U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 0-13500
1626 New York Associates Limited Partnership
(Exact name of Registrant as specified in its charter)
Massachusetts 04-2808184
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
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 ___
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
PART 1 - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT UNIT DATA)
JUNE 30, DECEMBER 31,
1997 1996
--------------------- ---------------------
ASSETS
Real estate:
Land $ 24,440 $ 24,440
Buildings and improvements, net of accumulated
depreciation of $135,893 and $130,617 as of
June 30, 1997 and December 31, 1996, respectively 110,198 110,878
--------------------- ---------------------
134,638 135,318
Other Assets:
Cash and cash equivalents 382 125
Restricted cash 7,062 8,935
Accounts receivable, net of reserves of $638 and $748
as of June 30, 1997 and December 31, 1996, respectively 801 751
Prepaid expenses and other assets 5,478 5,267
Deferred rent receivable 8,514 8,424
Deferred costs, net of accumulated amortization of
$22,895 and $21,786 as of June 30, 1997
and December 31, 1996, respectively 6,117 4,827
--------------------- ---------------------
Total Assets $ 162,992 $ 163,647
===================== =====================
See notes to consolidated financial statements.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT UNIT DATA)
(CONTINUED)
LIABILITIES AND PARTNERS' DEFICIT
JUNE 30, DECEMBER 31,
1997 1996
--------------------- ---------------------
Liabilities:
Mortgage notes payable to affiliates $ 204,690 $ 205,171
Other mortgage notes payable 19,112 19,171
Notes payable and accrued interest
to general partners and affiliates 18,201 13,695
Accounts payable, accrued expenses, security
deposits and other liabilities 9,303 8,826
Accrued interest on mortgage notes to affiliates 45,272 38,108
Accrued interest on other mortgage notes 960 960
Deferred purchase price obligation 1,498 1,498
--------------------- ---------------------
Total Liabilities 299,036 287,429
--------------------- ---------------------
Commitments and Contingencies
Partners' Deficit:
Limited Partners Deficit - Units of Investor Limited Partnership Interest
$250,000 stated value per unit; authorized, issued and outstanding
-1,340 as of June 30, 1997 and
December 31, 1996, respectively (140,873) (129,148)
Less: investor notes (68) (68)
--------------------- ---------------------
(140,941) (129,216)
General Partners Equity 4,897 5,434
--------------------- ---------------------
Total Partners' Deficit (136,044) (123,782)
--------------------- ---------------------
Total Liabilities and Partners' Deficit $ 162,992 $ 163,647
===================== =====================
See notes to consolidated financial statements.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT UNIT DATA)
FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996
------------------- -------------------
Revenues:
Rental and escalation income $ 18,719 $ 22,450
Interest and other income 678 169
------------------- -------------------
Total revenues 19,397 22,619
------------------- -------------------
Expenses:
Interest on obligations to affiliates 12,799 6,485
Interest 710 3,990
Depreciation and amortization 6,803 8,295
Real estate and other taxes 4,697 4,847
Utilities 2,066 2,156
Cleaning and security 2,000 1,902
Asset and property management fees 267 432
Repairs and maintenance 681 900
Payroll 645 731
General and administrative 639 714
Professional fees 302 252
Provision for doubtful accounts 50 -
------------------- -------------------
Total expenses 31,659 30,704
------------------- -------------------
Loss before extraordinary gain (12,262) (8,085)
Extraordinary gain on transfer of 227 East 45th Street - 13,688
------------------- -------------------
Net (loss) income $ (12,262) $ 5,603
=================== ===================
Net (loss) income allocated to general partners $ (537) $ 747
=================== ===================
Net loss before extraordinary item allocated to
investor limited partners $ (11,725) $ (7,882)
Extraordinary gain allocated to investor limited partners - 12,738
------------------- -------------------
Net (loss) income allocated to investor limited partners $ (11,725) $ 4,856
=================== ===================
Net loss per unit of investor limited partnership
interest before extraordinary gain $ (8,750.00) $ (5,882.09)
Extraordinary gain per unit of investor limited
partnership interest - 9,505.97
------------------- -------------------
Net (loss) income per unit of investor limited
