SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995 Commission File Number 0-17808
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2940131
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
399 Boylston Street, 13th Fl.
Boston, Massachusetts 02116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(617) 578-1200
Former Name, former address and former fiscal year if changed since last report
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 twelve (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 ___
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 1995
PART I
FINANCIAL INFORMATION
Page(s)
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
BALANCE SHEET
(Unaudited)
March 31, 1995 December 31, 1994
-------------- -----------------
ASSETS
Real estate investments:
Joint ventures $40,522,999 $ 40,779,263
Property, net 9,893,086 9,861,784
-------------- --------------
50,416,085 50,641,047
Cash and cash equivalents 10,953,737 8,975,244
Short-term investments 3,151,267 4,913,784
------------ -------------
$64,521,089 $ 64,530,075
============ =============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Accounts payable $ 93,624 $ 116,660
Accrued management fee 51,582 39,295
Deferred management and disposition fees 399,559 347,978
----------- --------------
Total liabilities 544,765 503,933
=========== ==============
Commitments to fund real estate investments
Partners' capital (deficit):
Limited partners ($952 per unit;
160,000 units authorized, 82,613
and 82,635 issued and outstanding,
respectively) 64,037,190 64,086,525
General partners (60,866) (60,383)
---------- -----------
Total partners' capital 63,976,324 64,026,142
---------- ----------
$64,521,089 $ 64,530,075
=========== ============
(See accompanying notes to financial statements)
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
(Unaudited)
Quarter ended March 31,
----------------------
1995 1994
---- ----
INVESTMENT ACTIVITY
Property rentals $ 238,307 $ 176,232
Property operations expense (68,598) (181,449)
Depreciation and amortization (68,310) (76,661)
--------- ----------
101,399 (81,878)
Joint venture earnings 625,480 577,153
--------- ----------
Total real estate operations 726,879 495,275
Interest on cash equivalents
and short-term investments 205,357 92,549
--------- ----------
Total investment activity 932,236 587,824
--------- ----------
PORTFOLIO EXPENSES
Management fee 103,163 82,622
General and administrative 82,817 65,311
--------- ----------
185,980 147,933
--------- ----------
NET INCOME $746,256 $ 439,891
========== ==========
Net income per weighted average
limited partnership unit $ 8.94 $ 5.27
========== ==========
Cash distributions per limited
partnership unit outstanding
for the entire period $ 9.52 $ 10.00
========== ==========
Weighted average number of
limited partnership units
outstanding during the period 82,613 82,705
========== ==========
(See accompanying notes to financial statements)
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
SUMMARIZED STATEMENT OF CASH FLOWS
(Unaudited)
Quarter ended March 31,
------------------------
1995 1994
---- ----
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 1,031,995 $ 544,757
------------ ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property (1,110) (136,903)
Decrease in short-term
investments, net 1,743,682 4,234,102
------------ ----------
Net cash provided by
investing activities 1,742,572 4,097,199
------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners (794,632) (835,576)
Repurchase of limited partnership units (1,442) (21,975)
------------ ----------
Net cash used in financing activities (796,074) (857,551)
------------ ----------
Net increase in cash
and cash equivalents 1,978,493 3,784,405
Cash and cash equivalents:
Beginning of period 8,975,244 3,243,164
------------ ----------
End of period $ 10,953,737 $ 7,027,569
============= ===========
(See accompanying notes to financial statements)
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
Quarter ended March 31,
------------------------
1995 1994
---- ----
General Limited General Limited
Partners Partners Partners Partners
-------- --------- -------- ---------
Balance at beginning
of period $(60,383) $64,086,525 $ (60,791) $ 68,092,152
Repurchase of limited
partnership units - (1,442) - (21,975)
Cash distributions (7,946) (786,686) (8,356) (827,220)
Net income 7,463 738,793 4,399 435,492
-------- ------------ --------- -------------
Balance at end of period $(60,866) $ 64,037,190 $(64,748) $ 67,678,449
======== =========== ========= =============
(See accompanying notes to financial statements)
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (Unaudited)
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the Partnership's financial
position as of March 31, 1995 and December 31, 1994 and the results of its
operations, its cash flows and changes in partners' capital (deficit) for the
interim periods ended March 31, 1995 and 1994. These adjustments are of a
normal recurring nature.
See notes to financial statements included in the Partnership's 1994 Annual
Report on Form 10-K for additional information relating to the Partnership's
financial statements.
NOTE 1 - ORGANIZATION AND BUSINESS
- - - - - ----------------------------------
New England Pension Properties V; A Real Estate Limited Partnership (the
"Partnership") is a Massachusetts limited partnership organized for the purpose
of investing primarily in to-be-developed, newly constructed and existing income
producing real properties. The Partnership commenced operations in May 1987,
and acquired the seven real estate investments it currently owns prior to the
end of 1989. It intends to dispose of its investments within eight to twelve
years of their acquisition, and then liquidate.
The Partnership maintains a repurchase fund for the purpose of repurchasing
limited partnership units. Two percent of cash flow, as defined, is designated
for this fund which had a balance of $21,911 and $4,447 at March 31, 1995 and
December 31, 1994, respectively.
