-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wbzg7p3uZP2ncn0HwBY3E87L4bMh/EvazOSar0v4IMOjp2FHnsZbEjpl64DcZgAT LcrzHVQdlj+lwYDwhzg5DQ== 0000891092-99-000368.txt : 19990621 0000891092-99-000368.hdr.sgml : 19990621 ACCESSION NUMBER: 0000891092-99-000368 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990618 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INVESTMENT PROPERTIES ASSOCIATES CENTRAL INDEX KEY: 0000052067 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 132647723 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-05537 FILM NUMBER: 99648858 BUSINESS ADDRESS: STREET 1: 60 E 42ND ST CITY: NEW YORK STATE: NY ZIP: 10165 BUSINESS PHONE: 2126876400 MAIL ADDRESS: STREET 1: 60 E 42ND ST CITY: NEW YORK STATE: NY ZIP: 10165 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to __________ Commission File Number: 0-5537 INVESTMENT PROPERTIES ASSOCIATES -------------------------------- (Exact Name of registrant as specified in its charter) A New York Limited Partnership 13-2647723 - ------------------------------ ---------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 60 East 42nd Street, New York, New York --------------------------------------- (Address of principal executive offices) 10165 ----- (Zip Code) Registrant's telephone number, including area code: (212) 687-6400 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 --- --- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No --- --- 820,000 Participations in Limited Partnership Interest INVESTMENT PROPERTIES ASSOCIATES (A New York Limited Partnership) I N D E X --------- Page Number ----------- Item 1. Financial Statements. Balance Sheets 3 Statement of Operations 4 Unaudited Statement of Cash Flows 5 Notes to Unaudited Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial 8 Condition and Results of Operations. Item 3. Quantitative and Qualitative Disclosures 9 about Market Risk. Signatures 10 -2- Item 1. Financial Statements. INVESTMENT PROPERTIES ASSOCIATES (A New York Limited Partnership) BALANCE SHEET ------------- AS AT MARCH 31, 1999 AND DECEMBER 31, 1998 ------------------------------------------
MARCH 31, 1999 DECEMBER 31, 1998 -------------- ----------------- (Unaudited) (Note) ASSETS Real estate, at cost $ 71,988,544 $ 71,323,688 Less: Accumulated depreciation and amortization 44,723,675 44,261,629 ------------ ------------ 27,264,869 27,062,059 Less: Allowance for loss on impairment of real estate 2,733,895 2,733,895 ------------ ------------ 24,530,974 24,328,164 Cash and cash equivalents 4,188,890 13,831,031 Due from managing agent (Helmsley-Spear, Inc.) including tenants' security deposits of $1,615,883 (1999) and $1,614,898 (1998) 2,311,565 2,375,753 Receivables, principally from rentals 468,996 471,968 Deferred rent receivable 1,314,763 1,045,707 Other deferred charges including deferred leasing commissions 7,770,209 7,709,611 ------------ ------------ $ 40,585,397 $ 49,762,234 ============ ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIENCY) Accounts payable $ 1,067,939 $ 1,155,069 Accrued real estate taxes 1,568,207 3,067,023 Accrued interest 152,385 155,025 Distributions payable to General Partners, Special Limited Partners and Limited Partner 781,676 10,884,318 Sundry liabilities and other accrued expenses 2,337,875 2,072,198 Mortgages payable 22,847,488 23,847,488 Deposits and rents received in advance 1,692,547 1,859,300 ------------ ------------ 30,448,117 43,040,421 ------------ ------------ Partners' Capital (Deficiency): General Partners (2,717,716) (2,768,948) Special Limited Partners (19,669,147) (21,325,648) Limited Partner (represented by the equivalent of 820,000 Participation Interests) 32,524,143 30,816,409 ------------ ------------ 10,137,280 6,721,813 ------------ ------------ $ 40,585,397 $ 49,762,234 ============ ============
Note: The balance sheet at December 31, 1998 has been derived from the audited financial statements at that date. See notes to financial statements. -3- INVESTMENT PROPERTIES ASSOCIATES (A New York Limited Partnership) STATEMENT OF OPERATIONS -----------------------
