SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 1, 1995
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
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(Exact Name of Registrant as Specified in its Charter)
Massachusetts 0-13473 04-2830750
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(State of (Commission (IRS Employer
Organization) File No.) Identification No.)
200 Berkeley Street
Boston, MA 02117 (800) 722-5457
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(Address of principal executive (Registrant's telephone
offices, including zip code) number, including area
code)
Not Applicable
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(Former name or former address, if changed since last report)
Page 1 of 27
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
ITEM 2 - Acquisition or Disposition of Assets
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Disposal of the Northgreen Apartments
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Since early 1992, new apartment construction has declined in Eugene,
Oregon and absorption of vacant units has continued. In consideration
of this gradual improvement in real estate market conditions in
Eugene, Oregon, and the Northgreen Apartments property's stabilized
occupancy rate and improved income and cash flow performance, the
Northgreen Apartments, a 222-unit garden apartment complex, was listed
for sale during the second quarter of 1994. Based upon the Managing
General Partner's analysis of comparable sales transactions and a
review of the offers received during the property's marketing period,
the Partnership selected the offer from Northgreen Partners (the
"Buyer") as the most favorable with respect to current and projected
market conditions. Two previous offers had been selected and Purchase
and Sale Agreements were executed, one on September 6, 1994 and the
other on November 4, 1994. However, each of these prospective buyers
exercised its right to terminate the Purchase and Sale Agreement and
terminate the proposed transaction prior to the scheduled date of
sale. Accordingly, the Managing General Partner resumed its efforts
to locate another buyer for the property and selected the Buyer's
offer and entered into a Purchase and Sale Agreement. There is no
relationship between the Buyer and the Partnership or any associate,
director or officer of the Managing General Partner.
Pursuant to a Purchase and Sale Agreement dated March 13, 1995, the
Partnership sold the Northgreen Apartments to the Buyer on June 1,
1995 for a gross sales price of $9,200,000. In connection with this
sale the Buyer assumed the related mortgage indebtedness, which
amounted to $4,603,711 at the time of sale.
ITEM 7 - Financial Statements
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(A) Financial Statements
Pro Forma Balance Sheet at March 31, 1995 3
Pro Forma Statement of Operations for the Three Months
Ended March 31, 1995 5
Pro Forma Statement of Operations for the Year Ended
December 31, 1994 6
Notes to Pro Forma Financial Statements 7
(B) Exhibits
1. Purchase and Sale Agreement between John Hancock
Properties Limited Partnership and Northgreen Partners
dated March 13, 1995 10
2. Loan Assignment and Assumption Agreement between
Great West Life & Annuity Insurance Company, John
Hancock Properties Limited Partnership and Northgreen
Partners dated May 9, 1995 21
2
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
On June 1, 1995, the Partnership sold the Northgreen Apartments
property to the Buyer for a gross sales price of $9,200,000. In
connection with this sale, the Buyer assumed the related mortgage
indebtedness on the property in the amount of $4,603,711. The Pro
Forma Balance Sheet reflects the financial position of the Partnership
as if the Northgreen Apartments property had been sold on March 31,
1995. The Pro Forma Statement of Operations for the three months
ended March 31, 1995 reflects the continued operations of the
Partnership as if the Northgreen Apartments property had been sold on
December 31, 1994. In addition, the Pro Forma Statement of Operations
for the year ended December 31, 1994 reflects the continued operations
of the Partnership as if the Northgreen Apartments property had been
sold on December 31, 1993.
