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, 2000
{ } 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, 2000 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 Statements
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
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 9
Part II. Other Information
Item 1. through Item 6. 9
Signatures 10
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Balance Sheets
<TABLE>
<CAPTION>
June 30,
2000 December 31,
(Unaudited) 1999
------------------ -----------------
Assets
<S> <C> <C>
Investment in real estate $ 13,753,087 $ 19,684,020
Cash and cash equivalents 872,974 649,014
Accounts receivable 183,013 287,440
Note receivable 200,000 -
------------------ -----------------
$ 15,009,074 $ 20,620,474
================== =================
Liabilities and Partners' Capital
Accounts payable $ 112,329 $ 104,024
Due to affiliates 53,887 63,070
Real estate taxes payable 147,220 250,300
Deposit 60,000 -
Note payable 736,000 2,086,000
------------------ -----------------
1,109,436 2,503,394
------------------ -----------------
Partners' Capital
General Partner - -
Assignee and Limited Partnership
Interests - $25 stated value per
unit, 1,392,800 units outstanding 13,899,538 18,116,980
Subordinated Limited Partner 100 100
------------------ -----------------
13,899,638 18,117,080
------------------ -----------------
$ 15,009,074 $ 20,620,474
================== =================
</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,
2000 1999 2000 1999
---------------------------------- -------------------------------------
Revenues
<S> <C> <C> <C> <C>
Parking lot rental $ 400,994 $ 766,987 $ 743,871 $ 1,243,858
Interest income 22,709 13,790 67,608 18,481
---------------- ---------------- ------------------ -----------------
423,703 780,777 811,479 1,262,339
---------------- ---------------- ------------------ -----------------
Expenses
Administrative, including amounts
to related party 25,033 22,775 53,306 47,102
Professional fees 5,000 4,000 10,000 10,000
Management fees to related party 26,914 52,662 58,782 104,670
Interest expense 33,610 51,674 79,067 102,250
Depreciation 15,535 42,232 31,070 85,315
Amortization - 1,503 - 3,003
---------------- ---------------- ------------------ -----------------
106,092 174,846 232,225 352,340
---------------- ---------------- ------------------ -----------------
Earnings from operations 317,611 605,931 579,254 909,999
Gain on sale of property, net 1,870,024 2,818,169 4,883,776 2,818,169
---------------- ---------------- ------------------ -----------------
Net earnings $ 2,187,635 $ 3,424,100 $ 5,463,030 $ 3,728,168
================ ================ ================== =================
Net earnings per unit of assignee and
limited partnership interest-basic $ 1.54 $ 2.43 $ 3.85 $ 2.65
================ ================ ================== =================
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
Realty Parking Properties II L.P.
Statements of Partners' Capital
For the Six Months Ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Assignee
and Limited Subordinated
Partnership Limited General
Interests Partner Partner Total
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1999 $ 18,116,980 $ 100 $ - $ 18,117,080
Net earnings 5,366,225 - 96,805 5,463,030
Distributions to partners -
Operations (450,010) - (4,546) (454,556)
Sales proceeds (9,133,657) - (92,259) (9,225,916)
----------------- ------------------ ------------------ -----------------
Balance at June 30, 2000 $ 13,899,538 $ 100 $ - $ 13,899,638
================= ================== ================== =================
Balance at December 31, 1998 $ 24,696,690 $ 100 $ (63,097) $ 24,633,693
Net earnings 3,690,886 - 37,282 3,728,168
Distributions to partners (744,138) - (7,517) (751,655)
----------------- ------------------ ------------------ -----------------
Balance at June 30, 1999 $ 27,643,438 $ 100 $ (33,332) $ 27,610,206
================= ================== ================== =================
</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, June 30,
2000 1999
-------------------------------------
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 5,463,030 $ 3,728,168
Adjustments to reconcile net earnings to net cash
provided by operating activities
Gain on sales of properties, net (4,883,776) (2,818,169)
Depreciation 31,070 85,315
Amortization - 3,003
Changes in assets and liabilities
Decrease (increase) in accounts receivable
and real estate taxes payable, net 1,347 (52,524)
Increase (decrease) in accounts payable 8,305 (16,717)
Increase (decrease) in due to affiliate (9,183) 36,736
------------------ -----------------
Net cash provided by operating activities 610,793 965,812
------------------ -----------------
Cash flows from investing activities
Proceeds from sales of properties, net 10,583,639 4,759,214
Deposit 60,000 -
------------------ -----------------
Net cash provided by investing activities 10,643,639 4,759,214
------------------ -----------------
Cash flows from financing activities
Distributions to partners (9,680,472) (751,665)
Repayment of note payable (1,350,000) -
------------------ -----------------
Net cash used in financing activities (11,030,472) (751,665)
------------------ -----------------
Net increase in cash and cash equivalents 223,960 4,973,361
Cash and cash equivalents
Beginning of period 649,014 645,327
------------------ -----------------
End of period $ 872,974 $ 5,618,688
================== =================
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
June 30, 2000
(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 financial position, operating results and cash flows 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 1999 Annual Report.
