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EXHIBIT 10.1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934
For the Transition period from to
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COMMISSION FILE NUMBER: 0-15463
MENDIK REAL ESTATE LIMITED PARTNERSHIP
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Exact Name of Registrant as Specified in its Charter
New York 11-2774249
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State or Other Jurisdiction of I.R.S. Employer Identification No.
Incorporation or Organization
3 World Financial Center, 29th Floor,
New York, NY Attn: Andre Anderson 10285
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Address of Principal Executive Offices Zip Code
(212) 526-3237
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Registrant's Telephone Number, Including Area Code
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
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MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
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CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AT MARCH 31 AT DECEMBER 31
1998 1997
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ASSETS
Property held for disposition $ 119,905,760 $ 119,791,043
Cash and cash equivalents 4,778,618 4,786,697
Restricted cash 7,182,391 7,041,844
Rent and other receivables (net of allowance for doubtful
accounts of $118,611 in 1997) 728,885 903,270
Deferred rent receivable 11,675,725 11,191,096
Other assets, net of accumulated amortization
of $4,940,857 in 1998 and $4,941,591 in 1997 12,596,401 8,426,941
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TOTAL ASSETS $ 156,867,780 $ 152,140,891
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LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Accounts payable and
accrued expenses $ 3,253,190 $ 1,572,939
Deferred income 6,118,488 5,904,654
Due to affiliates 2,670,246 2,956,140
Security deposits payable 1,160,635 1,116,249
Accrued interest payable 754,416 727,944
Mortgages payable 71,500,000 71,500,000
Notes payable to affiliates 2,230,000 2,230,000
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Total Liabilities 87,686,975 86,007,926
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Minority interest 22,400,183 21,445,577
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Partners' Capital (Deficit):
General Partners (398,851) (419,783)
Limited Partners (395,169 units outstanding) 47,179,473 45,107,171
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Total Partners' Capital 46,780,622 44,687,388
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 156,867,780 $ 152,140,891
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CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
SPECIAL
LIMITED GENERAL LIMITED
PARTNERS PARTNERS PARTNER TOTAL
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Balance at December 31, 1997 $45,107,171 $(419,783) $ -- $44,687,388
Net Income 2,072,302 20,932 -- 2,093,234
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Balance at March 31, 1998 $47,179,473 $(398,851) $ -- $46,780,622
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See accompanying notes to the consolidated financial statements.
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MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
================================================================================
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED) 1998 1997
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INCOME
Rental $ 9,261,488 $ 8,607,411
Interest 63,009 12,908
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Total Income 9,324,497 8,620,319
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EXPENSES
Property operating 4,797,564 5,045,432
Depreciation and amortization 49,183 1,836,303
Interest 1,387,394 1,744,992
General and administrative 42,516 120,607
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Total Expenses 6,276,657 8,747,334
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Income (loss) before minority interest 3,047,840 (127,015)
Minority interest in
consolidated venture (954,606) (29,243)
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Net Income (Loss) $ 2,093,234 $ (156,258)
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NET INCOME (LOSS) ALLOCATED:
To the General Partners $ 20,932 $ (156)
To the Special Limited Partner -- --
To the Limited Partners 2,072,302 (156,102)
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$ 2,093,234 $ (156,258)
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Per limited partnership unit
(395,169 outstanding) $ 5.24 $ (0.40)
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See accompanying notes to the consolidated financial statements.
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MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
=====================================================================================
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED) 1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 2,093,234 $ (156,258)
Adjustments to reconcile net income (loss) to net cash
provided by (used for) operating activities:
Depreciation -- 1,500,001
Amortization 49,183 336,302
Minority interest in consolidated venture 954,606 29,243
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Restricted cash (140,547) (10,186)
U.S. Treasuries and Agencies -- 5,810
Rent and other receivables 174,385 573,306
Deferred rent receivable (484,629) (181,416)
Other assets (4,218,643) (1,624,472)
Accounts payable and accrued expenses 1,680,251 469,148
Deferred income 213,834 9,130
Due to affiliates (285,894) (1,376,565)
Security deposits payable 44,386 10,186
Accrued interest payable 26,472 (20,824)
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Net cash provided by (used for) operating activities 106,638 (436,595)
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CASH FLOWS FROM INVESTING ACTIVITIES
Additions to real estate assets (114,717) (316,070)
Accounts payable - real estate assets -- (685,341)
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Net cash used for investing activities (114,717) (1,001,411)
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Net decrease in cash and cash equivalents (8,079) (1,438,006)
Cash and cash equivalents, beginning of period 4,786,697 4,727,720
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,778,618 $ 3,289,714
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $ 1,389,269 $ 1,765,816
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See accompanying notes to the consolidated financial statements.
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MENDIK REAL ESTATE LIMITED PARTNERSHIP
AND CONSOLIDATED VENTURE
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The unaudited financial statements should be read in conjunction with the
Partnership's annual 1997 audited financial statements within form 10-K.
The unaudited interim financial statements include all normal and reoccurring
adjustments which are, in the opinion of management, necessary to present a fair
statement of financial position as of March 31, 1998 and the results of
operations and cash flows for the three months ended March 31, 1998 and 1997 and
the statement of partners' capital (deficit) for the three months ended March
31, 1998. Results of operations for the period are not necessarily indicative of
the results to be expected for the full year.
Reclassification. Certain prior year amounts have been reclassified in order to
conform to the current year's presentation.
The following significant event occurred subsequent to fiscal year 1997 which
requires disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
The Partnership has reached an agreement in principle, subject to final
negotiation and execution of a definitive agreement, to sell the Partnership's
Properties for approximately $65 million, net of existing mortgage debt on the
Properties, (the "Proposed Transaction"). Pursuant to the terms of the Proposed
Transaction, the Partnership's interest in Two Park Avenue is to be purchased by
an affiliate of Vornado Realty Trust for approximately $34.5 million, payable in
shares of common stock of Vornado Realty Trust. Saxon Woods Corporate Center and
330 West 34th Street are to be purchased for an aggregate price of $30 million
in cash by Vornado Realty, L.P., or an affiliate thereof. Both Vornado Realty
Trust and Vornado Realty, L.P. are affiliates of Mendik RELP Corporation. After
the Proposed Transaction is consummated, the Partnership will be liquidated.
The Proposed Transaction was agreed to in principle in connection with, and is
conditioned upon, the settlement of three putative class action lawsuits that
have been brought against the General Partners of the Partnership and certain
affiliates of Mendik RELP Corporation by certain limited partners of the
Partnership (the "Settlement"). The Settlement contemplates the Proposed
Transaction, the subsequent dissolution and liquidation of the Partnership and
the distribution of the Partnership's remaining assets after the payment of the
Partnership's liabilities. The Settlement is subject to the final negotiation
and execution of a definitive agreement and is also conditioned upon final court
approval of the Settlement. There can be no assurance that the Proposed
Transaction will close as anticipated.
Upon execution of definitive documentation, a notice will be sent to all Limited
Partners which will explain in greater detail the terms of the Proposed
Transaction and Settlement.
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