NOTE 2 - REAL ESTATE JOINT VENTURES
- - - - - -----------------------------------
The following summarized financial information is presented in the aggregate
for the Partnership's joint ventures:
Assets and Liabilities
------------------------
March 31, 1995 December 31, 1994
-------------- -----------------
Assets
Real property, at cost
less accumulated depreciation
of $6,810,941 and
$6,358,984, respectively $45,025,559 $45,272,536
Other 3,830,437 3,525,687
----------- ------------
48,855,996 48,798,223
Liabilities (800,993) (440,384)
----------- ------------
Net assets $48,055,003 $48,357,839
=========== ============
Results of Operations
---------------------
Quarter ended March 31,
----------------------
1995 1994
----- -------
Revenue
Rental income $1,705,348 $ 1,925,929
Other 27,583 43,917
----------- ------------
1,732,931 1,969,846
----------- ------------
Expenses
Operating expenses 498,988 642,310
Depreciation and amortization 404,970 530,110
----------- -----------
903,958 1,172,420
----------- -----------
Net income $ 828,973 $ 797,426
=========== ============
The C.S. Graham and Lakewood investments were sold on June 17, 1994 and
August 17, 1994, respectively. The above amounts include their results of
operations in 1994.
Liabilities and expenses exclude amounts owed and attributable to the
Partnership and (with respect to two joint ventures) its affiliates on behalf of
their financing arrangements with the joint ventures.
NOTE 3- PROPERTY
- - - - - ----------------
The following is a summary of the Partnership's investment in property:
March 31, 1995 December 31, 1994
-------------- ------------------
Land $ 3,985,498 $ 3,985,498
Building and improvements 8,911,775 8,910,665
Accumulated depreciation (924,857) (874,768)
Investment valuation allowance (2,900,000) (2,900,000)
Other assets, net of accumulated
amortization 911,608 839,815
Accounts receivable 80,500 60,380
Accounts payable (171,438) (159,806)
----------- -----------
$ 9,893,086 $ 9,861,784
=========== ===========
NOTE 4 - SUBSEQUENT EVENT
- - - - - -------------------------
Distributions of cash from operations relating to the quarter ended March
31, 1995 were made on April 27, 1995 in the aggregate amount of $1,043,093
($12.50 per limited partnership unit).
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- - - - - --------------------------------------------------------------------------
OPERATIONS
- - - - - -----------
LIQUIDITY AND CAPITAL RESOURCES
- - - - - -------------------------------
The Partnership completed its offering of units of limited partnership
interest in December 1988. A total of 83,291 units were sold. The Partnership
received proceeds of $74,895,253, net of selling commissions and other offering
costs, which have been used for investment in real estate, for the payment of
related acquisition costs and for working capital reserves. The Partnership
made nine real estate investments, two of which were sold in 1994.
At March 31, 1995, the Partnership had $14,105,004 in cash, cash
equivalents and short-term investments, of which $1,043,093 was used for cash
distributions to partners on April 27, 1995; the remainder will be used to
complete the funding of real estate investments or be retained as working
capital reserves. The source of future liquidity or cash distributions to
partners will be cash generated by the Partnership's real estate and short-term
investments. Distributions of cash from operations were made at the annualized
rate of 4% on a capital contribution of $1,000 per limited partnership unit for
the first quarter of 1994. The distribution rate was increased to 5.25% for the
first quarter of 1995. The distribution rate was increased due to the
stabilization of property operations and the attainment of appropriate cash
reserve levels. The adjusted capital contribution was reduced from $1,000 to
$952 in September 1994 due to the distribution of sale proceeds from the C.S.
Graham and Lakewood Apartments sales.
The Partnership maintains a fund for the purpose of repurchasing limited
partnership units pursuant to the terms and conditions set forth in the
Partnership Agreement. Two percent of cash flow, as defined, is designated for
this fund which had a balance of $21,911 and $4,447 at March 31, 1995 and
December 31, 1994, respectively. Through March 31, 1995, the Partnership had
repurchased 678 limited partnership units for an aggregate cost of $666,214.
The carrying value of real estate investments in the financial statements
is at cost or is reduced to its lower net realizable value if the investment's
carrying value is determined not to be recoverable through expected undiscounted
cash flows. Carrying value may be greater or less than current appraised value.
At March 31, 1995, certain appraised values exceeded the related carrying values
by an aggregate of approximately $2,400,000 and the remaining investments had
carrying values which exceeded their appraised values by $3,000,000. The
current appraised value of real estate investments has been estimated by the
managing general
partner and is generally based on a combination of traditional appraisal
approaches performed by the advisor and independent appraisers. Because of the
subjectivity inherent in the valuation process, the estimated current appraised
value may differ significantly from that which could be realized if the real
estate were actually offered for sale in the marketplace.
RESULTS OF OPERATIONS
- - - - - ---------------------
FORM OF REAL ESTATE INVESTMENTS
The investments in the portfolio are structured as joint ventures with real
estate development/management firms, with the exception of Puente Street
(formerly FMC/Brea), which is a wholly-owned property. The C.S. Graham
investment and the Lakewood Apartments investment, which were both sold in 1994,
were joint ventures.
