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, 1996 Commission File Number 0-17807
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Massachusetts 04-2988542
(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
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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
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 1996
PART I
FINANCIAL INFORMATION
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
BALANCE SHEET
(Unaudited)
March 31, 1996 December 31, 1995
--------------- -----------------
ASSETS
Real estate investments:
Joint ventures $ 15,939,992 $ 16,200,967
Property, net 8,480,750 8,371,374
------------- ------------
24,420,742 24,572,341
Cash and cash equivalents 2,345,393 2,997,934
Short-term investments 2,934,645 2,524,633
------------- ------------
$ 29,700,780 $ 30,094,908
============= ============
Liabilities and Partners' Capital
Accounts payable $ 47,359 $ 79,597
Accrued management fee 51,517 60,924
Deferred disposition fees 582,677 582,677
------------- ------------
Total liabilities 681,553 723,198
------------- ------------
Partners' capital (deficit):
Limited partners ($768.98
per unit; 160,000 units
authorized 48,788 units
issued and outstanding) 29,048,990 29,397,948
General partners (29,763) (26,238)
------------- ------------
Total partners' capital 29,019,227 29,371,710
------------- ------------
$ 29,700,780 $ 30,094,908
============= ============
<FN>
(See accompanying notes to financial statements)
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
(Unaudited)
Quarter Ended March 31,
1996 1995
------------ ----------
Investment Activity
Property rentals $ 217,647 $ 343,067
Property operating expenses (117,516) (58,930)
Depreciation and amortization (71,337) (136,395)
------------ -----------
28,794 147,742
Joint venture earnings 269,811 302,285
------------ -----------
Total real estate activity 298,605 450,027
------------ -----------
Interest on cash equivalents
and short-term investments 67,710 75,266
------------ -----------
Total investment activity 366,315 525,293
------------ -----------
Portfolio Expenses
Management fee 51,517 60,924
General and administrative 51,271 61,973
------------ -----------
102,788 122,897
------------ -----------
Net income $ 263,527 $ 402,396
============ ===========
Net income per limited
partnership unit $ 5.35 $ 8.17
============ ===========
Cash distributions per limited
partnership unit $ 12.50 $ 12.50
============ ===========
Number of limited partnership units
outstanding during the period 48,788 48,788
============ ===========
<FN>
(See accompanying notes to financial statements)
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
Quarter Ended March 31,
1996 1995
--------------------- --------------------
General Limited General Limited
Partners Partners Partners Partners
-------- -------- -------- --------
Balance at beginning $ (26,238) $29,397,948 $ 464 $32,041,490
of period
Cash distributions (6,160) (609,850) (6,160) (609,850)
Net income 2,635 260,892 4,024 398,372
Balance at end
of period $ (29,763) $29,048,990 $ (1,672) $31,830,012
========== =========== ========== ===========
<FN>
(See accompanying notes to financial statements)
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
SUMMARIZED STATEMENT OF CASH FLOWS
(Unaudited)
Quarter Ended March 31,
1996 1995
----------- ----------
Net cash provided by operating
activities $ 455,449 $ 561,626
------------ ----------
Cash flows from investing activities:
Investment in property (81,968) -
Decrease (increase) in short-term
investments, net (410,012) 342,440
------------ ----------
Net cash provided by (used in)
investing activities (491,980) 342,440
------------ ----------
Cash flows from financing activity:
Distributions to partners (616,010) (616,010)
------------ ----------
Net increase (decrease) in cash
and cash equivalents (652,541) 288,056
------------ ----------
Cash and cash equivalents:
Beginning of period 2,997,934 4,652,903
------------ ----------
End of period $ 2,345,393 $4,940,959
============ ==========
<FN>
(See accompanying notes to financial statements)
COPLEY PENSION PROPERTIES VI;
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, 1996 and December 31,
1995 and its operations, its cash flows and changes in partners' capital
(deficit) for the interim periods ended March 31, 1996 and 1995. These
adjustments are of a normal recurring nature.
See notes to financial statements included in the Partnership's 1995
Annual Report on Form 10-K for additional information relating to the
Partnership's financial statements.
Note 1 - Organization and Business
Copley Pension Properties VI; A Real Estate Limited Partnership (the
"Partnership") is a Massachusetts limited partnership organized for the
purpose of investing primarily in newly constructed and existing income
producing real properties. It primarily serves as an investment for
qualified pension and profit sharing plans and other organizations
intended to be exempt from federal income tax. The Partnership commenced
operations in July 1988, and acquired the five real estate investments it
currently owns prior to the end of 1991. It intends to dispose of its
investments within eight to twelve years of their acquisition, and then
liquidate.
Note 2 - Investments in Joint Ventures
Summarized Financial Information
The following summarized financial information is presented in the
aggregate for the Partnership's joint ventures:
Assets and Liabilities
------------------------
March 31, 1996 December 31, 1995
-------------- -----------------
Assets
Real property, at cost less
accumulated depreciation
of $5,515,834 and $5,295,528,
respectively $17,842,266 $ 18,062,468
Other 732,035 885,699
------------ ------------
18,574,301 18,948,167
Liabilities 262,890 354,196
------------ ------------
Net assets $18,311,411 $ 18,593,971
============ ============
Results of Operations
----------------------
Quarter Ended March 31,
1996 1995
--------- ---------
Revenue:
Rental income $ 916,666 $ 900,989
Other income 625 1,096
------------- ------------
917,291 902,085
------------- ------------
Expenses:
Operating expenses 350,701 284,421
Depreciation and amortization 223,644 228,370
------------- ------------
574,345 512,791
------------- ------------
Net income $ 342,946 $ 389,294
============= ============
Liabilities and expenses exclude amounts owed and attributable to the
Partnership and (with respect to two investments) its affiliates on behalf
of their various financing arrangements with the joint ventures.
