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, 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 Septemer 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>
September 30,
2000 December 31,
(Unaudited) 1999
------------------ -----------------
Assets
<S> <C> <C>
Investment in real estate $ 13,737,552 $ 19,684,020
Cash and cash equivalents 616,811 649,014
Accounts receivable 381,604 287,440
Note receivable 200,000 -
------------------ -----------------
$ 14,935,967 $ 20,620,474
================== =================
Liabilities and Partners' Capital
Liabilities
Accounts payable $ 25,531 $ 104,024
Due to affiliate 43,469 63,070
Real estate taxes payable 147,220 250,300
Deposit 60,000 -
Note payable 736,000 2,086,000
------------------ -----------------
1,012,220 2,503,394
------------------ -----------------
Partners' Capital
General Partner - -
Assignee and Limited Partnership
Interests - $25 stated value per
unit, 1,392,800 units outstanding 13,923,647 18,116,980
Subordinated Limited Partner 100 100
------------------ -----------------
13,923,747 18,117,080
------------------ -----------------
$ 14,935,967 $ 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 Nine Months Ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
---------------------------------- -------------------------------------
Revenues
<S> <C> <C> <C> <C>
Parking lot rental $ 433,788 $ 666,459 $ 1,177,659 $ 1,910,317
Interest income 14,472 25,301 82,080 43,782
---------------- ---------------- ------------------ -----------------
448,260 691,760 1,259,739 1,954,099
---------------- ---------------- ------------------ -----------------
Expenses
Administrative, including amounts
to related party 26,833 30,448 80,139 77,550
Professional fees 5,000 6,322 15,000 16,322
Management fees to related party 25,769 44,713 84,551 149,383
Interest expense 17,868 50,455 96,935 152,705
Depreciation 15,535 37,375 46,606 122,690
Amortization - - - 3,003
---------------- ---------------- ------------------ -----------------
91,005 169,313 323,231 521,653
---------------- ---------------- ------------------ -----------------
Earnings from operations 357,255 522,447 936,508 1,432,446
Gain on sale of property, net - 3,493,153 4,883,776 6,311,322
---------------- ---------------- ------------------ -----------------
Net earnings $ 357,255 $ 4,015,600 $ 5,820,284 $ 7,743,768
================ ================ ================== =================
Net earnings per unit of assignee and
limited partnership interest-basic $ 0.26 $ 2.85 $ 4.11 $ 5.50
================ ================ ================== =================
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
Realty Parking Properties II L.P.
Statements of Partners' Capital
Nine Months Ended September 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 5,720,148 - 100,136 5,820,284
Distributions to partners -
Operations (779,824) - (7,877) (787,701)
Sales proceeds (9,133,657) - (92,259) (9,225,916)
----------------- ------------------ ------------------ -----------------
Balance at September 30, 2000 $ 13,923,647 $ 100 $ - $ 13,923,747
================= ================== ================== =================
Balance at December 31, 1998 $ 24,696,690 $ 100 $ (63,097) $ 24,633,693
Net earnings 7,666,330 - 77,438 7,743,768
Distributions to partners -
Operations (1,124,860) - (11,363) (1,136,223)
Sales proceeds (8,927,175) - (90,173) (9,017,348)
----------------- ------------------ ------------------ -----------------
Balance at September 30, 1999 $ 22,310,985 $ 100 $ (87,195) $ 22,223,890
================= ================== ================== =================
</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
September 30, September 30,
2000 1999
-------------------------------------
Cash flows from operating activities
<S> <C> <C>
Net earnings $ 5,820,284 $ 7,743,768
Adjustments to reconcile net earnings to net cash
provided by operating activities
Gain on sales of properties, net (4,883,776) (6,311,322)
Depreciation 46,606 122,690
Amortization - 3,003
Changes in assets and liabilities
Increase in accounts receivable and
real estate taxes payable, net (197,244) (265,973)
Increase (decrease) in accounts payable (78,493) 3,158
Increase (decrease) in due to affiliates (19,601) 292,520
------------------ -----------------
Net cash provided by operating activities 687,776 1,587,844
------------------ -----------------
Cash flows from investing activities
Proceeds from sales of properties, net 10,583,638 13,084,709
Deposit 60,000 -
------------------ -----------------
Net cash provided by investing activities 10,643,638 13,084,709
------------------ -----------------
Cash flows from financing activities
Distributions to partners (10,013,617) (10,153,571)
Repayment of note payable (1,350,000) (200,000)
------------------ -----------------
Net cash used in financing activities (11,363,617) (10,353,571)
------------------ -----------------
Net increase (decrease) in cash and cash equivalents (32,203) 4,318,982
Cash and cash equivalents
Beginning of period 649,014 645,327
------------------ -----------------
End of period $ 616,811 $ 4,964,309
================== =================
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
REALTY PARKING PROPERTIES II L.P.
