 1,222,865 1,067,761
Expenses
Administrative, due to affiliate 19,435 20,139 42,264 43,007
Professional fees 13,302 21,981 19,886 27,221
Management fees, due to affiliate 61,920 55,235 121,645 109,944
Interest expense 70,738 69,564 140,435 134,278
Depreciation of properties 43,472 43,805 86,944 87,610
Amortization of organization
and start-up costs and financing costs 4,110 4,110 8,220 8,220
212,977 214,834 419,394 410,280
Net earnings $420,241 $376,003 $ 803,471 $ 657,481
Net earnings per unit of assignee
limited partnership interest $ 0.30 $ 0.27 $ 0.57 $ 0.47
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Partners' Capital
For the Six Month's Ended June 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 795,413 23 - 8,035 803,471
Distribution to partners (783,416) (22) - (7,914) (791,352)
Balance at June 30, 1996 $28,876,127 $ 919 $ 100 $ (20,872) $28,856,274
Balance at December 31, 1994$28,983,677 $ 921 $ 100 $ (19,784) $28,964,914
Net earnings 650,887 19 - 6,575 657,481
Distribution to partners (783,416) (22) - (7,914) (791,352)
Balance at June 30, 1995 $28,851,148 $ 918 $ 100 $ (21,123) $28,831,043
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1996 June 30, 1995
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 803,471 $ 657,481
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation 86,944 87,610
Amortization 8,220 8,220
Changes in assets and liabilities
Decrease (increase) in accounts receivable 3,659 (26,381)
Increase in accounts payable and prepaid rent 66,922 2,341
Decrease in real estate taxes payable - (39,249)
Increase (decrease) in due to affiliates (673) 17,513
Net cash provided by operating activities 968,543 707,535
Cash flows from investing activities -
additions to investment in real estate (127,410) (44,023)
Cash flows from financing activities
Proceeds from note borrowing 116,000 252,000
Distributions to partners (791,352) (791,352)
Net cash used in financing activities (675,352) (539,352)
Net increase in cash and cash equivalents 165,781 124,160
Cash and cash equivalents
Beginning of period 367,930 249,548
End of period $ 533,711 $ 373,708
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
June 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 June 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>
June 30, 1996 December 31, 1995
<S> <C> <C>
Land $26,356,120 $26,347,870
Building 5,581,636 5,579,443
31,937,756 31,927,313
Less: accumulated depreciation (397,524) (310,580)
Total $31,540,232 $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 $61,920 and
$121,645 for advising the Fund and managing its investments during the three and
six months ended June 30, 1996, respectively, and $55,235 and $109,944 during
the three and six months ended June 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 totalling $18,034
and $40,482 during the three and six months ended June 30, 1996, respectively,
and $21,990 and $47,600 during the three and six months ended June 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.
-5-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
June 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 June 30,
1996) plus 1% per annum. The principal balance at June 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 $70,738 and $140,435 for the three and six
months ended June 30, 1996, respectively, and $69,564 and $134,278 for the three
and six months ended June 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 August 13, the Fund made a cash distribution totaling $395,676 of
which 99% is allocated to Unitholders. This distribution is derived from funds
provided by operations during the quarter ended June 30, 1996. Holders of Units
will receive a cash distribution of $.28 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
Cash and cash equivalents increased $188,833 during the second quarter
of 1996. This increase represents the net effect of $587,669 in cash provided by
operating activities, capital expenditures of $119,160, proceeds from note
borrowing of $116,000 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% as of
June 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 June 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 August 14, 1996, the Fund made a distribution to investors of
$395,676. This distribution was derived from cash provided by operating
activities during the quarter ended June 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 second quarter and first six months of 1996, parking lot
rental income increased $42,886 and $156,860, respectively, as compared to the
same periods in 1995. These increases are primarily attributable to percentage
rents earned at the San Francisco, Phoenix and San Antonio facilities.
Percentage rents totaled $120,722 and $203,735 for the second quarter and first
six months of 1996, respectively. This compares to $91,807 and $92,473, realized
during the same periods, respectively, in 1995. Rental income also increased due
to the scheduled increases in minimum rents for several facilities.
Subsequent to the end of the second quarter, the lessee of the Atlanta
facility, located near Atlanta's Olympic Centennial Park, reported that it had
arranged for the use of the property by an Olympic vendor during July. The rents
from this use totaled approximately $500,000, 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 according to the lease terms, are not payable until April 1997.
Interest income decreased slightly for the second quarter and first six
months of 1996, when compared to the same period in 1995. These changes are due
to lower interest rates. The Fund's expenses showed no significant variations
for the second quarter or first six months of 1996 when compared to the same
periods in 1995.
The Fund continues to examine opportunities for disposition of its
facilities. In accordance with the Fund's original investment strategy, 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 and is currently negotiating with
several parties who desire to purchase the Seattle property for the development
of a mid rise office building.
-7-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (continued)
The Fund has received a letter of intent to purchase the Dallas Metro
facility, a 605 space parking garage. The terms of the purchase are currently
being negotiated with the buyer.
At the present stage of negotiations, there can be no assurances that
the sales of these two properties will be consummated.
-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: 8/9/96 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company II, Inc.
General Partner
DATE: 8/10/96 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 533,711
<SECURITIES> 0
<RECEIVABLES> 287,659
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 821,370
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,386,191
<CURRENT-LIABILITIES> 468,917
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 32,386,191
<SALES> 0
<TOTAL-REVENUES> 1,222,865
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 278,959
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 140,435
<INCOME-PRETAX> 803,471
<INCOME-TAX> 0
<INCOME-CONTINUING> 803,471
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 803,471
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
