-----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, V5kivA1XlzQ0WWJKwmRpwD34Tyrukd5fYsLgYdSB2QTmicu+5qOaucYThKGDE/BC 5pdwo+mjdR4vK9Y42+QJdw== 0000898733-97-000711.txt : 19970815 0000898733-97-000711.hdr.sgml : 19970815 ACCESSION NUMBER: 0000898733-97-000711 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRUDENTIAL BACHE EQUITEC REAL ESTATE PARTNERSHIP CENTRAL INDEX KEY: 0000757191 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 942949474 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14271 FILM NUMBER: 97660435 BUSINESS ADDRESS: STREET 1: ONE SEAPORT PLAZA CITY: NEW YORK STATE: NY ZIP: 10292 BUSINESS PHONE: 2122141016 10-Q 1 PRUDENTIAL-BACHE EQUITEC REAL ESTATE SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (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, 1997 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 0-14271 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) California 94-2949474 - -------------------------------------------------------------------------------- (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) One Seaport Plaza, New York, N.Y. 10292-0128 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 214-1016 N/A - -------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check CK 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 _CK_ No __ Part I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
June 30, December 31, 1997 1996 - ---------------------------------------------------------------------------------------------------- (in thousands) ASSETS Investment in property: Land $ 10,842 $ 10,842 Buildings, improvements and equipment 40,881 40,545 Less: Accumulated depreciation (20,613 ) (19,634) Allowance for loss on impairment of assets (500 ) (500) --------- ------------ Net investment in property 30,610 31,253 Cash and cash equivalents 1,222 697 Prepaid expenses and other assets, net 1,126 1,396 --------- ------------ Total assets $ 32,958 $ 33,346 --------- ------------ --------- ------------ LIABILITIES AND PARTNERS' CAPITAL Liabilities Notes payable $ 26,650 $ 26,650 Due to affiliates 683 705 Accounts payable and accrued liabilities 365 266 Security deposits and deferred revenue 348 335 Real estate taxes payable 65 57 --------- ------------ Total liabilities 28,111 28,013 --------- ------------ Partners' capital Unitholders (68,795 depositary units issued and outstanding) 5,106 5,587 General partners (259 ) (254) --------- ------------ Total partners' capital 4,847 5,333 --------- ------------ Total liabilities and partners' capital $ 32,958 $ 33,346 --------- ------------ --------- ------------ - ---------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these statements
2 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the six months ended For the three months ended June 30, June 30, June 30, June 30, 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------------------- (in thousands, except for depositary unit amounts) REVENUES Operating $3,223 $3,055 $1,622 $1,545 Recovery of expenses 187 215 96 95 ------------ ------------ ------------ ------------ 3,410 3,270 1,718 1,640 ------------ ------------ ------------ ------------ EXPENSES Property operating 1,300 1,401 637 697 Interest 1,213 1,216 617 607 Depreciation and amortization 1,237 1,029 622 486 General and administrative 146 143 75 69 ------------ ------------ ------------ ------------ 3,896 3,789 1,951 1,859 ------------ ------------ ------------ ------------ Net loss $ (486) $ (519) $ (233) $ (219) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ALLOCATION OF NET LOSS Unitholders $ (481) $ (514) $ (231) $ (217) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ General partners $ (5) $ (5) $ (2) $ (2) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Net loss per depositary unit $(6.99) $(7.47) $(3.35) $(3.15) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ - -------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (Unaudited)
GENERAL UNITHOLDERS PARTNERS TOTAL - --------------------------------------------------------------------------------------------------- (in thousands) Partners' capital (deficit)--December 31, 1996 $5,587 $ (254) $5,333 Net loss (481) (5) (486) -------------- -------- ------ Partners' capital (deficit)--June 30, 1997 $5,106 $ (259) $4,847 -------------- -------- ------ -------------- -------- ------ - --------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these statements
