ITEM 1. BUSINESS
Unless otherwise indicated, all references to "Notes" are to Notes to Consolidated Financial Statements contained in this report. Capitalized terms used herein, but not defined, have the same meanings as used in the Notes.
The registrant, Carlyle Real Estate Limited Partnership - X (the "Partnership"), was a limited partnership formed in 1979 and governed by the Revised Uniform Limited Partnership Act of the State of Illinois to invest primarily in improved income-producing commercial and residential real property. A total of 100,000 Limited Partnership Interests (the "Interests") were sold to the public at $1,000 per Interest pursuant to a public offering. The offering closed in February 1981. No Limited Partner made any additional capital contribution after such date. The Limited Partners of the Partnership shared in their portion of the benefits of ownership of the Partnership's real property investments according to the number of Interests held.
The Partnership was engaged solely in the business of the acquisition, operation and sale and disposition of equity real estate investments. Such equity investments were held by fee title, leasehold estates and/or through joint venture partnership interests. The Partnership's real property investments were located throughout the nation and it had no real estate investments located outside of the United States. A presentation of information about industry segments, geographic regions, raw materials or seasonality was not applicable and would not have been material to an understanding of the Partnership's business taken as a whole. The Partnership made a liquidating distribution of $5,296,735 to its Limited Partners on December 31, 1996, and terminated its operations and dissolved the Partnership effective December 31, 1996. At sale of a particular property, the net proceeds, if any, were generally distributed or reinvested in existing properties rather than invested in acquiring additional properties.
The Partnership made the real property investments set forth in the following table:
The Partnership's real property investments were subject to competi- tion from similar types of properties (including in certain areas properties owned by affiliates of the General Partner) in the respective vicinities in which they were located. Such competition was generally for the retention of existing tenants. Additionally, the Partnership was in competition for new tenants in markets where significant vacancies were present. Approximate occupancy levels for the properties are set forth in the table in Item 2
ITEM 2. PROPERTIES
The Partnership owned directly or through joint venture partnerships the properties or interests in the properties referred to under Item 1 above to which reference is made for a description of said properties.
The following is a listing of principal businesses or occupations carried on in and approximate occupancy levels by quarter during fiscal years 1996 and 1995 for the Partnership's investment properties owned during 1996:
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
At the time of liquidation the Partnership was not subject to any pending material legal proceedings.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during fiscal years 1996 and 1995.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS AND RELATED SECURITY HOLDER MATTERS
Immediately prior to the dissolution of the Partnership, there were 10,322 record holders of the 99,995 Interests outstanding in the Partnership. On December 31, 1996, the Partnership made a liquidating distribution and terminated its operations and dissolved the Partnership. There had been no public market for Interests and it had not been anticipated that a public market for Interests would develop. Upon request, the Corporate General Partner provided information relating to a prospective transfer of Interests to an investor desiring to transfer his Interests. The price to be paid for the Interests, as well as any other economic aspects of the transaction, was subject to negotiation by the investor.
Reference is made to Item 6
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As a result of the public offering of Interests as described in Item 1, the Partnership had approximately $90,000,000 (after deducting selling expenses and other offering costs) with which to make investments in income-producing commercial and residential real property, to pay legal fees and other costs (including acquisition fees) related to such investments and for working capital reserves. A portion of such proceeds was utilized to acquire the properties described in Item 1 above.
During 1996 some of the Limited Partners in the Partnership received from unaffiliated third parties unsolicited tender offers to purchase up to 4.9% Interests in the Partnership at amounts ranging from $30 to $55 per Interest. The Partnership recommended against acceptance of these offers on the basis that, among other things, the offer prices were inadequate. As of the date of this report, the Partnership is aware that 407.25 Interests have been purchased by such unaffiliated third parties either pursuant to such tender offers or through negotiated purchases. In addition, the Partnership had, from time to time, received inquires from other third parties that may have considered making offers for Interests, including requests for the list of Limited Partners in the Partnership. These inquiries were generally preliminary in nature. The board of directors of JMB Realty Corporation ("JMB") the Corporate General Partner of the Partnership, had established a special committee (the "Special Committee") consisting of certain directors of JMB to deal with all matters relating to tender offers for Interests in the Partnership, including any and all responses to such tender offers. The Special Committee had retained independent counsel to advise it in connection with any potential tender offers for Interests and had retained Lehman Brothers Inc. as financial advisor to assist the Special Committee in evaluating and responding to potential tender offers for Interests.
