SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 ___ 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 33-29987 Corporate Realty Income Trust I (Exact name of registrant as specified in its charter) Massachusetts 13-6931017 (State of organization) (I.R.S. Employer identification No.) 388 Greenwich Street, 34th Floor, New York, New York 10013 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 816-8237 Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 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 CORPORATE REALTY INCOME TRUST I Index Page No. Part I Financial information 3 Balance Sheets -- June 30, 1996 and December 31, 1995 4 Statements of Income -- For the three months ended June 30, 1996 and 1995 5 Statements of Income -- For the six months ended June 30, 1996 and 1995 6 Statements of Cash Flows -- For the six months ended June 30, 1996 and 1995 7 Notes to the Financial Statements 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Part II Other information 11 Signatures 12 PART I. FINANCIAL INFORMATION Item I. Financial Statements The summarized financial information contained herein is unaudited; however, in the opinion of management, all adjustments necessary for a fair presentation of such financial information have been included. CORPORATE REALTY INCOME TRUST I BALANCE SHEETS JUNE 30, 1996 AND DECEMBER 31, 1995 JUNE 30, DECEMBER 31, 1996 1995 ASSETS: (Unaudited) Real estate, at cost: Land $ 715,400 $ 715,400 Buildings 31,884,600 31,884,600 32,600,000 32,600,000 Less: accumulated depreciation 4,655,985 4,257,428 27,944,015 28,342,572 Cash and cash equivalents 782,042 531,435 Rent receivable - 206,510 Prepaid expenses 118,354 101,877 Deferred rent receivable 1,945,650 1,867,274 Deferred financing costs, net of accumulated amortization of $132,162 in 1996 and $120,731 in 1995 93,996 105,427 Total assets $30,884,057 $31,155,095 LIABILITIES AND SHAREHOLDERS' EQUITY: Liabilities: Mortgage loans payable $15,438,042 $15,470,369 Accrued expenses 59,636 80,652 Due to affiliates 43,631 9,590 Dividends payable 353,771 353,772 Total liabilities 15,895,080 15,914,383 Shareholders' equity: Shares of beneficial interest $.10 par value; 20,000,000 shares authorized; 1,010,776 shares issued and outstanding 101,078 101,078 Additional paid-in-capital 14,887,899 15,139,634 Retained earnings - - Total shareholder's equity 14,988,977 15,240,712 Total liabilities and shareholders' equity $30,884,057 $31,155,095 See accompanying notes to financial statements. CORPORATE REALTY INCOME TRUST I STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995 (Unaudited) 1996 1995 Income: Rental $ 855,817 $ 906,598 Dividend and interest 9,455 6,088 865,272 912,686 Expenses: Interest 352,043 353,529 Depreciation 199,279 199,279 General and administrative 40,661 40,899 Annual advisor fee 43,381 43,400 635,364 637,107 Net income $ 229,908 $ 275,579 Net income per share $ .23 $ .27 Dividend per share $ .35 $ .35 See accompanying notes to financial statements CORPORATE REALTY INCOME TRUST I STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (Unaudited) 1996 1995 Income: Rental $ 1,711,633 $ 1,762,415 Dividend and interest 13,624 11,628 1,725,257 1,774,043 Expenses: Interest 704,469 715,227 Depreciation 398,557 398,557 General and administrative 79,524 75,464 Annual advisor fee 86,899 85,617 1,269,449 1,274,865 Net income $ 455,808 $ 499,178 Net income per share $ .45 $ .49 Dividend per share $ .35 $ .35 See accompanying notes to financial statements CORPORATE REALTY INCOME TRUST I STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (Unaudited) 1996 1995 Cash flows from operating activities: Net income $ 455,808 $ 499,178 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of deferred financing costs 409,987 409,906 Interest accrued into the balance of the mortgage payable - 24,486 Changes in assets and liabilities: Decrease in rent receivable 206,510 (78,750) Increase in prepaid expenses (16,477) (10,792) Decrease in accrued expenses (21,016) (19,857) Increase in deferred rent receivable (78,376) (163,012) Increase in amount due to affiliate 34,041 2,468 Increase in financing costs - (2,463) 	 Total adjustments 534,669 161,986 Net cash provided by operating activities 990,477 661,164 Cash flows from financing activities: Principal payments on mortgage (32,327) (29,410) Dividends paid to shareholders (707,543) (707,544) Net cash used in financing activities (739,870) (736,954) Net increase (decrease) in cash and cash equivalents 250,607 (75,790) Cash and cash equivalents at beginning of period 531,435 766,945 Cash and cash equivalents at end of period $ 782,042 $ 691,155 Supplemental disclosure of