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 the quarter ended June 30, 1996 Commission file number 0-16516
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(Exact Name of registrant as specified in its charter)
Illinois 36-3437938
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
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
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . 12
PART II OTHER INFORMATION
Item 3. Defaults Upon Senior Securities. . . . . . . . . . 13
Item 5. Other Information. . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 15
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP-XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
ASSETS
------
JUNE 30, DECEMBER 31,
1996 1995
------------- ------------
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 13,615,873 13,734,366
Interest, rents and other receivables, net of allowances for
doubtful accounts of approximately $896,000 and $619,000 at
June 30, 1996 and December 31, 1995, respectively. . . . . . . . . . 426,830 629,945
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 78,740 178,944
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 14,121,443 14,543,255
------------ ------------
Investment properties, at cost:
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . . 60,103,528 60,100,323
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . 15,027,609 14,023,956
------------ ------------
Total investment properties, net of accumulated depreciation. . 45,075,919 46,076,367
Investment in unconsolidated ventures, at equity. . . . . . . . . . . . 5,399,600 2,723,887
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 581,402 559,909
Notes receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,192 205,418
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 2,188,649 2,117,997
------------ ------------
$ 67,539,205 66,226,833
============ ============
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . $ 382,180 360,031
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 585,227 526,743
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 530,684 511,832
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . 1,498,091 1,398,606
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 54,451 47,950
Ground rent payable . . . . . . . . . . . . . . . . . . . . . . . . . . 1,094,326 1,059,000
Investment in unconsolidated ventures, at equity. . . . . . . . . . . . 12,239,128 6,274,627
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . 41,288,571 41,485,363
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 56,174,567 50,265,546
Venture partners' subordinated equity in ventures . . . . . . . . . . . 3,889,101 4,190,839
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . (3,430,557) (3,191,849)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (1,413,174) (1,394,169)
------------ ------------
(4,823,731) (4,566,018)
------------ ------------
Limited partners:
Capital contributions, net of offering
costs and purchase discounts. . . . . . . . . . . . . . . . . . . 120,541,353 120,541,353
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . (62,438,542) (59,093,511)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (45,803,543) (45,111,376)
------------ ------------
12,299,268 16,336,466
------------ ------------
Total partners' capital accounts. . . . . . . . . . . . . . . . 7,475,537 11,770,448
------------ ------------
$ 67,539,205 66,226,833
============ ============
<FN>
See accompanying notes to consolidated financial statements.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1996 1995 1996 1995
----------- ---------- ----------- ----------
Income:
Rental income . . . . . . . . . . . . . . . . . $ 2,539,464 2,599,282 5,257,273 5,279,902
Interest income . . . . . . . . . . . . . . . . 171,130 219,535 405,243 462,852
----------- ---------- ----------- ----------
2,710,594 2,818,817 5,662,516 5,742,754
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . . 1,272,264 1,261,089 2,525,911 2,544,206
Depreciation. . . . . . . . . . . . . . . . . . 501,826 501,223 1,003,653 1,002,433
Property operating expenses . . . . . . . . . . 1,313,951 1,169,652 2,558,514 2,460,456
Professional services . . . . . . . . . . . . . 44,481 42,621 132,637 183,618
Amortization of deferred expenses . . . . . . . 28,519 25,494 56,772 50,987
Management fees to corporate general
partner . . . . . . . . . . . . . . . . . . . 7,044 38,985 31,675 80,752
General and administrative. . . . . . . . . . . 91,262 84,350 219,563 184,943
----------- ---------- ----------- ----------
3,259,347 3,123,414 6,528,725 6,507,395
----------- ---------- ----------- ----------
Operating earnings (loss) . . . . . . . . (548,753) (304,597) (866,209) (764,641)
Partnership's share of earnings (loss)
