Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Document And Entity Information [Abstract] | |
Document Type | 10-K |
Amendment Flag | FALSE |
Document Period End Date | 31-Dec-14 |
Document Fiscal Year Focus | 2014 |
Document Fiscal Period Focus | FY |
Trading Symbol | DTRPII |
Entity Registrant Name | DEL TACO RESTAURANT PROPERTIES II |
Entity Central Index Key | 749153 |
Current Fiscal Year End Date | -19 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 0 |
Entity Public Float | $0 |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ||
Cash | $173,242 | $177,072 |
Receivable from Del Taco LLC | 49,915 | 48,194 |
Deposits | 1,940 | 1,709 |
Total current assets | 225,097 | 226,975 |
PROPERTY AND EQUIPMENT | ||
Land | 1,430,345 | 1,430,345 |
Land improvements | 375,661 | 375,661 |
Buildings and improvements | 1,238,879 | 1,238,879 |
Machinery and equipment | 898,950 | 898,950 |
Property and equipment, gross | 3,943,835 | 3,943,835 |
Less: accumulated depreciation | 2,263,720 | 2,228,324 |
Property and equipment, net | 1,680,115 | 1,715,511 |
Total assets | 1,905,212 | 1,942,486 |
CURRENT LIABILITIES | ||
Payable to limited partners | 54,773 | 51,253 |
Accounts payable | 23,373 | 10,955 |
Total current liabilities | 78,146 | 62,208 |
PARTNERS' EQUITY | ||
Limited partners; 27,006 units outstanding at December 31, 2014 and 2013 | 1,857,846 | 1,910,526 |
General partner-Del Taco LLC | -30,780 | -30,248 |
Total partners' equity | 1,827,066 | 1,880,278 |
Total liabilities and partners' equity | $1,905,212 | $1,942,486 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 |
Statement of Financial Position [Abstract] | |||||||||||||
Limited partners, units outstanding | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 |
Statements_of_Income
Statements of Income (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | |||
RENTAL REVENUES | $573,740 | $546,998 | $530,622 |
EXPENSES | |||
General and administrative | 111,738 | 85,455 | 82,406 |
Depreciation | 35,396 | 35,396 | 35,396 |
Total expenses | 147,134 | 120,851 | 117,802 |
Operating income | 426,606 | 426,147 | 412,820 |
OTHER INCOME | |||
Interest | 228 | 210 | 190 |
Other | 6,350 | 2,150 | 2,215 |
Net income | $433,184 | $428,507 | $415,225 |
Net income per limited partnership unit (Note 2) | $15.88 | $15.71 | $15.22 |
Number of limited partnership units used in computing per unit amounts | 27,006 | 27,006 | 27,006 |
Statements_of_Partners_Equity
Statements of Partners Equity (USD $) | Total | Limited Partners [Member] | General Partner [Member] |
Balance at Dec. 31, 2011 | $1,929,930 | $1,959,682 | ($29,752) |
Balance, shares at Dec. 31, 2011 | 27,006 | ||
Net income | 415,225 | 411,073 | 4,152 |
Cash Distributions | -438,402 | -434,018 | -4,384 |
Balance at Dec. 31, 2012 | 1,906,753 | 1,936,737 | -29,984 |
Balance, shares at Dec. 31, 2012 | 27,006 | ||
Net income | 428,507 | 424,222 | 4,285 |
Cash Distributions | -454,982 | -450,433 | -4,549 |
Balance at Dec. 31, 2013 | 1,880,278 | 1,910,526 | -30,248 |
Balance, shares at Dec. 31, 2013 | 27,006 | ||
Net income | 433,184 | 428,853 | 4,331 |
Cash Distributions | -486,396 | -481,533 | -4,863 |
Balance at Dec. 31, 2014 | $1,827,066 | $1,857,846 | ($30,780) |
Balance, shares at Dec. 31, 2014 | 27,006 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $433,184 | $428,507 | $415,225 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 35,396 | 35,396 | 35,396 |
Changes in operating assets and liabilities: | |||
Receivable from Del Taco LLC | -1,721 | -4,835 | 922 |
Deposits | -231 | -175 | |
Payable to limited partners | 3,520 | 2,900 | 3,990 |
Accounts payable | 12,418 | -9,228 | -7,514 |
Net cash provided by operating activities | 482,566 | 452,565 | 448,019 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Cash distributions to partners | -486,396 | -454,982 | -438,402 |
Net cash used in financing activities | -486,396 | -454,982 | -438,402 |
Net change in cash | -3,830 | -2,417 | 9,617 |
Beginning cash balance | 177,072 | 179,489 | 169,872 |
Ending cash balance | $173,242 | $177,072 | $179,489 |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The Partnership: Del Taco Restaurant Properties II, a California limited partnership, (the Partnership) was formed on June 20, 1984, for the purpose of acquiring real property in California for construction of seven Mexican-American restaurants to be leased under long-term agreements to Del Taco LLC (General Partner or Del Taco), for operation under the Del Taco trade name. The term of the partnership agreement is until April 30, 2025 unless terminated earlier by means provided in the partnership agreement. | |
The Partnership has no full-time employees (see Note 4). The Partnership agreement assigns full authority for general management and supervision of the business affairs of the Partnership to the General Partner. The General Partner has a one percent interest in the profits or losses and distributions of the Partnership. Limited partners have no right to participate in the day to day management or conduct of the Partnership’s business affairs. | |