cash flow information: Cash paid for interest during the six months ended June 30, 1996 and 1995 amounted to $628,508 and $687,453, respectively. Non-cash transactions: Dividends declared and unpaid as of June 30, 1996 and 1995 amounted to $353,772. See accompanying notes to financial statements. CORPORATE REALTY INCOME TRUST I NOTES TO FINANCIAL STATEMENTS JUNE 30, 1996 (Unaudited) 1. GENERAL The accompanying financial statements and related notes of Corporate Realty Income Trust I (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under generally accepted accounting principles have been condensed or omitted pursuant to such regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company's financial position, results of operations and cash flows have been included. These financial statements should be read in conjunction with the Company's Form 10-K for the year ended December 31, 1995. The amount of net income per share was calculated using the number of shares outstanding of 1,010,776 for the periods ended June 30, 1996 and 1995. Dividends declared as of June 30, 1996 and 1995 amounted to $.35 per share. 2. RENTAL INCOME In accordance with the Financial Accounting Standards Board Statement No. 13, "Accounting for Leases," the Company recognizes rental income on a straight-line basis over the fixed term of the lease period. Rental income is net of the rent due to Circuit City under the terms of the ground lease. Deferred rent receivable represents unbilled future rentals. The following reconciles rental income received to rental income recognized for the three months ended June 30, 1996 and 1995. For the three months For the six months ended June 30, ended June 30, 1996 1995 1996 1995 Rental income received $846,629 $816,628 $1,633,257 $1,599,403 Deferred rent 39,188 89,970 78,376 163,012 Rental income recognized $855,817 $906,598 $1,711,633 $1,762,415 CORPORATE REALTY INCOME TRUST I NOTES TO FINANCIAL STATEMENTS (CONT'D) JUNE 30, 1996 (Unaudited) 3. TRANSACTIONS WITH AFFILIATES The Company maintains an interest-bearing customer account with Smith Barney Inc. For the three and six months ended June 30, 1996 and 1995, the Company earned interest on this account of $9,455 and $13,624, respectively and $6,088 and $11,628, respectively. For purposes of these financial statements, the Company considers this account to be cash. The Company incurred expenses of $20,000 for the six months ended June 30, 1996 for administrative services performed by the Advisor which was paid as of June 30, 1996. The Advisor earned $86,899 of the annual advisor fee for the six months ended June 30, 1996, of which $43,381 was unpaid as of such date. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996 Liquidity and Capital Resources At June 30, 1996, the Company had cash of approximately $884,000 which was invested in an interest bearing account. Of this amount, approximately $438,000 represented a working capital reserve, $353,771 was reserved to pay the quarterly dividend in August 1996 and the balance was reserved for operations. The Company expects sufficient cash flow to be generated from operations to meet its current operating and debt service requirements on a short-term and long-term basis. The Company's only significant liabilities are mortgages aggregating approximately $15,438,042, maturing at various dates in approximately four to six years. The Company anticipates satisfying these mortgages with the proceeds of refinancings or sales of the underlying properties. Results of Operations Net income for the three and six months ended June 30, 1996 decreased slightly from the corresponding periods in 1995 due to an adjustment in the calculation of straight-line rent. However, actual rental income received increased due to the increase in rental income from the Circuit City building which became effective March 1, 1995. This increase in rental income increased the amount of cash available for investment which resulted in increased interest income in 1996. The Company completed the property acquisition stage of its life cycle in 1992 and has been in the portfolio management stage since the beginning of 1993. As a result, rental income and related expenses are comparable for the quarters ended March 31, 1996 and 1995. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - 27.1 Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter in which this report is filed. 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. CORPORATE REALTY INCOME TRUST I (Registrant) Dated: August 13, 1996 By: /s/ 					 James C. Cowles Chairman, President, and Treasurer Dated: August 13, 1996 By: /s/ 					 Valerie A. St. John Controller