SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
Amendment No. 1
Annual Report Pursuant to Section 13 or 15(d)
of Securities Exchange Act of 1934
Commission File
For the fiscal year ended December 31, 1995 Number 33-45291
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
Delaware 04-3131735
(State of organization) (IRS Employer Identification No.)
One International Place, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (617) 330-8600
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ X ]
No market exists for the limited partnership interests of the Registrant,
and, therefore, a market value for such interests cannot be determined.
DOCUMENTS INCORPORATED BY REFERENCE
Location in Form 10-K Document
In Which Document is
Incorporated
Parts I and IV The Prospectus of the Registrant dated
May 8, 1992 (the "Prospectus").
Part III Pages 27-30 and 101-104 of the
Prospectus.
Item 7 of the Registrants Annual Report on Form 10-K for the
year ended December 31, 1995 is hereby amended to read in its
entirety as follows:
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Capital Resources and Liquidity
The Registrant has invested as a general partner in the
Operating Partnerships and as such receives distributions of cash
flow as its sole source of revenues.
There were no distributions received from the Operating
Partnerships in 1995. The Registrant used cash reserves from the
Registrants reserves to satisfy administrative and other
expenses.
Cash provided by operations was $1,889,772. Expenditures
for building improvements and deferred costs totaled $2,542,844
during 1995. These were offset by net withdrawals from the
mortgage escrow of $1,565,655. At December 31, 1995, the
Registrant and the Operating Partnerships held unrestricted cash
of $6,708,060.
In addition to unrestricted cash, the Registrant maintains
an Escrow Account, as required under the Permanent Loan. The
Escrow Account was established to fund Permitted Escrow Uses and
is secured by a letter of credit. The Registrant maintains a
cash collateral account to secure its obligations under the
letter of credit. At December 31, 1995, the balance in this
account was $4,828,735. For a more detailed discussion of the
Escrow Account see Item 1, Description of Business.
On October 14, 1994, the Propertys fire suppression systems
malfunctioned, causing severe water damage to the Property. The
damage was substantially covered by insurance. During 1995, the
Miami Tower settled its insurance claim relating to its damage.
The insurance carrier agreed to pay Miami Tower approximately
$8,942,000, of which $8,387,893 was received in 1995. Under the
terms of the Permanent Loan, insurance proceeds were placed into
an escrow account under the control of the RTC. The balance of
the escrow account at December 31, 1995 was approximately
$3,100,000. Miami Tower has substantially completed the repair
and maintenance work associated with the damage; however, the
structural buildout is only in its initial phases. No other
significant capital improvements are planned in the near future
for the Property other than tenant improvements which are
incidental to the leasing-up of the Property.
As discussed in Item 1, Description of Business, the
Property is encumbered by a participating loan provided by the
Sellers in the amount of $36,800,000. The terms of the Permanent
Loan are more favorable than those provided by conventional real
estate lenders. Certain aspects of the Permanent Loan were
structured specifically to provide the Operating Partnerships
with increased liquidity during the lease-up of the property.
These include (i) no principal payments prior to maturity; (ii)
no minimum interest payments before November 1996 and minimum
interest payments at a reduced rate thereafter, i.e. 7% on the
original principal balance of the Permanent Loan; (iii) an
initial accrual rate of 8% for the first five years, increasing
to 10% in the last five years; and (iv) a sharing of net
operating income between the Operating Partnerships and the RTC
(in its capacity as lender). It is anticipated that cash flow
from operations will be sufficient to satisfy interest payments
which are scheduled to commence in 1996.
In December 1995, the RTC notified WFA of a net worth
deficiency under the Permanent Loan due to WFAs net worth being
less than the required minimum of $10,000,000. Under the terms
of the Permanent Loan documents, the Operating Partnerships can
cure this deficiency if an independent appraisal of the Property
indicates that the sum of the amount by which the fair market
value of the Property exceeds $44,000,000 plus WFAs net worth is
$10,000,000 or greater. In addition, the deficiency can be cured
if WFA deposits with the lender an amount equal to $10,000,000
less the sum of WFAs net worth and the amount by which the fair
value of the Property exceeds $44,000,000. The RTC is in the
process of obtaining their own appraisal to determine compliance
with the aforementioned provision. The Registrant believes,
based on its understanding of the market value of similar
properties, that the property should have an appraised value
sufficient to cure the default. In the event the appraised value
is not sufficient to cure the deficiency, and WFA is unable to
deposit with the RTC the amount required to cure the deficiency,
the RTC has the option, among other remedies, to accelerate the
maturity of the Permanent Loan and make all amounts under the
loan immediately due and payable, in which case the Registrants
property could be lost through foreclosure.
Results of Operations
The Registrant generated net income of approximately
$1,688,000 for the year ended December 31,1995 compared to a loss
of approximately $4,374,000 in 1994. The significant improvement
is the result of: (i) increased rental income of $2.4 million;
(ii) a $4,541,000 gain from an insurance settlement related to
water damage incurred when a chiller malfunctioned; and (iii) a
decrease in bad debt expense of $822,000. These were partially
offset by increased interest expense and depreciation charges.
Rental and escalation income increased by $2,281,000 to a
total of $10,369,000 in 1995 versus $8,088,000 in 1994. In
January 1995, the Operating Partnership signed a lease with
NationsBank for 93,249 square feet of office space in the
Property, representing 16% of the total square footage in the
Office Tower. This lease has an initial term of fifteen years
with an option to extend the lease for two additional terms of
five years each. In addition, the lease grants the tenant
certain expansion and contraction options. This lease
contributed $2,011,000 of revenue in 1995.
