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, 1998
{ } 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, 1998 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
<TABLE>
<CAPTION>
Unaudited
March 31, December 31,
1998 1997
Assets
<S> <C> <C>
Investment in real estate $26,746,721 $ 26,789,804
Cash and cash equivalents 854,041 887,200
Accounts receivable 284,781 283,112
Financing costs, less accumulated amortization
of $22,500 and $21,000, respectively 7,503 9,003
$27,893,046 $ 27,969,119
Liabilities and Partners' Capital
Accounts payable $ 19,951 $ 24,932
Due to affiliate 82,068 68,890
Real estate taxes payable 283,112 283,112
Note payable 3,061,000 3,061,000
3,446,131 3,437,934
Partners' Capital
General Partner (64,965) (64,122)
Assignee and Limited Partnership
Interests - $25 state value per
unit, 1,392,800 units outstanding 24,511,780 24,595,207
Subordinated Limited Partner 100 100
24,446,915 24,531,185
$27,893,046 $ 27,969,119
</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,
1998 1997
Revenues
<S> <C> <C>
Parking lot rental $ 456,998 $ 808,192
Interest income 6,927 4,111
463,925 812,303
Expenses
Administrative, due to affiliate 24,976 23,971
Professional fees 12,529 4,335
Management fees, due to affiliate 51,461 58,260
Interest expense 65,046 71,572
Depreciation of properties 43,083 43,500
Amortization of organization
and start-up costs and financing costs 1,500 2,865
198,595 204,503
Net earnings $ 265,330 $ 607,800
Net earnings per unit of assignee and
limited partnership interests-basic $ 0.19 $ 0.43
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
Statements of Partners' Capital
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Assignee
and Limited Subordinated
Partnership Limited General
Interests Partner Partner Total
<S> <C> <C> <C> <C>
Balance at December 31, 1997 $24,595,207 $ 100 $ (64,122) $24,531,185
Net earnings 262,677 - 2,653 265,330
Distribution to partners (346,104) - (3,496) (349,600)
Balance at March 31, 1998 $24,511,780 $ 100 $ (64,965) $24,446,915
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
</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, 1998 March 31,1997
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 265,330 $ 607,800
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation 43,083 43,500
Amortization 1,500 2,865
Changes in assets and liabilities
Increase in accounts receivable (1,669) (284,085)
Decrease in accounts payable (4,981) (15,856)
Increase (decrease) in due to affiliates 13,178 (31,789)
Net cash provided by operating activities 316,441 322,435
Cash flows from financing activities -
distribution to partners (349,600) (439,640)
Net decrease in cash and cash equivalents (33,159) (117,205)
Cash and cash equivalents
Beginning of period 887,200 694,405
End of period $ 854,041 $ 577,200
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
March 31, 1998
(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
1997 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, 1998 and December 31, 1997.
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, 1998 December 31, 1997
<S> <C> <C>
Land $21,857,657 $21,857,657
Building 5,583,532 5,583,532
27,441,189 27,441,189
Less: accumulated depreciation (694,468) (651,385)
Total $26,746,721 $26,789,804
</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 $51,461 and $58,260
for advising the Fund and managing its investments during the three months ended
March 31, 1998 and 1997, 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 plus 1% per annum.
Effective July 18, 1997, the line of credit agreement was amended to a maximum
$3.5 million capacity, the interest rate on outstanding borrowings was reduced
to the bank's prime rate (8.5% at March 31, 1998) and the commitment was
extended
-5-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
March 31, 1998
(Unaudited)
Note 5 - Note payable (continued)
for an additional three years, until July 18, 2000. The principal balance at
March 31, 1998 and December 31, 1997 was $3,061,000. The collateral security
provision of the loan agreement provides for the assignmeng of the Fund's rights
as a lessor to its interest in the parking lot leases, contracts and income.
Interest paid on the outstanding principal balance totaled $65,046 and $71,572
for the three months ended March 31, 1998 and 1997, respectively.
Note 6 - 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 7 - Subsequent Event
During the fourth quarter of 1997, the Fund signed a contract for the sale of
its Dallas-Metropolitan garage. After discovering certain title issues, the
buyer elected to terminate the purchase contract. In keeping with the terms of
the contract, the earnest money was returned to the buyer.