Note 3 - Property
The following is a summary of the Partnership's investment in
property at March 31, 1996 and December 31, 1995:
March 31, 1996 December 31, 1995
--------------- -----------------
Land $ 3,408,203 $ 3,408,203
Buildings, improvements and
other capitalized costs 8,784,837 8,702,871
Investment valuation allowance (1,500,000) (1,500,000)
Accumulated depreciation and
amortization (2,125,988) (2,058,235)
Net operating assets (liabilities) (86,302) (181,465)
------------ ------------
$ 8,480,750 $ 8,371,374
============ ============
The Wilmington Industrial building is being depreciated over 30 years
and capitalized improvements are being depreciated over seven years. The
buildings and improvements at Stemmons Industrial are being depreciated
over 25 years.
During the second quarter of 1995, as a result of a revision to long-
term rental assumptions, the managing general partner determined that the
carrying value of the Wilmington Industrial property would not be
recovered through expected future undiscounted cash flows. Accordingly,
the carrying value was reduced to estimated net fair market value through
the recognition of an investment valuation allowance of $1,500,000.
Note 4 - Subsequent Event
Distributions of cash from operations relating to the quarter ended
March 31, 1996 were made on April 25, 1996 in the aggregate amount of
$520,898 ($10.57 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 on December 31, 1988. A total of 48,788 units were
sold. The Partnership received proceeds of $43,472,858, net of selling
commissions and other offering costs, which have been used for investment
in real estate, for the payment of related acquisition costs or retained
as working capital reserves. The Partnership made seven real estate
investments; one was sold in 1990, and another in 1994. As a result of
these sales, capital of $11,271,004 has been returned to the limited
partners ($231.02 per limited partnership unit).
At March 31, 1996, the Partnership had $5,280,038 in cash, cash
equivalents and short-term investments, of which $520,898 was used for
cash distributions to partners on April 25, 1996; the remainder is being
retained as working capital reserves. The source of future liquidity and
cash distributions to partners will be cash generated by the Partnership's
short-term and real estate investments. Based on an adjusted capital
contribution of $768.98 per limited partnership unit, the distribution of
cash from operations relating to the first quarter of 1996 was made at the
annualized rate of 5.5%. The distribution rate for the comparative prior
year quarter was 6.5%. The decrease in the distribution rate is due to
the decline in cash flow from operations as a result of the vacancy at
Stemmons Industrial.
The carrying value of real estate investments in the financial
statements is at depreciated cost, or if the investment's carrying value
is determined not to be recoverable through expected undiscounted future
cash flows, the carrying value is reduced to estimated fair market value.
The fair market value of such investments is further reduced by the
estimated cost of sale for properties held for sale. Carrying value may
be greater or less than current appraised value. At March 31, 1996,
appraised values exceeded the related carrying values by an aggregate of
approximately $4,673,000. 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 Partnership's 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 Wilmington Industrial and Stemmons Industrial investments are
wholly-owned properties. The Lakewood investment, which was sold in
August, 1994, was a joint venture, as are the remaining investments in the
portfolio.
Operating Factors
Two of the Partnership's four industrial properties (Prentiss
Copystar and White Phonic) were 100% leased at March 31, 1996. At March
31, 1995, Stemmons Industrial was also 100% leased; however, the sole
tenant vacated upon expiration of its lease on September 30, 1995. The
Partnership negotiated a four-month lease for 82% of the space, beginning
November 1, 1995, with a corporation that needed temporary warehouse
capacity. That lease expired at the end of February 1996 and the tenant
vacated. The Partnership is marketing this space to potential long-term
tenants. There are no likely prospects at this time.
Although occupancy at the Wilmington Industrial property declined to
73% from 89% during the first quarter, occupancy is expected to improve by
the end of the second quarter of 1996. During the second quarter of 1995,
the managing general partner determined the Partnership would likely not
recover the carrying value of this investment over the projected holding
period. Accordingly, the carrying value was reduced to estimated net fair
market value, with a charge to operations of $1,500,000.
Occupancy at Waterford Apartments, the Partnership's multi-family
residential property, remained in the mid 90% range during the first
quarter of 1996, which is consistent with the prior year.
Investment Results
Interest income on cash equivalents and short-term investments did
not change significantly between the first quarter of 1996 and 1995,
investment balances and interest rates were relatively stable.
Total real estate activity for the first quarter of 1996 was
$298,605, a decrease from $450,027 for the comparable period of 1995.
Operating income at Stemmons Industrial decreased $133,000 due to lower
rental revenue and higher expenses as a result of the vacancy and lease
rollover. In addition, operating results at Waterford Apartments
decreased by $35,000 due to higher operating expenses for repairs and
maintenance.
Cash flow from operations decreased by $106,177 between the first
quarters of 1996 and 1995. This decrease is primarily attributable to the
operating results at Stemmons Industrial.
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 management fee decreased in the first quarter of 1996 due to a
decrease in the distributable cash flow. General and administrative
expenses decreased primarily due to lower professional fees.
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
FORM 10-Q
FOR QUARTER ENDED MARCH 31, 1996
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: None.
b. Reports on Form 8-K: No Current Reports on Form 8-K
were filed during the quarter ended March 31, 1996.
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.
COPLEY PENSION PROPERTIES VI;
A REAL ESTATE LIMITED PARTNERSHIP
(Registrant)
May 9, 1996
/s/ Peter P. Twining
-------------------------------
Peter P. Twining
Managing Director and General Counsel
of Managing General Partner,
Sixth Copley Corp.
May 9, 1996
/s/ Daniel C. Mackowiak
--------------------------------
Daniel C. Mackowiak
Principal Financial and Accounting
Officer of Managing General Partner,
Sixth Copley Corp.