Distributions are made to the general and limited partners in accordance with the provisions of the Partnership agreement (see Note 2). | |
Basis of Accounting: The Partnership utilizes the accrual method of accounting for transactions relating to the business of the Partnership. The summary of significant accounting policies presented below is designed to assist in understanding the Partnership’s financial statements. Such financial statements and accompanying notes are the representations of the Partnership’s management, who is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying financial statements. | |
Property and Equipment: Property and equipment is stated at cost. Depreciation is computed using the straight-line method over estimated useful lives which are 20 years for land improvements, 35 years for buildings and improvements, and 10 years for machinery and equipment. | |
The Partnership accounts for property and equipment in accordance with authoritative guidance issued by the Financial Accounting Standards Board that requires long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In evaluating long-lived assets held for use, an impairment loss is recognized if the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying value of the asset. Once a determination has been made that an impairment loss should be recognized for long-lived assets, various assumptions and estimates are used to determine fair value including, among others, estimated costs of construction and development, recent sales of comparable properties and the opinions of fair value prepared by independent real estate appraisers. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. | |
Income Taxes: No provision has been made for federal or state income taxes on partnership net income, since the Partnership is not subject to income tax. Partnership income is includable in the taxable income of the individual partners as required under applicable income tax laws. Certain items, primarily related to depreciation methods, are accounted for differently for income tax reporting purposes (see Note 5). | |
Net Income Per Limited Partnership Unit: Net income per limited partnership unit is based on net income attributable to the limited partners (after 1% allocation to the general partner) using the weighted average number of units outstanding during the periods presented which amounted to 27,006 units for all years presented. | |
Use of Estimates: The preparation of the financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | |
Revenue Recognition: Rental revenue is recognized based on 12 percent of gross sales of the restaurants for the corresponding period, and is earned at the point of sale. | |
Concentration of Risk: The five restaurants leased to Del Taco make up all of the income producing assets of the Partnership and contributed all of the Partnership’s rental revenues for the three years ended December 31, 2014. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties. The Partnership maintains substantially all of its cash and cash equivalents at one major commercial bank. Although the Partnership at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal. | |
Fair Value of Financial Instruments: The fair values of cash, accounts receivables, deposits, accounts payable and payables to limited partners approximate the carrying amounts due to their short maturities. | |
Subsequent Events: Management has evaluated events subsequent to December 31, 2014 through the date the accompanying financial statements were filed with the Securities and Exchange Commission for transactions and other events that may require adjustment of and/or disclosure in such financial statements (see Note 10). |
Partners_Equity
Partners' Equity | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Partners' Equity | NOTE 2 – PARTNERS’ EQUITY |
Pursuant to the partnership agreement, annual partnership income or loss is allocated one percent to Del Taco and 99 percent to the limited partners. Partnership gains from any sale or refinancing will be allocated one percent to the General Partner and 99 percent to the limited partners until allocated gains and profits equal losses, distributions and syndication costs previously allocated. Additional gains will be allocated 15 percent to the General Partner and 85 percent to the limited partners. |
Leasing_Activities
Leasing Activities | 12 Months Ended |
Dec. 31, 2014 | |
Leases [Abstract] | |
Leasing Activities | NOTE 3 – LEASING ACTIVITIES |
The Partnership leases its properties for operation of restaurants to Del Taco on a triple net basis. The leases are for terms of 35 years commencing with the completion of the restaurant facility located on each property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. The leases expire in the years 2021 to 2023. Pursuant to the lease agreements, minimum rentals of $3,500 per month are due to the Partnership during the first six months of any non-operating period caused by an insured casualty loss. The Partnership had a total of five properties leased as of December 31, 2014, 2013, and 2012. | |
