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 March 31, 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
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 06-1149695
(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 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
Part I - Financial Information
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
Consolidated Balance Sheets
March 31, December 31,
1995 1994
Assets (Unaudited) (Audited)
Property and improvements, at cost:
Land and improvements $9,497,405 $9,492,296
Buildings 27,310,597 27,310,597
Tenant improvements 5,176,613 5,168,282
Furniture and fixtures 820,904 820,904
42,805,519 42,792,079
Less accumulated depreciation 12,010,587 11,635,309
Net property and improvements 30,794,932 31,156,770
Cash and cash equivalents 3,552,066 3,404,809
Accounts receivable 261,255 375,506
Prepaid expenses and other assets 55,777 20,614
Deferred charges, net 576,493 611,084
Total $35,240,523 $35,568,783
Liabilities and Partners' Capital
Liabilities:
Accounts payable (including $30,021 in 1995
and $20,526 in 1994 due to affiliates) $325,743 $211,187
Tenant security deposits 105,372 108,426
Unearned income 17,086 14,252
Deferred acquisition fees due to affiliates 2,500,000 2,500,000
Total liabilities 2,948,201 2,833,865
Venture partner's equity in joint venture 3,085,162 3,043,024
Partners' capital:
General Partner:
Capital contributions 1,000 1,000
Cumulative net income 29,793 25,640
30,793 26,640
Limited partners (200,000 Units):
Capital contributions, net of
offering costs 45,463,209 45,463,209
Cumulative net income 2,949,502 2,538,389
Cumulative cash distributions (19,236,344) (18,336,344)
29,176,367 29,665,254
Total partners' capital 29,207,160 29,691,894
Total $35,240,523 $35,568,783
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
Consolidated Statements of Operations
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
Income:
Base rental income $1,150,764 $1,061,232
Other income 229,369 142,722
Interest income 42,340 22,531
1,422,473 1,226,485
Expenses:
Property operating expenses 431,819 417,275
General and administrative 87,965 109,510
Fees and reimbursements to affiliates 40,303 34,164
Depreciation and amortization 404,982 402,875
965,069 963,824
Income inclusive of venture
partner's share of venture operations 457,404 262,661
Venture partner's share of venture net income 42,138 4,947
Net income $415,266 $257,714
Net income:
General Partner $4,153 $2,577
Limited partners 411,113 255,137
$415,266 $257,714
Net income per Unit $2.06 $1.28
Cash distribution per Unit $4.50 $3.00
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1995 and 1994
(Unaudited)
1995 1994
Cash flows from operating activities:
Net income $415,266 $257,714
Adjustments to reconcile net income to net
cash provided by operating activities:
Deferred rent credits 4,887 4,605
Depreciation and amortization 404,982 402,875
Venture partner's share of venture's
operations 42,138 4,947
Accounts receivable 114,251 123,048
Accounts payable 114,556 121,127
Other, net (35,383) (32,030)
Net cash provided by operating
activities 1,060,697 882,286
Cash flows from investing activities:
Purchases of property and improvements (13,440) (62,034)
Payment of leasing commissions -- (10,875)
Net cash used in investing activities (13,440) (72,909)
Cash flows from financing activities:
Cash distribution to limited partners (900,000) (600,000)
Net increase in cash and cash equivalents 147,257 209,377
Cash and cash equivalents, beginning of year 3,404,809 3,049,518
Cash and cash equivalents, end of period $3,552,066 $3,258,895
<FN>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
Notes to Consolidated Financial Statements
(Unaudited)
Readers of this quarterly report should refer to CIGNA INCOME
REALTY-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
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. Consolidated Joint Venture - Summary Information
The Partnership owns a 73.92% 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
Connecticut General Equity Properties-I Limited Partnership, an affiliated
limited partnership.
Operations information for the Westford Office Venture for the
three months ended March 31, 1995 and 1994:
1995 1994
Total income of venture $493,932 $346,173
Net income of venture 161,572 18,970
Total assets and liabilities for the Westford Office Venture:
March 31, December 31,
1995 1994
Total assets $12,874,632 $12,671,892
Total liabilities 790,488 749,320
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
and Consolidated Venture
Notes to Consolidated Financial Statements - Continued
(Unaudited)
3. Deferred Charges
Deferred charges consist of the following:
March 31, December 31,
1995 1994
Deferred leasing commissions $1,038,495 $1,038,495
Accumulated amortization (514,576) (484,872)
523,919 553,623
Deferred rent credits 52,574 57,461
$576,493 $611,084
4. Transactions with Affiliates
An affiliate of the General Partner provided investment property
acquisition services to the Partnership for fees of $2,500,000 which will
be payable from adjusted cash from operations after priority distributions
to the Partners or, if necessary, from sales proceeds.
Other fees and expenses incurred by the Partnership related to the
General Partner or its affiliates are as follows:
Three Months Ended Unpaid at
March 31, March 31,
1995 1994 1995
Property management fees(a)(b) $29,772 $25,877 $20,412
Reimbursement (at costs)
for out-of-pocket expenses 10,531 8,287 9,609
$40,303 $34,164 $30,021
(a) Included in property management fees is $7,350 and $5,291 for the
three months ended March 31, 1995 and 1994, respectively,
attributable to the venture partner's share of the Westford Office
Venture.
(b) Does not include property management fees earned by independent
property management companies of $50,482 and $45,757 for the three
months ended March 31, 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.
