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 March 31, 1997
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended March 31, 1997 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
Part II. Other Information
Item 1. through Item 6. 8
Signatures 9
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31
1997 1996
Assets
<S> <C> <C>
Investment in real estate $31,414,322 $31,457,822
Cash and cash equivalents 577,200 694,405
Other assets
Accounts receivable 591,667 307,582
Financing costs, less accumulated amortization
of $16,500 and $15,000, respectively 13,503 15,003
Organization and start-up costs, less accumulated
amortization of $52,229 and $50,863, respectively - 1,366
605,170 323,951
$32,596,692 $32,476,178
Liabilities and Partners' Capital
Accounts payable and prepaid rent $ 108,034 $ 123,891
Due to affiliates 89,417 121,206
Real estate taxes payable 304,754 304,754
Note payable 3,061,000 3,061,000
3,563,205 3,610,851
Partners' Capital
General Partner (19,100) (20,782)
Assignee and Limited Partnership
Interests - $25 state value per
unit, 1,392,800 units outstanding 29,052,487 28,886,009
Subordinated Limited Partner 100 100
29,033,487 28,865,327
$32,596,692 $32,476,178
</TABLE>
See accompanying notes to financial statements
1
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31
1997 1996
Revenues
<S> <C> <C>
Parking lot rental $808,192 $586,835
Interest income 4,111 2,812
812,303 589,647
Expenses
Administrative, due to affiliate 23,971 22,829
Professional fees 4,335 6,584
Management fees, due to affiliate 58,260 59,725
Interest expense 71,572 69,697
Depreciation of properties 43,500 43,472
Amortization of organization
and start-up costs and financing costs 2,865 4,110
204,503 206,417
Net earnings $607,800 $383,230
Net earnings per unit of assignee and
limited partnership interests $ 0.43 $ 0.27
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Partners' Capital
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Assignee
and Limited Subordinated
Partnership Limited General
Interests Partner Partner Total
<S> <C> <C> <C> <C>
Balance at December 31, 1996$28,886,009 $ 100 $ (20,782) $28,865,327
Net earnings 601,722 - 6,078 607,800
Distribution to partners (435,244) - (4,396) (439,640)
Balance at March 31, 1997 $29,052,487 $ 100 $ (19,100) $29,033,487
Balance at December 31, 1995$28,865,048 $ 100 $ (20,993) $28,844,155
Net earnings 379,398 - 3,832 383,230
Distribution to partners (391,719) - (3,957) (395,676)
Balance at March 31, 1996 $28,852,727 $ 100 $ (21,118) $28,831,709
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31, 1996
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 607,800 $ 383,230
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation 43,500 43,472
Amortization 2,865 4,110
Changes in assets and liabilities
Increase in accounts receivable (284,085) (68,802)
Increase (decrease) in accounts payable (15,856) 17,318
Increase (decrease) in due to affiliates (31,789) 1,546
Net cash provided by operating activities 322,435 380,874
Cash flows from investing activities -
additions to investment in real estate - (8,250)
Cash flows from financing activities -
distribution to partners (439,640) (395,676)
Net decrease in cash and cash equivalents (117,205) (23,052)
Cash and cash equivalents
Beginning of period 694,405 367,930
End of period $ 577,200 $ 344,878
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
March 31, 1997
(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 1996 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 March 31, 1997 and December 31, 1996.
Note 3 - Investment in Real Estate
Investment in real estate is stated at the lower of fair value or cost,
net of accumulated depreciation, and includes all related acquisition costs of
the properties, and is summarized as follows:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
<S> <C> <C>
Land $26,356,118 $26,356,118
Building 5,583,532 5,583,532
31,939,650 31,939,650
Less: accumulated depreciation (525,328) (481,828)
Total $31,414,322 $31,457,822
</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 $58,260 and
$59,725 for advising the Fund and managing its investments during the three
months ended March 31, 1997 and 1996, 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.
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 (8.5% at March 31,
1997) plus 1% per annum. The principal balance at March 31, 1997 and December
31, 1996 was $3,061,000 and is due and payable no later than July 17, 1997.
Interest incurred on the outstanding principal balance totaled $71,572 and
$69,697 for the three months ended March 31, 1997 and 1996, respectively. The
Fund expects to renew this credit agreement with the existing lender under
similar terms.
-5-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
March 31, 1997
(Unaudited)
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 1996
Annual Report.
Note 7 - Net Earnings Per Unit of Assignee and Limited Partnership Interest
Net earnings per unit of assignee and limited partnership interest as
disclosed on the Statements of Operations is based upon 1,392,800 units
outstanding.
Note 8 - Subsequent Events
On May 14, 1997 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 March 31, 1997.
Holders of Units will receive a cash distribution of $.31 per $25 unit.
-6-
<PAGE>
<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 decreased $117,205 during the first quarter
of 1997. This decrease represents the net effect of $322,435 in cash provided by
operating activities and distributions to investors of $439,640.
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 plus 1% per
annum and all borrowings are due and payable no later than July 17, 1997. At
March 31, 1997 and December 31, 1996 the balance due on the note payable was
$3,061,000. The Fund expects to renew this credit agreement with the existing
lender under similar terms.
The Fund has substantially completed all major capital improvements
contemplated for its facilities. The Fund's operations and its available line of
credit provide sufficient capital to satisfy the Fund's liquidity requirements.
On May 14, 1997, the Fund made a distribution to investors of $439,640.
This distribution was derived from cash provided by operating activities during
the quarter ended March 31, 1997.
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 first quarter of 1997, parking lot rental income totaled
$808,192 a 42% increase over the $586,835 recorded during the same period of
1996. This increase is primarily attributable to percentage rents of $283,908
and $4,090 recognized during the quarter at the Atlanta and Dallas-Metro
facilities, respectively. In 1996, the Atlanta facility recognized percentage
rent of $81,013. While the amount of percentage rent earned at the Atlanta
facility for 1997 and 1996 is impressive, it is unlikely that this facility will
realize percentage rent in the foreseeable future. The facility's close
proximity to the Olympic Games' Centennial Park permitted it to earn substantial
revenues during the Olympic events. In addition, approximately 150 parking
spaces had been leased for two years to the Atlanta Committee for the Olympic
Games(ACOG). Shortly after the conclusion of the Olympics, ACOG terminated these
leases. Rental income also increased due to the scheduled increases in minimum
rents for several facilities.
Interest income increased slightly during the first quarter of 1997
when compared to 1996, while expenses declined during the period.
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 has
placed the Seattle property under contract to an office developer. While several
governmental approvals must be granted before the sale can be completed, it is
anticipated the sale will close by October 1997.
-7-
<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: 5/9/97 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company II, Inc.
General Partner
DATE: 5/9/97 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 577,200
<SECURITIES> 0
<RECEIVABLES> 591,667
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,168,867
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,596,692
<CURRENT-LIABILITIES> 502,205
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 32,596,692
<SALES> 0
<TOTAL-REVENUES> 812,303
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 132,931
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 71,572
<INCOME-PRETAX> 607,800
<INCOME-TAX> 0
<INCOME-CONTINUING> 607,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 607,800
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
