UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION PERIOD PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 33-17274
MANHATTAN BEACH HOTEL PARTNERS, L.P.
Exact name of registrant as specified in its charter
Delaware 95-4201183
State or other jurisdiction of
incorporation or organization I.R.S. Employer Identification No.
ATTN: Andre Anderson
3 World Financial Center, 29th Floor,
New York, New York 10285
Address of principal executive offices zip code
Registrant's telephone number, including area code: (212) 526- 3237
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
DEPOSITARY UNITS OF LIMITED PARTNERSHIP INTEREST
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 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
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 the 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. (x)
Aggregate market value of the voting stock held by non-affiliates of the
registrant: Not applicable.
Documents Incorporated by Reference:
Portions of Parts I, II, III and IV are incorporated by reference to the
Partnership's Annual Report to Unitholders for the year ended December 31, 1996,
filed as an exhibit under Item 14.
PART I
Item 1. Business
(a) General Development of Business.
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Manhattan Beach Hotel Partners, L.P., formerly Shearson California Radisson
Plaza Partners, L.P. (see Item 10. "Certain Matters Involving Affiliates of
Manhattan Beach Commercial Properties III Inc."), a Delaware limited
partnership (the "Registrant" or the "Partnership"), was formed on September 8,
1987. The Partnership will continue until December 31, 2037 in accordance with
the terms of its Amended and Restated Agreement of Limited Partnership (the
"Partnership Agreement"), unless terminated earlier pursuant thereto. The
affairs of the Partnership are conducted by its general partner, Manhattan
Beach Commercial Properties III Inc., formerly Shearson Lehman Commercial
Properties III, Inc. (see Item 10. "Certain Matters Involving Affiliates of
Manhattan Beach Commercial Properties III Inc."), a Delaware corporation (the
"General Partner"), and an affiliate of Lehman Brothers Inc.
Manhattan Beach Commercial Properties III Depositary, Inc. (the "Assignor
Limited Partner"), formerly Shearson Lehman Commercial Properties III
Depositary, Inc. (see Item 10. "Certain Matters Involving Affiliates of
Manhattan Beach Commercial Properties III Inc."), is the record owner of the
limited partnership interests, but the Unitholders are entitled to all the
economic and other substantive rights and interests of the underlying limited
partnership interests and are entitled to direct any voting of such limited
partnership interests. A Unitholder, subject to certain conditions, may
convert his Units into limited partnership interests.
The Property.
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The Partnership was formed to acquire, own, lease and ultimately
sell a leasehold interest in the land underlying and a fee estate in the
improvements constituting the Radisson Plaza Hotel and Golf Course (the
"Property" or the "Hotel"), a 384-room, 287,965 square foot commercial hotel
and nine-hole executive golf course located on a 26.3 acre site in the City of
Manhattan Beach, Los Angeles County, California (the "City"). The Property was
acquired for a purchase price of $56,500,000 on December 1, 1987 from Manhattan
Beach Hotel Properties, Ltd., a California limited partnership (the "Seller"),
which developed the Property and opened it for occupancy in January 1987. The
General Partner began marketing the Hotel for sale during the fourth quarter of
1996. For further information concerning the marketing of the Hotel, please
refer to Item 7. "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained herein, and to the section entitled
Message to Investors contained in the Partnership's Annual Report to
Unitholders for the year ended December 31, 1996, filed as an exhibit under
Item 14. On March 20, 1997, the Partnership executed a Letter of Intent ( the
"Letter of Intent") to sell the Property to a joint venture comprised of Host
Marriott Corporation and Interstate Hotels Corporation (the "Buyer") for a cash
purchase price of $38,250,000 (the "Marriott/Interstate Sale"). A subsidiary
of Interstate Hotels Corporation ("Interstate") currently manages the Property
and has done so for more than five years. The Buyer has 30 days in which to
complete its due diligence investigation of the Property, during which time the
parties will attempt to negotiate and execute a formal Purchase and Sale
Contract (the "Contract"). It is currently anticipated that the closing of the
sale would be within 10 business days following the end of the due diligence
period. Certain of the conditions and terms in the Letter of Intent are not
legally binding and are subject to the execution of the Contract. No assurance
can be given that the Contract will be executed or that the Hotel will be sold
on the terms contemplated by the Letter of Intent or at all. Please refer to
Item 7. "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained herein for information regarding the
liquidation of the Partnership following the sale of the Hotel.