Notes to Financial Statements
September 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 September 30, 2000 and December 31, 1999.
Note 3 - Investment in Real Estate
Investment in real estate is summarized as follows:
<TABLE>
<CAPTION>
September 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 406,657 872,524
Total $ 13,737,552 $ 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 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 and $100,000 in
October, 2000. As of October 31, 2000 the issuer of the promissory note
continues to owe the Fund $100,000. The second lien promissory note has been
extended until January 2001. 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 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
September 30, 2000
(Unaudited)
Note 6 - Related Party Transactions
The General Partner earned a management fee of $25,769 and $44,713 during the
three months ended September 30, 2000 and 1999, respectively, and $84,551 and
$149,383 during the nine months ended September 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 2001 with 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 September 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 September 30, 2000 and December 31, 1999
was $736,000 and $2,086,000. Interest paid on the outstanding principal balance
totaled $17,868 and $50,455 during the three months ended September 30, 2000 and
1999, respectively, and $96,935 and $152,705 during the nine months ended
September 30, 2000 and 1999, respectively.
Note 8 - Subsequent Event
On October 30, 2000, the Fund received a $100,000 payment from the issuer of the
promissory note. The Fund used the cash to reduce the principal balance on the
note payable.
On November 15, 2000, the Fund will make a cash distribution totaling $372,790,
of which 99% will be allocated to Assignee and Limited Partners. This
distribution is derived from funds provided by operating activities for the
three months ended September 30, 2000. Holders of Units will receive a cash
distribution of approximately $0.26 per 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
The Fund does not contemplate making any major improvements to it
properties during 2000.
At September 30, 2000, the Fund had a working capital position that
includes cash and cash equivalents of $616,811, accounts receivable (net of real
estate taxes payable) of $234,384, and accounts payable and accrued expenses of
$25,531. Cash and cash equivalents decreased $256,163 during the quarter ended
September 30, 2000. This decrease represents the net effect of $76,982 in cash
provided by operating activities and a cash distribution to investors of
$333,145. It is anticipated that remaining cash and cash equivalents and current
operations will provide sufficient capital to satisfy the Fund's liquidity
requirements.
On November 15, 2000, the Fund will make a cash distribution totaling
$372,790, of which 99% will be allocated to Assignee and Limited Partners. This
distribution is derived from funds provided by operating activities for the
three months ending September 30, 2000. Holders of Units will receive a cash
distribution of approximately $0.26 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 2001 with 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 September 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 and
October 2000 the Fund received $350,000 and $100,000, respectively, 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 September 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 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, and an additional
$100,000 in October 2000. As of October 31, 2000, the issuer of the promissory
note continues to owe the Fund $100,000. The second lien promissory note has
been extended until January 2001. 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 $433,788 and $666,459 were earned during the
three months ended September 30, 2000 and 1999, respectively. For the nine
months ended September 30, 2000 and 1999, parking lot rents totaled $1,177,659
and $1,910,317, 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 $82,080 was earned during the nine months
ended September 30, 2000, reflecting a $38,298 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 nine months ended September 30, 2000 totaled
$75,470 and $276,625 (net of depreciation and amortization), respectively,
representing decreases of $56,468 and $119,335 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.
The Fund has signed contracts for the sale of the San Diego-Union and
Dallas-Main facilities. The potential buyers of both properties are currently
performing their due diligence, and there are no assurances that these
facilities will be sold.
-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: 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: 11/13/00 By: /s/ John M. Prugh
John M. Prugh
President and Director
Realty Parking Company II, Inc.
General Partner
DATE: 11/13/00 By: /s/ Timothy M. Gisriel
Timothy M. Gisriel
Treasurer
Realty Parking Company II, Inc.
General Partner
-10-
