SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1996 Commission File Number 0-15740
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
Delaware 04-2924048
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
One International Place, Boston, MA 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 330-8600
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
BALANCE SHEETS
- ---------------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1996 1995
(Unaudited) (Audited)
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investment in Real Estate
Land $ 6,357,564 $ 6,357,564
Building improvements and personal property
65,848,426 65,541,641
------------ ------------
72,205,990 71,899,205
Less accumulated depreciation 27,543,596 26,065,442
------------ ------------
44,662,394 45,833,763
Cash 1,158,800 2,752,859
Prepaid and other assets 1,785,199 610,462
Deferred costs, net of accumulated
amortization of $2,076,425 and $1,972,608, respectively - 103,817
-------------------- ------------
Total Assets $ 47,606,393 $ 49,300,901
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Mortgage payable $ 37,857,416 $ 38,114,269
Accounts payable 74,506 280,465
Accrued expenses 1,038,849 375,194
Tenants' security deposits 156,876 159,161
------------ ------------
Total Liabilities 39,127,647 38,929,089
Partners' Capital (Deficit)
Limited partners equity, 566 units
authorized and outstanding, 9,487,732 11,324,006
General partner's deficit (1,008,986) (952,194)
------------- ------------
Total Partners' Capital 8,478,746 10,371,812
------------- ------------
Total Liabilities and Partners' Capital $ 47,606,393 $ 49,300,901
============ ============
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
- ---------------------------------------------------------------------------------------------------------------------------------
Income
Rental $ 2,404,893 $ 2,331,065 $ 4,830,868 $ 4,597,004
Interest on short-term investments 21,046 35,425 42,513 67,267
Other 273,084 257,646 520,895 475,748
------------ ------------ ------------ ------------
2,699,023 2,624,136 5,394,276 5,140,019
----------- ----------- ----------- -----------
Expenses
Leasing 86,346 96,082 175,114 199,859
General & administrative 40,484 46,202 94,211 100,494
Management Fees 150,661 144,287 295,125 283,179
Utilities 233,202 242,570 553,039 635,041
Repairs & Maintenance 303,744 292,667 528,084 553,708
Insurance 59,928 56,767 119,204 112,094
Taxes 184,569 160,327 366,895 386,047
------------ ------------ ------------ ------------
Total operating expenses 1,058,934 1,038,902 2,131,672 2,270,422
Other expenses
Depreciation 748,032 726,746 1,478,154 1,450,536
Amortization 38,817 51,910 103,817 103,821
Interest expense 1,203,722 955,325 2,150,620 1,949,329
Other expenses 35,460 18,548 256,069 38,074
-------------- ------------- ------------ -------------
Total expenses 3,084,965 2,791,431 6,120,332 5,812,182
------------ ----------- ----------- -----------
Net loss $ (385,942) $ (167,295) $ (726,056) $ (672,163)
============ =========== =========== ===========
Net loss allocated to General Partner $ (11,578) $ (5,019) $ (21,782) $ (20,165)
============= ============= ============ ============
Net loss allocated to Limited Partners $ (374,364) $ (162,276) $ (704,274) $(651,998)
============ =========== =========== ===========
Net loss per unit outstanding - Limited Partners $ (661) $ (287) $ (1,244) $ (1,152)
=============== ============= ============= =============
Weighted average number of units outstanding 566 566 566 566
=============== ================= =============== ================
STATEMENTS OF CASH FLOWS
- ---------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended
June 30, 1996 and 1995 (Unaudited) 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
Cash flow from operating activities
Net loss $ (726,056) $ (672,163)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 1,478,154 1,450,536
Amortization 103,817 103,821
Changes in assets and liabilities:
Increase in prepaid and other assets (1,174,737) (482,632)
Increase in accounts payable and accrued expenses 457,696 125,777
(Decrease) increase in tenants security deposits (2,285) 2,609
------------- ------------
136,589 527,948
------------- ------------
Cash flows from investing activities:
Additions of and improvements to property (306,785) (113,424)
------------- ------------
Net cash used in investing activities (306,785) (113,424)
------------- ------------
Cash flows from financing activities:
Principal payments on mortgage note (256,853) (233,936)
Cash distributions paid to partners (1,167,010) (583,505)
------------ ------------
Net cash used in financing activities (1,423,863) (817,441)
------------ ------------
Net decrease in cash (1,594,059) (402,917)
Cash, beginning of period 2,752,859 3,054,764
------------- ------------
Cash, end of period $ 1,158,800 $ 2,651,847
============ ============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,890,620 $ 1,949,329
============ ============
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