Ground Lease.
- ------------
Information regarding the Ground Lease is incorporated by reference to
Note 5 "Real Estate Investments" of the Notes to the Financial Statements
contained in the Partnership's Annual Report to Unitholders for the
year ended December 31, 1996, filed as an exhibit under Item 14.
The Management Agreement and Hotel Leases.
- -----------------------------------------
Information regarding the Management Agreement and Hotel Leases is
incorporated by reference to Note 6 "Hotel Management Agreement" of the Notes
to the Financial Statements contained in the Partnership's Annual Report to
Unitholders for the year ended December 31, 1996, filed as an exhibit under
Item 14.
The Hotel is operated under a license agreement with Radisson Hotels
International, Inc. ("Radisson"), which the Buyer has agreed to assume.
Information regarding Radisson is incorporated by reference to Note 5 "Real
Estate Investments" of the Notes to the Financial Statements contained in the
Partnership's Annual Report to Unitholders for the year ended December 31,
1996, filed as an exhibit under Item 14. The Hotel is operated under a
management agreement (the "Management Agreement") with Manhattan Beach
Management Company, an affiliate of Interstate. Details regarding the
Management Agreement are incorporated by reference to Note 6 "Hotel Management
Agreement" of the Notes to the Financial Statements contained in the
Partnership's Annual Report to Unitholders for the year ended December 31,
1996, filed as an exhibit under Item 14. The golf course is operated under an
operating agreement with Radisson Golf Course Company, Inc., a party not
affiliated with either Radisson or the Partnership.
(b) Financial Information About Industry Segments.
---------------------------------------------
The Partnership's sole business is to own and operate the Property. All of the
Partnership's revenues, operating profit or loss and assets relate solely to
such industry segment.
(c) Narrative Description of Business.
---------------------------------
The Partnership's principal objectives have been to (i) provide quarterly cash
distributions, a portion of which are anticipated to be non-taxable due to
depreciation deductions, (ii) preserve and protect capital and (iii) achieve
long-term appreciation in the value of the Property for distribution upon sale.
In view of the recently improved operating results of the Hotel and the
strengthening hotel market, the General Partner began marketing the Hotel for
sale. If the Hotel is sold, the Partnership will be liquidated.
Competition
- -----------
Information with respect to market conditions in the area where the Property is
located is incorporated by reference to the section entitled Message to
Investors of the Partnership's Annual Report to Unitholders for the year ended
December 31, 1996, filed as an exhibit under Item 14.
Employees
- ---------
The Partnership's business is managed by the General Partner and the Partnership
has no employees. The current hotel staff and other personnel are employees of
Interstate. Information regarding Interstate is incorporated by reference to
Note 6 "Hotel Management Agreement" of the Notes to Financial Statements
contained in the Partnership's Annual Report to Unitholders for the year ended
December 31, 1996, filed as an exhibit under Item 14.
Item 2. The Property
Incorporated by reference to Note 5 "Real Estate Investments" of the Notes to
the Financial Statements contained in the Partnership's Annual Report to
Unitholders for the year ended December 31, 1996, filed as an exhibit under
Item 14.
Item 3. Legal Proceedings
Incorporated by reference to Note 8 "Litigation" of the Notes to the Financial
Statements contained in the Partnership's Annual Report to Unitholders for the
year ended December 31, 1996, filed as an exhibit under Item 14.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Unitholders at a meeting or
otherwise during the fourth quarter of the fiscal year for which this report
has been filed.