In October 1996, the Partnership sold the Sunrise Mall. Reference is made to the Notes for a further description of such sale.
In December 1996, the Partnership sold its interest in the Greenway Tower Joint Venture to its venture partner. Reference is made to the Notes for a further description of such sale.
On December 31, 1996, the Partnership made a final liquidating distribution of $5,296,735 ($52.97 per Interest) to the Limited Partners.
RESULTS OF OPERATIONS
Significant variances between periods reflected in the accompanying consolidated financial statements are the result of the sale of the Partnership's interest in the Greenway Tower Joint Venture in December 1996, the sale of the Sunrise Mall in October 1996, the lender realizing upon its security in the Holly Pond Office Center in January 1996, the sale of the Partnership's interest in the Garret Mountain Venture in January 1995 and the sale of the Silvermine Apartments in November 1994.
The decrease in cash and cash equivalents at December 31, 1996 as compared to December 31, 1995 is primarily due to the distribution of $9,999,500 ($100 per Interest) made to the Limited Partners in May 1996. This is partially offset by proceeds received totalling approximately $1,266,000 from the sale of the Sunrise Mall in October 1996 and the sale of the Partnership's interest in the Greenway Tower Joint Venture in December 1996.
The decrease in interest income for 1996 as compared to 1995 is primarily due to the distribution of $9,999,500 in May 1996 reducing the average balance of interest earning investments for 1996. The increase in interest income in 1995 as compared to 1994 is primarily the result of an increase in the average balance of investments in U.S. Government obligations in 1995. This increase is also due to an increase in the average rate of interest earned on investments in U.S. Government obligations in 1995.
The decrease in depreciation for 1996 as compared to 1995 is primarily due to the classification of the Sunrise Mall as an asset held for sale or disposition on July 1, 1996, and therefore not subject to continued depreciation.
The increase in general and administrative expenses for 1996 as compared to 1995 and 1994 is primarily due to an increase in certain costs due to the winding up of the Partnership.
The increase in Partnership's share of operations of unconsolidated venture for 1996 as compared to 1995 and decrease in 1995 as compared to 1994 is primarily due to Greenway Towers $1,300,000 provision for value impairment made as of September 30, 1995 (all of which was allocated to the Partnership) to reduce the net carrying value of the Greenway Towers Office Building. Additionally, the increase in 1996 as compared to 1995 is due to the sale of the Partnership's remaining interest in Carlyle Seattle in December 1995.
INFLATION
Due to the decrease in the level of inflation in recent years, inflation generally has not had a material effect on rental income or property operating expenses.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X (A LIMITED PARTNERSHIP) AND CONSOLIDATED VENTURES
INDEX
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1996 (Immediately prior to final liquidating distribution) and December 31, 1995
Consolidated Statements of Operations, years ended December 31, 1996 (Immediately prior to final liquidating distribution), 1995 and 1994
Consolidated Statements of Partners' Capital Accounts (Deficits), years ended December 31, 1996 (Immediately prior to final liquidating distribution), 1995 and 1994
Consolidated Statements of Cash Flows, years ended December 31, 1996 (Immediately prior to final liquidating distribution), 1995 and 1994
Notes to Consolidated Financial Statements
SCHEDULES NOT FILED:
All schedules have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.
INDEPENDENT AUDITORS' REPORT
The Partners CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X:
We have audited the consolidated financial statements of Carlyle Real Estate Limited Partnership - X (a limited partnership) and consolidated ventures as listed in the accompanying index. These consolidated financial statements are the responsibility of the General Partners of the Partnership. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the General Partners of the Partnership, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Carlyle Real Estate Limited Partnership - X and consolidated ventures at December 31, 1996 (immediately prior to final liquidating distribution) and 1995, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1996 (immediately prior to final liquidating distribution), in conformity with generally accepted accounting principles.