from operations of unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . (736,199) (297,112) (6,197,893) (181,559)
Venture partners' share of ventures'
operations. . . . . . . . . . . . . . . . . . . 194,656 122,952 301,738 424,172
----------- ---------- ----------- ----------
Net operating earnings (loss) . . . . . . (1,090,296) (478,757) (6,762,364) (522,028)
Gain on sale of Partnership's investment
in unconsolidated ventures. . . . . . . . . . . 3,211,946 61,647 3,309,104 667,443
----------- ---------- ----------- ----------
Net operating earnings (loss)
before extraordinary item . . . . . . . 2,121,650 (417,110) (3,453,260) 145,415
Extraordinary item:
Partnership's share of unconsolidated
venture debt prepayment penalty . . . . . . (130,479) -- (130,479) --
----------- ---------- ----------- ----------
Net earnings (loss) . . . . . . . . . . . $ 1,991,171 (417,110) (3,583,739) 145,415
=========== ========== =========== ==========
Net earnings (loss) per limited
partnership interest:
Net operating earnings (loss). . . . . $ (7.46) (3.27) (46.26) (3.57)
Gain on sale of Partnership's
investment in unconsolidated
ventures. . . . . . . . . . . . . . . 22.65 .44 23.34 4.71
Extraordinary item . . . . . . . . . . (.92) -- (.92) --
----------- ---------- ----------- ----------
$ 14.27 (2.83) (23.84) 1.14
=========== ========== =========== ==========
Cash distributions per
limited partnership
interest (including
Georgia State withholding
taxes). . . . . . . . . . . . . . . . . $ 5.00 4.00 5.00 8.00
=========== ========== =========== ==========
<FN>
See accompanying notes to consolidated financial statements.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
1996 1995
------------ ------------
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (3,583,739) 145,415
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,003,653 1,002,433
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 56,772 50,987
Partnership's share of (earnings) loss from operations of
unconsolidated ventures (net of distributions). . . . . . . . . . . . 6,433,929 181,559
Venture partners' share of ventures' operations . . . . . . . . . . . . (301,738) (424,171)
Gain on sale of Partnership's investment in
unconsolidated ventures . . . . . . . . . . . . . . . . . . . . . . . (3,309,104) (667,443)
Extraordinary item. . . . . . . . . . . . . . . . . . . . . . . . . . . 130,479 --
Changes in:
Interest, rents and other receivables . . . . . . . . . . . . . . . . . 203,115 425,459
Other prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . 100,204 114,615
Notes receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,226 (31,849)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . (70,652) (179,458)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,484 (58,189)
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,852 18,142
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 6,501 (18,375)
Ground rent payable . . . . . . . . . . . . . . . . . . . . . . . . . . 35,326 89,729
----------- -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . . . . . . . . . . . . . . 815,308 648,854
----------- -----------
Cash flows from investing activities:
Net sales and maturities of short-term investments. . . . . . . . . . . . -- 580,248
Additions to investment properties. . . . . . . . . . . . . . . . . . . . (3,205) (9,953)
Partnership's distributions from unconsolidated ventures. . . . . . . . . 33,484 129,663
Partnership's contributions to unconsolidated ventures. . . . . . . . . . -- (45,000)
Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . (78,265) (76,565)
----------- -----------
Net cash provided by (used in) investing activities . . . . . . . . (47,986) 578,393
----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (174,643) (154,987)
Venture partners' distributions from venture. . . . . . . . . . . . . . . -- (24,496)
Venture partners' contributions to venture. . . . . . . . . . . . . . . . -- 137,120
Distributions to limited partners . . . . . . . . . . . . . . . . . . . . (692,167) (1,122,762)
Distributions to general partners . . . . . . . . . . . . . . . . . . . . (19,005) (48,451)
----------- -----------
Net cash provided by (used in) financing activities . . . . . . . . (885,815) (1,213,576)
----------- -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . . (118,493) 13,671
Cash and cash equivalents, beginning of the year. . . . . . . . . . 13,734,366 14,266,786
----------- -----------
Cash and cash equivalents, end of the period. . . . . . . . . . . . $13,615,873 14,280,457
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 2,507,059 2,526,064
=========== ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1995, which
are included in the Partnership's 1995 Annual Report on Form 10-K (File No.