OPERATING FACTORS
Occupancy at University Business Park was at 96% at March 31, 1995, an
increase from 89% at December 31, 1994 and 80% a year earlier. Rental rates are
increasing and occupancy levels have remained high as the Phoenix market appears
to have stabilized. However, this property faces leasing exposure during 1995
as leases expire for approximately 25% of the space.
Overall occupancy at the Columbia Gateway Corporate Park remained at 92% at
March 31, 1995, up from 73% at March 31, 1994.
Occupancy at Puente Street remained at 100% at March 31, 1995, where it has
been since one year ago (occupancy was 70% at December 31, 1993). As a result
of depressed market conditions, the carrying value of this investment was
reduced to its lower net realizable value in 1993 and 1994.
The development of Waters Landing II continues to be on hold. The
Partnership has postponed indefinitely its plans to develop an apartment complex
at this site and continues to consider the feasibility of an alternative
development plan.
Occupancy increased from 92% to 95% at the Palms Business Center III and IV
during the first quarter of 1995 (down slightly from 98% one year ago). The
overall health of the Las Vegas market has strengthened and there has been
upward movement in rental rates. Discussions continue with the venture partner
to dissolve the joint venture to obtain full ownership of this property and full
control over management decisions. It is expected that documentation will be
finalized during the second quarter; however, there can be no assurance that
this transaction will be completed.
Occupancy at the Dahlia property increased from 89% to 100% during the
first quarter of 1994, where it has remained through the first quarter of 1995.
Santa Rita Plaza was 94% leased at March 31, 1995, which approximated the
occupancy at December 31, 1994 and one year ago. Discussions with the venture
partner to restructure this joint venture are in process; however, there can be
no assurance that these negotiations will be successful.
INVESTMENT ACTIVITY
Interest on short-term investments and cash equivalents more than doubled
during the first quarter of 1995 as compared to the same period in 1994, due to
both an increase in interest rates and a higher average investment balance.
The average investment balance has increased as a result of the retention of a
portion of sale proceeds from the C.S. Graham and Lakewood sales in the latter
half of 1994.
Operating income from Puente Street increased significantly between the
first quarter of 1995 and the comparable period in 1994, with the lease-up of
the property during the first quarter of 1994.
Exclusive of the operating results from C.S. Graham and Lakewood, joint
venture earnings were $625,480 in the first quarter of 1995 and $401,718 in the
comparable quarter in 1994. This $223,762 or 56% increase resulted from
improved operating results at Dahlia ($177,000) and Columbia Gateway Corporate
Park ($72,000). These improvements were primarily due to increased rental
income resulting from improved occupancy levels. These increases were
partially offset by a decrease in operating results at Palms Business Center III
and IV ($37,000) due to a decrease in rental income.
Exclusive of operating cash flow from Lakewood and C.S. Graham (totaling
$86,400), operating cash flow increased $573,638 between the first quarter of
1995 and the comparable quarter of 1994. In addition to the effect of improved
operating results, cash flow also increased during the first quarter of 1995 as
a result of the timing of cash distributions to the Partnership from certain
joint ventures which had been retaining additional working capital reserves.
This reduction in working capital reserves was most notable at Santa Rita Plaza
($171,000) and University Business Park ($35,000). Operating cash flow at
Puente Street increased by approximately $232,000 between the respective first
quarters due primarily to the payment of lease commissions in 1994. These
increases were partially offset by the retention of $60,000 in working capital
reserves at Dahlia.
PORTFOLIO EXPENSES
The Partnership management fee is 9% of distributable cash flow from
operations after any increase or decrease in working capital reserves as
determined by the managing general partner. General and administrative expenses
consist primarily of real estate appraisal, printing, legal, accounting and
investor servicing fees.
The Partnership management fee increased between the first quarter of 1995
and 1994 due to an increase in distributable cash flow. General and
administrative expenses increased $17,506 or 27% between the respective
quarters, primarily due to an increase in professional fees, as well as legal
costs associated with the various joint venture restructurings.
INFLATION
- - - - - ---------
By their nature, real estate investments tend not to be adversely affected
by inflation. Inflation may result in appreciation in the value of the
Partnership's real estate investments over time if rental rates and replacement
costs increase. Recently, declines in property values, due to market and
economic conditions, have overshadowed the positive effect inflation may have on
the value of the Partnership's investments.
NEW ENGLAND PENSION PROPERTIES V;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 1995
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: NONE.
b. Reports on Form 8-K: No reports on Form 8-K were filed
during the quarter ended March 31, 1995.
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.
NEW ENGLAND PENSION PROPERTIES V; A REAL ESTATE
LIMITED PARTNERSHIP
(Registrant)
May 12, 1995 ---------------------------------
Peter P. Twining
Managing Director and General
Counsel of Managing General
Partner,Fifth Copley Corp.
May 12, 1995 ---------------------------------
Marie A. Welch
Investment Officer and Chief
Accounting Officer of Managing
General Partner Fifth Copley Corp.