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): January 29, 1999
CONAM REALTY INVESTORS 2 L.P.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 0-11085 13-3100545
- --------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
1764 San Diego Avenue, San Diego, California 92110
- --------------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (619) 297-6771
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 29, 1999, ConAm Realty Investors 2 L.P. (the "Partnership")
completed the sale (the "Sale") of its four remaining properties, Creekside Oaks
Apartments, a 120-unit apartment community located in Jacksonville, Florida,
Ponte Vedra Beach Village I Apartments, a 122-unit apartment complex located in
Ponte Vedra Beach, Florida, Rancho Antigua, a 220-unit apartment community
located in Scottsdale, Arizona, and Village at Foothills I Apartments, a 60-unit
apartment community located in Tucson, Arizona (the "Properties"), to DOC
Investors, L.L.C., a Delaware limited liability company (the "Purchaser"). The
members of the Purchaser are two pension funds which own an aggregate 91%
interest in the Purchaser, advised by Lend Lease Real Estate Investments, Inc.
("Lend Lease"), which is unaffiliated with ConAm Property Services II, Ltd., the
general partner of the Partnership (the "General Partner"), and ConAm DOC
Affiliates LLC, an affiliate of the General Partner ("ConAm DOC"), which owns a
9% interest in the Purchaser. As described in the Consent Solicitation Statement
defined below, ConAm DOC has the potential to receive up to an additional 18% of
the profits of the Purchaser after certain priority returns are paid to the
members of the Purchaser. The Purchaser has retained ConAm Management
Corporation, an affiliate of the General Partner, to act as the initial property
manager for the Properties. As required by the Partnership's Certificate and
Agreement of Limited Partnership (the "Partnership Agreement"), the consent of a
majority in interest of the Limited Partners to the Sale was obtained pursuant
to a Consent Solicitation Statement dated December 16, 1998 (the "Consent
Solicitation Statement").
The sale price of the Properties was $29,300,000 (before selling costs
and prorations). The sale price was negotiated between the General Partner, on
behalf of the Partnership, and Lend Lease on behalf of the Purchaser. The
Partnership received approximately $17,217,000 of cash proceeds from the Sale,
net of closing costs of approximately $93,000 and repayment of indebtedness of
approximately $11,990,000. All net cash proceeds from the Sale, less any amount
the General Partner determines to set aside as a reserve for contingencies, will
be distributed to the Limited Partners.
The Purchaser purchased the Properties on an "As Is" basis with only
limited representations and warranties by the Partnership as to the condition of
the Properties or their fitness for any purpose. Any representations made by the
Partnership will survive for only a period of six months following the closing
date. Although it is not expected, the Partnership could ultimately have some
liability to the Purchaser under such representations and warranties.
ITEM 5. OTHER EVENTS.
By amendment dated January 18, 1999 (the "Amendment"), Section 12 of the
Partnership's Partnership Agreement was amended to permit proposed sales of
Partnership properties to "affiliates" of the General Partner, if such proposed
sales are
approved by the Limited Partners. As required by the Partnership Agreement, the
consent of a majority in interest of the Limited Partners to the Amendment was
obtained pursuant to the Consent Solicitation Statement.
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 Properties by the Partnership, beyond the
date of sale there will be no further rental income, property operating
expenses, interest expense, or depreciation and amortization expenses in the
consolidated financial statements of the Partnership. For the Partnership's
fiscal year ended December 31, 1997 (the last fiscal year for which information
is available at the date of this Report) such amounts were $4,327,499,
$2,329,300, $904,630, and $1,017,912, respectively. Rental income, property
operating expenses, interest expense, and depreciation and amortization expenses
were $3,333,733, $1,682,747, $667,227, and $760,045, respectively, for the nine
months ended September 30, 1998 in the consolidated financial statements of the
Partnership. Also as a result of the Sale of the Properties, there are no
further assets and liabilities related to the Properties in the Partnership's
consolidated financial statements, which at September 30, 1998 consisted of
investments in real estate, less accumulated depreciation, of $16,023,754;
restricted cash of $521,854; other assets, net of accumulated amortization, of
$247,615; mortgages payable of $11,382,614; and security deposits of $92,286.
Following the Sale, the Partnership's only asset will be cash and cash
equivalents; its only liabilities will be distribution payable and accounts
payable and accrued expenses; its only income will be interest income; and its
only expenses will be general and administrative expenses of winding up and
liquidating the Partnership.
(c) Exhibits.
4.1 Amendment, dated January 18, 1999 to Partnership Agreement.
10.1 Agreement for Purchase and Sale and Joint Escrow Instructions between
Creekside Oaks Joint Venture and DOC Investors, L.L.C. dated January
26, 1999 with respect to Creekside Oaks.
10.2 Agreement for Purchase and Sale and Joint Escrow Instructions between
Ponte Vedra Beach Village Joint Venture and DOC Investors, L.L.C. dated
January 26, 1999 with respect to Ponte Vedra Beach Village I
Apartments.
10.3 Agreement for Purchase and Sale and Joint Escrow Instructions between
Rancho Antigua Joint Venture and DOC Investors, L.L.C. dated January
26, 1999 with respect to Rancho Antigua.
10.4 Agreement for Purchase and Sale and Joint Escrow Instructions between
Village at the Foothills (Phase I) Joint Venture Limited Partnership
and DOC Investors, L.L.C. dated January 26, 1999 with respect to
Village at Foothills I Apartments.
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.
CONAM PROPERTY SERVICES II, LTD.,
General Partner of ConAm Realty Investors 2 L.P.
By: Continental American Development, Inc.,
General Partner
Date: February 12, 1999 By: /s/Daniel J. Epstein
--------------------
Daniel J. Epstein
Director, President, and Principal Executive
Officer
Date: February 12, 1999 By: /s/Robert J. Svatos
-------------------
Robert J. Svatos
Chief Financial Officer