SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 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 0-19123
FOGELMAN MORTGAGE L.P. I
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(Exact name of registrant as specified in its charter)
Tennessee 62-1317805
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
One Seaport Plaza, New York, New York 10292-0128
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 214-3500
Securities registered pursuant to Section 12(g) of the Act:
Depositary Units
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Title of class
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 CK No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ CK ]
DOCUMENTS INCORPORATED BY REFERENCE
Amended and Restated Certificate and Agreement of Limited Partnership dated
November 12, 1986, included as part of the Registration Statement (File No.
33-8596) filed with the Securities and Exchange Commission on November 26, 1986
pursuant to Rule 424(b) under the Securities Act of 1933, as amended on December
31, 1991 and on December 24, 1992, is incorporated by reference into Part IV of
this Annual Report on Form 10-K
Annual Report to Unitholders for the year ended December 31, 1997 is
incorporated by reference into Parts II and IV of this Annual Report on Form
10-K
Index to exhibits can be found on pages 9 through 10.
FOGELMAN MORTGAGE L.P. I
(a limited partnership)
Table of Contents
PART I PAGE
Item 1 Business......................................................................... 3
Item 2 Properties....................................................................... 5
Item 3 Legal Proceedings................................................................ 5
Item 4 Submission of Matters to a Vote of Unitholders................................... 5
PART II
Item 5 Market for Registrant's Units and Related Unitholder Matters..................... 5
Item 6 Selected Financial Data.......................................................... 6
Item 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations..................................................................... 6
Item 8 Financial Statements and Supplementary Data...................................... 6
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure..................................................................... 6
PART III
Item 10 Directors and Executive Officers of the Registrant............................... 6
Item 11 Executive Compensation........................................................... 7
Item 12 Security Ownership of Certain Beneficial Owners and Management................... 8
Item 13 Certain Relationships and Related Transactions................................... 8
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K.................. 9
Financial Statements and Financial Statement Schedules........................... 9
Exhibits......................................................................... 9
Reports on Form 8-K.............................................................. 10
SIGNATURES................................................................................. 13
2
PART I
Item 1. Business
General
Fogelman Mortgage L.P. I (the 'Registrant'), a Tennessee limited partnership,
was formed on September 4, 1986 and will terminate on December 31, 2016 unless
terminated sooner under the provisions of the Amended and Restated Certificate
and Agreement of Limited Partnership, as amended (the 'Partnership Agreement').
(See the discussion below concerning the Payoff Agreement and the possible
earlier termination of the Partnership.) The Registrant was formed to invest in
mortgage loans with the proceeds raised from the initial sale of 54,200
depositary units ('Units'). The Registrant invested in two mortgage loans (the
'Mortgage Loans'), which provided construction and permanent financing for the
development of two multi-family residential apartment complexes. The
Registrant's fiscal year for book and tax purposes ends on December 31.
The Mortgage Loans consist of: (1) a loan (the 'Pointe Royal Loan') in the
face amount of $22,745,000 made to FPI Royal View, Ltd., L.P. ('Pointe Royal'),
which is secured by a first mortgage and related security documents encumbering
the Pointe Royal Apartments, which is a 437 unit residential rental property
located in Overland Park, Kansas (the 'Pointe Royal Property'); and (2) a loan
(the 'Westmont Loan') in the face amount of $23,320,000 made to FPI
Chesterfield, L.P. ('Westmont' and together with Pointe Royal, the
'Partnerships'), which is secured by a first mortgage and related security
documents that encumber the Westmont Apartments, a 489 unit residential rental
property located in Chesterfield, Missouri (the 'Westmont Property' and together
with the Pointe Royal Property, the 'Properties'). Fogelman Enterprises, L.P., a
Delaware limited partnership ('FELP'), and Avron B. Fogelman, an individual
('ABF') are the general partners of each of the Partnerships.
On January 30, 1998, the Registrant entered into an agreement (the 'Payoff
Agreement') with FELP and ABF which supersedes the November 26, 1997 agreement
previously entered into by the parties. Through its general partner,
Prudential-Bache Properties, Inc. ('PBP'), the Registrant has advised FELP that
the Registrant will accept the Payoff Amount, as hereinafter defined, in full
satisfaction of the Mortgage Loans if the Transactions, as hereinafter defined,
are approved by a majority in interest of the unitholders of the Registrant. PBP
has received a written opinion from its advisor to the effect that the offer to
payoff the Mortgage Loans pursuant to the terms of the Payoff Agreement (the
'Transactions') are fair to the Registrant and the Unitholders from a financial
point of view. If the Transactions are approved by the Unitholders, the
Registrant intends to consummate the Transactions, distribute the Payoff Amount
(net of expenses) and the remaining net assets of the Registrant and liquidate
the Registrant.