3 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the six For the six months ended months ended June 30, June 30, 1997 1996 - --------------------------------------------------------------------------------------------------- (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (486) $ (519) ------------ ------------ Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,237 1,029 Lease concessions-effective rents 38 42 Leasing commissions paid (133) (96) Changes in: Prepaid expenses and other assets, net 107 (4) Due to affiliates (22) 3 Accounts payable and accrued liabilities 99 81 Security deposits and deferred revenue 13 48 Real estate taxes payable 8 17 ------------ ------------ Total adjustments 1,347 1,120 ------------ ------------ Net cash provided by operating activities 861 601 CASH FLOWS FROM INVESTING ACTIVITIES Building improvements (336) (212) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes -- (103) ------------ ------------ Net increase in cash and cash equivalents 525 286 Cash and cash equivalents at beginning of period 697 806 ------------ ------------ Cash and cash equivalents at end of period $1,222 $1,092 ------------ ------------ ------------ ------------ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest paid $1,091 $1,078 ------------ ------------ ------------ ------------ - --------------------------------------------------------------------------------------------------- The accompanying notes are an integral part of these statements
4 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1997 (Unaudited) A. General These financial statements have been prepared without audit. In the opinion of Prudential-Bache Properties, Inc. ('PBP') and Glenborough Corporation and Robert Batinovich (together, 'Glenborough') (collectively, the 'General Partners'), the financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position of Prudential-Bache/Equitec Real Estate Partnership, A California Limited Partnership (the 'Partnership') as of June 30, 1997, and the results of its operations for the six and three months ended June 30, 1997 and 1996 and its cash flows for the six months ended June 30, 1997 and 1996. However, the operating results for the interim periods may not be indicative of the results expected for the full year. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1996. B. Related Parties The General Partners and their affiliates perform services for the Partnership which include, but are not limited to: accounting and financial management; registrar, transfer and assignment functions; property management; investor communications; printing and other administrative services. The General Partners and their affiliates receive reimbursements for costs incurred in connection with these services, the amount of which is limited by the provisions of the Partnership Agreement. The costs and expenses were:
Six months Six months ended ended June 30, 1997 June 30, 1996 - ----------------------------------------------------------------------------------------------------- (in thousands) PBP and affiliates: General and administrative $ 48 $ 53 ------ ------ Glenborough and affiliates: Property management fee and expenses 322 292 Leasing commissions 31 63 ------ ------ 353 355 ------ ------ $ 401 $ 408 ------ ------ ------ ------
Three months Three months ended ended June 30, 1997 June 30, 1996 - ----------------------------------------------------------------------------------------------------- (in thousands) PBP and affiliates: General and administrative $ 24 $ 25 ------ ------ Glenborough and affiliates: Property management fee and expenses 188 132 Leasing commissions 3 52 ------ ------ 191 184 ------ ------ $ 215 $ 209 ------ ------ ------ ------
5 PBP is not being paid on a current basis for general and administrative expenses other than printing costs. During the six and three months ended June 30, 1997, PBP was reimbursed approximately $100,000 and $50,000, respectively, which was applied to prior years' general and administrative expenses due. At June 30, 1997 and December 31, 1996, the total liability outstanding to PBP was approximately $644,000 and $705,000, respectively. At June 30, 1997, the total liability outstanding to Glenborough was approximately $39,000. The Partnership maintains an account with the Prudential Institutional Liquidity Portfolio Fund, an affiliate of PBP, for investment of its available cash in short-term instruments pursuant to the guidelines established by the Partnership Agreement. Prudential Securities Incorporated ('PSI'), an affiliate of PBP, owns 180 depositary units at June 30, 1997. 