SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 1998
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XVI
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 0-19496 36-3426137
- ------------------- -------------- --------------------
(State or other) (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Organization
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
-----------------------------------------------------
(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
-------------------------------------------------------------------
PALM DESERT TOWN CENTER
PALM DESERT, CALIFORNIA
-----------------------
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On December 29, 1998 (the
"Closing Date") Carlyle Real Estate Limited Partnership - XVI (the
"Partnership"), an Illinois limited partnership, along with Carlyle Real
Estate Limited Partnership - XVII ("Carlyle-XVII"), an Illinois limited
partnership affiliated with the Partnership (collectively, the "JMB Group")
sold their respective interests in the joint venture (the "Joint Venture")
that owns the Palm Desert Town Center (the "Property") located in Palm
Desert (Palm Springs), California. (A portion of the JMB Group's interests
in the Joint Venture was owned indirectly through Carlyle/Palm Desert,
Inc.) The sale was pursuant to an option agreement (the "Option
Agreement") entered into with the venture partner, TrizecHahn Centers,
Inc., (the "Buyer") effective January 1, 1998 and originally scheduled to
expire July 15, 1998 but extended first through August 14, 1998 pursuant to
a first amendment to the Option Agreement and then extended through
December 29, 1998 pursuant to a second amendment to the Option Agreement.
The Option Agreement gave the Buyer the right (but not the obligation) to
purchase all (but not less than all) of the JMB Groups' interest in the
joint venture by giving notice of its exercise of the option during the
term of the option. The Buyer exercised this option on December 29, 1998.
The Buyer is not affiliated with either the Partnership or Carlyle-XVII or
their General Partners, and the purchase price under the Option Agreement
was determined by arm's-length negotiation.
The sale price of the JMB Group's interest in the Joint Venture was
$4,000,000 (before selling costs of approximately $20,000) of which the
Partnership's share was $3,431,000. The Partnership's share of the sale
price was based upon the ratio of the Partnership's interest in the Joint
Venture to the aggregate interests of the JMB Group in the Joint Venture.
The Property was 84% occupied at the date of sale. The Property was
classified as held for sale as of July 1, 1997 and therefore has not been
subject to continued depreciation as of that date for financial reporting
purposes. The sale is expected to result in a gain to the Partnership in
1998 of approximately $2,000,000 for financial reporting purposes. In
addition, the Partnership expects to report a gain on sale of approximately
$4,000,000 for Federal income tax reporting purposes in 1998. The
Partnership has no liability for any representations, warranties or
covenants in connection with the sale of its interest in the Joint Venture.
The Partnership Agreement provides that, subject to certain
conditions, the General Partners shall receive as a distribution of the
proceeds (net after expenses and liabilities and retained working capital)
from the sale or refinancing of a real property up to 3% of the selling
price, and that the remaining proceeds be distributed 85% to the holders
("Holders") of limited partnership interests (and assignee interests
therein) in the Partnership (the "Interests") and 15% to the General
Partners. However, prior to such distributions being made, the Holders of
Interests are entitled to receive 99% and the General Partners 1% of net
sale or refinancing proceeds until the Holders of Interests (i) have
received cumulative cash distributions from the Partnership's operations
which, when combined with net sale or refinancing proceeds previously
distributed, equal a 6% non-compound annual return on the Holders' of
Interests average capital investment for each year (their initial capital
investment as reduced by net sale or refinancing proceeds previously
distributed) commencing with the third fiscal quarter of 1987 and (ii) have
received cash distributions of net sale or refinancing proceeds in an
amount equal to the Holders' of Interests aggregate initial capital
investment in the Partnership. In addition, upon termination of the
Partnership, any prior distributions of sales proceeds to the General
Partners must be returned to the Partnership if, at such time, the Holders
of Interests had not previously received distributions equal to or
exceeding the return levels specified in (i) and (ii) above. As the
Holders of Interests will not receive the return levels in (i) and (ii)
above, no portion of the proceeds of this sale were distributed to the
General Partners.
ITEM 5. OTHER EVENTS. The Partnership reduced all of its assets to cash
or cash equivalents and thereby dissolved in accordance with the terms of
its Partnership Agreement. Pursuant to the Partnership Agreement, the
General Partners returned to the Partnership $141,766 of previously
received sales distributions. The Partnership made a final liquidating
cash distribution to its Holders of Interests in the aggregate amount of
$20,415,530.28 or $145.48 per Interest. In addition, the Partnership made
a final cash distribution out of net cash receipts (as defined) to its
General Partners and paid a management fee to its Corporate General Partner
in the aggregate amount of $1,236,950.49. The Partnership wound up its
affairs effective December 31, 1998.
In connection with its winding up, the Partnership entered into an
agreement (the "Winding Up Agreement") with JMB Realty Corporation, the
Corporate General Partner, pursuant to which the Corporate General Partner
generally assumed the obligation to pay or otherwise discharge expenses and
liabilities of the Partnership not otherwise paid, discharged or provided
for by the Partnership, including contingent liabilities of the Partnership
that may arise after its winding up. In consideration of such assumption,
the Partnership paid the Corporate General Partner approximately $8,000 in
cash and transferred to the Corporate General Partner the Partnership's
contingent rights, if any, to indemnification or reimbursement, including
coverage and benefits under contracts of insurance, and certain other
rights to receive or collect amounts, if any, that may be payable to the
Partnership.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. Not Applicable.
(b) Pro Forma Financial Information - Narrative.
As a result of the sale of the Partnership's interest in the
Joint Venture, beyond the date of sale there will be no further rental
income, interest income, mortgage interest, depreciation, property
operating expenses, amortization of deferred expenses, and venture
partners' share of venture' operations recorded for the Property in the
consolidated financial statements of the Partnership, which for the
Partnership's most recent fiscal year (the year ended December 31, 1997)
were $10,693,118, $74,327, $4,952,355, $1,004,061, $4,625,425, $152,704,
and $(11,735), respectively. Rental income, interest income, mortgage
interest, property operating expenses, amortization of deferred expenses,
and venture partners' share of venture' operations recorded for the
Property were $7,712,345, $144,866, $3,680,510, $2,978,492, $115,811, and
$(386,077), respectively, for the nine months ended September 30, 1998.
Also, as a result of the sale of the Partnership's interest in the Joint
Venture, there are no further assets and liabilities related to the
Property, which at September 30, 1998 consisted of cash and cash
equivalents of approximately $2,395,000; investment property held for sale
or disposition of approximately $43,172,000; deferred expenses of
approximately $526,000, notes receivable of approximately $101,000; accrued
rents receivable of approximately $2,698,000; long-term debt (less current
portion) of approximately $40,242,000; current liabilities of approximately
$2,157,000; security deposits of approximately $55,000; and ground rent
payable of approximately $1,349,000.
(c) Exhibits.
10.1 Second Amendment to Palm Desert Option Agreement by the
Partnership and Carlyle-XVII relating to the unaffiliated venture partner's
option to purchase the Partnership and Carlyle-XVII's interests in the
joint venture dated December 28, 1998.
10.2 Winding Up Agreement dated as of December 29, 1998, by
and between the Partnership and JMB Realty Corporation.
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.
Carlyle Real Estate Limited Partnership-XVI
By: JMB Realty Corporation
Corporate General Partner
By: /s/ GAILEN J. HULL
_______________________________
Gailen J. Hull
Senior Vice President
Dated: January 13, 1999