Pursuant to the Payoff Agreement, FELP has agreed to pay to the Registrant
the payoff amount ('Payoff Amount') of $48,000,000 and an amount, if any, by
which the aggregate amount of interest paid to the Registrant by the
Partnerships in respect of the Mortgage Loans for the period from October 1,
1997, through the closing of the Transactions is less than the interest on the
face amount of the Mortgage Loans during such period calculated at an annual
rate of 7.7%.
The Transactions must be consummated not later than May 29, 1998.
The Registrant is engaged solely in the business of investing in mortgage
loans; therefore, presentation of industry segment information is not
applicable. For more information regarding the Registrant's operations, see Item
7 Management's Discussion and Analysis of Financial Condition and Results of
Operations.
General Partner
The general partner of the Registrant is Prudential-Bache Properties, Inc.
('PBP' or the 'General Partner').
3
Mortgage Loans and Properties Underlying Mortgage Loans
The Pointe Royal project, which secures the Pointe Royal Loan, is located in
Overland Park, Kansas and is a townhouse apartment community consisting of 52
buildings on approximately 35 acres of land. As of December 31, 1997, the
monthly rents at the Pointe Royal project range from $610 to $930.
The Westmont project, which secures the Westmont Loan, is located in
Chesterfield, Missouri and is an apartment community consisting of 25 buildings
on approximately 58 acres of land. As of December 31, 1997, the monthly rents at
the Westmont project range from $605 to $840.
Information on
Underlying Properties
---------------------------------------
Original Interest Average
Amount of Rate on Average Monthly
Mortgage Mortgage Maturity Occupancy Rental Rental Units
Property Closing Date Loan Loan Date Rates Rates Available
- ---------------- --------------- ----------- ------------ -------------- --------- -------------- ------------
Pointe Royal
Overland Park,
Kansas April 23, 1987 $22,745,000 9.5% April 23, 1999 96.7% $793 437
Westmont
Chesterfield,
Missouri July 8, 1987 23,320,000 9.5 July 8, 1999 96.7 710 489
- ---------------
Average occupancy and rental rates are for the twelve months ended December 31, 1997.
The interest pay rate on the Mortgage Loans has been modified and is equal to
the net property cash flow generated by the respective Properties payable
monthly (4.5% for 1997), with the difference between the amount actually paid
and the original pay rate of 9.5% per annum being accounted for in a separate
account for each Property, which itself bears interest at 9.5% per annum
('Unpaid Interest'). The Mortgage Loans require current payments of interest
only with balloon payments of the entire principal and Unpaid Interest amounts
due from sale or refinancing proceeds or upon maturity. The ultimate
collectibility of the Unpaid Interest as well as the full principal of the
Mortgage Loans will depend upon the value of the underlying properties which are
currently estimated, based on third party appraisals, to be less than the
amounts due. However, the estimated property values exceed the Registrant's
carrying amount of the Mortgage Loans, which is recorded based upon the equity
method of accounting. A full appraisal for both properties was obtained in 1997.
The values of Pointe Royal and Westmont estimated in the appraisal reports were
$24,200,000 and $25,600,000, respectively, as of April 15, 1997. (See above
discussion of proposed payoff of Mortgage Loans.)
Following is the interest received from each of the Registrant's Mortgage
Loans as a percentage of total interest received and the equity income on the
underlying properties as a percentage of total equity income:
Interest Received Equity Income
---------------------- ----------------------
1997 1996 1995 1997 1996 1995
---- ---- ---- ---- ---- ----
Pointe Royal 34.6% 43.2% 49.4% 43.5% 44.3% 46.8%
Westmont 65.4% 56.8% 50.6% 56.5% 55.7% 53.2%
For summary financial statements of the underlying properties, see Note F to
the financial statements in the Registrant's Annual Report to Unitholders for
the year ended December 31, 1997 ('Registrant's Annual Report') which is filed
as an exhibit hereto.