partnership interest $ (8,750.00) $ 3,623.88
=================== ===================
See notes to consolidated financial statements.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT UNIT DATA)
FOR THE THREE MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996
------------------- -------------------
Revenues:
Rental and escalation income $ 8,892 $ 10,628
Interest and other income 313 27
------------------- -------------------
Total revenues 9,205 10,655
------------------- -------------------
Expenses:
Interest on obligations to affiliates 6,443 4,179
Interest 302 975
Depreciation and amortization 3,498 4,686
Real estate and other taxes 2,351 2,417
Utilities 981 1,047
Cleaning and security 966 951
Asset and property management fees 132 88
Repairs and maintenance 401 635
Payroll 335 243
General and administrative 343 444
Professional fees 148 172
Provision for doubtful accounts 50 -
------------------- -------------------
Total expenses 15,950 15,837
------------------- -------------------
Net loss (6,745) (5,182)
=================== ===================
Net loss allocated to general partners $ (307) $ (165)
=================== ===================
Net loss allocated to investor limited partners $ (6,438) $ (5,017)
=================== ===================
Net loss per unit of investor limited partnership
interest $ (4,804.48) $ (3,744.03)
=================== ===================
See notes to consolidated financial statements.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
CONSOLIDATED STATEMENT OF PARTNERS' DEFICIT (UNAUDITED)
(IN THOUSANDS, EXCEPT UNIT DATA)
UNITS OF
INVESTOR INVESTOR
LIMITED LIMITED GENERAL TOTAL
PARTNERSHIP PARTNERS' PARTNERS' PARTNERS'
INTEREST (DEFICIT) EQUITY DEFICIT
------------------ ---------------------- --------------------- ---------------------
Balance - December 31, 1996 1,340 $ (129,216) $ 5,434 $ (123,782)
Net Loss - (11,725) (537) (12,262)
------------------ ---------------------- --------------------- ---------------------
Balance - June 30, 1997 1,340 $ (140,941) $ 4,897 $ (136,044)
================== ====================== ===================== =====================
See notes to consolidated financial statements.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
(IN THOUSANDS) JUNE 30, JUNE 30,
1997 1996
----------------- -----------------
Cash Flows from Operating Activities:
Net (loss) income $ (12,262) $ 5,603
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Depreciation 5,276 8,295
Amortization 1,527 -
Change in deferred rent receivable (508) 28
Gain on transfer of 227 East 45th Street - (13,688)
Provision for doubtful accounts 50 -
Changes in operating assets and liabilities:
Increase in accounts receivable, prepaid
expenses and other assets (311) 899
Decrease in accounts payable, accrued expenses,
security deposits and other liabilities 477 987
----------------- -----------------
Net cash (used in) provided by operating activities (5,751) 2,124
----------------- -----------------
Cash Flows from Investing Activities:
Additions to buildings and improvements (4,596) (3,265)
Increase in deferred costs (2,399) (108)
----------------- -----------------
Cash used in investing activities (6,995) (3,373)
----------------- -----------------
Cash Flows from Financing Activities:
Increase in accrued mortgage interest 7,164 -
Principal payments on mortgage notes to affiliates (481) -
Increase in notes payable and accrued interest to
general partners and affiliates 4,506 (1,104)
Principal payments on other mortgage notes (59) (55)
Decrease in restricted cash 1,873 2,443
----------------- -----------------
Net cash provided by financing activities 13,003 1,284
----------------- -----------------
Net increase in cash and cash equivalents 257 35
Cash and cash equivalents, beginning of period 125 267
----------------- -----------------
Cash and cash equivalents, end of period $ 382 $ 302
================= =================
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 5,876 $ 7,221
================= =================
Supplemental Disclosure of Non-Cash Investing
and Financing Activities:
Deed in lieu of foreclosure - See Note 4
Related party debt forgiveness and
modification - See Note 2
See notes to consolidated financial statements.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The accompanying consolidated financial statements, footnotes and
discussions should be read in conjunction with the consolidated financial
statements, related footnotes and discussions contained in the
Partnership's Annual Report on Form 10-K for the year ended December 31,
1996.