- ---------------------------------------------------------------------------------------------------------------------------
For the Six Months Ended General Limited
June 30, 1996 and 1995 Partners' Partners' Total
(Unaudited) Capital Capital Capital
- ---------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1995 $ (952,194) $11,324,006 $10,371,812
Net loss (21,782) (704,274) (726,056)
Distributions (35,010) (1,132,000) (1,167,010)
----------- ----------- ------------
Balance, June 30, 1996 $(1,008,986) $ 9,487,732 $ 8,478,746
=========== =========== ===========
Balance, December 31, 1994 $ (885,391) $13,483,971 $12,598,580
Net loss (20,165) (651,998) (672,163)
Distributions (17,505) (566,000) (583,505)
----------- ----------- -----------
Balance, June 30, 1995 $ (923,061) $12,265,973 $11,342,912
=========== =========== ===========
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
1. ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein have been prepared by the
Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The Registrant's accounting and financial
reporting policies are in conformity with generally accepted accounting
principles and include adjustments in interim periods considered necessary for a
fair presentation of the results of operations. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. It is suggested that these financial
statements be read in conjunction with the financial statements and notes
thereto included in the Registrant's latest annual report on Form 10-K.
The accompanying financial statements reflect the Partnership's results of
operations for an interim period and are not necessarily indicative of the
results of operations for the year ending December 31, 1996.
2. TAXABLE INCOME
The Partnership's results of operations on a tax basis are expected to differ
from net loss for financial reporting purposes primarily due to the accounting
differences in the recognition of depreciation and amortization.
3. RELATED PARTY TRANSACTIONS
The Partnership paid an affiliate a property management fee of $109,311 and
$212,426 and $102,937 and $200,480 for the three and six months ended June 30,
1996 and 1995, respectively. An Investor Service fee of $41,350 and $82,699 for
the three and six months June 30, 1996 and 1995 was also paid to an affiliate of
WFA.
4. ACCOUNTING CHANGES
On January 1, 1996, the Partnership adopted Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of", which requires impairment losses
to be recognized for long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows are not sufficient to
recover the asset's carrying amount. The impairment loss is measured by
comparing the fair value of the asset to its carrying amount. The adoption of
the SFAS had no effect on the Partnership's financial statements.
5. RECLASSIFICATION
Certain amounts in the 1995 Statement of Operations have been reclassified to
conform with the current year presentation.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity and Capital Resources
The Partnership's sole asset is a 1,222 unit apartment complex known as
Riverside Park located in Fairfax County, Virginia. The Property is leased to
tenants subject to leases of up to one year. The Partnership requires cash to
pay principal and interest on the mortgage loan encumbering the Property and to
pay operating expenses in connection with the Property, including management
fees and general and administrative expenses. The Partnership continues to have
positive cash flow after its operating and debt service requirements and
provides cash distributions to its partners. It is expected that the
Partnership's income will be sufficient in future years to continue to pay these
expenses as well as to provide for cash distributions to its partners.
The Washington, D.C., area apartment market is stable but remains competitive.
The Partnership continues to make capital improvements to the property to
enhance its competitiveness within the local market. The Partnership spent
$306,785 on capital improvements during the first six months of 1996 compared to
$113,424 in the first six months of 1995. Improvements include balcony and deck
repairs and continuous renovating and upgrading of apartment units. The capital
improvements have been funded by a combination of the property's reserves and
cash flow from operations. As of June 30, 1996, the Partnership had a cash
balance of approximately $1,158,800, as well as $535,322 that is being held by
the lender to complete unit renovations.
The Partnership provided $136,589 from operating activities, for the six months
ended June 30, 1996, as opposed to $527,948 for the same period in 1995. As
noted above, the Partnership used $306,785 and $113,424 in investing activities
for 1996 and 1995 respectively, for capital improvements. Cash used in financing
activities increased significantly in 1996 to $1,423,863, as opposed to $817,441
in 1995, due to an increase in distributions paid to partners from $583,505 in
1995 to $1,167,010 in 1996.