Competition
The General Partner has formed various entities to engage in businesses which
may be competitive with the Registrant. Both of the Properties collateralizing
the Mortgage Loans are located in markets where the property manager manages
other apartment complexes.
The Registrant's business is affected by competition to the extent that the
underlying properties from which it derives interest payments are subject to
competition from neighboring properties. The Westmont
4
apartments are located in the St. Louis metropolitan area and the Pointe Royal
apartments are located in the Kansas City metropolitan area. The Properties'
occupancy and rental rates are comparable to their competitors. However, the
value of the Properties has declined between the two most recent appraisals and
may continue to decline as construction with newer and superior amenities adds
to the competitive pressure on the property values, particularly in Overland,
Park, Kansas where the Pointe Royal Apartments is located.
Employees
The Registrant has no employees. Management and administrative services for
the Registrant are performed by the General Partner and its affiliates pursuant
to the Partnership Agreement. The General Partner receives compensation and
reimbursement of expenses in connection with such activities as described in
Sections 9 and 10 of the Partnership Agreement. See Note E to the financial
statements in the Registrant's Annual Report which is filed as an exhibit
hereto.
Item 2. Properties
The Registrant does not own or lease any property.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Unitholders
None
PART II
Item 5. Market for Registrant's Units and Related Unitholder Matters
As of March 5, 1998 there were 4,979 holders of record owning 54,200 Units. A
significant secondary market for the Units has not developed and it is not
expected that one will develop in the future. There are also certain
restrictions set forth in the Partnership Agreement limiting the ability of a
Unitholder to transfer Units. Consequently, holders of Units may not be able to
liquidate their investments in the event of an emergency or for any other
reason.
The following per Unit cash distributions were paid to Unitholders during the
following calendar quarters.
Quarter Ended 1997 1996
- ------------------- ------ ------
March 31 $15.63 $15.00
June 30 15.63 15.63
September 30 11.50 15.63
December 31 11.50 15.63
There are no material legal restrictions upon the Registrant's present or
future ability to make distributions in accordance with the provisions of the
Partnership Agreement. Cash distributions paid in 1997 were funded from current
and prior undistributed cash flow from operations. Approximately $2,023,000 and
$1,291,000 of the distributions paid to Unitholders during 1997 and 1996,
respectively, represent a return of capital on a generally accepted accounting
principles (GAAP) basis. The return of capital on a GAAP basis is calculated as
Unitholder distributions less net income allocated to Unitholders. The
Registrant currently does not expect that quarterly cash distributions will
continue to be paid in the future subject to the approval by the Unitholders of
the proposed disposition of the Mortgage Loans. (See Item 1 above for discussion
of proposed payoff of Mortgage Loans.) However, if the Mortgage Loans are paid
off pursuant to the Payoff Agreement, distributions of the net Payoff Amount and
the remaining assets will be made to Unitholders.
5
Item 6. Selected Financial Data
The following table presents selected financial data of the Registrant. This
data should be read in conjunction with the financial statements of the
Registrant and the notes thereto on pages 2 through 9 of the Registrant's Annual
Report which is filed as an exhibit hereto.
Year ended December 31,
-------------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
Equity income from the
underlying properties $ 1,633,515 $ 2,557,797 $ 2,166,858 $ 2,267,243 $ 2,082,554
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net income $ 1,157,009 $ 2,314,871 $ 1,929,656 $ 1,997,698 $ 1,773,686
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net income per Unit $ 16.93 $ 38.08 $ 31.04 $ 32.28 $ 28.19
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total assets $26,408,195 $28,321,329 $29,783,810 $31,191,034 $32,349,343
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total Unitholder
distributions $ 2,940,892 $ 3,354,437 $ 3,116,500 $ 2,981,000 $ 2,879,387
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Unitholder
distributions per Unit $ 54.26 $ 61.89 $ 57.50 $ 55.00 $ 53.13
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This information is incorporated by reference to pages 10 and 11 of the
Registrant's Annual Report which is filed as an exhibit hereto.
Item 8. Financial Statements and Supplementary Data
The financial statements are incorporated by reference to pages 2 through 9
of the Registrant's Annual Report which is filed as an exhibit hereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Reference is made to the Registrant's Current Report on Form 8-K dated May
14, 1996, as filed with the Securities and Exchange Commission on May 16, 1996
regarding the change in the Registrant's certifying accountant from Deloitte &
Touche LLP to Price Waterhouse LLP.