The financial information contained herein is unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such
financial information have been included. All adjustments are of a normal
recurring nature except as discussed in Notes 2, 3 and 4. Certain amounts
have been reclassified to conform to the June 30, 1997 presentation. The
balance sheet at December 31, 1996 was derived from audited financial
statements at such date.
The results of operations for the three and six months ended June 30, 1997
and 1996 are not necessarily indicative of the results to be expected for
the full year.
2. Related Parties
The Partnership incurred approximately $329,000 of property and asset
management fees and approximately $135,000 of leasing and construction
fees through February 28, 1996, payable to an affiliate of the general
partner. As part of the sale of the Fuji Loan, (described in Note 3), the
Partnership agreed to retain new, unaffiliated management and leasing
agents for all of its properties.
In connection with the sale of the Fuji Loan, Winthrop Financial
Associates ("WFA") and certain of its affiliates entered into an agreement
with the Investor Partnership, the Operating Partnership and an affiliate
of Zeus Property LLC ("Zeus") with regard to amounts owed to WFA and its
affiliates by the Investor Partnership and the Operating Partnership (the
"Winthrop Debt Agreement"). Prior to this agreement, Winthrop and its
affiliates were owed, in the aggregate, $47,162,000 by the Investor
Partnership and the Operating Partnership. This amount was comprised of
cash advances made by Winthrop to the Operating Partnership, as well as
unpaid deferred fees related to the on-site management of the properties,
asset management and syndication. This amount also included accrued
interest on these outstanding balances.
Under the Winthrop Debt Agreement, Winthrop and its affiliates contributed
approximately $37,162,000 of the $47,162,000 to the Operating Partnership.
The remaining $10,000,000 receivable has been evidenced by a promissory
note issued by the Operating Partnership (the "Receivables Note") and is
payable from the excess cash flow, as defined, from 509 Fifth Avenue and
300 Park Avenue South. WFA then sold the Receivables Note to an affiliate
of Zeus for a payment of $6 million in cash. The Receivables Note has an
annual base interest rate of 6% and an additional annual contingent
interest rate of 9% and was scheduled to mature on July 31, 1997. Interest
is payable only from available cash flow after payment of debt service on
the Dime loans. Interest, to the extent that it cannot be paid currently,
accrues until the repayment of this Note. However, the holder of the
Receivables Note previously entered into a forbearance agreement which
prohibits it from exercising its remedies if the Receivables Note is not
satisfied at maturity. The Note was not satisfied on July 31, 1997. The
Partnership is currently negotiating to extend the Receivables Note.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Related Parties (Continued)
As of June 30, 1997, the outstanding balance against the Unsecured Note
was $6,929,000 and is included in notes payable and accrued interest to
general partners and affiliates.
3. Debt Modification
On February 28, 1996, Zeus purchased the existing debt held by The Fuji
Bank, Ltd. for $115 million. The Operating Partnership obtained a
reduction in the current interest required to be paid under the modified
loan which, based on current projections, will greatly reduce the
likelihood of monetary default under the loan prior to February 28, 1998,
the new maturity date for a portion of the loan. As part of the
restructuring of the Fuji loan, each of the Operating Partnership's 535
and 545 Fifth Avenue, 1372 Broadway and 757 Third Avenue properties (the
"Fuji Properties") were conveyed by the Operating Partnership to
newly-created limited liability companies which are wholly-owned,
indirectly, by the Operating Partnership and its partners.