As discussed in the Notes to the consolidated financial statements, in 1996, the Partnership and its consolidated ventures changed their method of accounting for long-lived assets and long-lived assets to be disposed of to conform with Statement of Financial Accounting Standards No. 121.
KPMG PEAT MARWICK LLP
Chicago, Illinois March 14, 1997
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X (A LIMITED PARTNERSHIP) AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION), 1995 AND 1994
OPERATIONS AND BASIS OF ACCOUNTING
GENERAL
The Partnership held (either directly or through joint ventures) an equity investment portfolio of United States real estate. Business activities consisted of rentals to a wide variety of commercial and retail companies, and the ultimate sale or disposition of such real estate.
The accompanying consolidated financial statements include the accounts of the Partnership and its majority-owned consolidated ventures, Holly Pond Associates ("Holly Pond"), Garret Mountain Office Center Associates I ("Garret Mountain"), Victoria Apartments Partnership ("Victoria"), and Greenway Associates ("Greenway"). The effect of all transactions between the Partnership and the consolidated ventures has been eliminated. The equity method of accounting has been applied in the accompanying consolidated financial statements with respect to the Partnership's interests in Carlyle Seattle Associates ("Carlyle Seattle"), and Greenway Tower Joint Venture ("Greenway Tower"). Accordingly, the accompanying consolidated financial statements do not include the accounts of Carlyle Seattle and Carlyle Seattle's venture, Wright-Carlyle Seattle ("First Interstate") or Greenway's venture, Greenway Tower.
The Partnership records were maintained on the accrual basis of accounting as adjusted for Federal income tax reporting purposes. The accompanying consolidated financial statements have been prepared from such records after making appropriate adjustments to present the Partnership's accounts in accordance with generally accepted accounting principles ("GAAP") and to consolidate the accounts of the consolidated ventures as described above. Such GAAP and consolidation adjustments were not recorded on the records of the Partnership. The net effect of these items for the years ended December 31, 1996 (immediately prior to final liquidating distribution) and December 31, 1995 is summarized as follows:
The net earnings (loss) per limited partnership interest is based upon the Interests outstanding at the end of each period. Also, because net earnings are computed immediately prior to dissolution, Holders of interests may have on dissolution, an additional capital gain or loss depending on the Holders basis for Federal income tax purposes.
The preparation of financial statements in accordance with GAAP required the Partnership to make estimates and assumptions that affected the reported or disclosed amount of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may have differed from those estimates.
Statement of Financial Accounting Standards No. 95 required the Partnership to present a statement which classifies receipts and payments according to whether they stemmed from operating, investing or financing activities. The required information has been segregated and accumulated according to the classification specified in the pronouncement. Partner- ship distributions from unconsolidated ventures were considered cash flow from operating activities only to the extent of the Partnership's cumulative share of net earnings. In addition, the Partnership recorded amounts held in U.S. Government obligations at cost which approximated market. For the purposes of these financial statements, the Partnership's policy was to consider all such amounts held with original maturities of three months or less (none and $13,503,187 at December 31, 1996 and 1995, respectively) as cash equivalents, which included investments in an institutional mutual fund which holds United States Government obligations, with any remaining amounts (generally with original maturities of one year or less) reflected as short-term investments being held to maturity.
Deferred expenses consisted primarily of leasing fees incurred in connection with procuring tenants and loan fees incurred in connection with the acquisition of the properties. Deferred leasing fees were amortized using the straight-line method over the terms stipulated in the related agreements. Deferred loan fees were amortized over the related loan periods.
Although certain leases of the Partnership provided for tenant occupancy during periods for which no rent was due and/or increases in minimum lease payments over the term of the lease, rental income was accrued for the full period of occupancy on a straight-line basis.
No provision for state or Federal income taxes had been made as the liability for such taxes is that of the Partners rather than the Partnership. However, in certain instances, the Partnership had been required under applicable law to remit directly to the taxing authorities amounts representing withholding from distributions paid to Partners.
Depreciation on the operating properties had been provided over the estimated useful lives of 5 to 30 years using the straight-line method.