0-16516) filed on March 25, 1996, as certain footnote disclosures which
would substantially duplicate those contained in such audited financial
statements have been omitted from this report. Capitalized terms used but
not defined in this quarterly report have the same meaning as in the
Partnership's 1995 Annual Report on Form 10-K.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Certain amounts reported in the 1995 financial statements have been
reclassified to conform with the 1996 presentation.
Statement of Financial Accounting Standards No. 121 was adopted by the
Partnership on January 1, 1996.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership (or its consolidated
venture) to the General Partners and their affiliates as of June 30, 1996
and for the six months ended June 30, 1996 and 1995 were as follows:
Unpaid at
June 30,
1996 1995 1996
-------- ------ ---------
Management fees to
Corporate General
Partner. . . . . . . . . . . $ 31,675 80,752 --
Insurance commissions . . . . 27,254 19,277 --
Reimbursement (at cost)
for out-of-pocket
salary and salary-related
expenses related to the
on-site personnel and for
other costs for the
Partnership and its
investment properties. . . . 51,565 65,177 48,560
-------- ------- ------
$110,494 165,206 48,560
======== ======= ======
An affiliate of the General Partners guaranteed payment to the
unaffiliated third party property manager for the property management and
leasing fees relating to the 260 Franklin property. As of June 30, 1996,
$521,757 and $988,375 of management and leasing fees payable to the
unaffiliated third party property manager and the affiliate of the General
Partners, respectively, were unpaid, of which the Partnership's share is
$156,527 and $296,513, respectively.
260 FRANKLIN
Occupancy of the property at June 30, 1996 has dropped to 95% from 98%
at year-end 1995 and, in the remaining portion of 1996, the leases of
tenants occupying approximately 31,000 square feet (approximately 9% of the
property) expire. There can be no assurance that these leases will renew
and therefore significant costs related to re-leasing this space may be
incurred.
The long-term mortgage loan in the original principal amount of
approximately $75,000,000 matured January 1, 1996. 260 Franklin, as of
such date, began submitting the net operating cash flow of the property to
the lender while seeking an extension or refinancing of the loan. However,
there can be no assurance that the joint venture will be able to obtain any
such modification or extension. If 260 Franklin is unable to refinance or
extend the mortgage loan, the Partnership may decide not to commit any
significant additional funds. This may result in 260 Franklin and the
Partnership no longer having an ownership interest in the property. This
would result in 260 Franklin and the Partnership recognizing a gain for
financial reporting and Federal income tax purposes with no distributable
proceeds.
260 Franklin recorded a provision for value impairment of $17,400,000
as of January 1, 1996, of which the Partnership's share is $5,220,000.
VILLAGES NORTHEAST
On May 7, 1996, the Partnership sold (through the Villages Northeast
venture) the Dunwoody apartment complex to the unaffiliated venture
partner, pursuant to such venture partner's right of first refusal, for
$47,000,000 less brokerage commissions, transfer taxes and legal fees of
approximately $470,000. Approximately $30,900,000 of the sales proceeds
was utilized to retire the mortgage debt including a prepayment penalty of
approximately $435,000 (of which the Partnership's share of approximately
$130,500 was reported as an extraordinary item in the 1996 consolidated
financial statements). Additionally, approximately $787,000 (of which the
Partnership's share was approximately $236,000) was paid to the State of
Georgia on behalf of the Limited Partners for withholding tax related to
the sale. As a result of the sale, the Partnership recognized a gain of
approximately $3,100,000 for financial reporting purposes at June 30, 1996
and expects to recognize a gain of approximately $8,000,000 for Federal
income tax purposes in 1996. The Partnership will be making a distribution
of $30 per Interest from the net sales proceeds of this sale in August
1996.