The modified Fuji loan (the "Modified Loan") is comprised of several
component non-recourse loans, all held by Zeus and its affiliates. The
senior loan component consists of a series of secured notes in the
aggregate principal amount of $102,240,000 at June 30, 1997. These notes
have an annual interest rate of 295 basis points over 30-day LIBOR (8.64%
at June 30, 1997), maturing on February 28, 1998 unless extended at Zeus'
option (the "Secured A Notes").
A junior component consists of secured notes in the aggregate principal
amount of $102,450,000, each having a fixed annual interest rate of 14%
for the next three years and then 16.75% thereafter, maturing on February
28, 2016 (the "Secured B Notes"). The Secured A Notes and Secured B Notes
are collectively secured by first mortgages on the Fuji Properties. A
third component is the unsecured $19,550,000 note (the "Unsecured Note")
representing the additional financing expected to be drawn upon by the
Operating Partnership to fund capital improvements and tenant lease-up
costs with respect to the Fuji Properties. The Unsecured Note bears
interest at a fixed annual rate of 14% for the next three years and then
16.75% thereafter and matures on February 28, 1998, unless extended at
Zeus' option.
The Partnership has maturing mortgage debt, totaling approximately
$29,000,000, plus accrued interest, due between July 31, 1997 and December
31, 1997, approximately $102,000,000 due February 28, 1998 and a
$25,000,000 mandatory principal payment due March 15, 1998. The
Partnership is currently negotiating to refinance or restructure the 1997
liabilities. It is anticipated that loans, representing $19,000,000 of the
$29,000,000 due in 1997, will be refinanced with a new lender. However,
based on the current value of the Properties it is highly unlikely the
Partnership will be able to meet its 1998 obligations. Accordingly, it
appears there is a substantial likelihood that some or all of the
Properties will be lost through foreclosure in 1998. This raises
substantial doubt about the Partnerships' ability to continue as a going
concern.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Deed in Lieu of Foreclosure
In early January 1996, a deed in lieu of foreclosure agreement was reached
between the Operating Partnership and Sanwa Business Credit Corporation
("Sanwa"). Pursuant to the deed in lieu of foreclosure agreement, the
Operating Partnership transferred title to the property located at 227
East 45th St. to Sanwa on January 24, 1996. In exchange, Sanwa released,
as of the closing date, the Operating Partnership from all claims,
demands, liabilities, obligations, actions and causes of any kind with
regard to Sanwa.
As of December 31, 1995, the related indebtedness to Sanwa was
approximately $24,409,000. As a result of the above described
transactions, the Operating Partnership has recognized an extraordinary
gain of approximately $13,688,000. The property was stated at its fair
value as of December 31, 1995 as a result of a recorded write-down.
5. Contract for Sale of Property
In May 1997, the Partnership contracted to sell its 1372 Broadway property
to an unaffiliated third party for $52,000,000. The sale is expected to
close in January 1998. All of the proceeds from such sale will be required
to be used to partially satisfy the Modified Loan. For financial statement
purposes, the Partnership will recognize a substantial gain on the sale.
6. Subsequent Event
In August 1997, Zeus sold the portion of the Modified Loan allocated to
1372 Broadway to the ultimate purchaser of the property. The terms of the
loan remain unchanged.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q JUNE 30, 1997
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Item should be read in conjunction with the Consolidated
Financial Statements and other items contained elsewhere in this
Report.
Liquidity and Capital Resources
The Registrant serves as the general partner of Nineteen New York
Properties Limited Partnership (the "Operating Partnership"). All of
the Operating Partnership's six remaining properties (the
"Properties") are office buildings located in New York City. The
Registrant's sole source of revenue is from distributions from the
Operating Partnership and interest income on cash reserves. The
Registrant is responsible for its operating expenses. The Operating
Partnership receives rental revenue from tenants and is responsible
for operating expenses, administrative expenses, capital improvements
and debt service payments.