PART II
Item 5. Market for the Partnership's Limited Partnership interests and
Security Holder Matters
(a) Market Information.
------------------
There is no established public market in which the Units are currently traded.
(b) Holders.
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The number of Unitholders of record as of December 31, 1996 was 5,492.
(c) Dividends.
---------
A distribution in the amount of $1,395,000 or $0.20 per Unit was
paid to limited partners on February 1, 1996. This distribution represented a
one-time distribution of 1995 annual cash flow and surplus Partnership
reserves, and did not indicate the reinstatement of regular cash distributions.
The General Partner received a cash distribution of $14,091, representing its
1% share of the distribution paid February 1, 1996. No distributions were paid
to Unitholders during the years ended December 31, 1995 and 1994. Cumulative
distributions paid to Unitholders since the Partnership's inception total $2.24
per Unit. This amount includes $0.57 per Unit paid to class member Unitholders
(the "Settlement Class") pursuant to the settlement of class actions brought
against Shearson Lehman Hutton Inc., the Partnership and other affiliated
defendants (the "Settlement"). Such distributions were drawn from the
settlement fund (the "Settlement Fund") established to pay such distributions
to the Settlement Class. The Settlement Fund was exhausted with the payment of
the fourth quarter 1992 distribution. Unless the Hotel is sold, the ability of
the Partnership to make future distributions will be dependent upon the cash
flow generated from Hotel operations and the adequacy of cash reserves. There
can be no assurance that future cash flow will be sufficient to fund any such
additional distributions.
Item 6. Selected Financial Data
Incorporated by reference to the section entitled Financial Results Comparison
of the Partnership's Annual Report to Unitholders for the year ended
December 31, 1996, filed as an exhibit under Item 14.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
- -------------------------------
The Hotel's operations improved during 1996 principally as a result of
strengthening conditions in the Los Angeles Airport hotel market and
management's efforts to diversify the Hotel's customer base. The Hotel is
dependent primarily on business, group, contract and leisure travel for its
revenues. The improved profitability of the Hotel during the year is largely
attributable to the 7.7% increase in the average room rate and the 3.6%
increase in the Hotel's average occupancy level, which were achieved as a
result of management's efforts to reduce the volume of airline contracts and
increase the number of business and group guests at higher rates.
At December 31, 1996, the Partnership had cash and cash equivalents of
$2,100,400, including cash held at the Hotel for working capital, compared to
$4,414,032 at December 31, 1995. The decrease is primarily due to the
distribution paid to limited partners on February 1, 1996 and the payment
during the fourth quarter of 1996 of management oversight fees accrued from
1989 through the third quarter of 1996 and the payment of other reimbursable
expenses to the General Partner. Such remaining cash balances are expected to
be sufficient to meet the anticipated cash requirements for operations of the
Partnership. Restricted cash increased to $413,229 at December 31, 1996,
compared to $187,464 at December 31, 1995. The increase is due to
contributions to the account for furniture, fixtures and equipment ("FF&E
reserve account") exceeding expenditures. Pursuant to the Management
Agreement, contributions to the FF&E reserve account will be made over time to
protect and maintain the value of the Hotel.
Accounts receivable increased to $1,386,303 at December 31, 1996, compared to
$992,941 at December 31, 1995. Accounts payable and accrued liabilities
increased to $1,549,286 at December 31, 1996, compared to $1,371,160 at
December 31, 1995. The changes in both accounts receivable and accounts
payable and accrued liabilities are due primarily to differences in the timing
of payments. Prepaid and other assets was $382,225 at December 31, 1996,
largely unchanged from $374,304 at December 31, 1995. Due to affiliates
decreased to $63,495 at December 31, 1996 from $2,338,650 at December 31, 1995,
primarily due to the payment in the fourth quarter of 1996 of management
oversight fees accrued from 1989 through the third quarter of 1996 and the
payment of other reimbursable expenses to the General Partner.
