FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
March 7, 1994
-----------------
Date of Report
(Date of Earliest Event Reported)
MRI Business Properties Fund, Ltd. III
---------------------------
(Exact name of registrant as
specified in its charter)
0-15348 CALIFORNIA 94-2969782
--------- ---------- ----------
(Registration (State or Other (IRS Employer
File Jurisdiction of Identification
Number) Incorporation) Number)
950 TOWER LANE, FOSTER CITY, CALIFORNIA 94404
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(415) 378-7000
(800) 366-6707 ... WATS LINE FOR ALL STATES
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The Registrant was organized to acquire, hold for investment, and sell
income-producing real property. In the ordinary course of its business the
Registrant's interest in the Park Hyatt Water Tower Associates joint
venture, which owned the Park Hyatt Chicago located in Chicago, Illinois,
was sold on March 7, 1994.
TERMS OF ORIGINAL ACQUISITION
A 60 percent interest in the Park Hyatt Water Tower Associates, a
joint venture, was purchased by the Registrant on December 30, 1986 for a
cash investment of $16,129,000. Of the total, $15,063,000 represented cash
down payment and $1,066,000 representing acquisition fees and miscellaneous
costs.
TERMS OF DISPOSITION AND FINANCING
The Registrant's 60 percent interest in the Park Hyatt Water Tower
Associates joint venture was sold on March 7, 1994. The gross sales price
is comprised of the following: (1) the purchase money note of $2,500,000,
(2) accrued and unpaid interest of $1,581,000 assumed by the buyer, and (3)
cash of $1,750,000.
CARRYING AMOUNT AT DATE OF SALE
At the date of sale, the carrying value of the Registrant's investment
in the joint venture, net of a $6,985,000 provision for impairment of value
recognized in 1992, for financial statement purposes was $5,821,000 and for
tax reporting purposes was $6,255,000.
GAIN (LOSS) ON SALE
Under the accrual method of accounting, the estimated gain of $10,000
from the sale of the Registrant's interest in the Park Hyatt Water Tower
Associates joint venture was recognized at the time of sale. Under the tax
method of accounting, the estimated capital loss is $4,502,000.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial statements.
Not applicable.
(b) Pro Forma Financial Information.
Historical financial information and Pro Forma financial information
relating to the sale of Park Hyatt Water Tower Associates are included in
this Form 8-K.
(c) Exhibits.
Upon their receipt, Registrant will amend its Form 8-K to include the
disposition documents for Park Hyatt Water Tower Associates
MRI BUSINESS PROPERTIES FUND, LTD. III
(A LIMITED PARTNERSHIP)
PRO FORMA CONSOLIDATED BALANCE SHEETS (UNAUDITED)
DECEMBER 31, 1993
PRO FORMA
ADJUSTMENTS
HISTORICAL (NOTE 1) PRO FORMA
---------- -------- ---------
ASSETS
CASH AND CASH EQUIVALENTS $ 5,455,000 $ (675,000) $ 4,780,000
CASH INVESTMENTS 3,463,000 - 3,463,000
ACCOUNTS AND INTEREST
RECEIVABLE - NET 1,758,000 (820,000) 938,000
INVENTORIES AND OPERATING SUPPLIES 499,000 (347,000) 152,000
PREPAID EXPENSES AND OTHER ASSETS 393,000 (85,000) 308,000
PROPERTIES AND IMPROVEMENTS 111,712,000 (37,406,000) 74,306,000
ACCUMULATED DEPRECIATION (30,845,000) 10,623,000 (20,222,000)
ALLOWANCE FOR IMPAIRMENT OF VALUE (14,348,000) 6,985,000 (7,363,000)
----------- ------------ -------------
NET PROPERTIES AND IMPROVEMENTS 66,519,000 (19,798,000) 46,721,000
DEFERRED FINANCING COSTS - NET 151,000 (47,000) 104,000
----------- ------------ -------------
TOTAL ASSETS $78,238,000 $(21,772,000) $ 56,466,000
=========== ============ ============
LIABILITIES AND PARTNERS' DEFICIENCY
ACCOUNTS PAYABLE $ 1,737,000 $ (1,338,000) $ 399,000
ACCRUED INTEREST 864,000 (452,000) 412,000
ACCRUED PROPERTY TAXES 743,000 (624,000) 119,000
PAYABLE TO AFFILIATE OF JOINT
VENTURE PARTNER 1,581,000 (1,581,000) -
DUE TO UNCONSOLIDATED JOINT VENTURE 103,000 - 103,000
OTHER LIABILITIES 1,491,000 (757,000) 734,000
NOTE PAYABLE TO AFFILIATE OF JOINT
VENTURE PARTNER 2,500,000 (2,500,000) -
NOTES PAYABLE 51,795,000 (15,000,000) 36,795,000
----------- ------------ ------------
TOTAL LIABILITIES 60,814,000 (22,252,000) 38,562,000
----------- ------------ ------------
MINORITY INTEREST IN JOINT VENTURES 1,000 (1,000) -
----------- ------------ ------------
PARTNERS' EQUITY (DEFICIENCY):
GENERAL PARTNER (1,993,000) 10,000 (1,983,000)
LIMITED PARTNERS (109,027 units
outstanding at
September 30, 1993 and 1992) 19,416,000 471,000 19,887,000
----------- ------------ ------------
TOTAL PARTNERS' EQUITY 17,423,000 481,000 17,904,000
----------- ------------ ------------
TOTAL LIABILITIES AND
PARTNERS' EQUITY $78,238,000 $(21,772,000) $ 56,466,000
=========== ============ ============
See notes to consolidated financial statements (unaudited).