Maintenance and repair expenses were charged to operations as incurred. Significant betterments and improvements were capitalized and depreciated over their estimated useful lives.
Statement of Financial Accounting Standards No. 121 ("SFAS 121") "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" was issued in March 1995. The Partnership adopted SFAS 121 as required in the first quarter of 1996. SFAS 121 required that the Partnership record an impairment loss on its properties to be held for investment whenever their carrying value cannot be fully recovered through estimated undiscounted future cash flows from their operations and sale. The amount of the impairment loss to be recognized would be the difference between the property's carrying value and the property's estimated fair value. In addition, the $4,000,000 impairment
loss on the Holly Pond Office Center investment property, which was categorized as held for sale or disposition at January 1, 1996 upon adoption of SFAS 121, has been reflected in the accompanying consolidated financial statements as the cumulative effect of an accounting change as provided by SFAS 121. In accordance with SFAS 121, any properties identified as "held for sale or disposition" were no longer depreciated. Adjustments for impairment loss for such properties (subsequent to the date of adoption of SFAS 121) were made in each period as necessary to report these properties at the lower of carrying value or fair value less costs to sell. In certain situations, such estimated fair value could be less than the existing non-recourse debt which was secured by the property. There was no assurance that any estimated fair value of these properties would ultimately be obtained by the Partnership in any future sale or disposition transaction.
Under the prior accounting policy, provisions for value impairment were recorded with respect to investment properties whenever the estimated future cash flows from a property's operations and projected sale were less than the property's carrying value. The amount of any such impairment loss recognized by the Partnership was limited to the excess, if any, of the property's carrying value over the outstanding balance of the property's non-recourse indebtedness. An impairment loss under SFAS 121 was determined without regard to the nature or the balance of such non-recourse indebtedness. Upon the disposition of a property with the related extinguishment of the long-term debt for which an impairment loss has been recognized under SFAS 121, the Partnership recognized, at a minimum, a net gain for financial reporting purposes (comprised of gain on extinguishment of debt and gain or loss on the sale or disposition of property) for financial reporting purposes to the extent of any excess of the then outstanding balance of the property's non-recourse indebtedness over the then carrying value of the property, including the effect of any reduction for impairment loss under SFAS 121.
In addition, upon the disposition of any impaired property, the Partnership generally recognized more net gain for financial reporting purposes under SFAS 121 than it would have under the Partnership's prior impairment policy, without regard to the amount, if any, of cash proceeds received by the Partnership in connection with the disposition. Although implementation of this accounting statement impacted the Partnership's reported earnings, there was no impact on cash flows. Further, any such impairment loss was not recognized for Federal income tax purposes.
The results of operations for consolidated properties sold or disposed of during the past three years were ($250,615), ($2,063,365) and ($529,100), respectively, for the years ended December 31, 1996, 1995 and 1994.
In addition, the accompanying consolidated financial statements include $0, ($345,431), ($411,465), respectively, of the Partnership's share of total property operations of $0, ($1,293,750) and ($1,618,070) of the unconsolidated property sold or disposed of in the past three years.
INVESTMENT PROPERTIES
CARLYLE SEATTLE
During 1982, the Partnership acquired, through a joint venture ("First Interstate") between Carlyle Seattle and the developer, an office building in Seattle, Washington. Carlyle Seattle was a joint venture between the Partnership and Carlyle Real Estate Limited Partnership-XII ("C-XII"), an affiliated partnership sponsored by the Corporate General Partner of the Partnership. Under the terms of the First Interstate venture agreement, Carlyle Seattle made initial cash contributions aggregating $30,000,000 ($8,000,000 by the Partnership).
The terms of the Carlyle Seattle venture agreement provided that all the capital contributions were to be made in the proportion of 26.7% by the Partnership and 73.3% by C-XII. The Carlyle Seattle venture agreement further provides that all of the venture's share of First Interstate's annual cash flow, sale or refinancing proceeds, operating profits and losses, and tax items will be allocated 26.7% to the Partnership and 73.3% to C-XII.