In view of the recently improved operating results of the Hotel and the
strengthening hotel market, the General Partner began marketing the Hotel for
sale during the fourth quarter of 1996. The General Partner subsequently
retained the services of Eastdil Realty Company ("Eastdil"), a
nationally-recognized real estate firm, to market the Hotel for sale, with the
goal of maximizing the selling price of the Hotel and ultimately distributing
the net sales proceeds to partners. On March 20, 1997, the Partnership executed
a Letter of Intent ( the "Letter of Intent") to sell the Property to a joint
venture of Host Marriott Corporation and Interstate Hotels Corporation (the
"Buyer") for a cash purchase price of $38,250,000 (the "Marriott/Interstate
Sale"). The Buyer has 30 days in which to complete its due diligence
investigation of the Property, during which time the parties will attempt to
negotiate and execute a formal Purchase and Sale Contract (the "Contract"). It
is currently anticipated that the closing of the sale would be within 10
business days following the end of the due diligence period. Certain of the
conditions and terms in the Letter of Intent are not legally binding and are
subject to the execution of the Contract. If the Marriott/Interstate Sale is
consummated on the terms contemplated by the Letter of Intent, the resulting
distribution to limited partners is estimated to be in excess of $5.00 per
Unit. However, the precise amount will be dependent on the results of Hotel and
Partnership operations until closing, the specific terms of the Contract which
remain to be negotiated, estimated expenses and other factors. While the
General Partner believes that the Hotel is likely to be sold in 1997, there can
be no assurance, however, that the Marriott/Interstate Sale or any other sale
of the Hotel will be consummated, or that a sale, if completed, will result in
any particular level of net sales proceeds.
During 1996, the Partnership wrote down the net book value of the Hotel by
$4,797,429 to its estimated fair market value less costs to sell. The
determination of the estimated fair market value of the property was based upon
the Letter of Intent executed by the Partnership.
In view of the anticipated sale of the Hotel in 1997, the Partnership's real
estate at cost, less accumulated depreciation and amortization at December 31,
1996, has been recorded on the Partnership's Balance Sheet as "Property held
for disposition." Property held for disposition at December 31, 1996 was
$36,800,000.
A distribution in the amount of $1,395,000 or $0.20 per Unit was paid to
limited partners on February 1, 1996. This distribution represented a onetime
distribution of 1995 annual cash flow and surplus Partnership reserves, and did
not indicate the reinstatement of regular cash distributions. Unless the Hotel
is sold, the ability of the Partnership to make future distributions is
dependent upon various factors, including the cash flow generated from Hotel
operations, the adequacy of cash reserves, and the outcome of the Partnership's
marketing efforts. There can be no assurance that future cash flow will be
sufficient to fund any such additional distributions.
On February 13, 1996, based upon, among other things, the advice of legal
counsel, Skadden, Arps, Slate, Meagher & Flom LLP, the General Partner adopted
a resolution that states, among other things, if a Change of Control (as
defined below) occurs, the General Partner may distribute the Partnership's
cash balances not required for its ordinary course day-to-day operations.
"Change of Control" means any purchase or offer to purchase more than 10% of
the Units that is not approved in advance by the General Partner. In
determining the amount of the distribution, the General Partner may take into
account all material factors. In addition, the Partnership will not be
obligated to make any distribution to any partner, and no partner will be
entitled to receive any distribution, until the General Partner has declared
the distribution and established a record date and distribution date for the
distribution.