The five restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $4,781,167, $4,558,320, and $4,421,845 and unaudited net losses of $98,452, $178,500 and $170,321 for the years ended December 31, 2014, 2013 and 2012, respectively. Del Taco net income by restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the decrease in net loss from the corresponding period of the prior years primarily relates to increased sales. |
Related_Parties
Related Parties | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Parties | NOTE 4 – RELATED PARTIES |
The receivable from Del Taco consists of rent accrued for the month of December 2014 and 2013. The rent receivable was collected in January 2015 and 2014, respectively. | |
The General Partner received $4,863, $4,549 and $4,384 in distributions relating to its one percent interest in the Partnership for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Del Taco serves in the capacity of General Partner in other partnerships which are engaged in the business of operating restaurants, and three other partnerships which were formed for the purpose of acquiring real property in California for construction of Mexican-American restaurants for lease under long-term agreements to Del Taco. | |
The General Partner provides certain minimal managerial and accounting services to the Partnership at no cost. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | NOTE 5 – INCOME TAXES (UNAUDITED) | ||||||||||||
The Partnership is not subject to income taxes because its income is taxed directly to the General Partner and limited partners. The reconciling items presented in the table below are the only items that create a difference between the tax basis and reported amounts of the Partnership’s assets and liabilities. | |||||||||||||
A reconciliation of financial statement net income to taxable income for each of the periods is as follows: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net income per financial statements | $ | 433,184 | $ | 428,507 | $ | 415,225 | |||||||
Excess book depreciation | 3,777 | 3,777 | 3,777 | ||||||||||
Taxable income | $ | 436,961 | $ | 432,284 | $ | 419,002 | |||||||
A reconciliation of partnership equity per the financial statements to partners’ equity for tax purposes as of December 31, 2014, is as follows (unaudited): | |||||||||||||
Partners’ equity per financial statements | $ | 1,827,066 | |||||||||||
Issue costs of limited partnership units capitalized for tax purposes | 986,745 | ||||||||||||
Difference in book vs. tax depreciation | 142,195 | ||||||||||||
Writedown of real estate previously held for sale | 161,963 | ||||||||||||
Other | 5,465 | ||||||||||||
Partners’ equity for tax purposes | $ | 3,123,434 | |||||||||||
Cash_Distributions_to_Limited_
Cash Distributions to Limited Partners | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Text Block [Abstract] | |||||||||||||
Cash Distributions to Limited Partners | NOTE 6 – CASH DISTRIBUTIONS TO LIMITED PARTNERS | ||||||||||||
Cash distributions to limited partners for the three years ended December 31, 2014 were as follows: | |||||||||||||
Quarter Ended | Cash | Weighted | Number of Units | ||||||||||
Distribution per | Average Number | Outstanding at | |||||||||||
Limited Partnership | of Units | the End of | |||||||||||
Unit | Outstanding | Quarter | |||||||||||
December 31, 2011 | $ | 3.76 | 27,006 | 27,006 | |||||||||
March 31, 2012 | 3.82 | 27,006 | 27,006 | ||||||||||
June 30, 2012 | 4.35 | 27,006 | 27,006 | ||||||||||
September 30, 2012 | 4.14 | 27,006 | 27,006 | ||||||||||
Total paid in 2012 | $ | 16.07 | |||||||||||
December 31, 2012 | $ | 4.37 | 27,006 | 27,006 | |||||||||
March 31, 2013 | 3.59 | 27,006 | 27,006 | ||||||||||
June 30, 2013 | 4.24 | 27,006 | 27,006 | ||||||||||
September 30, 2013 | 4.48 | 27,006 | 27,006 | ||||||||||
Total paid in 2013 | $ | 16.68 | |||||||||||
December 31, 2013 | $ | 4.17 | 27,006 | 27,006 | |||||||||
March 31, 2014 | 4.46 | 27,006 | 27,006 | ||||||||||
June 30, 2014 | 4.86 | 27,006 | 27,006 | ||||||||||
September 30, 2014 | 4.34 | 27,006 | 27,006 | ||||||||||
Total paid in 2014 | $ | 17.83 | |||||||||||
Cash distributions per limited partnership unit were calculated based upon the weighted average units outstanding for each quarter and were paid from operations. Distributions declared in January 2015, for the quarter ended December 31, 2014, amounted to $3.79 per limited partnership unit and were paid in February 2015. |
Results_by_Quarter
Results by Quarter | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Results by Quarter | NOTE 7 – RESULTS BY QUARTER (UNAUDITED) | ||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||
Rental revenues | $ | 137,980 | $ | 145,576 | $ | 143,586 | $ | 146,598 | |||||||||
Net income | 88,326 | 121,856 | 112,347 | 110,655 | |||||||||||||
Net income per limited partnership unit | 3.24 | 4.47 | 4.12 | 4.05 | |||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Rental revenues | $ | 128,580 | $ | 139,284 | $ | 137,523 | $ | 141,611 | |||||||||
