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 15, 1994
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Date of Report
(Date of Earliest Event Reported)
MRI BUSINESS PROPERTIES FUND, LTD. III
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(Exact name of registrant as
specified in its charter)
0-15348 CALIFORNIA 94-2969782
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(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 Washington Park Hotel Associates
joint venture, which owned the Radisson Park Terrace Hotel located in
Washington, D.C. was sold on March 15, 1994.
TERMS OF ORIGINAL ACQUISITION
A 65 percent interest in the Washington Park Hotel Associates, a
joint venture, was purchased by the Registrant on September 12, 1986 for a
cash investment of $14,449,000. Of the total, $13,080,000 represented cash
down payment and $1,369,000 representing acquisition fees and miscellaneous
costs.
TERMS OF DISPOSITION AND FINANCING
The Registrant's 65 percent interest in the Washington Park Hotel
Associates joint venture was sold on March 15, 1994. The gross sales price
is a cash payment of $1,455,000. After payment of estimated expenses of
sale of $7,000, the proceeds to the Registrant were approximately
$1,448,000.
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 $7,363,000 provision for
impairment of value recognized in 1990 and 1992, for financial statement
purposes was $848,000 and for tax reporting purposes was $5,758,000.
GAIN (LOSS) ON SALE
Under the accrual method of accounting, the estimated gain of
$600,000 from the sale of the Registrant's interest in the Washington Park
Hotel Associates joint venture was recognized at the time of sale. Under
the tax method of accounting, the estimated capital loss is $4,300,000.
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 Washington Park Hotel 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 Washington Park Hotel Associates
MRI BUSINESS PROPERTIES FUND, LTD. III
(A LIMITED PARTNERSHIP)
PRO FORMA CONSOLIDATED BALANCE SHEETS (UNAUDITED)
DECEMBER 31, 1993
PRO FORMA PRO FORMA
ADJUSTMENTS ADJUSTMENTS PRO FORMA
HISTORICAL (NOTE 1) (NOTE 2) (NOTE 3)
ASSETS
CASH AND CASH EQUIVALENTS $ 5,455,000 $ (675,000) $ 201,000 $ 4,981,000
CASH INVESTMENTS 3,463,000 - - 3,463,000
ACCOUNTS AND INTEREST
RECEIVABLE - NET 1,758,000 (820,000) (408,000) 530,000
INVENTORIES AND OPERATING
SUPPLIES 499,000 (347,000) (117,000) 35,000
PREPAID EXPENSES AND OTHER ASSETS 393,000 (85,000) (81,000) 227,000
PROPERTIES AND IMPROVEMENTS 111,712,000 (37,406,000) (26,424,000) 47,882,000
ACCUMULATED DEPRECIATION (30,845,000) 10,623,000 5,968,000 (14,254,000)
ALLOWANCE FOR
IMPAIRMENT OF VALUE (14,348,000) 6,985,000 7,363,000 -
----------- ------------ ------------ ------------
NET PROPERTIES AND IMPROVEMENTS 66,519,000 (19,798,000) (13,093,000) 33,628,000
DEFERRED FINANCING COSTS - NET 151,000 (47,000) - 104,000
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TOTAL ASSETS $78,238,000 $(21,772,000) $(13,498,000) $ 42,968,000
=========== ============ ============ ============
LIABILITIES AND PARTNERS' DEFICIENCY
ACCOUNTS PAYABLE $ 1,737,000 $ (1,338,000) $ (126,000) $ 273,000
ACCRUED INTEREST 864,000 (452,000) (355,000) 57,000
ACCRUED PROPERTY TAXES 743,000 (624,000) (19,000) 100,000
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) (176,000) 558,000
NOTE PAYABLE TO AFFILIATE OF JOINT
VENTURE PARTNER 2,500,000 (2,500,000) - -
NOTES PAYABLE 51,795,000 (15,000,000) (13,731,000) 23,064,000
----------- ------------ ------------ ------------
MINORITY INTEREST IN
JOINT VENTURES 1,000 (1,000) - -
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PARTNERS' EQUITY (DEFICIENCY):
GENERAL PARTNER (1,993,000) 10,000 18,000 (1,965,000)
LIMITED PARTNERS (109,027 units
,027 units
outstanding at
September 30, 1993 and 1992) 19,416,000 471,000 891,000 20,778,000