The Registrant and the Operating Partnership had $382,000 of cash and
cash equivalents and $7,062,000 of restricted cash at June 30, 1997,
as compared to $125,000 and $8,935,000 respectively, at December 31,
1996. Restricted cash primarily includes amounts held in mortgage
collateral accounts. The $257,000 increase in cash and cash
equivalents at June 30, 1997, as compared to December 31, 1996, was
due to $13,003,000 of cash provided by financing activities, which
was substantially offset by $6,995,000 of cash used in investing
activities and $5,751,000 of cash used in operating activities. Cash
used in investing activities consisted primarily of $4,596,000 of
improvements to real estate, the majority of which were building
improvements, and $2,399,000 of cash expended on leasing activities.
Cash provided by financing activities consisted primarily of the
accrual of $7,164,000 of interest on mortgage notes payable,
$4,037,000 in borrowings against the unsecured line of credit, and
$368,000 of accrued and unpaid interest on the Receivables Note. In
addition, Registrant used $481,000 of cash provided by financing
activities for principal payments on mortgage notes to affiliates.
All other increases (decreases) in certain assets and liabilities are
the result of the timing of receipt and payment of various
activities.
The Operating Partnership's only other source of liquidity is a
$19,550,000 unsecured credit line provided by Zeus Property LLC
("Zeus"). This credit line can be used by the Operating Partnership
to fund capital improvements and tenant lease-up costs at the Fuji
Properties. However, any borrowings under this credit line are
subject to Zeus' discretion. Accordingly, it is possible that the
Operating Partnership may not be able to borrow against this credit
line each time it deems it necessary. As of June 30, 1997, the
outstanding borrowings against the unsecured credit line were
$6,929,000.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-JUNE 30, 1997
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Liquidity and Capital Resources (Continued)
The Registrant has maturing mortgage debt, totaling approximately
$29,000,000, plus accrued interest, due between July 31, 1997 and
December 31, 1997, approximately $102,000,000 due February 28, 1998
and a $25,000,000 mandatory principal payment due March 15, 1998. The
Registrant is currently negotiating to refinance, extend, or
restructure the 1997 maturing liabilities. It is anticipated that
loans, representing $19,000,000 of the $29,000,000 due in 1997, will
be refinanced with a new lender. The $10,000,000 Receivables Note,
which was scheduled to mature July 31, 1997, was not satisfied at
maturity. The holder of the Receivables Note previously entered into
a forbearance agreement which prohibits it from exercising its
remedies if the Receivables Note was not satisfied at maturity.
However, based on the current value of the Properties it is highly
unlikely the Registrant will be able to meet its 1998 maturing debt
obligations. Accordingly, some or all of the Properties will be lost
through foreclosure in 1998. This raises substantial doubt about the
Partnerships' ability to continue as a going concern.
In May 1997, the Registrant entered into an agreement to sell its
1372 Broadway property for $52,000,000. All of the proceeds from such
sale will be required to be used to partially satisfy the Modified
Loan. The sale is expected to close in January 1998.
In August 1997, Zeus sold the portion of the Modified Loan allocated
to 1372 Broadway to the ultimate purchaser of the property. This
transaction is not expected to have any effect on the Registrant.
The Registrant's original objective of capital appreciation will not
be achieved and it is anticipated that the Registrant's partners will
not receive any future distributions. Accordingly, the Registrant's
partners will not receive a return of their original investment.
There have been, and it is possible there may be other Federal, state
and local legislation and regulations enacted relating to the
protection of the environment and individual rights (such as the
American with Disabilities Act). The Registrant is unable to predict
the extent, if any, to which such new legislation or regulation might
occur and the degree to which such existing or new legislation or
regulations might adversely affect the Registrant's liquidity and
capital resources.
Real Estate Market
The income and expenses of operating the Properties owned by the
Operating Partnership are subject to factor's outside its control,
such as the over-supply of similar properties, increases in
unemployment, population shifts, or changes in patterns or needs of
users. Expenses, such as local real estate taxes and miscellaneous
expenses, are subject to change and cannot always be reflected in
rental rate increases due to market conditions. In addition, there
are risks inherent in owning and operating office buildings because
such properties are labor intensive and are susceptible to the impact
of economic and other conditions outside the control of the
Registrant.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-JUNE 30, 1997
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Results of Operations
Six Months ended June 30, 1997 vs. June 30, 1996
The Partnership generated a net loss of approximately $12.3 million
for the six months ended June 30, 1997, as compared to a net loss
before extraordinary gain of approximately $8.1 million for the six
months ended June 30, 1996. The increase in net loss before the
extraordinary gain was due to a decrease in revenues and an increase
in expenses.