Net income | 79,029 | 114,746 | 116,149 | 118,583 | |||||||||||||
Net income per limited partnership unit | 2.9 | 4.21 | 4.26 | 4.34 |
Payable_to_Limited_Partners
Payable to Limited Partners | 12 Months Ended |
Dec. 31, 2014 | |
Other Liabilities Disclosure [Abstract] | |
Payable to Limited Partners | NOTE 8 – PAYABLE TO LIMITED PARTNERS |
Payable to limited partners represents a reclassification from cash for distribution checks made to limited partners that have remained outstanding for six months or longer. |
Communication_from_Certain_Lim
Communication from Certain Limited Partners and Straw Poll Results | 12 Months Ended |
Dec. 31, 2014 | |
Text Block [Abstract] | |
Communication from Certain Limited Partners and Straw Poll Results | NOTE 9 – COMMUNICATION FROM CERTAIN LIMITED PARTNERS AND STRAW POLL RESULTS |
During the third quarter of 2014, several limited partners communicated to the General Partner their desire to potentially sell all of the properties and then dissolve the Partnership. Pursuant to the Partnership agreement, any decision to sell all of the properties and to dissolve the Partnership would require approval from a majority in interest of limited partners. On October 1, 2014 the General Partner initiated a “straw poll” of all limited partners to determine if there is sufficient interest to support a potential sale of the properties and dissolution of the Partnership, as disclosed in Form 8-K filed on October 1, 2014. Limited partner responses to the straw poll were received during the fourth quarter of 2014 and on December 17, 2014, Del Taco filed a Form 8-K to disclose the results of the poll. The poll was intended to gauge interest level only and the results indicate a strong majority of the units responded either “open to” or “strongly in favor of” Del Taco testing the market and presenting a sale proposal to the limited partners for a vote. Accordingly, Del Taco filed a Form 8-K on January 12, 2015 indicating its intention to initiate a sale process to market the properties owned by the Partnership that may result in the presentation of a sale transaction to the limited partners for approval (see Note 10). |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 – SUBSEQUENT EVENTS |
The Partnership filed a Form 8-K on January 12, 2015 indicating its intention to initiate a sale process to market the properties owned by the Partnership that may result in the presentation of a sale transaction to the limited partners for approval. Del Taco intended to appoint a special committee comprised of a small group of qualified limited partners to facilitate the sale process and to manage any potential conflicts of interest with respect to Del Taco that may arise during the sale process, however, zero timely applications were received. Therefore, the sale process has commenced without a special committee and Del Taco will resolve any potential conflicts of interest pursuant to the Partnership’s partnership agreement and applicable law. The sale process may result in the presentation of a sale transaction to the limited partners for approval; however, there are no assurances that Del Taco will receive any offers or will be successful in entering into a binding agreement to sell the properties. On February 17, 2015, MacKenzie Realty Capital, Inc. (“MacKenzie”), a limited partner, filed a Schedule TO initiating a tender offer to purchase all units of the Partnership. The MacKenzie tender offer is unrelated to the sale process that Del Taco has initiated. On February 27, 2015, the Partnership filed a Schedule 14D-9 solicitation/recommendation statement in response to the Schedule TO. |
Schedule_III_Real_Estate_and_A
Schedule III - Real Estate and Accumulated Depreciation | 12 Months Ended | ||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Schedule III - Real Estate and Accumulated Depreciation | DEL TACO RESTAURANT PROPERTIES II | ||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
31-Dec-14 | |||||||||||||||||||||||||||||||
Initial cost to company | Cost | Gross amount | |||||||||||||||||||||||||||||
capitalized | at which carried | ||||||||||||||||||||||||||||||
subsequent to | at close of | ||||||||||||||||||||||||||||||
acquisition | period | ||||||||||||||||||||||||||||||
Description | Encumbrances | Land & land | Building & | Carrying | Land, | Accumulated | Date of | Date | Life on which | ||||||||||||||||||||||
(All Restaurants) | improvements | Improvements | costs | buildings & | depreciation | construction | acquired | depreciation in | |||||||||||||||||||||||
improvements | latest income | ||||||||||||||||||||||||||||||
Total | statement is | ||||||||||||||||||||||||||||||
computed | |||||||||||||||||||||||||||||||
Victorville, CA | $ | — | $ | 327,770 | $ | 224,843 | $ | — | $ | 552,613 | $ | 247,690 | 1986 | 1986 | 20 (LI), 35 (BI) | ||||||||||||||||
Colton, CA | — | 262,661 | 180,179 | — | 442,840 | $ | 198,491 | 1986 | 1986 | 20 (LI), 35 (BI) | |||||||||||||||||||||
Palmdale, CA | — | 404,791 | 277,677 | — | 682,468 | $ | 305,900 | 1986 | 1986 | 20 (LI), 35 (BI) | |||||||||||||||||||||