Prior to the sale transaction described below, Carlyle Seattle was generally entitled to receive a cumulative $2,400,000 per annum preferred distribution of cash flow. Any excess cash flow was first distributable to the First Interstate joint venture partner up to the next $500,000 then 50% to Carlyle Seattle and 50% to the First Interstate joint venture partner. Operating profits or losses of the First Interstate joint venture generally were allocated in the same ratio as the allocation of annual cash flow, however, the joint venture partner was to be allocated not less than 25% of such profits and losses.
In May 1994, Carlyle Seattle executed an agreement which granted an option to sell its interest in First Interstate to the unaffiliated venture partner. The agreement provided for the purchase of 49.95% of Carlyle Seattle's interest by October 17, 1994 (for which Carlyle Seattle received a non-refundable deposit of $500,000 on June 30, 1994 and which was subsequently extended until December 22, 1994 with the receipt of an additional $500,000 on September 22, 1994) with an option for the unaffiliated venture partner to purchase the remaining 50.05% of Carlyle Seattle's interest between one year and two years after the sale closing date. On December 1, 1994 (initial sale transaction closing), Carlyle Seattle received (from the unaffiliated joint venture partner) $20,276,000 in cash (less non-refundable deposits as described above) for 49.95% of its interest. The unaffiliated venture partner paid $5,000,000 cash for the option of the unaffiliated venture partner to purchase the remaining 50.05% of Carlyle Seattle's interest in First Interstate. Additionally, the unaffiliated venture partner loaned Carlyle Seattle $15,000,000 (bearing interest at a rate of 9% per annum with accrued interest and unpaid principal due on January 1, 1997) which was secured by the remaining 50.05% of Carlyle Seattle's interest in First Interstate. The exercise price for the remaining 50.05% interest was to be $21,350,000 if the purchase option was exercised on or before December 22, 1995 and increasing 7% per annum thereafter until the termination of the option period. The $5,000,000 option purchase price and the balance of unpaid principal and accrued interest on the $15,000,000 Carlyle Seattle loan could be applied toward the exercise price. In connection with the sale transaction, the First Interstate joint venture agreement was amended to cause the joint venture to be converted to a limited partnership in which Carlyle Seattle was the sole limited partner and the unaffiliated venture partner was the sole general partner. Additionally, the amendment states that no profits, income or gain was to be allocable to Carlyle Seattle except to the extent that Carlyle Seattle received distributions from First Interstate and operating losses were to be allocated to the extent of Carlyle Seattle's positive capital account balance and thereafter at 25.025%. The amended Venture Agreement provided that any distributions to Carlyle Seattle were subordinate to the joint venture partner's preferred return (as defined). No distributions were made to Carlyle Seattle from operations subsequent to the initial sale transaction. Additionally, effective December 1, 1994 and through the final disposition date, the equity method of accounting was applied with respect to Carlyle Seattle's interest in First Interstate as Carlyle Seattle's interest decreased to less than 50% and was converted to a limited partnership interest. The Partnership's share of proceeds from this transaction was approximately $10,754,000. Carlyle Seattle recognized a gain of $34,583,869 (of which the Partnership's share was $9,373,572) for financial reporting purposes in 1994 and a gain of $83,565,440 (of which the Partnership's share was $22,340,642) for Federal income tax purposes in 1994.
On December 15, 1995, the unaffiliated venture exercised its option to purchase the Partnership's remaining 50.05% interest in Carlyle Seattle for $21,350,000. The exercise price was satisfied by applying the $5,000,000 option purchase price paid at the initial closing and applying the balance of unpaid principal ($15,000,000) and accrued interest ($1,406,250) on the Carlyle Seattle loan. Therefore, there are no additional cash proceeds from the sale of Carlyle Seattle's remaining 50.05% interest. As a result of this transaction, Carlyle Seattle realized a gain on sale of approximately $21,406,000 for financial reporting purposes in 1995 of which the Partnership's share is approximately $5,715,000.
The office building was managed by an affiliate of the First Interstate joint venture partner for a fee computed at 2% of base and percentage rents.