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
PRO FORMA BALANCE SHEET
MARCH 31, 1995
(Unaudited)
Pro Forma
Historical Adjustment for
Summary the Northgreen Pro Forma
March 31, 1995 Apartments March 31, 1995
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Assets:
Cash and cash equivalents $607,802 $4,307,165 $4,914,967
Restricted cash 448,026 (107,973) 340,053
Note receivable, net of allowance - - -
Prepaid expenses and other assets 59,799 (47,898) 11,901
Investment in property:
Land 2,588,726 (900,000) 1,688,726
Buildings and improvements 18,205,348 (6,431,461) 11,773,887
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20,794,074 (7,331,461) 13,462,613
Less: accumulated depreciation (6,975,047) 2,353,765 (4,621,282)
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13,819,027 (4,977,696) 8,841,331
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Total assets $14,934,654 ($826,402) $14,108,252
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Continued on Next Page
3
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
PRO FORMA BALANCE SHEET (Continued)
MARCH 31, 1995
(Unaudited)
Pro Forma
Historical Adjustment for
Summary the Northgreen Pro Forma
March 31, 1995 Apartments March 31, 1995
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Liabilities:
Accounts payable and accrued expenses $373,171 ($54,072) $319,099
Accounts payable to affiliates 169,813 - 169,813
Note payable to affiliate 1,000,000 - 1,000,000
Long-term debt 13,367,069 (4,614,490) 8,752,579
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Total liabilities 14,910,053 (4,668,562) 10,241,491
Partners' equity/(deficit):
General Partners' (708,209) 38,422 (669,787)
Limited Partners' 732,810 3,803,738 4,536,548
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Total partners' equity 24,601 3,842,160 3,866,761
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Total liabilities and
partners' equity $14,934,654 ($826,402) $14,108,252
=========== ========= ===========
See Notes to Pro Forma Financial Statements
4
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
PRO FORMA STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995
(Unaudited)
Historical
Summary Pro Forma Pro Forma
For the Three Adjustment for For the Three
Months Ended the Northgreen Months Ended
March 31, 1995 Apartments March 31, 1995
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Income:
Rental income $764,448 ($369,606) $394,842
Interest income 8,674 - 8,674
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Total income 773,122 (369,606) 403,516
Expenses:
Interest 284,546 (101,239) 183,307
Property operating expenses 319,474 (104,484) 214,990
Depreciation 153,365 (57,324) 96,041
General and administrative 37,049 - 37,049
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Total expenses 794,434 (263,047) 531,387
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Net loss ($21,312) ($106,559) ($127,871)
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Allocation of net loss:
General Partners' ($213) ($1,066) ($1,279)
Limited Partners' (21,099) (105,493) (126,592)
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($21,312) ($106,559) ($127,871)
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Net loss per Limited Partnership
Unit outstanding ($0.96) ($4.81) ($5.77)
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See Notes to Pro Forma Financial Statements
5
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
Historical
Summary Pro Forma Pro Forma
For the Adjustment for For the
Year Ended the Northgreen Year Ended
December 31, 1994 Apartments December 31, 1994
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(Audited) (Unaudited) (Unaudited)
Income:
Rental income $3,190,235 ($1,440,582) $1,749,653
Interest income 30,141 - 30,141
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Total income 3,220,376 (1,440,582) 1,779,794
Expenses:
Interest 1,141,871 (408,262) 733,609
Property operating expenses 1,373,439 (535,886) 837,553
Depreciation 624,361 (232,550) 391,811
General and administrative 138,570 - 138,570
Provision for/(recovery of)
uncollectible note receivable (13,903) - (13,903)
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Total expenses 3,264,338 (1,176,698) 2,087,640
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Net loss ($43,962) ($263,884) ($307,846)
Allocation of net loss:
General Partners' ($440) ($2,639) ($3,079)
Limited Partners' (43,522) (261,245) (304,767)
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($43,962) ($263,884) ($307,846)
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Net loss per Limited Partnership
Unit outstanding ($1.98) ($11.90) ($13.88)
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See Notes to Pro Forma Financial Statements
6
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Notes to Pro Forma Financial Statements
(Unaudited)
Note 1 - Northgreen Apartments
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On May 31, 1995 the Partnership sold the Northgreen Apartments
property for a net sales price of approximately $8,900,000, after
deductions for sales commissions and other expenses incurred in
connection with the sale of the property. The sale of the property
resulted in a non-recurring gain of approximately $3,960,000, which
represents the difference between the net sales price and the
property's net book value of approximately $4,940,000. The
Partnership received net cash proceeds of approximately $4,300,000
from the sale of the property (representing the excess of the net
sales proceeds over the related mortgage indebtedness on the property,
which indebtedness was assumed by the Buyer).
The historical financial statements are adjusted to show the effects
resulting from the sale of the Northgreen Apartments property on the
Partnership's operations, assets and liabilities. The Pro Forma
Balance Sheet at March 31, 1995 reflects the financial position of the
Partnership as if the Northgreen Apartments property had been sold on
March 31, 1995. The Pro Forma Statement of Operations for the three
months ended March 31, 1995 reflects the continued operations of the
Partnership as if the Northgreen Apartments property had been sold on
December 31, 1994. In addition, the Pro Forma Statement of Operations
for the year ended December 31, 1994 reflects the continued operations
of the Partnership as if the Northgreen Apartments property had been
sold on December 31, 1993.