Pedley, CA | — | 364,334 | 249,925 | — | 614,259 | $ | 275,325 | 1987 | 1987 | 20 (LI), 35 (BI) | |||||||||||||||||||||
Thousand Palms, CA | — | 446,450 | 306,255 | — | 752,705 | $ | 337,363 | 1987 | 1987 | 20 (LI), 35 (BI) | |||||||||||||||||||||
$ | — | $ | 1,806,006 | $ | 1,238,879 | $ | — | $ | 3,044,885 | $ | 1,364,769 | ||||||||||||||||||||
Restaurants | Accumulated | ||||||||||||||||||||||||||||||
Depreciation | |||||||||||||||||||||||||||||||
Balances at December 31, 2011 | $ | 3,044,885 | $ | 1,258,581 | |||||||||||||||||||||||||||
Additions | — | 35,396 | |||||||||||||||||||||||||||||
Retirements | — | — | |||||||||||||||||||||||||||||
Balances at December 31, 2012 | 3,044,885 | 1,293,977 | |||||||||||||||||||||||||||||
Additions | — | 35,396 | |||||||||||||||||||||||||||||
Retirements | — | — | |||||||||||||||||||||||||||||
Balances at December 31, 2013 | 3,044,885 | 1,329,373 | |||||||||||||||||||||||||||||
Additions | — | 35,396 | |||||||||||||||||||||||||||||
Retirements | — | — | |||||||||||||||||||||||||||||
Balances at December 31, 2014 | $ | 3,044,885 | $ | 1,364,769 | |||||||||||||||||||||||||||
The aggregate cost basis of Del Taco Restaurant Properties II real estate assets for Federal income tax purposes was $2,910,462 (unaudited) at December 31, 2014. |
Organization_and_Summary_of_Si1
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
The Partnership | The Partnership: Del Taco Restaurant Properties II, a California limited partnership, (the Partnership) was formed on June 20, 1984, for the purpose of acquiring real property in California for construction of seven Mexican-American restaurants to be leased under long-term agreements to Del Taco LLC (General Partner or Del Taco), for operation under the Del Taco trade name. The term of the partnership agreement is until April 30, 2025 unless terminated earlier by means provided in the partnership agreement. |
The Partnership has no full-time employees (see Note 4). The Partnership agreement assigns full authority for general management and supervision of the business affairs of the Partnership to the General Partner. The General Partner has a one percent interest in the profits or losses and distributions of the Partnership. Limited partners have no right to participate in the day to day management or conduct of the Partnership’s business affairs. | |
Distributions are made to the general and limited partners in accordance with the provisions of the Partnership agreement (see Note 2). | |
Basis of Accounting | Basis of Accounting: The Partnership utilizes the accrual method of accounting for transactions relating to the business of the Partnership. The summary of significant accounting policies presented below is designed to assist in understanding the Partnership’s financial statements. Such financial statements and accompanying notes are the representations of the Partnership’s management, who is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying financial statements. |
Property and Equipment | Property and Equipment: Property and equipment is stated at cost. Depreciation is computed using the straight-line method over estimated useful lives which are 20 years for land improvements, 35 years for buildings and improvements, and 10 years for machinery and equipment. |
The Partnership accounts for property and equipment in accordance with authoritative guidance issued by the Financial Accounting Standards Board that requires long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In evaluating long-lived assets held for use, an impairment loss is recognized if the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying value of the asset. Once a determination has been made that an impairment loss should be recognized for long-lived assets, various assumptions and estimates are used to determine fair value including, among others, estimated costs of construction and development, recent sales of comparable properties and the opinions of fair value prepared by independent real estate appraisers. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. | |
Income Taxes | Income Taxes: No provision has been made for federal or state income taxes on partnership net income, since the Partnership is not subject to income tax. Partnership income is includable in the taxable income of the individual partners as required under applicable income tax laws. Certain items, primarily related to depreciation methods, are accounted for differently for income tax reporting purposes (see Note 5). |
Net Income Per Limited Partnership Unit | Net Income Per Limited Partnership Unit: Net income per limited partnership unit is based on net income attributable to the limited partners (after 1% allocation to the general partner) using the weighted average number of units outstanding during the periods presented which amounted to 27,006 units for all years presented. |
Use of Estimates | Use of Estimates: The preparation of the financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition: Rental revenue is recognized based on 12 percent of gross sales of the restaurants for the corresponding period, and is earned at the point of sale. |