In total the Operating Partnership signed 5 leases totaling
approximately 128,000 square feet in 1995. As a result of this
leasing activity, the Property had approximately 105,000 square
feet of vacant office space at December 31, 1995 or approximately
18% of the total space in the Office Tower.
The increase in interest income reflects the benefit of
additional interest earned on the insurance proceeds held in
escrow during 1995.
Total expenses for the year ended December 31, 1995
increased by $189,000 from $13,536,000 in 1994 to $13,725,000 in
1995. The major components of the expense increase were interest
expense increasing $611,000 in 1995 and depreciation and
amortization expense which increased $374,000 in 1995. These
increases were partially offset by a decrease in bad debt expense
of $822,000. The remaining building operating expenses decreased
$196,000 or 2.6% in 1995 from $7,648,000 to $7,452,000.
As discussed above, the Propertys fire suppression systems
malfunctioned causing water damage to the upper floors of the
Property. During 1995, the Operating Partnership settled its
insurance claim related to the damage incurred which resulted in
total insurance proceeds of approximately $8,942,000. The
Operating Partnership commenced repairs required and is still in
process of completing buildout work. The Operating Partnership
recognized a gain of approximately $4,541,000 which represents
reimbursement for the replacement cost of several tenant
improvements initially constructed by the Seller resulting in the
Office Tower having a basis less than the replacement cost.
Revenue from 1993 to 1994 decreased from approximately
$11,400,000 in 1993 to $8,500,000 in 1994. This decrease was due
primarily to the $2.8 million of revenue received from American
Bankers during 1993 prior to its lease expiration. The rental
income lost following the default of Fine Jacobson, however, was
offset by rental income from new leases signed for Office Tower
space during 1994.
Over the course of 1994, rental income accrued on leases
with approximately forty-five tenants, accounting for
approximately 90% of the Property's total income and the
remaining 10% representing operating expense and tax escalation
reimbursements and miscellaneous income.
In 1994, seven new leases, comprising an aggregate of 74,267
square feet of space in the Office Tower were signed. The
Operating Partnership also renewed one tenant, Goldfarb & Gold,
for a seven year term. In February, 1994, the Miami Tower signed
a ten year lease with Fowler, White, Burnett, Hurley, Banick &
Strickroot, P.A. covering 40,898 square feet of space (or 7.2% of
the Office Tower) on the 17th and 18th floors. The second
largest lease signed in 1994 was with the law firm of Wilson
Elser for 13,515 square feet of office space and a term of ten
years. As of December 31, 1994, the Property had 228,054 square
feet of vacant office space, or approximately 39% of the total
space in the Office Tower. This is a 5% decrease from the
vacancy rate as of December 31, 1993 of 44%.
Actual operating expenses (before interest expenses,
depreciation and amortization) incurred during 1994 totaled
approximately $7,650,000, an increase of approximately $450,000
over the 1993 expense total of $7,200,000, which in turn
represented a $600,000 decrease from the 1992 operating expenses
in the amount of $7,800,000. The 1994 expense increase is
attributable to the $660,000 increase in bad debts incurred as a
result of the Fine Jacobson default.
General
The allocation of RTC debt service payments and
distributable cash flow are calculated based on specific criteria
set forth in the Permanent Loan documents. As defined in the
Permanent Loan documents, net operating income (RTC NOI)
generated by the Operating Partnerships for 1995 was
approximately $2,760,000 of which approximately $157,000 was used
to pay debt service (this excludes $1,257,000 of excess insurance
proceeds also paid for interest during 1995), approximately
$1,400,000 was used to fund real estate tax and insurance
escrows, and $259,000 was contributed to the working capital
reserve. The remainder, $733,000, was available to distribute to
the Registrant. RTC NOI for 1994 was approximately $1,938,000 of
which $315,500 was used to pay debt service and $600,000 was
available to distribute to the Registrant. The remainder of the
1994 RTC NOI was used for real estate tax and insurance escrows.
The Operating Partnerships retained the 1994 and 1995 funds
available for distribution as additional reserves. RTC NOI for
1993 was approximately $2,700,000 of which approximately $383,000
was used to fund debt service, approximately $1,500,000 was made
available to the Registrant and the remainder was used to
establish a working capital reserve.
The Registrant distributed approximately $1,800,000 in March
1994 to the Partners. This amount represented $1,500,000 from
1993 operations distributed from the Operating Partnerships to
Registrant plus interest income of $300,000 earned by the
Registrant. There were no distributions made to the Partners
from 1994 or 1995 operations. Given the current occupancy of the
property, it is not currently anticipated that the Registrant
will make any distributions from operations in the immediate
future. However, the performance of the property and the
Registrants distribution policy will continue to be reviewed on
a quarterly basis.
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 121 Accounting for Long-Lived
Assets and for Long-Lived Assets to be disposed of (the
Statement). The Statement requires a write down to fair value
of long-lived assets to be held and used when such assets are
impaired. The Statement also requires long-lived assets to be
disposed of to be carried at the lower of cost or fair value less
the costs to sell and does not allow such assets to be
depreciated. The Statement will become effective for the
Registrant in 1996. The General Partners anticipate that the
implementation of the Statement will not have a material impact
on the Registrants 1996 financial statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized on this
12th day of February 1997.
WINTHROP MIAMI ASSOCIATES LIMITED PARTNERSHIP
By: One International Associates, L.P.
Its Sole General Partner
By: One International, Inc.
its sole General Partner
By: /s/ Michael L. Ashner
Michael L. Ashner
Chief Executive Officer
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