Results of Operations
- ---------------------
1996 versus 1995
For the year ended December 31, 1996, the Partnership had a net loss of
$4,306,925, compared with net income of $232,226 for the year ended
December 31, 1995. The change is primarily due to the loss on the
Partnership's write down in 1996 of the net book value of the Hotel by
$4,797,429. Excluding the loss on the write-down of real estate, the
Partnership had net income of $490,504 for the year ended December 31, 1996,
compared with net income of $232,226 for the year ended December 31, 1995. The
improvement in 1996 is due primarily to an increase in Hotel revenues,
comprised of rooms, food and beverage, telephone and other departmental income,
which was partially offset by an increase in unallocated Hotel operating
expenses, primarily consisting of administrative and general expenses, and also
including depreciation and amortization.
For the year ended December 31, 1996, the Hotel generated departmental income
of $8,544,477, compared to $7,618,135 for the year ended December 31, 1995.
The increase in departmental income in 1996 is due to an increase in total
Hotel Revenues as a result of higher occupancy levels and room rates, and
higher food and beverage, telephone and other revenues, which was offset by an
increase in departmental expenses.
For the year ended December 31, 1996, unallocated Partnership and Hotel
operating expenses, including depreciation, were $12,999,678, compared to
$7,564,513 for the year ended December 31, 1995. The increase is primarily
due to the $4,797,429 loss on the write down of the net book value of the Hotel.
Also contributing to the increase were higher Hotel general and administrative
expenses, and to a lesser extent, higher ground rent, management fees,
advertising and sales expense and depreciation and amortization. Ground rent,
which is based on total revenues, increased due to higher total revenues for
the period. Management fees increased due to higher gross sales on which
Interstate receives a base percentage fee and higher profits on which
Interstate's incentive management fee is based. Depreciation increased due to
additions to furniture, fixtures and equipment. These increases were partially
offset by decreases in Partnership general and administrative expenses and
operating leases.
For the year ended December 31, 1996, the Partnership generated total other
income of $148,276, compared to $178,604 for the year ended December 31, 1995.
The decrease is due primarily to a decrease in interest income as a result of
lower cash balances being maintained by the Partnership during 1996.
The following summarizes the Hotel's performance for the twelve months ended
December 31 of the indicated years:
1996 1995 % Change
Average Occupancy 85.3% 82.3% 3.6%
Average Room Rate $ 83.59 $ 77.58 7.7%
Hotel Sales $ 15,594,871 $ 13,835,896 12.7%
Hotel House Profit $ 4,477,825 $ 4,013,122 11.6%
1995 versus 1994
For the year ended December 31, 1995, the Partnership had net income
of $232,226, compared to a net loss of $245,012 for the year ended
December 31, 1994. The improvement in 1995 primarily was due to an increase
in Hotel Revenues, comprised of rooms, food and beverage, telephone and other
departmental income and Partnership interest income which was partially offset
by an increase in unallocated Hotel and Partnership operating expenses
including depreciation.
For the year ended December 31, 1995, the Hotel generated departmental income
of $7,618,135 compared to $6,985,451 for the year ended December 31, 1994. The
9.1% increase in departmental income in 1995 was due to a increase in total
Hotel revenues as a result of higher room rates, higher food and beverage and
telephone revenues, which was partially offset by a slight increase in
departmental expenses.
For the year ended December 31, 1995, unallocated Hotel and Partnership
operating expenses, including depreciation, were $7,564,513 compared to
$7,287,878 for the corresponding period in 1994. The increase primarily was
due to an increase in Hotel general and administrative expenses, which was
largely attributable to higher property insurance premiums at the Hotel in 1995
relative to 1994. Also contributing to the increase were higher management
fees, Partnership general and administrative expenses and depreciation and
amortization costs. Management fees increased due to higher gross sales on
which management receives a base percentage fee and higher incentive management
fees associated with Hotel performance. Partnership general and administrative
expenses increased due to increased legal expenses regarding the settlement of
the lawsuit with Satellite Programming Services. Depreciation increased due to
an increase in capitalized personal property.
Total other income for the year ended December 31, 1995 increased to $178,604
from $57,415 for the year ended December 31, 1994, primarily due to higher
interest income attributable to higher cash balances and higher interest rates
earned during the year.