Note 2 - Cash and Cash Equivalents
The Fund considers all short-term investments with maturities of three months or
less at dates of purchase as 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, 2000 and December 31, 1999.
Note 3 - Investment in Real Estate
Investment in real estate is summarized as follows:
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
<S> <C> <C>
Land $ 12,711,555 $ 15,716,812
Building 1,432,654 4,839,732
14,144,209 20,556,544
---------- ----------
Less: accumulated depreciation (391,122) (872,524)
-------- --------
Total $ 13,753,087 $ 19,684,020
============ ============
</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 - Deposit
On May 16, 2000 the Fund entered into a land option agreement for the sale of
its San Diego-Union, California property for $5,320,000. The agreement expires
one year from the date of contract and provides for a non-refundable option
consideration in the amount of $60,000, which will be credited against the
purchase price.
Note 5 - Sales of Property
On January 31, 2000, the Fund sold its Dallas-Metro, Texas property for
$7,000,000, including cash of $6,450,000 and a second lien promissory note of
$550,000. The Fund's investment in the property was $3,673,210, net of
accumulated depreciation of $512,472. The capital gain from the sale totaled
$3,013,752, net of expenses of $313,038. The second lien promissory note of
$550,000 is secured by a Second Deed of Trust and is due on October 31, 2000.
The Fund collected $350,000 of the promissory note in April, 2000. Interest on
the unpaid principal balance accrues at the rate of 15% per annum.
On May 15, 2000, the Fund sold its San Diego-B, California property for
$4,328,000. The Fund's investment in the property was $2,226,652. The capital
gain from the sale totaled $1,870,024, net of expenses of $231,324.
-5-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
June 30, 2000
(Unaudited)
Note 6 - Related Party Transactions
The General Partner earned a management fee of $26,914 and $52,662 during the
three months ended June 30, 2000 and 1999, respectively, and $58,782 and
$104,670 during the six months ended June 30, 2000 and 1999, respectively.
Additionally, the General Partner is reimbursed for certain costs incurred
relating to administrative and professional services of the Fund.
Note 7 - Note payable
The Fund had a $3.5 million line of credit agreement with a bank which expired
in July 2000. The line of credit has been renewed until July 2001with a
commitment of $736,000, the principal balance outstanding at the time of
renewal. The interest rate on outstanding borrowings is the bank's prime rate,
9.5% at June 30, 2000. The line of credit is expected to be repaid from proceeds
of additional property sales. The collateral security provision of the loan
agreement provides for the assignment of the Fund's rights as a lessor to its
interest in the parking lot leases, contracts and income.
The principal balance outstanding at June 30, 2000 and December 31, 1999 was
$736,000 and $2,086,000. Interest paid on the outstanding principal balance
totaled $33,610 and $51,674 during the three months ended June 30, 2000 and
1999, respectively, and $79,067 and $102,250 during the six months ended June
30, 2000 and 1999, respectively.
Note 8 - 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.
-6-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Fund does not contemplate making any major improvements to it
properties during 2000.
At June 30, 2000, the Fund had a working capital position that includes
cash and cash equivalents of $872,974, accounts receivable (net of real estate
taxes payable) of $35,793, and accounts payable and accrued expenses of
$166,216. Cash and cash equivalents increased $189,301 during the quarter ended
June 30, 2000. This increase represents the net effect of $363,078 in cash
provided by operating activities, $4,446,677 from the sale of a property, a
$60,000 deposit for the sale of a property, cash distributions to investors of
$3,330,454 and repayment of $1,350,000 of the Fund's outstanding note payable.