The property was classified as held for sale or disposition as of
January 1, 1996 and therefore has not been subject to continued
depreciation. The unconsolidated venture had revenues of $2,560,507 and
$3,691,518 and operating expenses of $2,251,414 and $3,893,497 for the six
months ended June 30, 1996 and 1995, of which the Partnership's share of
income (loss) was $83,455 and ($54,534), respectively. The property had a
net carrying value of $35,681,989 at December 31, 1995.
PALM DESERT TOWN CENTER
Occupancy at the portion of the shopping center in which the
Partnership owns an interest at June 30, 1996 decreased to 92% from 93% at
December 31, 1995. Sales at the center have been negatively impacted
during the last several quarters by new competition in the center's trade
area. The center will continue to be subject to increased competition from
new developments that are expected to be opening in the vicinity in the
near future. In addition, the property's operations have been affected by
tenant bankruptcies during the past year. The property is operating at an
approximately break-even level.
The joint venture is considering a possible expansion of the mall and
restructuring of the ground lease and loan. In the event that the joint
venture decides to proceed, the Partnership would utilize its funds to pay
for its share of costs.
NEWPARK MALL
As a result of the recent acquisition by Federated Department Stores
of the company which owns the Emporium Capwell store at NewPark Mall,
Federated, which also owns the Macy's store at NewPark, has approached the
joint venture regarding the possible sale of the Emporium building to the
joint venture. This would be accompanied by the closing of the Emporium
Capwell operations at the mall. In the event that the joint venture
decides to proceed with this transaction, the Partnership would utilize its
funds to pay for its share of the costs of acquiring the building and re-
merchandising the store with a replacement operator.
In response to uncertainty concerning the Partnership's ability to
recover the net carrying value of the NewPark Mall investment property
through future operations or sale and since the Partnership has shortened
its intended holding period for this investment to not later than 1999, the
NewPark venture, in accordance with SFAS 121, recorded a provision for
value impairment at June 30, 1996 in the amount of $8,600,000 of which the
Partnership's share is $430,000. Such provision was recorded to reduce the
venture's carrying value of the investment property to its estimated fair
market value.
UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
Summary income statement information for 260 Franklin for the six
months ended June 30, 1996 and 1995 is as follows:
1996 1995
----------- ----------
Total income . . . . . . . . . $ 5,187,622 5,922,774
Expenses applicable to
operating loss . . . . . . . 25,136,202 8,256,025
----------- ----------
Operating loss . . . . . . . . $19,948,580 2,333,251
=========== ==========
Partnership's share of loss. . $ 5,984,574 699,975
=========== ==========
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of June 30, 1996
and for the three and six months ended June 30, 1996 and 1995.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investment properties. Capitalized terms used in this report and not
otherwise defined have the same meaning as in the Partnership's 1995 Annual
Report on Form 10-K.
During the second quarter some of the Limited Partners in the
Partnership received from an unaffiliated third party an unsolicited tender
offer to purchase up to 12,150 Interests in the Partnership at between $80
and $100 per Interest. The Partnership recommended against acceptance of
this offer on the basis that, among other things, the offer price was
inadequate. In June such offer expired with approximately 1,549 Interests
being purchased by such unaffiliated third party pursuant to such offer.
In addition, the Partnership has, from time to time, received inquires from
other third parties that may consider making offers for Interests,
including requests for the list of Limited Partners in the Partnership.
These inquiries are generally preliminary in nature. There is no assurance
that any other third party will commence an offer for Interests, the terms
of any such offer or whether any such offer, if made, will be consummated,
amended or withdrawn. The board of directors of JMB Realty Corporation
("JMB") the corporate general partner of the Partnership, has established a
special committee (the "Special Committee") consisting of certain directors
of JMB to deal with all matters relating to tender offers for Interests in
the Partnership, including any and all responses to such tender offers.