FOR THE THREE MONTHS ENDED -------------------------------- MARCH 31, 1999 MARCH 31, 1998 -------------- -------------- Revenues: Gross revenues from real estate $ 7,894,118 $11,606,278 Interest 164,811 63,607 ----------- ----------- 8,058,929 11,669,885 ----------- ----------- Expenses: Leasehold rentals 146,911 Real estate taxes 1,209,774 2,323,135 Interest on mortgages 445,885 1,157,496 Other expenses 2,456,928 4,743,683 Co-owners share of income 8,983 Depreciation and amortization of real estate 462,046 713,103 Amortization of mortgage refinancing costs 1,593 ----------- ----------- 4,576,226 9,093,311 ----------- ----------- Income before items shown below 3,482,703 2,576,574 Gain on Sale of Ground Lease 611,700 ----------- ----------- 3,482,703 3,188,274 ----------- ----------- Payments required under the Limited Partnership Agreement: To the Limited Partner 3,750 3,750 To the General and Special Limited Partners 63,486 83,733 ----------- ----------- 67,236 87,483 ----------- ----------- Net income transferred to Partners' Capital Accounts $ 3,415,467 $ 3,100,791 =========== =========== Net income allocable as follows (based on terms of the Limited Partnership Agreement): General Partners $ 51,232 $ 46,512 Special Limited Partners 1,656,501 1,503,884 Limited Partner (represented by the equivalent of 820,000 Participation Interests - unchanged during the periods) 1,707,734 1,550,395 ----------- ----------- $ 3,415,467 $ 3,100,791 =========== =========== Per Participation Interest: Net Income $ 2.0826 $ 1.8907 ----------- -----------
See notes to financial statements. -4- INVESTMENT PROPERTIES ASSOCIATES (A New York Limited Partnership) UNAUDITED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND MARCH 31, 1998 ------------------------------------------------------------ 1999 1998 ------------ ------------ OPERATING ACTIVITIES: Net income $ 3,415,467 $ 3,100,791 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of real estate 462,046 713,103 Amortization of mortgage refinancing costs 1,593 Gain on Sale of Real Estate (611,700) Amortization of deferred leasing commissions 196,397 265,465 Changes in operating assets and liabilities: Decrease in due from managing agent 64,188 1,009,536 Decrease in receivables 2,972 164,778 Increase in deferred rent receivable (269,056) Decrease (Increase) in other deferred charges (258,588) 83,799 (Decrease) in accounts payable (87,130) (615,942) (Decrease) in accrued real estate tax (1,498,816) (1,533,666) (Decrease) Increase in accrued interest (2,640) 5,301 Increase in sundry and other accrued expenses 265,677 1,030,892 (Decrease) Increase in deposits and rents received in advance (166,753) 27,358 ------------ ------------ Net Cash Provided by Operating Activities 2,125,357 3,639,715 ------------ ------------ INVESTING ACTIVITIES: Property improvements (664,856) (713,089) Net Proceeds from Sale of Real Estate 1,298,000 ------------ ------------ Net Cash Provided by Investing Activities (664,856) 584,911 ------------ ------------ FINANCING ACTIVITIES: Distributions of net operating revenues to General Partners, Special Limited Partners and Limited Partner (10,102,642) (3,190,251) Principal payments on mortgage payable (1,000,000) (1,000,000) ------------ ------------ Net Cash Used in Financing Activities (11,102,642) (4,190,251) ------------ ------------ (9,642,141) 34,375 (Decrease) Increase in Cash and Cash Equivalents 13,831,031 2,240,190 ------------ ------------ Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at March 31 $ 4,188,890 $ 2,274,565 ============ ============ Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 488,525 $ 1,152,195 ============ ============
-5- INVESTMENT PROPERTIES ASSOCIATES (A New York Limited Partnership) NOTES TO UNAUDITED FINANCIAL STATEMENTS --------------------------------------- NOTE 1 As permitted by the Securities and Exchange Commission, the accompanying Unaudited Financial Statements and footnotes have been condensed and therefore, do not contain all disclosures required by generally accepted accounting principles. Reference should be made to the Company's Annual Report Form 10-K for the year ended December 31, 1998, filed with the Securities and Exchange Commission. NOTE 2 In the opinion of the Company, the accompanying Unaudited Financial Statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly its financial position as of March 31, 1999 and the