It is anticipated that remaining cash and cash equivalents and current
operations will provide sufficient capital to satisfy the Fund's liquidity
requirements.
On August 10, 2000, the Fund made a cash distribution totaling
$333,146, of which 99% was allocated to Assignee and Limited Partners. Assignee
and Limited Partners received a cash distribution of approximately $.24 per
unit.
The Fund had a $3.5 million line of credit agreement with a bank which
expired in July 2000. The line of credit has been renewed until July 2001with a
commitment of $736,000, the principal balance outstanding at the time of
renewal. The interest rate on outstanding borrowings is the bank's prime rate,
9.5% at June 30, 2000. The line of credit is expected to be repaid from proceeds
of additional property sales. The collateral security provision of the loan
agreement provides for the assignment of the Fund's rights as a lessor to its
interest in the parking lot leases, contracts and income. In April 2000, the
Fund received a $350,000 payment from the issuer of the promissory note and used
the cash to reduce the principal balance on the note payable. Additionally, the
Fund used $1,000,000 from the proceeds of the San Diego-B property sale to
reduce the principal balance on the note payable. The principal balance
outstanding at June 30, 2000 and December 31, 1999 was $736,000 and $2,086,000,
respectively.
Results of Operations
Sales
On January 31, 2000, the Fund sold its Dallas-Metro, Texas property for
$7,000,000, including cash of $6,450,000 and a second lien promissory note of
$550,000. The Fund's investment in the property was $3,673,210, net of
accumulated depreciation of $512,472. The capital gain from the sale totaled
$3,013,752, net of expenses of $313,038. The second lien promissory note of
$550,000 is secured by a Second Deed of Trust and is due on or Before October
31, 2000. The Fund collected $350,000 of the promissory note in April, 2000.
Interest on the unpaid principal balance accrues at the rate of 15% per annum.
On May 15, 2000, the Fund sold its San Diego-B property for $4,328,000. The
Fund's investment in the property was $2,226,652. The capital gain from the sale
totaled $1,870,024, net of expenses of $231,324.
-7-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations (continued)
Operations
Parking lot rental income includes base rents and percentage rents earned
pursuant to lease agreements in effect during each period. The Fund leases its
facilities to the Advisor under terms that typically include a minimum rent
calculated as a percentage of certain acquisition costs. In addition, the
Advisor is typically obligated to pay percentage rent, calculated as a
percentage of gross parking revenues.
Total parking lot rents of $400,994 and $766,987 were earned during the
three months ending June 30, 2000 and 1999, respectively. For the six months
ending June 30, 2000 and 1999, parking lot rents totaled $743,871 and
$1,243,858, respectively. The decreases in parking lot rents during 2000 were
primarily the result of sales of three properties during 1999 and the sale of
the Dallas-Metro garage and San Diego-B property in 2000.
Interest income totaling $67,608 was earned during the first six months of
2000, reflecting a $49,127 increase over 1999. The increase is primarily a
result of higher cash balances from property sales during the first six months
of 2000 and the interest earned on the note receivable.
Expenses for the three and six months ended June 30, 2000 totaled $90,557
and $201,155 (net of depreciation and amortization), respectively, representing
decreases of $40,554 and $62,867 from the same periods in 1999. The decreases
are primarily due to lower management fees as a result of the sales of
properties. In addition, interest expense decreased due to the lower balance
outstanding on the note payable.
Outlook
On May 16, 2000 the Fund entered into a land option agreement for the sale
of its San Diego-Union, California property for $5,320,000. The agreement
expires one year from the date of contract and provides for a non-refundable
option consideration in the amount of $60,000, which will be credited against
the purchase price.
-8-
<PAGE>
REALTY PARKING PROPERTIES II L.P.
PART I. FINANCIAL INFORMATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
No significant change in the Fund's market risk has occurred
since December 31, 1999.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities and Use of Proceeds
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: Financial Data Schedule
b) Reports on Form 8-K:
Form 8-K dated May 15, 2000 described the Fund's
sale of a 50,000 square-foot parcel of land located
in San Diego, California.
-9-
<PAGE>
<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: 8/14/00 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company II, Inc.
General Partner
DATE: 8/14/00 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company II, Inc.
General Partner
-10-
