UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
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 0-15748
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Connecticut 06-1094176
(State of Organization) (I.R.S. Employer Identification
No.)
900 Cottage Grove Road, South Building
Bloomfield, Connecticut 06002
(Address of principal executive offices)
Telephone Number: (203) 726-6000
Indicate by checkmark 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
Part I - Financial Information
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Balance Sheets
September 30, December 31,
1995 1994
Assets (Unaudited) (Audited)
Property and improvements, at cost:
Land and improvements $2,860,533 $2,810,237
Buildings 12,641,248 13,002,842
Tenant improvements 3,103,218 2,879,677
18,604,999 18,692,756
Less accumulated depreciation 7,178,920 6,686,953
Net property and improvements 11,426,079 12,005,803
Equity investment in unconsolidated joint venture 2,644,566 3,043,024
Cash and cash equivalents 1,537,096 368,015
Accounts receivable (net of allowance of $3,815
in 1995 and $1,684 in 1994) 17,843 97,349
Prepaid expenses and other assets 56,845 76,872
Deferred charges, net 234,785 295,340
Total $15,917,214 $15,886,403
Liabilities and Partners' Capital (Deficit)
Liabilities:
Accounts payable (including $65,666 in 1995
and $9,324 in 1994 due to affiliates) $436,629 $220,449
Tenant security deposits 102,325 102,076
Unearned income 67,507 6,269
Total liabilities 606,461 328,794
Partners' capital (deficit):
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 159,969 143,212
Cumulative cash distributions (164,741) (156,705)
(3,772) (12,493)
Limited partners (39,236.25 Units):
Capital contributions, net of offering
costs 35,602,279 35,602,279
Cumulative net income 3,150,752 2,549,406
Cumulative cash distributions (23,438,506) (22,581,583)
15,314,525 15,570,102
Total partners' capital 15,310,753 15,557,609
Total $15,917,214 $15,886,403
The Notes to Consolidated Financial Statements are an integral part of these
statements.
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Income:
Base rental income $581,382 $500,728 $1,882,795 $1,563,641
Other operating income 63,856 51,044 178,201 149,008
Interest income 22,372 16,120 51,348 42,669
667,610 567,892 2,112,344 1,755,318
Expenses:
Property operating expenses 248,364 260,779 736,453 737,048
General and administrative 26,359 36,304 98,862 114,435
Fees and reimbursements to
affiliates 59,941 42,674 191,634 151,765
Depreciation and amortization 260,586 193,561 673,833 581,304
595,250 533,318 1,700,782 1,584,552
Net partnership operating
income 72,360 34,574 411,562 170,766
Gain on sale of property -- -- 83,399 245,873
Other income:
Equity interest in joint
venture net income 39,010 27,270 123,142 62,056
Net income $111,370 $61,844 $618,103 $478,695
Net income:
General Partner $1,114 $618 $16,757 $ 52,480
Limited partners 110,256 61,226 601,346 426,215
$ 111,370 $61,844 $618,103 $478,695
Net income per Unit $ 2.82 $ 1.56 $ 15.33 $ 10.86
Cash distribution per Unit $ 13.71 $ 32.01 $ 21.84 $ 43.17
The Notes to Consolidated Financial Statements are an integral part of these
statements.
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
Statements of Cash Flows
For the Nine Months Ended September 30, 1995 and 1994
(Unaudited)
1995 1994
Cash flows from operating activities:
Net income $618,103 $478,695
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on sale of property (83,399) (245,873)
Deferred rent credits 37,633 31,739
Depreciation and amortization 673,833 581,304
Equity interest in joint venture net income (123,142) (62,056)
Accounts receivable 79,506 67,312
Accounts payable 259,760 247,707
Other, net 81,514 15,149
Net cash provided by operating activities 1,543,808 1,113,977
Cash flows from investing activities:
Purchases of property and improvements (299,278) (197,594)
Payment of leasing commissions (72,557) (38,597)
Proceeds from sale of property 365,400 1,115,100
Payment of closing costs related to
sale of property (24,372) (53,100)
Distribution from joint venture 521,600 --
Net cash provided by investing activities 490,793 825,809
Cash flows from financing activities:
Cash distribution to limited partners (857,484) (1,694,159)
Cash distribution to General Partner (8,036) (6,210)
Net cash used in financing activities (865,520) (1,700,369)
Net increase in cash and cash equivalents 1,169,081 239,417
Cash and cash equivalents, beginning of year 368,015 693,863
Cash and cash equivalents, end of period $1,537,096 $933,280
The Notes to Consolidated Financial Statements are an integral part of
these statements.