results of operations for the three months ended March 31, 1999 and 1998. NOTE 3 The results of operations for the three months ended March 31, 1999 and 1998 are not necessarily indicative of the results to be expected for the full year. NOTE 4 - Taxes The net income for Federal income tax purposes is $3,122,954 (March 31, 1999) and $3,413,505 (March 31, 1998) as compared with net income of $3,415,467 and $3,100,791 respectively, as shown in the statement of operations. The differences result principally from (a) rents received in advance and recognized currently for income tax purposes, and (b) differences in depreciation expense resulting from differences in the basis of real estate for tax and financial reporting purposes. NOTE 5 - Mortgages Payable On March 24, 1999, the Company paid the scheduled March 15, 1999 principal payment of $1,000,000 to Chase Manhattan Bank. The payment was applied to 261 Fifth Avenue and 245 Fifth Ave., New York, New York. The $8,000,000 first mortgage loan on 1328 Broadway Building, New York, New York (in which the Company has a 50% tenancy in common interest) which became due initially on November 24, 1997 was extended to April 30, 1999, at the interest rate of 8.5% per annum. The mortgage was further extended to May 31, 1999 at the same interest rate. Discussions are being held regarding new terms. -6- NOTE 6 On April 14, 1999, the Company sold Mojud Building in Long Island City, New York for $6,500,000. The sales proceeds would be used to first pay mortgage debt, closing costs, other commitments and future distributions to the partners. -7- INVESTMENT PROPERTIES ASSOCIATES (A New York Limited Partnership) Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Gross revenue from rentals for 1999 decreased approximately 37.39% as compared to 1998. The decrease was primarily due to the sale of the five Chicago properties (the "Chicago Properties") in 1998 offset in part by increase in rental in New York properties. The increase in interest income was due to the proceeds received from the sale of Chicago Properties invested in Commercial Paper. The decrease in other expenses in 1999 as compared to 1998 is principally attributable to the sale of the Chicago Properties. The decrease in real estate taxes was primarily attributable to the sale of the Chicago Properties. The decrease in leasehold rentals was due to the sale of the ground lease of the Chicago Property. The decrease in interest expense was due to the repayment of notes payable to the partners and mortgage principal balance. The decrease in depreciation and amortization of real estate was primarily due to the sale of the Chicago Properties. Liquidity and Capital Resources - The Company's cash generated from operations plus its ability to refinance certain mortgage obligations provide it with the resources needed to meet its anticipated obligations including operating expenses, mortgage amortization and required distributions to partners. -8- INVESTMENT PROPERTIES ASSOCIATES (A New York Limited Partnership) ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to interest rate risk on its variable rate mortgages. On March 31, 1999, the Company had total mortgage debt of approximately $22,847,000 of which approximately $18,847,000 (or approximately 82%) is at a variable rate. All of the Company's mortgage debt is scheduled to mature within the next 12 months. If the Company elects to refinance such mortgage debt upon maturity, the Company would seek to manage its interest rate risk through the use of fixed rate debt or interest rate derivatives in conjunction with variable rate debt. The Company believes that it can refinance such mortgage debt at commercially reasonable rates, although there can be no assurances in this regard. -9- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INVESTMENT PROPERTIES ASSOCIATES By: /s/ Irving Schneider -------------------- Irving Schneider General and Special Limited Partner Dated: June 14, 1999 EX-27 2 FDS --
5 3-MOS Dec-31-1999 Jan-1-1999 Mar-31-1999 4,884,572 0 1,783,759 0 0 8,284,214 69,254,649 44,723,675 40,585,397 3,570,207 0 0 0 0 0 40,585,397 0 8,058,929 0 0 4,197,577 0 445,886 0 0 0 0 0 0 3,415,467 0 0
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