PART III
Item 10. Directors and Executive Officers of the Registrant
There are no directors or executive officers of the Registrant. The
Registrant is managed by the General Partner.
Section 16(a) Beneficial Ownership Reporting Compliance
The Registrant, the Registrant's General Partner and its directors and
executive officers, and any persons holding more than ten percent of the
Registrant's Units are required to report their initial ownership of such Units
and any subsequent changes in that ownership to the Securities and Exchange
Commission on Forms 3, 4 and 5. Such executive officers, directors and
Unitholders who own greater than ten percent of the Registrant's Units are
required by Securities and Exchange Commission regulations to furnish the
Registrant with copies of all Forms 3, 4 or 5 they file. All of these filing
requirements were satisfied on a timely basis. In making these disclosures, the
Registrant has relied solely on written representations of the General Partner's
directors and executive officers and Unitholders who own greater than ten
percent of the Registrant's Units or copies of the reports they have filed with
the Securities and Exchange Commission during and with respect to its most
recent fiscal year.
6
Prudential-Bache Properties, Inc.
The directors and executive officers of PBP and their positions with regard
to managing the Registrant are as follows:
Name Position
Brian J. Martin President, Chief Executive Officer,
Chairman of the Board of Directors
and Director
Barbara J. Brooks Vice President--Finance and Chief Financial
Officer
Eugene D. Burak Vice President and Chief Accounting Officer
Chester A. Piskorowski Senior Vice President
Frank W. Giordano Director
Nathalie P. Maio Director
BRIAN J. MARTIN, age 47, is the President, Chief Executive Officer, Chairman of
the Board of Directors and a Director of PBP. He is a Senior Vice President of
Prudential Securities Incorporated ('PSI'), an affiliate of PBP. Mr. Martin also
serves in various capacities for certain other affiliated companies. Mr. Martin
joined PSI in 1980. Mr. Martin is a member of the Pennsylvania Bar.
BARBARA J. BROOKS, age 49, is the Vice President--Finance and Chief Financial
Officer of PBP. She is a Senior Vice President of PSI. Ms. Brooks also serves in
various capacities for other affiliated companies. She has held several
positions within PSI since 1983. Ms. Brooks is a certified public accountant.
EUGENE D. BURAK, age 52, is a Vice President of PBP. He is a First Vice
President of PSI. Prior to joining PSI in September 1995, he was a management
consultant for three years and was with Equitable Capital Management Corporation
from March 1990 to May 1992. Mr. Burak is a certified public accountant.
CHESTER A. PISKOROWSKI, age 54, is a Senior Vice President of PBP. He is a
Senior Vice President of PSI and is the Senior Manager of the Specialty Finance
Asset Management area. Mr. Piskorowski has held several positions within PSI
since April 1972. Mr. Piskorowski is a member of the New York and Federal Bars.
FRANK W. GIORDANO, age 55, is a Director of PBP. He is a Senior Vice President
and Senior Counsel of PSI. Mr. Giordano also serves in various capacities for
other affiliated companies. He has been with PSI since July 1967.
NATHALIE P. MAIO, age 47, is a Director of PBP. She is a Senior Vice President
and Deputy General Counsel of PSI and supervises non-litigation legal work for
PSI. She joined PSI's Law Department in 1983; presently, she also serves in
various capacities for other affiliated companies.
Thomas F. Lynch, III ceased to serve as President, Chief Executive Officer,
Chairman of the Board of Directors and a Director of Prudential-Bache
Properties, Inc. effective May 2, 1997. Effective May 2, 1997, Brian J. Martin
was elected President, Chief Executive Officer, Chairman of the Board of
Directors and a Director of Prudential-Bache Properties, Inc.
There are no family relationships among any of the foregoing directors or
officers. All of the foregoing officers and/or directors have indefinite terms.
Item 11. Executive Compensation
The Registrant does not pay or accrue any fees, salaries or any other form of
compensation to directors and officers of the General Partner for their
services. Certain officers and directors of the General Partner receive
compensation from affiliates of the General Partner, not from the Registrant,
for services performed for various affiliated entities, which may include
services performed for the Registrant; however, the General Partner believes
that any compensation attributable to services performed for the Registrant is
immaterial. See Item 13 Certain Relationships and Related Transactions for
information regarding reimbursement to the General Partner for services provided
to the Registrant.