The Special Committee has retained independent counsel to advise it in
connection with any potential tender offers for Interests and has retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to any additional potential tender offers for
Interests. Expenses incurred in connection with the previous tender offers
and additional potential tender offers for Interests are expected to
increase Partnership operating expenses in the third quarter.
On May 7, 1996, the joint venture through which the Partnership owned
an interest in the Dunwoody Crossing Apartments sold the property to the
unaffiliated venture partner for $47,000,000. The Partnership will be
making a distribution of $30.00 per Interest from the net sale proceeds of
this sale in August 1996.
After reviewing the remaining properties and the marketplaces in which
they operate, the General Partners of the Partnership expect to be able to
conduct an orderly liquidation of its remaining investment portfolio as
quickly as practicable. As a result, the affairs of the Partnership are
expected to be wound up no later than December 31, 1999 (sooner if the
properties are sold in the near term), barring unforeseen economic
developments. The Partnership's goal of capital appreciation will not be
achieved. Moreover, although the Partnership expects to distribute sale
proceeds from the disposition of the Partnership's remaining assets,
aggregate sale distributions received by Limited Partners over the entire
term of the Partnership will be significantly less than their original
investment. However, in connection with sales or other dispositions
(including transfers of title to a lender) of properties (or interests
therein) owned by the Partnership or its joint ventures, the Limited
Partners may be allocated substantial gain for Federal income tax purposes
regardless of whether any proceeds are distributable from such sales or
other dispositions.
RESULTS OF OPERATIONS
The decrease in interest, rents and other receivables at June 30, 1996
as compared to December 31, 1995 is primarily due to an increase in the
allowance for doubtful accounts as a result of tenant bankruptcies at Palm
Desert Town Center.
The decrease in prepaid expenses at June 30, 1996 as compared to
December 31, 1995 is primarily due to the timing of payment of insurance
premiums at Palm Desert Town Center.
The increase in investment in unconsolidated ventures, at equity at
June 30, 1996 as compared to December 31, 1995 and the increase in gain on
sale of Partnership's investment in unconsolidated ventures for the three
and six months ended June 30, 1996 as compared to the three and six months
ended June 30, 1995 is due primarily to the recognition of gain on sale of
the Partnership's interest in Dunwoody Crossing Apartments. The increase
is partially offset by the Partnership's share ($430,000) of NewPark Mall's
provision for value impairment recorded at June 30, 1996 at the NewPark
Mall venture.
The increased deficit in investment in unconsolidated ventures, at
equity at June 30, 1996 as compared to December 31, 1995 and the increase
in Partnership's share of loss from operations of unconsolidated ventures
for the six months ended June 30, 1996 as compared to the previous year is
primarily due to the Partnership's share ($5,220,000) of 260 Franklin's
provision for value impairment recorded at January 1, 1996 at the 260
Franklin venture.
The decrease in interest income for the three and six months ended
June 30, 1996 as compared to the three and six months ended June 30, 1995
is primarily due to a lower average cash balance invested by the
Partnership in 1996.
The decrease in venture partners' share of venture operations for the
six months ended June 30, 1996 as compared to the six months ended June 30,
1995 is primarily due to the change in the allocation of the losses under
the venture agreement for Palm Desert related to the satisfaction in the
fourth quarter of 1995 of the venture partner's obligations to contribute
to the venture for operating deficits and the Partnership's and the
Affiliated Partner's preferred returns.
The extraordinary item reported for the three and six months ended
June 30, 1996 represents the Partnership's share of pre-payment penalties
resulting from the extinguishment of debt related to the 1996 sale of
Dunwoody Crossing Apartments.
PART II. OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The mortgage loan in the current amount of approximately $89,000,000
(including accrued interest) secured by 260 Franklin Street matured on
January 1, 1996. 260 Franklin, as of such date suspended debt service on
the loan and began submitting the net cash flow of the property to the
lender (Teachers Insurance and Annuity Association of America) while
seeking an extension or refinancing of the loan. As of June 30, 1996,
approximately $2,996,000 of interest on the mortgage loan was in arrears.