The Property's Mortgage Loan is evidenced by a promissory note payable by the
Partnership to the Lender and secured by a mortgage in favor of the Lender on
the Property in the full amount of the Mortgage Loan. As of June 30, 1996, the
remaining balance of the Mortgage Loan was $37,857,416. The Mortgage Loan bears
interest at the rate of 9.9375%, requiring monthly payments of principal and
interest totaling $357,912. The Mortgage Loan matured in July 1996, at which
time a balloon payment of the remaining outstanding principal in the amount of
$37,810,866 balance was due. In June, 1996, the General Partner received an
extension of the Mortgage Loan maturity until October 1, 1996. The General
Partner has signed a loan application to refinance the existing Mortgage Loan.
The anticipated amount of the new loan is expected to be in excess of the
existing loan balance which would provide additional funds to the Partnership.
It is anticipated than the New Loan will close during the second half of 1996.
The Partnership has expensed $260,000 in non-refundable commitment fees as of
June 30, 1996. Although the General Partner anticipates that the Mortgage Loan
can be replaced, if the Mortgage Loan is not extended or refinanced or the
Property sold, the Property could be lost through mortgage foreclosure.
Results of Operations
The Partnership's net loss increased from $672,163 to $726,056 for the six
months ended June 30, 1995 and 1996. Net losses for the three months ended June
30, 1996 were $385,942 as opposed to a net loss of $167,295 for the quarter
ended June 30, 1995.
The Partnership's rental revenue increased from $2,331,065 and $4,597,004 to
$2,404,893 and $4,830,868 for the three and six months ended June 30, 1995 and
1996 respectively. Rental income was 3.2% and 5.1% higher in the quarter ended
June 30, 1996 and the six months ended June 30, 1996, respectively. The
increased rental income reflects the higher average occupancy of 97.5% for the
six months ended June 30, 1996 compared to 91.5% for the same period in 1995.
The improved average occupancy was partially offset by a decrease in the average
rental changes from $693 per unit to $672 per unit for the six months ended June
30, 1995 and 1996, respectively.
The increased loss for the three month period is primarily the result of
$260,000 of commitment fees expensed during the period.
The direct operating expenses of the Partnership's property declined by 6.1% or
$138,750 from $2,270,422 for the six months ended June 30, 1995 to $2,131,672
for the six months ended June 30, 1996. Direct operating costs increased by 1.9%
or $20,032 from $1,038,902 to $1,058,934 for the comparable three month period
ended June 30. The cost savings for the six month period were primarily a result
of lower leasing, utilities, and repairs and maintenance expenses, and a
decrease in the property's taxes. The cost increases in the three month period
ended June 30, 1996 were in management fees, repairs and maintenance, insurance
and taxes which were partially offset by savings in leasing, utilities and
general and administrative expenses. The Partnership's depreciation expense
increased as a result of the higher average dollar amount of assets in service
during the three and six month periods of 1996 compared to the same period in
1995. Amortization expense was consistent with the results for the same period
in 1995.
Interest expense increased to $1,203,722 and $2,150,620 for the three and six
months ended June 30, 1996, as opposed to $955,325 and $1,949,329 for the three
and six months ended June 30, 1996 as a result of the $260,000 of loan
commitment fees expensed during the second quarter.
Other expenses increased from $38,074 to $256,069 primarily as a result of
approximately $180,000 of legal costs incurred related to litigation initiated
by the Partnership in connection with a third party proxy solicitation.
The results of operations in future quarters may differ from the results of
operations for the three and six months ended June 30, 1996, due to inflation
and changing economic conditions which could affect occupancy levels, rental
rates and operating expenses.
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
JUNE 30, 1996
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit 27, Financial Data Schedule.
b) Reports on Form 8-K:
No report on Form 8-K was filed during the period.
RIVERSIDE PARK ASSOCIATES LIMITED PARTNERSHIP - FORM 10-QSB
JUNE 30, 1996
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RIVERSIDE PARK ASSOCIATES
LIMITED PARTNERSHIP
By: Winthrop Financial Associates
Its General Partner
By: /s/ Michael L. Ashner
Michael Ashner
Chief Executive Officer
By: /s/ Edward V. Williams
Edward V. Williams
Chief Financial Officer
Date: August 14, 1996