Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Discontinued Operations

(6)  Discontinued Operations –

On February 2, 2010, Hollywood Entertainment Corporation (HEC), the tenant of the Hollywood Video stores in Minot, North Dakota (100% ownership interest) and Saraland, Alabama (3.08% ownership interest) filed for Chapter 11 bankruptcy reorganization for the second time.  In July 2010, HEC closed its remaining stores, filed a motion with the bankruptcy court to reject the Lease for the Minot store and returned possession of the property to the Partnership.  The Partnership listed the property for sale with a real estate broker in the Minot area.  While the property was vacant, the Partnership was responsible for real estate taxes and other costs associated with maintaining the property.  Based on an analysis of market conditions in the area, the Partnership determined the property was impaired.  As a result, in the second quarter of 2010, a charge to discontinued operations for real estate impairment of $218,607 was recognized, which was the difference between the carrying value at June 30, 2010 of $1,018,607 and the estimated fair value of $800,000.  The charge was recorded against the cost of the land and building.

In November 2010, the Partnership entered into an agreement to sell the Minot store to an unrelated third party.  On January 14, 2011, the sale closed with the Partnership receiving net proceeds of $881,953, which resulted in a net gain of $81,953.  At December 31, 2010, the property was classified as Real Estate Held for Sale.

In February 2010, HEC closed the Saraland store and filed a motion with the bankruptcy court to reject the Lease for this property.  The court approved the motion and HEC returned possession of the property to the Partnership.  The Partnership listed the property for sale or lease with a real estate broker in the Saraland area.  While the property was vacant, the Partnership was responsible for its 3.08% share of real estate taxes and other costs associated with maintaining the property.  In May 2010, the Partnership entered into an agreement to sell its interest in the Saraland store to an unrelated third party.  On August 20, 2010, the sale closed with the Partnership receiving net sale proceeds of $34,485, which resulted in a net gain of $3,403.  The cost and related accumulated depreciation of the interest sold was $42,439 and $11,357, respectively.

On March 17, 2011, the Partnership sold its remaining 0.5877% interest in the Arby’s restaurant in Homewood, Alabama to an unrelated third party.  The Partnership received net sale proceeds of $8,012, which resulted in a net gain of $1,781.  The cost and related accumulated depreciation of the interest sold was $8,184 and $1,953, respectively.

On January 6, 2012, the Partnership sold the KinderCare daycare center in Pearland, Texas to an unrelated third party.  The Partnership received net sale proceeds of approximately $854,000, which resulted in a net gain of approximately $271,600.  At December 31, 2011, the property was classified as Real Estate Held for Sale with a carrying value of $582,390.

During 2011 and 2010, the Partnership distributed net sale proceeds of $70,707 and $90,909 to the Limited and General Partners as part of their quarterly distributions, which represented a return of capital of $4.45 and $5.73 per Limited Partnership Unit, respectively.  The Partnership anticipates the remaining net sale proceeds will either be reinvested in additional property or distributed to the Partners in the future.

The financial results for these properties are reflected as Discontinued Operations in the accompanying financial statements.  The following are the results of discontinued operations for the years ended December 31:

		2011		2010
Rental Income	$	103,511	$	184,756
Property Management Expenses		(2,848)		(41,813)
Depreciation		(22,208)		(44,414)
Real Estate Impairment		0		(218,607)
Gain on Disposal of Real Estate		83,734		3,403
Income (Loss) from Discontinued Operations	$	162,189	$	(116,675)