In April 1998, the Fund signed a contract for the sale of its San Francisco lot.
The prospective buyer is a development group which intends to construct a hotel
on the site. As a condition of closing, the buyer must receive various
developmental approvals from local municipalities. In light of these approvals,
there are no assurances that a sale will occur.
On May 14, 1998, the Fund made a cash distribution totaling $367,087 of which
99% will be allocated to assignee and limited partners. This distribution is
derived from funds provided by operating activities. Holders of Units will
receive a cash distribution of $.26 per original $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
At March 31, 1998, the Fund had a working capital position that
includes cash and cash equivalents of $854,041 and accounts payable of $102,019.
Cash and cash equivalents decreased $33,159 during the first quarter of 1998.
This decrease represents the net effect of $316,441 in cash provided by
operating activities and distributions to investors of $349,600.
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 plus 1% per annum.
Effective July 18, 1997, the line of credit agreement was amended to a maximum
$3.5 million capacity, the interest rate on outstanding borrowings was reduced
to the bank's prime rate (8.5% at March 31, 1998) and the commitment was
extended for an additional three years, until July 18, 2000. The principal
balance at March 31, 1998 and December 31, 1997 was $3,061,000.
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, 1998, the Fund made a distribution to investors of $367,087
of which 99% will be allocated to holders of assignee and limited partnership
units in accordance with the Partnership Agreement. This distribution is derived
from funds provided by operating activities.
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.
Parking lot rental income totaled $456,998 and $808,192 during the
three months ended March 31, 1998 and 1997, respectively. The decrease in income
is primarily the result of two activities. The sale of the Seattle property
decreased base rental income by $78,416, and the percentage rent earned at the
Dallas-Metro and Atlanta facilities in 1997, as discussed below, was not
duplicated in 1998.
During the three months ended March 31, 1998 percentage rents earned at
the Atlanta facility totaled $1,669. During the three months ended March 31,
1997 percentage rents earned at the Atlanta and Dallas-Metro facilities totaled
$287,738. The percentage rents earned at the Atlanta facility in 1997 are
largely attributable to an increase in parking lot revenues brought about by the
1996 Olympic Games. 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). The percentage rent
earned at the Atlanta facility in 1997 was a one time event, and will likely not
occur in the future.
Interest income increased during the three months ended March 31, 1998,
when compared to 1997, due to higher average cash balances.
Expenses, net of depreciation and amortization, decreased $4,126 during
the three months ended March 31, 1998, when compared to 1997. The change is
primarily due to the sale of the Seattle property which has reduced management
fees, the reduction of the interest due on the note payable, net of the increase
in professional fees incurred regarding property sales opportunities that were
subsequently terminated.
-7-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (continued)
During the fourth quarter of 1997, the Fund signed a contract for the
sale of its Dallas-Metropolitan garage. After discovering certain title issues,
the buyer elected to terminate the purchase contract. In keeping with the terms
of the contract, the earnest money was returned to the buyer.
In April 1998, the Fund signed a contract for the sale of its San
Francisco lot. The prospective buyer is a development group which intends to
construct a hotel on the site. As a condition of closing, the buyer must receive
various developmental approvals from local municipalities. In light of these
approvals, there are no assurances that a sale will occur.
The Fund, in accordance with its original investment strategy,
continues to examine opportunities for disposition of its facilities. While it
was originally anticipated that the highest returns would be obtained from
property sales to buyers who desired sites for near-term development potential,
management now believes that certain properties could be sold at substantial
gains based on their parking economics.
-8-
<PAGE>
<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: 5/15/98 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company II, Inc.
General Partner
DATE: 5/15/98 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company II, Inc.
General Partner
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with legend, if applicable)
</LEGEND>
<CIK> 0000871014
<NAME> Realty Parking Properties II L.P.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 854,041
<SECURITIES> 0
<RECEIVABLES> 284,781
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,138,822
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 27,893,046
<CURRENT-LIABILITIES> 385,131
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 27,893,046
<SALES> 0
<TOTAL-REVENUES> 463,925
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 133,549
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 65,046
<INCOME-PRETAX> 265,330
<INCOME-TAX> 0
<INCOME-CONTINUING> 265,330
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 265,330
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