Concentration of Risk | Concentration of Risk: The five restaurants leased to Del Taco make up all of the income producing assets of the Partnership and contributed all of the Partnership’s rental revenues for the three years ended December 31, 2014. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties. |
The Partnership maintains substantially all of its cash and cash equivalents at one major commercial bank. Although the Partnership at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: The fair values of cash, accounts receivables, deposits, accounts payable and payables to limited partners approximate the carrying amounts due to their short maturities. |
Subsequent Events | Subsequent Events: Management has evaluated events subsequent to December 31, 2014 through the date the accompanying financial statements were filed with the Securities and Exchange Commission for transactions and other events that may require adjustment of and/or disclosure in such financial statements (see Note 10). |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Reconciliation of Financial Statement Net Income to Taxable Income | A reconciliation of financial statement net income to taxable income for each of the periods is as follows: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net income per financial statements | $ | 433,184 | $ | 428,507 | $ | 415,225 | |||||||
Excess book depreciation | 3,777 | 3,777 | 3,777 | ||||||||||
Taxable income | $ | 436,961 | $ | 432,284 | $ | 419,002 | |||||||
Reconciliation of Partnership Equity Per Financial Statements to Partners' Equity for Tax Purposes | A reconciliation of partnership equity per the financial statements to partners’ equity for tax purposes as of December 31, 2014, is as follows (unaudited): | ||||||||||||
Partners’ equity per financial statements | $ | 1,827,066 | |||||||||||
Issue costs of limited partnership units capitalized for tax purposes | 986,745 | ||||||||||||
Difference in book vs. tax depreciation | 142,195 | ||||||||||||
Writedown of real estate previously held for sale | 161,963 | ||||||||||||
Other | 5,465 | ||||||||||||
Partners’ equity for tax purposes | $ | 3,123,434 | |||||||||||
Cash_Distributions_to_Limited_1
Cash Distributions to Limited Partners (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Text Block [Abstract] | |||||||||||||
Summary of Cash Distributions to Limited Partners | Cash distributions to limited partners for the three years ended December 31, 2014 were as follows: | ||||||||||||
Quarter Ended | Cash | Weighted | Number of Units | ||||||||||
Distribution per | Average Number | Outstanding at | |||||||||||
Limited Partnership | of Units | the End of | |||||||||||
Unit | Outstanding | Quarter | |||||||||||
December 31, 2011 | $ | 3.76 | 27,006 | 27,006 | |||||||||
March 31, 2012 | 3.82 | 27,006 | 27,006 | ||||||||||
June 30, 2012 | 4.35 | 27,006 | 27,006 | ||||||||||
September 30, 2012 | 4.14 | 27,006 | 27,006 | ||||||||||
Total paid in 2012 | $ | 16.07 | |||||||||||
December 31, 2012 | $ | 4.37 | 27,006 | 27,006 | |||||||||
March 31, 2013 | 3.59 | 27,006 | 27,006 | ||||||||||
June 30, 2013 | 4.24 | 27,006 | 27,006 | ||||||||||
September 30, 2013 | 4.48 | 27,006 | 27,006 | ||||||||||
Total paid in 2013 | $ | 16.68 | |||||||||||
December 31, 2013 | $ | 4.17 | 27,006 | 27,006 | |||||||||
March 31, 2014 | 4.46 | 27,006 | 27,006 | ||||||||||
June 30, 2014 | 4.86 | 27,006 | 27,006 | ||||||||||
September 30, 2014 | 4.34 | 27,006 | 27,006 | ||||||||||
Total paid in 2014 | $ | 17.83 | |||||||||||
Results_by_Quarter_Tables
Results by Quarter (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Summary of Results by Quarter | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Year ended December 31, 2014 | |||||||||||||||||
Rental revenues | $ | 137,980 | $ | 145,576 | $ | 143,586 | $ | 146,598 | |||||||||
Net income | 88,326 | 121,856 | 112,347 | 110,655 | |||||||||||||
Net income per limited partnership unit | 3.24 | 4.47 | 4.12 | 4.05 | |||||||||||||
Year ended December 31, 2013 | |||||||||||||||||
Rental revenues | $ | 128,580 | $ | 139,284 | $ | 137,523 | $ | 141,611 | |||||||||
Net income | 79,029 | 114,746 | 116,149 | 118,583 | |||||||||||||
Net income per limited partnership unit | 2.9 | 4.21 | 4.26 | 4.34 |
Organization_and_Summary_of_Si2
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restaurants | |||||||||||||||
CommercialBank | |||||||||||||||
Organization And Significant Accounting Policies [Line Items] | |||||||||||||||
Date of formation | 20-Jun-84 | ||||||||||||||
Mexican-American restaurants | 7 | ||||||||||||||
Percentage of general partner interest in the profits or losses and distributions | 1.00% | ||||||||||||||
Percentage of net income allocated to general partner | 1.00% | ||||||||||||||
Weighted average number of units outstanding to general partner | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 |
Rental revenue percentage | 12.00% | ||||||||||||||
Restaurants leased | 5 | ||||||||||||||