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements
(Unaudited)
Readers of this quarterly report should refer to the CONNECTICUT
GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP'S ("the Partnership")
audited financial statements for the year ended December 31, 1994 which are
included in the Partnership's 1994 Annual Report, as certain footnote
disclosures which would substantially duplicate those contained in such
audited financial statements have been omitted from this report.
1. Basis of Accounting and Significant Accounting Policies
a) Basis of Presentation: The accompanying financial statements were
prepared in accordance with generally accepted accounting
principles. It is the opinion of management that the financial
statements presented reflect all the adjustments necessary for a
fair presentation of the financial condition and results of
operations. Certain amounts in the 1994 financial statements have
been reclassified to conform with the 1995 presentation.
b) Cash and Cash Equivalents: Short-term investments with a maturity
of three months or less at the time of purchase are reported as
cash equivalents.
2. Unconsolidated Joint Venture - Summary Information
The Partnership owns a 26.08% interest in the Westford Office
Venture which owns the Westford Corporate Center in Westford,
Massachusetts. The remaining equity interest in the venture is held by
CIGNA Income Realty-I Limited Partnership, an affiliated limited
partnership.
Operations information for the Westford Office Venture:
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Total income of venture $478,526 433,584 $1,452,241 $1,204,226
Net income of venture 149,575 104,563 472,168 237,945
Total assets and liabilities for the Westford Office Venture:
September 30, December 31,
1995 1994
Total assets $11,158,622 $12,671,892
Total liabilities 763,882 749,320
The Venture paid a distribution to the venturers of $2,000,000 in
1995, of which the Partnership's share was $521,600.
3. Sale of Investment Property
Westside Industrials consisted of four one-story industrial
warehouse buildings with total square footage of 63,080. On April 27,
1995, the Partnership sold building #6 (totalling 12,600 square feet) for a
gross sales price of $365,400. After deducting closing costs and expenses,
the Partnership netted $341,028. The Partnership recorded a gain on the
sale of $83,399.
4. Deferred Charges
Deferred charges consist of the following:
September 30, December 31,
1995 1994
Deferred leasing commissions $952,992 $880,435
Accumulated amortization (755,956) (660,477)
197,036 219,958
Deferred rent credits 37,749 75,382
$234,785 $295,340
5. Transactions with Affiliates
Fees and other expenses incurred by the Partnership related to the General
Partner or its affiliates are as follows:
Three Months Ended Nine Months Ended Unpaid at
September 30, September 30, September 30,
1995 1994 1995 1994 1995
Partnership management fee(a) $23,727 $21,031 $103,203 $82,449 $23,727
Property management fee (b)(c) 13,761 10,331 44,292 33,591 9,292
Reimbursement (at cost) of
out-of-pocket expenses 22,453 11,312 44,139 35,725 32,647
$59,941 $42,674 $191,634 $151,765 $65,666
(a) Includes management fees attributable to the Partnership's 26.08%
interest in the Westford Office Venture.
(b) Does not include management fees attributable to the Partnership's
26.08% interest in the Westford Office Venture of $7,227 and $7,452
for the three months ended September 30, 1995 and 1994,
respectively, and $22,052 and $18,847 for the nine months ended
September 30, 1995 and 1994, respectively.
(c) Does not include property management fees earned by independent
management companies of $28,108 and $23,192 for the three months
ended September 30, 1995 and 1994, respectively, and $87,909 and
$72,230 for the nine months ended September 30, 1995 and 1994,
respectively. Certain property management services have been
contracted by an affiliate of the General Partner on behalf of the
Partnership and are paid directly by the Partnership to the third
party companies.
6. Subsequent Event
On November 15, 1995, the Partnership paid a distribution of
$393,149 to limited partners and $2,399 to the General Partner.
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At September 30, 1995, the Partnership's cash and cash equivalents
and the Partnership's share of cash and cash equivalents from the Westford
Office Venture totalled $1,537,096 and $214,508, respectively, which will
be used to fund liabilities, Partnership reserves and a distribution to
partners. The Partnership paid the first quarter 1995 cash distribution of
$196,576 or $5.01 per Unit on May 15, 1995, representative of the
quarter's adjusted cash from operations, including adjustments to reserves.
The Partnership paid the second quarter 1995 distribution of $537,930 or
$13.71 per Unit on August 15, 1995, consisting of $341,354 or $8.70 per
Unit from the sale of a building at the Westside property and $196,576 or
$5.01 per Unit representative of the second quarter's adjusted cash from
operations. The Partnership paid the third quarter 1995 distribution of
$393,149 or $10.02 per Unit on November 15, 1995 reflecting actual
results for the quarter and adjustments to cash reserves. The
Partnership's distribution from operations for the remainder of the year
should reflect actual operating results subject to changes in reserves for
liabilities or leasing risk.