5. Subsequent Events
On April 5, 1995, the Westford Office Venture paid a distribution
of $2,000,000 to the venture partners, of which the Partnership's share was
$1,478,400.
On May 15, 1995, the Partnership paid a distribution of $690,000 to
the limited partners.
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At March 31, 1995, the Partnership's cash and cash equivalents and
the Partnership's share of cash and cash equivalents from the Westford
Office Venture totalled $1,302,579 and $1,662,821, respectively. Cash and
cash equivalents will be used to fund liabilities, partnership reserves and
distributions. Capital improvements and leasing commissions are expected
to be funded by cash from operations as required. The Partnership paid
distributions for the first quarter of 1995 of $690,000 or $3.45 per Unit
on May 15, 1995, approximating the quarter's adjusted cash from operations
including adjustments to reserves. The Partnership's operations for the
remainder of the year should support continued distributions and changes in
reserves for liabilities or leasing risk.
Piedmont Plaza Shopping Center produced adjusted cash from
operations for the first quarter of $190,000 after $6,000 of capital
improvements. For the year, the Partnership has approximately $50,000
planned for capital expenditures. No significant leasing activity is
planned for the year as the property is 95% occupied with no lease
expirations during 1995. Now that occupancy and net operating income have
stabilized, the property will be put on the market by mid-1995 in an
attempt to capitalize on the increase in the property's value obtained over
the last two years.
At Westford Corporate Center, adjusted cash from operations for the
first quarter was $297,000 ($220,000 attributable to the Partnership's
interest) with no tenant improvements or leasing commissions for the
quarter. The property remains 100% occupied. Capital expenditures for the
year have been planned at approximately $160,000.
Adjusted cash from operations at Woodlands Tech for the first
quarter was $129,000. First quarter capital expenditures totaled $2,300,
with approximately $155,000 planned for the year. At March 31, 1995, the
property was 94% occupied. One of two leases scheduled to expire in 1995
was renewed during the first quarter. In May 1995, two leases representing
the remaining vacant space were executed. In 1996, leases representing
41% of total space are scheduled to expire.
For the first quarter of 1995, Overlook had maintained average
occupancy of 98%. Adjusted cash from operations for the first quarter
totalled approximately $249,000 including $5,100 of capital improvements.
The market in which Overlook operates continues to expand, allowing the
property to raise rates slightly on renewals. No significant changes are
expected in the remainder of the year.
Results of Operations
Base rental income increased approximately $90,000 for the three
months ended March 31, 1995, as compared with the same period of 1994.
Slightly higher average occupancy at Piedmont Plaza led to an increase in
rental income of approximately $10,000. At Westford Corporate Center, rent
from a tenant expansion executed during 1994 contributed approximately
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware limited partnership)
Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
$71,000 to the increase. Rental income at Overlook Apartments increased
approximately $23,000 as a result of modest rental rate increases. Tenant
turnover and lower rates have resulted in an approximate $14,000 decrease
in rental income at Woodlands Plaza.
Other income increased approximately $87,000 for the three months
ended March 31, 1995, as compared to the same period of 1994. Piedmont
reported a $22,000 increase, principally related to expense recoveries from
the anchor tenant. A 1994 tenant expansion allowed Westford to increase
"expense charge-back" billings. The additional billings resulted in a
$65,000 increase.
Interest income increased for the three months ended March 31,
1995, as compared to the same period of 1994, due to an increase in
interest rates on short term investments.
Property operating expenses increased for the three months ended
March 31, 1995, as compared to the same period of 1994, due primarily to
increased repairs and maintenance expense at Piedmont Plaza, as a result of
an exterior painting project, and at Overlook Apartments due to a termite
treatment. An overall decrease in property operating expenses at Westford
partially offset the increases. Westford had an increase in cleaning and
management fee expenses for the three months as a result of the increase in
occupancy; however, substantially less was spent on snowplowing. In
addition, property taxes at Westford decreased as a result of a drop in the
assessed value.
The decrease in general and administrative expenses for the three
months ended March 31, 1995, as compared with the previous year, was the
result of a second quarter 1994 agreement with the anchor tenant at
Piedmont Plaza relating to the reimbursement of sales tax paid on rental
receipts. The receipts from the tenant are now netted against the payments
made by the property.
The increase in fees and reimbursements to affiliates for the three
months ended March 31, 1995, as compared with the same period of 1994, was
due to increased management fee expenses as a result of increased property
revenues collected.
The joint venture operations improved for the three months ended
March 31, 1995, as compared with the same period of 1994, due to a tenant's
expansions in the second and third quarters of 1994.
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
(a Delaware 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
1. Woodlands Tech Center
St. Louis, Missouri 95% 100% 94% 94% 94%
2. Westford Corporate Center
Westford, Massachusetts(a) 75% 85% 100% 100% 100%
3. Piedmont Plaza Shopping Center
Apopka, Florida 92% 94% 93% 95% 95%
4. Overlook Apartments
Scottsdale, Arizona 99% 97% 99% 98% 98%
(a) See the Notes to Consolidated Financial Statements for information
on the joint venture partnership through which the Partnership has
made this real property investment. The Partnership owns a 73.92%
interest in the joint venture which owns the property.
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 March
31, 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.
CIGNA INCOME REALTY-I LIMITED PARTNERSHIP
By: CIGNA Realty Resources, Inc. - Tenth,
General Partner
Date: May 11, 1995 By: /s/ John D. Carey
John D. Carey, President and Controller
(Principal Executive Officer)
(Principal Accounting Officer)