MRI BUSINESS PROPERTIES FUND, LTD. III
(A LIMITED PARTNERSHIP)
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED SEPTEMBER 30, 1993
PRO FORMA
ADJUSTMENTS
HISTORICAL (NOTE 1) PRO FORMA
REVENUES:
Room revenue $25,748,000 $ (7,975,000) $17,773,000
Food and beverage revenue 5,848,000 (4,387,000) 1,461,000
Other operating revenue 1,975,000 (793,000) 1,182,000
Interest and other 329,000 (56,000) 273,000
Total revenues 33,900,000 (13,211,000) 20,689,000
EXPENSES (including $1,227,000
paid to an affiliate of
the joint venture partners,
general partner and
affiliates in 1993):
Room expenses 6,810,000 (2,405,000) 4,405,000
Food and beverage expenses 5,491,000 (4,167,000) 1,324,000
Other operating expenses 14,624,000 (5,978,000) 8,646,000
Equity in Unconsolidated joint
venture's operations 1,370,000 - 1,370,000
Interest 3,498,000 (737,000) 2,761,000
Depreciation and amortization 2,663,000 (619,000) 2,044,000
General and administrative 415,000 - 415,000
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Total expenses 34,871,000 (13,906,000) 20,965,000
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INCOME (LOSS) BEFORE
MINORITY INTEREST
IN JOINT VENTURES'
OPERATIONS (971,000) 695,000 (276,000)
MINORITY INTEREST IN
JOINT VENTURES'
OPERATIONS 28,000 (28,000) -
----------- ------------ ------------
NET INCOME (LOSS) $ (943,000)$ 667,000 $ (276,000)
=========== ============ ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $(8) $6 $(2)
=== == ===
See notes to consolidated financial statements (unaudited).
MRI BUSINESS PROPERTIES FUND, LTD. III
(A LIMITED PARTNERSHIP)
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE FIRST QUARTER ENDED DECEMBER 31, 1993
PRO FORMA
ADJUSTMENTS
HISTORICAL (NOTE 1) PRO FORMA
---------- -------- ---------
REVENUES:
Room revenue $ 6,929,000 $(2,648,000) $ 4,281,000
Food and beverage revenue 1,777,000 (1,365,000) 412,000
Other operating revenue 537,000 (240,000) 297,000
Interest and other 54,000 (16,000) 38,000
----------- ----------- -----------
Total revenues 9,297,000 (4,269,000) 5,028,000
----------- ----------- -----------
EXPENSES:
Room expenses 1,692,000 (590,000) 1,102,000
Food and beverage expenses 1,499,000 (1,167,000) 332,000
Other operating expenses 3,464,000 (1,389,000) 2,075,000
Equity in unconsolidated joint
ventures operations 106,000 - 106,000
Interest 507,000 (11,000) 496,000
Depreciation and amortization 386,000 - 386,000
General and administrative 125,000 - 125,000
----------- ----------
Total expenses 7,779,000 (3,157,000) 4,622,000
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INCOME (LOSS) BEFORE
MINORITY INTEREST
IN JOINT VENTURES'
OPERATIONS 1,518,000 (1,112,000) 406,000
MINORITY INTEREST
IN JOINT VENTURES'
OPERATIONS (445,000) 445,000 -
----------- ----------- ----------
NET INCOME (LOSS) $ 1,073,000 $ (667,000) $ 406,000
=========== =========== ==========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $10 $(6) $4
=== === ==
See notes to consolidated financial statements (unaudited).
BASIS OF PRESENTATION
NOTE 1.
The unaudited statements present the pro forma consolidated balance sheet
at December 31, 1993, had the Registrant sold the Park Hyatt Chicago on
December 31, 1993 and the pro forma consolidated statements of operations
for the year ended September 30, 1993 and for the three months ended
December 31, 1993, had the Registrant sold the Park Hyatt Chicago at the
beginning of each period presented. The unaudited statements also present
the historical figures as previously reported in the appropriate Form 10-K
and 10-Q Reports.
No provision for Federal and state income taxes has been made in the
historical or pro forma consolidated financial statements because income
taxes are the obligation of the partners.
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.
REGISTRANT
MRI BUSINESS PROPERTIES FUND, LTD. III
By: Montgomery Realty Company - 85,
its managing General Partner
By: Fox Realty Investors,
the general partner
of the General Partner
By: NPI Equity Investments II, Inc. ("NPI Equity II"),
its managing partner
By:/s/ Arthur N. Queler
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Arthur N. Queler
Executive Vice President (Principal
Financial and Accounting Officer)
and Director of
NPI Equity II
Date: March 20, 1994