The following summarizes the Hotel's performance for the twelve months ended
December 31 of the indicated years:
1995 1994 % Change
Average Occupancy 82.3% 85.5% (3.7%)
Average Room Rate $ 77.58 $ 70.02 10.8%
Hotel Sales $ 13,835,896 $ 13,186,812 4.9%
Hotel House Profit $ 4,013,122 $ 3,386,612 18.5%
Item 8. Financial Statements and Supplementary Data
Incorporated by reference to Schedule III and the Partnership's Annual Report
to Unitholders for the year ended December 31, 1996, filed as an exhibit under
Item 14.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers. The affairs of the
Partnership are conducted through the General Partner. The names and ages of,
as well as the positions held by, the principal directors and officers of the
General Partner are set forth below. All directors of the General Partner will
serve until the next meeting of the stockholders of the General Partner. There
are no family relationships between any officers or directors.
Certain officers of the General Partner are now serving (or in the past have
served) as officers or directors of entities which act as general partners of a
number of real estate limited partnerships which have sought protection under
the provisions of the federal bankruptcy code. The partnerships which have
filed bankruptcy petitions own real estate which has been adversely affected by
the economic conditions in the markets in which that real estate is located
and, consequently, the partnerships sought the protection of the bankruptcy
laws to protect the partnerships' assets from loss through foreclosure.
The officers and/or directors of the General Partner are as follows:
Name Office
---- ------
Jeffrey C. Carter President, Director and Chief
Financial Officer
Rocco F. Andriola Director and Vice President
Regina Hertl Vice President
Michael Marron Vice President
Jeffrey C. Carter, 51, is a Senior Vice President of Lehman Brothers in the
Diversified Asset Group. Mr. Carter joined Lehman Brothers in September 1988.
From 1972 to 1988, Mr. Carter held various positions with Helmsley-Spear
Hospitality Services, Inc. and Stephen W. Brener Associates, Inc. including
Director of Consulting Services at both firms. From 1982 through 1987, Mr.
Carter was President of Keystone Hospitality Services, an independent hotel
consulting and brokerage company. Mr. Carter received his B.S. degree in Hotel
Administration from Cornell University and an M.B.A. degree from Columbia
University.
Rocco F. Andriola, 38, is a Managing Director of Lehman Brothers in its
Diversified Asset Group and has held such position since October 1996.. Since
joining Lehman Brothers in 1986, Mr. Andriola has been involved in a wide range
of restructuring and asset management activities involving real estate and
other direct investment transactions. From June 1991 through September 1996,
Mr. Andriola held the position of Senior Vice President in Lehman's Diversified
Asset Group. From June 1989 through May 1991, Mr. Andriola held the position
of First Vice President in Lehman's Capital Preservation and Restructuring
Group. From 1986-89, Mr. Andriola served as a Vice President in the
Corporate Transactions Group of Shearson Lehman Brothers' office of the general
counsel. Prior to joining Lehman Brothers, Mr. Andriola practiced corporate
and securities law at Donovan Leisure Newton & Irvine in New York. Mr.
Andriola received a B.A. from Fordham University, a J.D. from New York
University School of Law, and an LL.M in Corporate Law from New York
University's Graduate School of Law.
Regina M. Hertl, 38, is a First Vice President of Lehman Brothers in its
Diversified Asset Group and is responsible for the investment management of
commercial and residential real estate, and a venture capital portfolio. From
January 1988 through December 1988, Ms. Hertl was Vice President of the Real
Estate Accounting Group within the Controller's Department of Shearson Lehman
Brothers. From September 1986 through December 1987, she was an Assistant Vice
President responsible for real estate accounting analysis within the
Controller's Department at Shearson. From September 1981 to September 1986,
Ms. Hertl was employed by the accounting firm of Coopers & Lybrand. Ms. Hertl,
who is a Certified Public Accountant, graduated from Manhattan College in 1981
with a B.S. degree in Accounting.