GREENWAY TOWER OFFICE BUILDING
Greenway Associates had been discussing a potential buyout of its interest in the Greenway Tower Joint Venture by its venture partner. On December 26, 1996 the venture partner purchased Greenway Associates interest in the Greenway Tower Joint Venture for $850,000, which was paid in cash at closing. The Partnership received the entire $850,000 of sale proceeds as repayment of disproportionate contributions and accrued but unpaid return on such contributions as defined in the Greenway Associates amended venture agreement (discussed below). As a result of this transaction, the venture recognized a loss of approximately $366,000 of which the Partnership's share was a gain of approximately $3,740,000 for financial reporting purposes and a gain of approximately $1,539,000 of which the Partnership's share was approximately $601,000 for Federal income tax purposes in 1996.
In January 1988, the Partnership and its venture partner agreed to amend the existing partnership agreement for the Greenway Associates Partnership which is a venture partner in Greenway Tower Joint Venture ("Greenway Tower"), discussed below. The amendment provided, among other changes, that distributions of net sales or refinancing proceeds first be used to pay back to any disproportionate contributions (as defined) and any accrued but unpaid return on such contributions made by either partner. Any remaining proceeds were then to be allocated first to the venture partner up to $2,800,000 and then to the Partnership up to $11,200,000. All remaining proceeds were to be allocated with respect to the venture ownership percentages.
In September 1987, Greenway Associates entered into an agreement with an additional venture partner to form a new venture, Greenway Tower. The terms of the Greenway Tower agreement called for contributions of the property, subject to the original first mortgage loan, plus additional cash contributions from both partners.
In October 1992, the Greenway Tower venture refinanced the first and second mortgage notes with a new first mortgage note of $9,000,000. The initial advance of the note was $5,750,000 and allowed for additional advances of up to $3,250,000 for approved tenant improvements, leasing commissions, interest advances, capital improvements and under certain circumstances borrower equity repayments. Such replacement financing matures October 31, 1999 and requires monthly installments of interest equal to the "Contract Interest Rate", computed as 3.75% per annum in excess of the lender's composite commercial paper rate. To the extent such rate exceeded 9% in year one, 9.5% in year two, 10% in years three and four and 10.5% in years five through seven ("Applicable Base Percentage Rate"), the venture may defer the difference for a given month provided that the total interest deferred does not exceed 10% of the existing loan balance. Any deferred interest was due when and to the extent that in any one month the Contract Index Rate was less than the Applicable Base Percentage Rate along with the existing principal balance upon maturity of the loan. Pursuant to the replacement financing, the lender participates in 50% of the net cash flow from the property as well as in 50% of any net proceeds
resulting from the sale of the property. In addition, the Greenway Tower Joint Venture agreement was amended to reflect a 45% interest for Greenway Associates and a 55% interest for the venture partner. In 1995 or 1996, no such excess cash flow or sale proceeds participation had been paid or accrued by Greenway. In order to secure the replacement financing, the venture had been required to make a capital contribution of $635,574 ($286,008 of which was paid by the Partnership); however, portions of this contribution could have been refunded to the venture. The Partnership had received a partial refund of approximately $261,000 (including interest) of its original contribution.
PARK PLACE
In April 1986, as a result of defaults by the venture partner in its obligations under the joint venture partnership and related agreements, the venture partner transferred its interest in the joint venture to the Partnership and the two individual principals of the venture partner signed non-interest bearing promissory notes in the aggregate amount of $1,000,000 payable to the joint venture on April 24, 1991. The notes had not been recorded in the accompanying consolidated financial statements due to the unlikelihood of their collection. The Partnership obtained judgments against the makers of the notes aggregating $1,024,000 for which enforcement was pursued. However, it was unlikely the Partnership would be able to collect fully upon these judgements as it was uncertain whether these individuals had sufficient assets to satisfy the judgments in whole or in part. During 1995, the Partnership received $30,000 and title to a certain parcel of residential real estate as settlement of such judgements.
Such residential real estate was sold in 1996 for nominal proceeds.