Early in 1995, a user/owner approached the manager for the Westside
property and offered to buy vacant building #6 (12,600 square feet,
representing 100% of the vacant space at March 31, 1995) at a gross price
of $29 per square foot. On April 27, 1995, the Partnership sold building
#6 to JACLS Holding Company for a gross sales price of $365,400. After
closing costs and expenses, the Partnership netted approximately $341,000.
The sale, reflecting an above market sales price, has allowed the
Partnership to convert a vacancy and potential leasing problem into
distributable cash to the partners. The net proceeds have been distributed
to partners along with the second quarter distribution on August 15, 1995.
Operations at Westside for the third quarter of 1995 produced
$27,000 of adjusted cash from operations with no tenant improvements or
leasing commissions. Subsequent to the sale of building #6, the property
has been 100% occupied. Leasing exposure at the start of 1995, exclusive
of building #6, totalled 35,120 square feet. During the first quarter, one
lease for 4,000 square feet was renewed and during the second quarter a
3,120 square foot lease renewal was executed. A lease for a tenant
occupying 14,000 square feet was scheduled to expire on January 31, 1995.
The tenant, held over as a month to month, requested to retain its existing
space but required additional parking. As a result of the Partnership's
negotiations with an adjacent property owner to purchase a 20,000 square
foot land parcel to be used for additional parking, the tenant executed a
seven year lease contingent upon the land purchase. The land owner
withdrew its interest to sell the parcel but is now receptive to a ground
lease arrangement. The remaining 14,000 square feet of 1995 leasing
exposure is not expected to be renewed during the remainder of the year.
As a result of strong growth in the Phoenix area and an increase in
interest of all property types in the general Phoenix market, the
Partnership has received requests to sell the remainder of the Westside
project. The Partnership is pursuing a proposal for a sale of Westside
with a closing anticipated by December 31, 1995 at a gross sales price in
the range of $23 per square foot or $1,175,000.
Lake Point's adjusted cash from operations for the third quarter
of 1995 totalled approximately $134,000 after $20,000 of capital
improvements and an adjustment of $85,000 to cash reserves for potential
fourth quarter leasing costs. The property was 100% occupied at September
30, 1995. The 1995 leasing plan for the property includes renewals
representing 27,102 square feet and new leases representing 22,644 square
feet. By the third quarter, the renewals planned at the start of the year
had not been completed but an early renewal was executed with a tenant
occupying 27,360 square feet originally set to expire in 1997. New leases
representing 10,740 square feet were executed during the first quarter. In
addition, an existing tenant (7,296 square feet) expanded by an additional
4,224 square feet for a period of five months and extended the existing
lease to coincide. Although this tenant's lease is still set to expire
during 1995, a three year renewal has been negotiated and is expected to be
signed in the fourth quarter. During the fourth quarter additional
renewals representing 14,824 square feet and new leasing of 2,160 square
feet are expected to be completed. In addition, an early renewal of a
12,278 square foot lease set to expire in 1996 maybe completed by the end
of the year. In anticipation of the fourth quarter leasing activity, the
Partnership has retained approximately $135,000 in cash reserves from cash
generated by the first three quarters of 1995 operations.
Woodlands Plaza generated a deficit from operations for the third
quarter of 1995 prior to adjustments to cash reserves to fund approximately
$149,000 of tenant improvements and leasing commissions. During the second
quarter the Partnership had located a tenant to lease the 10,319 square
feet of space vacated by Magnum Mortgage in April as an early termination.
The Partnership was required to fund a leasing commission and tenant
improvements of $149,000 during the third quarter for the new tenant, Dun &
Bradstreet. The Partnership utilized funds that were added to cash
reserves from property operations during the first two quarters of 1995.
The Partnership reduced cash reserves relative to Woodlands Plaza by
$240,000 as a result of the third quarter leasing costs and a reprojection
of fourth quarter leasing activity and associated costs. The largest
component of the Partnership's cash reserves for Woodlands Plaza were two
early termination fees collected during the second quarter of $190,000 and
$20,000. On September 30, 1995 a tenant occupying 8,276 square feet
vacated. Although the lease expired in August, the tenant remained for an
additional holdover month at 200% of the monthly lease amount. Minimal
leasing and capital expenditures are expected during the fourth quarter.
As a result of revised estimates of fourth quarter leasing activity, the
Partnership retained in cash reserves for Woodlands Plaza approximately
$40,000 of cash generated by operations during the first half of 1995.