Michael Marron, 33, is a Vice President of Lehman Brothers and has been a
member of the Diversified Asset Group since 1990 where he has actively managed
and restructured a diverse portfolio of syndicated limited partnerships. Prior
to joining Lehman Brothers, Mr. Marron was associated with Peat Marwick
Mitchell & Co. serving in both its audit and tax divisions from 1985 to 1989.
Mr. Marron received a B.S. degree from the State University of New York at
Albany in 1985 and is a Certified Public Accountant.
Certain Matters Involving Affiliates of Manhattan Beach
Commercial Properties III Inc.
On July 31, 1993, Shearson Lehman Brothers Inc. ("Shearson") sold
certain of its domestic retail brokerage and asset management businesses to
Smith Barney, Harris Upham & Co. Incorporated ("Smith Barney"). Subsequent to
this sale, Shearson changed its name to Lehman Brothers Inc. The transaction
did not affect the ownership of the General Partner. However, the assets
acquired by Smith Barney included the name "Shearson." Consequently, the
Shearson Lehman Commercial Properties III, Inc. general partner changed its
name to Manhattan Beach Commercial Properties III Inc.; Shearson Lehman
Commercial Properties III Depositary, Inc., the Assignor Limited Partner,
changed its name to Manhattan Beach Commercial Properties III Depositary, Inc.;
and the name of the Partnership was changed to Manhattan Beach Hotel Partners,
L.P. to delete any reference to "Shearson."
Item 11. Executive Compensation
All of the directors and executive officers of the General Partner are
employees of Lehman. They do not receive any salaries or other compensation
from the Partnership.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security ownership of certain beneficial owners. To the knowledge of the
General Partner, no person owns more than 5% of the outstanding Units.
(b) Security ownership of management. No director or executive officer of the
General Partner owns any of the outstanding Units.
(c) Changes in control. No changes of control of the Partnership occurred
in 1996.
Item 13. Certain Relationships and Related Transactions
Incorporated by reference to Note 3 "Partnership Agreement," and Note 4
"Transactions with Related Parties" of the Notes to Financial Statements
contained in the Partnership's Annual Report to Unitholders for the year ended
December 31, 1996, filed as an exhibit under Item 14.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements:
Report of Independent Accountants (1)
Balance Sheets - At December 31, 1996 and 1995 (1)
Statements of Operations - For the years ended
December 31, 1996, 1995 and 1994 (1)
Statements of Partners' Capital (Deficit) - For the years ended
December 31, 1996, 1995 and 1994 (1)
Statements of Cash Flows - For the years ended
December 31, 1996, 1995 and 1994 (1)
Notes to the Financial Statements (1)
(1) Incorporated by reference to the Partnership's Annual Report to
Unitholders for the year ended December 31, 1996, which is filed as an
exhibit under Item 14.
(a)(2) Financial Statement Schedules: Independent Accountant's Report
on Schedule III - Real Estate and Accumulated Depreciation.
(a)(3) Exhibits: See Exhibit Index contained herein.
(b) Reports on Form 8-K: No reports on Form 8-K were filed in the fourth
quarter of the calendar year 1996.