6 PRUDENTIAL-BACHE/EQUITEC REAL ESTATE PARTNERSHIP, A California Limited Partnership ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Partnership generated cash from operations of $861,000 for the six months ended June 30, 1997. During the six months ended June 30, 1997, the Partnership disbursed approximately $336,000 for building and tenant improvements, primarily related to the Montrose, Poplar Towers and Totem Valley properties. In order to keep the properties competitive, building and tenant improvements will continue to be required. The Partnership had cash of approximately $1,222,000 at June 30, 1997. PBP is not being reimbursed for its general and administrative expenses (other than printing) on a current basis; however, a payment for past due amounts of $50,000 was made in the second quarter of 1997. At June 30, 1997, the total liability outstanding (including printing) was approximately $644,000. Cash on hand plus any cash generated from operations may not be sufficient to fund building and tenant improvements and to pay deferred general and administrative expenses. The General Partners of the Partnership believe that now is the appropriate time to sell the Partnership's properties given current market conditions, increased availability of investor capital, increased purchasing activity and a favorable interest rate environment, among other reasons. The General Partners are preparing a proxy statement to be filed with the Securities and Exchange Commission that will be sent to limited partners requesting their consent to sell the Partnership's properties by an auction process and to liquidate the Partnership, among other matters. Results of Operations The Partnership's net loss decreased by approximately $33,000 and increased by approximately $14,000 for the six and three months ended June 30, 1997 as compared to the corresponding period in 1996 for the reasons discussed below. Property operating revenues increased by approximately $168,000 and $77,000 for the six and three months ended June 30, 1997 as compared to the corresponding period in 1996 as increases in Montrose, Poplar Towers, Gateway and Totem Valley more than offset the decrease at the Park Plaza property. The increase in operating revenues was primarily the result of increased occupancies at the properties Recovery of expenses decreased by approximately $28,000 for the six months ended June 30, 1997 as compared to the corresponding period in 1996 primarily due to lower tenant recoveries at the Montrose property as a result of new tenant leases. Property operating expenses decreased by $101,000 and $60,000 for the six and three months ended June 30, 1997 as compared to the corresponding period in 1996 primarily due to decreases in property taxes and general repairs and maintenance. Depreciation and amortization increased by approximately $208,000 and $136,000 for the six and three months ended June 30, 1997 as compared to the corresponding period in 1996 primarily due to the amortization of loan fees relating to the December 1996 mortgage refinancing. 7 PART II. OTHER INFORMATION Item 1. Legal Proceedings--None Item 2. Changes in Securities--None Item 3. Defaults Upon Senior Securities--None Item 4. Submission of Matters to a Vote of Security Holders--None Item 5. Other Information--None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 3 and 4 Amended and Restated Limited Partnership Agreement of Registrant dated February 11, 1985 (incorporated by reference to Amendment No. 1 to the Registrant's Form S-11 Registration Statement filed on February 14, 1985) and Amendment No. 1 thereto dated April 18, 1985 (incorporated by reference to Form 8-A filed on February 28, 1986), as amended on March 25, 1994 (incorporated by reference to Registrant's 1994 Annual Report on Form 10-K) Amended and Restated Agreement between General Partners dated December 28, 1990 (incorporated by reference to the Registrant's 1990 Annual Report filed on Form 10-K) 27 Financial Data Schedule (filed herewith) (b) Reports on Form 8-K--None 8 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. Prudential-Bache/Equitec Real Estate Partnership, A California Limited Partnership By: Prudential-Bache Properties, Inc. A Delaware corporation, General Partner By: /s/ Eugene D. Burak Date: August 14, 1997 - ------------------------------- Eugene D. Burak Vice President Chief Accounting Officer for the Registrant 9 EX-27 2 ART. 5 FDS FOR 2ND QUARTER 10-Q
5 The Schedule contains summary financial information extracted from the financial statements for Prudential-Bache Equitec Real Estate and is qualified in its entirety by reference to such financial statements 0000757191 Prudential-Bache Equitec Real Estate 1 Dec-31-1997 Jan-1-1997 Jun-30-1997 6-Mos 1,222,000 0 1,126,000 500,000 0 0 51,723,000 20,613,000 32,958,000 28,111,000 0 0 0 0 4,847,000 32,958,000 0 3,410,000 0 2,683,000 0 0 1,213,000 0 0 0 0 0 0 (486,000) (6.99) 0
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