Base rent and rent escalations (collectively "rental and escalation
income") decreased to approximately $18.7 million for the six months
ended June 30, 1997 as compared to approximately $22.5 million for
the six months ended June 30, 1996. Rental and escalation income
declined due to a decrease in rental revenues at 757 Third Avenue,
1372 Broadway, 535 Fifth Avenue and 300 Park Avenue South for the six
months ended June 30, 1997, as compared to 1996. The lower rental
revenues were primarily the result of lower effective rental rates.
Rental and escalation income at the other properties remained
relatively constant.
Expenses increased by $955,000 for the six months ended June 30,
1997, as compared to 1996. The increase in interest expense was
partially offset by decreases in overall operating expenses (i.e.,
real estate and other taxes, payroll, utilities, repairs and
maintenance, and cleaning and security) asset and property management
fees and depreciation and amortization expense.
Interest expense increased due to the Modified Loan incurring
interest at an overall higher interest rate than on the prior loan.
Asset and property management fees declined due to the elimination of
the asset management fee payable to a related party and the new
management agreement (which changed the previous fee of 2.5% of cash
receipts to a fixed fee). Depreciation and amortization expenses
declined due to fixed assets and intangible assets becoming fully
amortized during 1996, which was only partially offset by the current
years fixed asset additions. All other expenses remained relatively
constant.
On May 27, 1997, approximately 90,000 square feet of unoccupied space
at the Partnerships 757 Third Avenue Property was re-leased,
representing approximately 20% of the building. As of June 30, 1997
and 1996, the current portfolio's occupancy was 86% and 82%,
respectively. During the first six months of 1997, the Operating
Partnership signed new, renewal, extension, and expansion leases
totaling 380,742 square feet at rental terms comparable to buildings
of similar quality in the market.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-JUNE 30, 1997
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Results of Operations
Three Months ended June 30, 1997 vs. June 30, 1996
The Partnership generated a net loss of approximately $6.7 million
for the three months ended June 30, 1997, as compared to a net loss
before extraordinary gain of approximately $5.2 million for the three
months ended June 30, 1996. The increase in net loss was due to a
decrease in revenues and an increase in expenses.
Rental and escalation income decreased to approximately $8.9 million
for the three months ended June 30, 1997 as compared to approximately
$10.6 million for the three months ended June 30, 1996. Rental and
escalation income declined due to a decrease in rental revenues at
757 Third Avenue, 1372 Broadway, 535 Fifth Avenue and 300 Park Avenue
South for the three months ended June 30, 1997, as compared to 1996.
The lower rental revenues were primarily the result of lower
effective rental rates. Rental and escalation income at the other
properties remained relatively constant.
Expenses increased by $113,000 for the three months ended June 30,
1997, as compared to 1996. The increase in interest expense was
partially offset by decreases in overall operating expenses (i.e.,
real estate and other taxes, payroll, utilities, repairs and
maintenance, and cleaning and security) and depreciation and
amortization expense.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-JUNE 30, 1997
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8K:
No report on Form 8-K was filed during the period.
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1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
FORM 10-Q-JUNE 30, 1997
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
1626 NEW YORK ASSOCIATES LIMITED PARTNERSHIP
BY: TWO WINTHROP PROPERTIES, INC.
MANAGING GENERAL PARTNER
BY: /s/ Michael L. Ashner
----------------------------
Michael L. Ashner
Chief Executive Officer
BY: /s/ Edward V. Williams
----------------------------
Edward V. Williams
Chief Financial Officer
DATED: August 14, 1997
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