(c) Exhibit Index
Exhibit Number
3.1 Amended and Restated Agreement of Limited Partnership of the
Registrant, as amended (included as, and incorporated herein by
reference to, Exhibit 3.1 of the Registrant's 1988 Annual Report
on Form 10-K filed on May 17, 1989).**
10.1 Depositary Agreement between the Registrant and Shearson Lehman
Commercial Properties Depositary III Inc., as Assignor Limited
Partner (included as, and incorporated herein by reference to
Exhibit 10.3 to the Registration Statement*).**
10.2 Purchase Agreement, as amended, relating to the acquisition of the
Registrant's hotel property (included as, and incorporated herein
by reference to Exhibit 10.4 to the Registration Statement*).**
10.3 Hotel Sublease, as amended (included as, and incorporated herein
by reference to Exhibit 10.3 of the Registrant's 1988 Annual Report
on Form 10-K filed on May 17, 1989).**
10.4 Hotel Ground Lease and Related Amendments (included as, and
incorporated herein by reference to Exhibit 10.6 to the
Registration Statement*).**
10.5 Radisson License (included as, and incorporated herein by reference
to Exhibit 10.7 to the Registration Statement*).**
10.6 License Agreement between Radisson Hotel Corporation and the
Registrant (included as, and incorporated herein by reference to
Exhibit 10.8 to the Registration Statement*).**
10.7 Guaranty of the Sublease (included as, and incorporated herein by
reference to Exhibit 10.9 of the Registration Statement*).**
10.8 Accounting Services Agreement between the Registrant and Boston
Safe Deposit and Trust Company (included as and incorporated
herein by reference to Exhibit 10.8 of the Registrant's 1988
Annual Report on Form 10-K filed May 17, 1989).**
10.9 Investor Services Agreement between the Registrant and Boston
Safe Deposit and Trust Company (included as, and incorporated
herein by reference to the Registrant's 1988 Annual Report on
Form 10-K filed May 17, 1989).**
10.10 Sublease Agreement, dated October 2, 1989, between Manhattan Beach
Hotel Properties, Ltd., U.S. Hotel Properties Corporation, and
Horst Osterkamp, (collectively, the "Sublessor"), and Kentucky
Hospitality Employer, Inc., (the "Sublessee") (included as, and
incorporated herein by reference to the Registrant's 1989 Annual
Report on Form 10-K filed March 14, 1990.**
10.11 Credit Agreement, dated September 1989, between the Registrant and
Carlson Hospitality Group, Inc. (included as, and incorporated
herein by reference to the Registrant's 1989 Annual Report on
Form 10-K filed March 14, 1990.**
10.12 Management Agreement, dated January 3, 1991, between the Registrant
and Interstate Hotels Corporation incorporated herein by reference
to Exhibit 10.12 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1990.**
10.13 Form of the Settlement Agreement dated August 27, 1990 between the
Partnership and class members incorporated herein by reference to
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1990.**
10.14 Management Agreement, dated January 3, 1992, between the Registrant
and Interstate Hotels Corporation incorporated herein by reference
to Exhibit 10.14 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1991.**
10.15 Management Agreement Extension, dated March 20, 1997, between the
Registrant and Manhattan Beach Management Company.
10.16 Letter of Intent, dated March 20, 1997, between the Registrant and
a joint venture of Host Marriott Corporation and Interstate Hotels
Corporation.
13.1 Annual Report to the Unitholders for the year ended
December 31, 1996.
27.1 Financial Data Schedule
------------------------------
* References to the "Registration Statement" are to the Registrant's
Registration Statement on Form S-11 (File No. 33-17274).
** Previously 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.
MANHATTAN BEACH HOTEL PARTNERS, L.P.
BY: Manhattan Beach Commercial Properties III Inc.
General Partner
Date: March 28, 1997
BY: s/Jeffrey C. Carter/
Name: Jeffrey C. Carter
Title: President, Director and
Chief Financial Officer
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.
MANHATTAN BEACH COMMERCIAL PROPERTIES III INC.
General Partner
Date: March 28, 1997
BY: s/Jeffrey C. Carter/
Name: Jeffrey C. Carter
Title: President, Director and
Chief Financial Officer
Date: March 28, 1997
BY: s/Rocco F. Andriola/
Name: Rocco F. Andriola
Title: Director and Vice President
Date: March 28, 1997
BY: s/Regina Hertl/
Name: Regina Hertl
Title: Vice President
Date: March 28, 1997
BY: s/Michael Marron/
Name: Michael Marron
Title: Vice President