7
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 5, 1998, no director or officer of the General Partner owns
directly or beneficially any interest in the voting securities of the General
Partner.
As of March 5, 1998, no director or officer of the General Partner owns
directly or beneficially any of the Units issued by the Registrant.
As of March 5, 1998, no beneficial owners who are neither a director nor
officer of the General Partner beneficially own more than five percent of the
Units issued by the Registrant.
Item 13. Certain Relationships and Related Transactions
The Registrant has and will continue to have certain relationships with the
General Partner and its affiliates. However, there have been no direct financial
transactions between the Registrant and the directors or officers of the General
Partner.
Reference is made to Notes A and E to the financial statements in the
Registrant's Annual Report, which is filed as an exhibit hereto, which identify
the related parties and discuss the services provided by these parties and the
amounts paid or payable for their services.
8
PART IV
Page in
Annual Report
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements and Report of Independent Accountants--incorporated by
reference to the Registrant's Annual Report which is filed as an exhibit
hereto
Reports of Independent Accountants:
2
Report of Independent Accountants at December 31, 1997 and 1996 and for
the years then ended
2A
Independent Auditors' Report for the year ended December 31, 1995
Financial Statements:
3
Statements of Financial Condition--December 31, 1997 and 1996
4
Statements of Operations--Three years ended December 31, 1997
4
Statements of Changes in Partners' Capital--Three years ended
December 31, 1997
5
Statements of Cash Flows--Three years ended December 31, 1997
6
Notes to Financial Statements
2. Financial Statement Schedule and Report of Independent Accountants
Report of Independent Accountants on Financial Statement Schedule
Schedule:
IV--Mortgage Loans on Real Estate--December 31, 1997
Separate Financial Statements for Pointe Royal Project and Westmont Project
Financial Statements:
Report of Independent Auditors
Statements of Assets, Liabilities and Project Deficit--December 31, 1997
and 1996
Statements of Revenues and Expenses and Changes in Project Deficit--Three
years ended December 31, 1997
Statements of Cash Flows--Three years ended December 31, 1997
Notes to Financial Statements
All other schedules have been omitted because they are not applicable or
the required information is included in the financial statements or notes
thereto.
3. Exhibits
Description:
3.1 Amended and Restated Certificate and Agreement of Limited Partnership dated
November 12, 1986 (incorporated by reference to Registration Statement No.
33-8596 filed November 26, 1986)
3.2 Second Amendment to Amended and Restated Certificate and Agreement of
Limited Partnership dated December 24, 1992 (incorporated by reference to
the Registrant's Annual Report on Form 10-K for the year ended December 31,
1992)
9
10.1 Assignment of Partnership Interest by Fogelman Assignor L.P., Inc. to
Prudential-Bache Investor Services II, Inc. dated December 14, 1992
(incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992)
10.2 Assignment of Partnership Interest by Fogelman Mortgage Partners I, Inc. to
Prudential-Bache Properties, Inc. dated December 14, 1992 (incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992)
10.3 Assignment of Partnership Interest by ABF to Prudential-Bache Properties,
Inc. dated December 14, 1992 (incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1992)
10.4 Second Amendment to Loan Agreement dated as of December 24, 1992 between the
Registrant and FPI Chesterfield, L.P. (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1992)
10.5 Release, Discharge and Cancellation of Guaranty between the Registrant and
Avron B. Fogelman dated December 24, 1992 (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1992)
10.6 Third Amendment to Loan Agreement dated December 24, 1992 between the Regis-
trant and FPI Royal View, Ltd., L.P. (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1992)
10.7 Amended and Restated Payoff Agreement dated January 30, 1998 between the
Registrant, Fogelman Enterprises, L.P. and ABF (filed herewith)
13.1 Registrant's Annual Report to Unitholders for the year ended December 31,
1997 (with the exception of the information and data incorporated by
reference in Items 7 and 8 of this Annual Report on Form 10-K, no other
information or data appearing in the Registrant's Annual Report is to be
deemed filed as part of this report)
16.1 Letter dated May 15, 1996 from Deloitte & Touche LLP to the Securities and
Exchange Commission regarding change in certifying accountant (incorporated
by reference to Exhibit 16.1 to the Registrant's Current Report on Form 8-K
dated May 14, 1996)
19.1 First Amendment to Amended and Restated Certificate and Agreement of Limited
Partnership dated December 31, 1991 (incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
1992)
19.2 Amended Stipulation of Settlement dated February 25, 1992 (incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992)
27 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
Registrant's Current Report on Form 8-K dated November 26, 1997, as filed with the
Securities and Exchange Commission on December 10, 1997 relating to Item 5
regarding the entering into an agreement to payoff the Registrant's two mortgage
loans.