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties:
1995 1996
-------------------------------------- -------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
1. 260 Franklin Street Building
Boston, Massachusetts. . . . 99% 99% 99% 98% 96% 95%
2. Dunwoody Crossing
(Phase I, II, and III)
Apartments
DeKalb County (Atlanta),
Georgia. . . . . . . . . . . 93% 93% 93% 91% 90% N/A
3. NewPark Mall
Newark (Alameda County),
California . . . . . . . . . 80% 80% 80% 80% 79% 79%
4. Palm Desert Town Center
Palm Desert (Palm Springs),
California . . . . . . . . . 97% 96% 93% 93% 91% 92%
<FN>
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An "N/A" indicates that the property was not owned by the Partnership at the end of the quarter.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3 and
4-A. The Amended and Restated Agreement of Limited Partnership and
the Assignment Agreement set forth as Exhibit B to the Prospectus, copies
of which are hereby incorporated by reference to Exhibit 3 and Exhibit 4-A
to the Partnership's report for December 31, 1992 on Form 10-K (File No. 0-
16516) dated March 19, 1993.
4-B. Documents relating to the loan modification of the mortgage loan
secured by the 260 Franklin Street Building is hereby incorporated by
reference to Exhibit 4-B to the Partnership's report for December 31, 1991
on Form 10-K (File No. 0-16516) dated March 27, 1992.
4-C. Documents relating to the Promissory Note secured by NewPark
Mall dated December 19, 1995 are hereby incorporated by reference to the
Partnership's report for December 31, 1995 on Form 10-K (File No. 0-16516)
dated March 25, 1996.
10-A. Escrow Deposit Agreement is hereby incorporated by reference to
Exhibit 10.1 to the Partnership's Amendment No. 1 to Form S-11 (File No.
33-3567) Registration Statement dated May 14, 1986.
10-B. Acquisition documents relating to the purchase of an interest in
the 260 Franklin Street Building, Boston, Massachusetts, are hereby
incorporated herein by reference to Exhibit 10.4 to the Partnership's
Amendment No. 2 to Form S-11 (File No. 33-3567) dated July 25, 1986.
10-C. Additional acquisition documents relating to the purchase of an
interest in the 260 Franklin Street Building, Boston, Massachusetts, are
hereby incorporated herein by reference to Exhibit 10.4.1 to the
Partnership's Post-Effective Amendment No. 1 to Form S-11 (File No. 33-
3567) dated September 30, 1986.
10-D. Acquisition documents relating to the purchase by the
Partnership of an interest in NewPark Mall in Newark (Alameda County),
California, are hereby incorporated herein by reference to Exhibit 10.6 to
the Partnership's Post-Effective Amendment No. 2 to Form S-11 (File No. 33-
3567) dated December 30, 1986.
10-E. Acquisition documents relating to the acquisition by the
Partnership of an interest in the Palm Desert Town Center in Palm Desert,
California, dated December 23, 1988 are hereby incorporated by reference to
Exhibit 1 to the Partnership's Form 8-K (File No. 0-16516) dated January 6,
1989.
10-F. Modification to Reserve Escrow Agreement relating to the 260
Franklin Street Building is hereby incorporated by reference to the
Partnership's Form 10-Q for March 31, 1995 (File No. 0-16516) dated May 11,
1995.
10-G. Sale documents relating to the contract for sale between VNE
Partners, L.P. and Post Apartment Homes, L.P. dated May 7, 1996 regarding
the sale of the Partnership's interest in the Dunwoody Crossing Apartments
is filed herewith.
27. Financial Data Schedule
(b) The following reports on Form 8-K were filed since the beginning of
the last quarter of the period covered by this report.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
BY: JMB Realty Corporation
(Corporate General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: August 9, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: August 9, 1996