----------- ------------ ------------ ------------
TOTAL PARTNERS' EQUITY 17,423,000 481,000 909,000 18,813,000
----------- ------------ ------------ ------------
TOTAL LIABILITIES AND
PARTNERS' EQUITY $78,238,000 $(21,772,000) $(13,498,000) $ 42,968,000
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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 PRO FORMA
ADJUSTMENTS ADJUSTMENTS
HISTORICAL (NOTE 1) (NOTE 2) PRO FORMA
REVENUES:
Room revenue $25,748,000 $ (7,975,000) $(5,197,000) $12,576,000
Food and beverage revenue 5,848,000 (4,387,000) (1,461,000) -
Other operating revenue 1,975,000 (793,000) (404,000) 768,000
Interest and other 329,000 (56,000) - 273,000
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Total revenues 33,900,000 (13,211,000) (7,072,000) 13,617,000
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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) (1,259,000) 3,146,000
Food and beverage expenses5,491,000(4
Equity in Unconsolidated joint
venture's operations 1,370,000 - - 1,370,000
Interest 3,498,000 (737,000) (748,000) 2,013,000
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) (6,443,000) 14,522,000
34,871,000 (13,906,000) (6,443,000) 14,522,000
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INCOME (LOSS) BEFORE
MINORITY INTEREST IN
JOINT VENTURES' OPERATIONS (971,000) 695,000 (629,000) (905,000)
MINORITY INTEREST IN
JOINT VENTURES' OPERATIONS 28,000 (28,000) - -
----------- ------------ ----------- ------------
NET INCOME (LOSS) $ (943,000)$ 667,000 $ (629,000)$ (905,000)
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NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $(8) $6 $(6) $(8)
=== == === ===
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 PRO FORMA
ADJUSTMENTS ADJUSTMENTS
HISTORICAL (NOTE 1) (NOTE 2) PRO FORMA
REVENUES:
Room revenue $ 6,929,000 $(2,648,000) $(1,288,000) $ 2,993,000
Food and beverage revenue 1,777,000 (1,365,000) (412,000) -
Other operating revenue 537,000 (240,000) (86,000) 211,000
Interest and other 54,000 (16,000) - 38,000
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Total revenues 9,297,000 (4,269,000) (1,786,000) 3,242,000
Room expenses 1,692,000 (590,000) (312,000) 790,000
Food and beverage expenses 1,499,000 (1,167,000) (332,000) -
Other operating expenses 3,464,000 (1,389,000) (743,000) 1,332,000
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
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Total expenses 7,779,000 (3,157,000) (1,387,000) 3,235,000
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INCOME (LOSS) BEFORE MINORITY INTEREST
IN JOINT VENTURES' OPERATIONS 1,518,000 (1,112,000) (399,000) 7,000
MINORITY INTEREST IN JOINT VENTURES'
OPERATIONS (445,000) 445,000 - -
----------- ----------- ---------- -----------
NET INCOME (LOSS) $ 1,073,000 $ (667,000) $ (399,000)$ 7,000
=========== =========== ========== ===========
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP UNIT $10 $(6) $(4) $-
=== === === ==
See notes to consolidated financial statements (unaudited).
BASIS OF PRESENTATION
NOTE 1.
As reported in a previously filed Form 8-K, the Registrant
sold the Park Hyatt Chicago on March 7, 1994. Accounts
related to the Park Hyatt Chicago have been eliminated as
presented by the pro forma adjustments. See Note 3 below.
NOTE 2.
The Registrant sold the Radisson Park Terrace on March 15,
1994. Accounts related to the Radisson Park Terrace have been
eliminated as presented by the pro forma adjustments. See Note
3 below.
NOTE 3.
The unaudited statements present the pro forma consolidated
balance sheet at December 31, 1993, had the Registrant sold the
Park Hyatt Chicago and the Radisson Park Terrace 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 and the Radisson Park Terrace 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