Registrant's Current Report on Form 8-K dated January 30, 1998, as filed with the
Securities and Exchange Commission on February 5, 1998 relating to Item 5
regarding the entering into a revised agreement to payoff the Registrant's two
mortgage loans.
10
Price Waterhouse LLP (LOGO)
1177 Avenue of the Americas
New York, NY 10036
Telephone 212 596-7000
Facsimile 212 596-8910
Report of Independent Accountants on
Financial Statement Schedule
February 13, 1998
To the Unitholders and
General Partner of Fogelman Mortgage L.P. I
Our audit of the financial statements referred to in our report dated February
13, 1998 appearing in the 1997 Annual Report to Unitholders of Fogelman Mortgage
L.P. I (which report and financial statements are incorporated by reference in
this Annual Report on Form 10-K) also included an audit of the Financial
Statement Schedule listed in Item 14(a) of this Form 10-K. In our opinion, this
Financial Statement Schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
financial statements.
/s/ Price Waterhouse LLP
11
FOGELMAN MORTGAGE L.P. I
Schedule IV--Mortgage Loans On Real Estate
December 31, 1997
MORTGAGE LOANS ON REAL ESTATE
- --------------------------------------------------------------------------------------------------------------
Periodic
Final maturity payment Face amount of
Description Interest rate date terms Prior liens mortgage
- --------------------------------------------------------------------------------------------------------------
Pointe Royal
First Mortgage Loan (A) 9.5%(C) April 23, 1999 (C) None $22,745,000
Westmont
First Mortgage Loan (B) 9.5%(C) July 8, 1999 (C) None 23,320,000
---------------
$46,065,000
---------------
---------------
Carrying amount of
Description mortgage (D)
- --------------------------------------------------------------
Pointe Royal
First Mortgage Loan (A) $ 13,236,500
Westmont
First Mortgage Loan (B) 12,465,246
------------------
$ 25,701,746
------------------
------------------
(A) Multi-family residential apartment complex--Overland Park, Kansas
(B) Multi-family residential apartment complex--Chesterfield, Missouri
(C) The interest pay rate has been modified and is equal to the net property
cash flow generated by the respective Properties payable monthly (4.5% for
1997), with the difference between the amount actually paid and the original
pay rate of 9.5% per annum being accounted for in a separate account for
each Property, which itself bears interest at 9.5% per annum. The Mortgage
Loans require current payments of interest only with balloon payments of the
entire principal and Unpaid Interest amounts due from sale or refinancing
proceeds or upon maturity (the twelfth anniversary of the respective loan
closing dates). The Mortgage Loans as of December 31, 1997, may be prepaid
in whole with no prepayment penalty.
(D) See Note C to the financial statements in the Registrant's Annual Report
which is filed as an exhibit hereto. No principal amount of the loans is
subject to delinquent interest because the loans have been modified to a
cash flow basis.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Fogelman Mortgage L.P. I
By: Prudential-Bache Properties, Inc.
A Delaware corporation, General Partner
By: /s/ Eugene D. Burak Date: March 31, 1998
----------------------------------------
Eugene D. Burak
Vice President and Chief Accounting
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities (with respect to the General Partner) and on
the dates indicated.
By: Prudential-Bache Properties, Inc.
A Delaware corporation, General Partner
By: /s/ Brian J. Martin Date: March 31, 1998
----------------------------------------
Brian J. Martin
President, Chief Executive Officer,
Chairman of the Board of Directors and
Director
By: /s/ Barbara J. Brooks Date: March 31, 1998
----------------------------------------
Barbara J. Brooks
Vice President-Finance and Chief
Financial Officer
By: /s/ Eugene D. Burak Date: March 31, 1998
----------------------------------------
Eugene D. Burak
Vice President
By: /s/ Frank W. Giordano Date: March 31, 1998
----------------------------------------
Frank W. Giordano
Director
By: /s/ Nathalie P. Maio Date: March 31, 1998
----------------------------------------
Nathalie P. Maio
Director
13