Note 2 - Allocation of Profits or Losses
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Profits from the normal operations of the Partnership for each fiscal
year, or portion thereof, are allocated between the Limited Partners
and the General Partners in the same proportion as Distributable Cash
from Operations, as defined in the Partnership Agreement, provided
that (i) in no event shall the General Partners be allocated less
than 1% of any such profits from normal operations, and (ii) if there
is any fiscal year which produces no Distributable Cash from
Operations but which produces profits for tax purposes from normal
operations, such profits are allocated 90% to the Limited Partners and
10% to the General Partners.
Losses from the normal operations of the Partnership for each fiscal
year or portion thereof are allocated 99% to the Limited Partners and
1% to the General Partners, except any such profits or losses which
were based upon the Partnership's operations prior to the initial
closing under the Partnership's offering of Units were allocated 99%
to the General Partners and 1% to the initial Limited Partner.
Distributable Cash from Operations is distributed 90% to the Limited
Partners and 10% to the General Partners; provided, however, that in
each fiscal year the General Partners will defer their receipt of any
Distributable Cash from Operations to the extent necessary to provide
the Limited Partners a non-cumulative return in such year equal to 4%
of their Invested Capital, as defined in the Partnership Agreement.
All distributions of Distributable Cash from Operations deferred by
the General Partners accrue and are payable to them, to the extent
possible, out of subsequent years' Distributable Cash from Operations
remaining after the receipt by the Limited Partners of the aforesaid
4% return, or out of cash from sales and refinancings, as specified
below.
7
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
Notes to Pro Forma Financial Statements
(Unaudited)
Note 2 - Allocation of Profits or Losses (continued)
- ----------------------------------------------------
Cash from Sales or Refinancings, as defined in the Partnership
Agreement, are distributed to the Limited Partners until the Limited
Partners have received, first, a return of their total Invested
Capital, and, second, such additional amount as may be necessary,
after giving effect to all previous distributions of Distributable
Cash from Operations and of Cash from Sales or Refinancings to the
extent required to satisfy any deficiency in the Cumulative Return on
Investment, as defined in the Partnership Agreement, to produce in the
aggregate a Cumulative Return on Investment of 7% per annum for all
fiscal quarters commencing on or after January 1, 1986, and ending
prior to the date of such distribution. The General Partners are then
entitled to receive an amount of Cash from Sales or Refinancings equal
to any portion of the General Partners' share of Distributable Cash
from Operations which was previously deferred in order to permit the
payment to the Limited Partners of a non-cumulative return in each
year equal to 4% of their Invested Capital. Any Cash from Sales or
Refinancings remaining after the Limited Partners have received a
return of their total Invested Capital plus the Cumulative Return on
Investment of 7% per annum for all fiscal quarters commencing on or
after January 1, 1986, and ended prior to the date of such
distribution, and after the General Partners have received an amount
of such cash equal to any such deferred payment of Distributable Cash
from Operations, will be distributed 85% to the Limited Partners and
15% to the General Partners.
Cash from the Sale of the last of the Partnership's properties is
distributed in the same manner as Cash from Sales or Refinancings,
except that before any other distribution is made to the Partners,
each Partner shall first receive from such cash, an amount equal to
the then positive balance, if any, in such Partner's capital account
after crediting or charging to such account the profits or losses for
tax purposes from such sale. To the extent, if any, that a Partner is
entitled to receive a distribution of cash based upon a positive
balance in its capital account prior to such distribution, such
distribution will be credited against the amount of such cash the
Partner would have been entitled to receive based upon the manner of
distribution of Cash from Sales or Refinancings, as specified in the
previous paragraph.
Profits from Sales or Refinancings are generally allocated in the same
manner as cash from the related transaction. Losses from Sales or
Refinancings are allocated 99% to the Limited Partners and 1% to the
General Partners. In connection with the sale of the last of the
Partnership's properties, and therefore the dissolution of the
Partnership, profits will be allocated to any Partners having a
deficit balance in their capital account in an amount equal to the
deficit balance. Any remaining profits will be allocated in the same
order as cash from the sale would be distributed.
8
JOHN HANCOCK PROPERTIES LIMITED PARTNERSHIP
(A Massachusetts Limited Partnership)
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report on Form 8-K to be signed on
its behalf by the undersigned, hereunto duly authorized, on the 15th
day of June, 1995.
John Hancock Properties Limited Partnership
By: John Hancock Realty Equities, Inc.,
Managing General Partner
By: WILLIAM M. FITZGERALD
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William M. Fitzgerald, President
By: RICHARD E. FRANK
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Richard E. Frank, Treasurer
(Chief Accounting Officer)