At Westford Corporate Center, adjusted cash from operations for
the third quarter was $297,000 ($77,500 attributable to the Partnership's
interest) with no tenant improvements or leasing commissions and $5,000 of
capital expenditures. The property remains 100% occupied. During the
fourth quarter Intel's lease for 16,469 square feet is scheduled to expire
and one of the other existing tenants, Cascade Communications, is expected
to assume the space. Negotiations are currently underway for a triple net
lease with no tenant improvements. Although the rent proposed on Cascade's
expansion would be at market with no cost to the Partnership for tenant
improvements or leasing commissions, rental revenue is likely be less than
what is currently received from Intel.
Results of Operations
Rental income increased by approximately $81,000 and $319,000 for
the three and nine months ended September 30, 1995, respectively, as
compared with the same periods in 1994, as a result of the tenant changes
at each of the Partnership's properties. Rental income at Woodlands
increased approximately $46,000 and $342,000 for the three and nine months,
respectively, due to extensive leasing activity at the property during 1994
and two lease termination fees totalling $210,000 recorded in the second
quarter of 1995. At Westside, rental income decreased approximately $8,000
and $92,000 for the three and nine months, respectively, due to a lower
income potential from the sale of buildings #1 and #2 in April 1994 and the
loss of tenants occupying 12,600 square feet in the latter half of 1994.
In addition, 1994 included the residual of a lease termination fee from
1993. Rental income at Lake Point increased approximately $42,000 and
$69,000 for the three and nine months, respectively, due to increased
occupancy.
The increase in other income for the three and nine months ended
September 30, 1995, as compared with the same periods of 1994, was
primarily the result of expense charge-back billings relating to the newly
leased space at Lake Point.
Property operating expenses decreased for the three and were flat
for the nine months ended September 30, 1995, as compared with the same
periods in 1994. The decrease for the three months was the result of a
third quarter 1994 landscaping project at Westside. An increase at
Woodlands for the nine months was primarily due to management fees earned
on lease termination fees coupled with maintenance projects, including
painting of the vending lounge, additional utility usage and janitorial
expenses due to a higher level of occupancy. The increases were offset by
lower property tax costs at Westside due to the sale of buildings #1 and #2
in April 1994 and building #6 in April 1995.
The increase in fees and reimbursements to affiliates for the three
and nine months ended September 30, 1995, as compared to the same periods
of 1994, was primarily due to increased partnership management fees as a
result of increased adjusted cash from operations.
Depreciation and amortization increased for the three and nine
months ended September 30, 1995, as compared with the same periods in 1994,
due primarily to accelerated depreciation and amortization of assets
associated with vacated tenants at Woodlands and as a result of new tenant
improvements at Lake Point. Partially offsetting the increase was a
decrease in depreciation and amortization expense at Westside due to the
sale of buildings #1 and #2 in April 1994 and building #6 in April 1995.
The gains on sale were the result of the sale of building #6 in
April 1995 and the sale of buildings #1 and #2 in April 1994 of the
Westside property.
The joint venture operations improved for the three and nine months
ended September 30, 1995, as compared with the same periods in 1994, due to
a tenant's expansions in the second and third quarters of 1994.
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Occupancy
The following is a listing of approximate physical occupancy levels
by quarter for the Partnership's investment properties:
1994 1995
At 3/31 At 6/30 At 9/30 At 12/31 At 3/31 At 6/30 At 9/30
1. Woodlands Plaza II
Office Building
St. Louis, Missouri 81% 78% 84% 92% 94% 90% 79%
2. Westside Industrials
(formerly Interpark)
Phoenix, Arizona (a) 67% 100% 85% 80% 80% 100% 100%
3. Lake Point I, II, III
Service Center
Orlando, Florida 90% 83% 89% 89% 100% 100% 100%
4. Westford Corporate
Center
Westford,
Massachusetts (b) 75% 85% 100% 100% 100% 100% 100%
(a) On April 15, 1994, Westside Industrials sold two buildings, reducing
square footage from 105,560 to 63,080.
On April 27, 1995, Westside Industrials sold building #6, reducing
square footage from 63,080 to 50,480.
(b) The partnership owns a 26.08% interest in the Westford Office Venture
which owns the Westford Corporate Center.
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedules
(b) No Form 8-Ks were filed during the three months ended September 30,
1995.
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 thereunto duly authorized.
CONNECTICUT GENERAL EQUITY PROPERTIES-I
LIMITED PARTNERSHIP
By: Connecticut General Realty Resources,
Inc. - Third, General Partner
Date: November 14, 1995 By: /s/ John D. Carey
John D. Carey, President and Controller
(Principal Executive Officer)
(Principal Accounting Officer)