Commercial bank | 1 | ||||||||||||||
Land improvements [Member] | |||||||||||||||
Organization And Significant Accounting Policies [Line Items] | |||||||||||||||
Estimated useful lives property and equipment | 20 years | ||||||||||||||
Buildings and improvements [Member] | |||||||||||||||
Organization And Significant Accounting Policies [Line Items] | |||||||||||||||
Estimated useful lives property and equipment | 35 years | ||||||||||||||
Machinery and equipment [Member] | |||||||||||||||
Organization And Significant Accounting Policies [Line Items] | |||||||||||||||
Estimated useful lives property and equipment | 10 years |
Partners_Equity_Additional_Inf
Partners' Equity - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Percentage of net income allocated to general partner | 1.00% |
Percentage of net income attributable limited partners | 99.00% |
Percentage of gain on sale and refinancing allocated to General Partner | 1.00% |
Percentage of gain on sale and refinancing allocated to limited partners | 99.00% |
Percentage of additional gain on sale and refinancing allocated to General Partner | 15.00% |
Percentage of additional gain on sale and refinancing allocated to limited partners | 85.00% |
Leasing_Activities_Additional_
Leasing Activities - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restaurants | Restaurants | Restaurants | |
Leases [Abstract] | |||
Number of properties leased | 5 | 5 | 5 |
Number of lease years | 35 years | ||
Percentage of gross sales of the restaurants | 12.00% | ||
Leases termination period | 2021 to 2023 | ||
Minimum rentals due to partnership | $3,500 | ||
Combined unaudited sales | 4,781,167 | 4,558,320 | 4,421,845 |
Combined unaudited net losses | $98,452 | $178,500 | $170,321 |
Number of restaurants operated | 5 |
Related_Parties_Additional_Inf
Related Parties - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Acquisition | |||
Schedule of Other Related Party Transactions [Line Items] | |||
Cash distributions | $486,396 | $454,982 | $438,402 |
Number of other partnerships formed for acquisition | 3 | ||
General Partner [Member] | |||
Schedule of Other Related Party Transactions [Line Items] | |||
Cash distributions | $4,863 | $4,549 | $4,384 |
General Partner, Partnership interest percentage | 1.00% | 1.00% | 1.00% |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Financial Statement Net Income to Taxable Income (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||||||||||
Net income per financial statements | $110,655 | $112,347 | $121,856 | $88,326 | $118,583 | $116,149 | $114,746 | $79,029 | $433,184 | $428,507 | $415,225 |
Excess book depreciation | 3,777 | 3,777 | 3,777 | ||||||||
Taxable income | $436,961 | $432,284 | $419,002 |
Income_Taxes_Reconciliation_of1
Income Taxes - Reconciliation of Partnership Equity Per Financial Statements to Partners' Equity for Tax Purposes (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Disclosure [Abstract] | ||||
Partners' equity per financial statements | $1,827,066 | $1,880,278 | $1,906,753 | $1,929,930 |
Issue costs of limited partnership units capitalized for tax purposes | 986,745 | |||
Difference in book vs. tax depreciation | 142,195 | |||
Writedown of real estate previously held for sale | 161,963 | |||
Other | 5,465 | |||
Partners' equity for tax purposes | $3,123,434 |
Cash_Distributions_to_Limited_2
Cash Distributions to Limited Partners - Summary of Cash Distributions to Limited Partners (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Cash Distribution per Limited Partnership Unit | $4.34 | $4.86 | $4.46 | $4.17 | $4.48 | $4.24 | $3.59 | $4.37 | $4.14 | $4.35 | $3.82 | $3.76 | $17.83 | $16.68 | $16.07 |
Weighted Average Number of Units Outstanding | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 |
Number of Units Outstanding at the End of the Quarter | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 | 27,006 |
Cash_Distributions_to_Limited_3
Cash Distributions to Limited Partners - Additional Information (Detail) (USD $) | 3 Months Ended |
Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |
Distributions to the limited partner, per unit amount declared | $3.79 |
Distributions to the limited partner, declaration date | 31-Jan-15 |
Distributions to the limited partner, distribution date | 28-Feb-15 |
Results_by_Quarter_Summary_of_
Results by Quarter - Summary of Results by Quarter (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
RENTAL REVENUES | $146,598 | $143,586 | $145,576 | $137,980 | $141,611 | $137,523 | $139,284 | $128,580 | $573,740 | $546,998 | $530,622 |
Net income | $110,655 | $112,347 | $121,856 | $88,326 | $118,583 | $116,149 | $114,746 | $79,029 | $433,184 | $428,507 | $415,225 |
Net income per limited partnership unit | $4.05 | $4.12 | $4.47 | $3.24 | $4.34 | $4.26 | $4.21 | $2.90 | $15.88 | $15.71 | $15.22 |
Payable_to_Limited_Partners_Ad
Payable to Limited Partners - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Payables and Accruals [Abstract] | |
Period of payable outstanding to limited partners | Six months or longer |
Schedule_III_Real_Estate_and_A1
Schedule III - Real Estate and Accumulated Depreciation (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | $0 | |||
Initial cost to company, land & land improvements | 1,806,006 | |||
Initial cost to company, building & improvements | 1,238,879 | |||
Cost capitalized subsequent to acquisition carrying costs | 0 | |||
Gross amount at which carried at close of period land, buildings & improvements Total | 3,044,885 | 3,044,885 | 3,044,885 | 3,044,885 |
Accumulated depreciation | 1,364,769 | 1,329,373 | 1,293,977 | 1,258,581 |
Victorville, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 0 | |||
Initial cost to company, land & land improvements | 327,770 | |||
Initial cost to company, building & improvements | 224,843 | |||
Cost capitalized subsequent to acquisition carrying costs | 0 | |||
Gross amount at which carried at close of period land, buildings & improvements Total | 552,613 | |||
Accumulated depreciation | 247,690 | |||
Date of construction | 1986 | |||
Date acquired | 1986 | |||
Colton, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 0 | |||
Initial cost to company, land & land improvements | 262,661 | |||
Initial cost to company, building & improvements | 180,179 | |||
Cost capitalized subsequent to acquisition carrying costs | 0 | |||
Gross amount at which carried at close of period land, buildings & improvements Total | 442,840 | |||
Accumulated depreciation | 198,491 | |||
Date of construction | 1986 | |||
Date acquired | 1986 | |||
Palmdale, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 0 | |||
Initial cost to company, land & land improvements | 404,791 | |||
Initial cost to company, building & improvements | 277,677 | |||
Cost capitalized subsequent to acquisition carrying costs | 0 | |||
Gross amount at which carried at close of period land, buildings & improvements Total | 682,468 | |||
Accumulated depreciation | 305,900 | |||
Date of construction | 1986 | |||
Date acquired | 1986 | |||
Pedley, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 0 | |||
Initial cost to company, land & land improvements | 364,334 | |||
Initial cost to company, building & improvements | 249,925 | |||
Cost capitalized subsequent to acquisition carrying costs | 0 | |||
Gross amount at which carried at close of period land, buildings & improvements Total | 614,259 | |||
Accumulated depreciation | 275,325 | |||
Date of construction | 1987 | |||
Date acquired | 1987 | |||
Thousand Palms, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 0 | |||
Initial cost to company, land & land improvements | 446,450 | |||
Initial cost to company, building & improvements | 306,255 | |||
Cost capitalized subsequent to acquisition carrying costs | 0 | |||
Gross amount at which carried at close of period land, buildings & improvements Total | 752,705 | |||
Accumulated depreciation | $337,363 | |||
Date of construction | 1987 | |||
Date acquired | 1987 | |||
Land and land improvements [Member] | Victorville, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 20 years | |||
Land and land improvements [Member] | Colton, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 20 years | |||
Land and land improvements [Member] | Palmdale, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 20 years | |||
Land and land improvements [Member] | Pedley, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 20 years | |||
Land and land improvements [Member] | Thousand Palms, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 20 years | |||
Buildings and improvements [Member] | Victorville, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 35 years | |||
Buildings and improvements [Member] | Colton, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 35 years | |||
Buildings and improvements [Member] | Palmdale, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 35 years | |||
Buildings and improvements [Member] | Pedley, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 35 years | |||
Buildings and improvements [Member] | Thousand Palms, CA [Member] | ||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||
Life on which depreciation in latest income statement is computed | 35 years |
Schedule_III_Real_Estate_and_A2
Schedule III - Real Estate and Accumulated Depreciation II (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Real Estate [Abstract] | |||
Restaurants, Beginning Balance | $3,044,885 | $3,044,885 | $3,044,885 |
Restaurants, Additions | 0 | 0 | 0 |
Restaurants, Retirements | 0 | 0 | 0 |
Restaurants, Ending Balance | 3,044,885 | 3,044,885 | 3,044,885 |
Accumulated Depreciation, Beginning Balance | 1,329,373 | 1,293,977 | 1,258,581 |
Accumulated Depreciation, Additions | 35,396 | 35,396 | 35,396 |
Accumulated Depreciation, Retirements | 0 | 0 | 0 |
Accumulated Depreciation, Ending Balance | $1,364,769 | $1,329,373 | $1,293,977 |
Schedule_III_Real_Estate_and_A3
Schedule III - Real Estate and Accumulated Depreciation - Additional Information (Detail) (USD $) | Dec. 31, 2014 |
Real Estate [Abstract] | |
Aggregate cost of real estate assets for Federal tax purposes | $2,910,462 |