SILVERMINE APARTMENTS
On November 29, 1994, the Partnership through its venture, Victoria Apartments Partnership, sold the land, buildings, related improvements and personal property of the Silvermine Apartments, located in Victoria, Texas for $5,750,000. After retirement of the related mortgage note, payment of a mortgage prepayment fee, closing costs and prorations, cash proceeds from the sale was $1,635,663, of which the Partnership received $1,143,216. As a result of the sale, the Partnership recognized a net gain of $1,601,796 (comprised of a gain on sale of investment property of $1,748,652 and an extraordinary loss of $146,856 due to the prepayment fee and the retirement of deferred expenses related to the mortgage note for financial reporting purposes, net of the venture partner's share of $1,150,550). In addition, the Partnership recognized a gain in 1994 of $3,161,480 for Federal income tax purposes.
GARRET MOUNTAIN
On January 25, 1995, the Partnership sold its interest in the Garret Mountain venture to its venture partner. The sale price was $300,000, represented by $50,000 in cash at closing and an interest bearing note for $250,000 originally due February 1, 1997. The note earned interest at 10% per annum and was payable in monthly payments of interest only until maturity when the full principal balance was scheduled to be due. The note provided that at any time on or prior to April 25, 1995, the venture partner could prepay the note in whole, without penalty or additional interest, by the payment to the Partnership of a discounted sum of $225,000, together with any accrued but unpaid interest then owing on the outstanding principal balance of the note on the date of such discounted prepayment. The venture partner exercised this option on April 24, 1995, therefore, the sale price was adjusted to $275,000 to reflect the discounted payment.
As a result of the sale of its interest, the Partnership had recognized in 1995 a gain of $1,350,289 for financial reporting purposes and $1,631,285 for Federal income tax purposes.
The Garret Mountain venture had approached the first mortgage lender in an effort to negotiate debt service relief on the 12-5/8% first mortgage note secured by the Garret Mountain Office Center in West Paterson, New Jersey. Effective November 1, 1993, the venture began making cash flow debt service payments. The venture remitted cash flow from the property to the first mortgage lender through March 1994, at which time an agreement was reached whereby reduced monthly payments were submitted while negotiations continued. The venture was unable to finalize a modification of the debt with the first mortgage lender and subsequently reached an agreement with another mortgage lender to retire the first and second mortgage notes with a new first mortgage note.
In October 1989, the venture obtained a short-term (one year) second mortgage in the amount of $1,000,000 secured by the Garret Mountain Office Center, located in West Paterson, New Jersey, and the venture. The second mortgage was subsequently extended to September 1, 1991, August 1, 1992, August 1, 1993 and July 31, 1996 and was assumed by the venture partner at sale of the Partnership's interest.
HOLLY POND OFFICE CENTER
On January 19, 1996, the mortgage lender realized upon its security and took title to the property.
The Holly Pond venture ceased making debt service payments, effective August 1, 1990, on the long-term, non-recourse mortgage note secured by Holly Pond Office Center located in Stamford, Connecticut and sought a modification of the note terms. In November 1991, the lender commenced proceedings to obtain title to the property. In conjunction with the lender's actions, it came to the venture's attention that there were traces of petroleum-based contaminant evident in a sump well located in the building's garage. The venture's initial environmental investigation indicated that, although some contamination was located on the property, the cause of the problem was most likely a result of certain activities of the owner of a neighboring land parcel. The Partnership notified the owner of the neighboring land parcel and had subsequently initiated litigation regarding the responsibility for the clean-up of the contaminant ("Environmental Action"). As a result, the lender suspended its efforts to obtain title to the property pending the results of the venture's investigation and litigation. Although the Partnership believed the owner of the neighboring parcel would ultimately bear financial responsibility for the clean-up, the Partnership had accrued $21,600 for potential future costs related to the clean-up. Such accrual is reflected in accounts payable in the accompanying 1995 consolidated balance sheet. Because the venture had been unable to secure debt service relief, the Partnership had decided, based upon current and anticipated future market conditions and other considerations relating to the property and the Partnership's portfolio, not to commit any additional amounts to the property. As part of the property turnover, the Partnership assigned to the lender or its assignee the right to proceed with the Environmental Action and obtained from the lender release of liability associated with the above described environmental condition. The loan has been classified at December 31, 1995 as a current liability in the accompanying consolidated financial statements.
The Partnership recognized a gain of $3,404,444 for Federal income tax purposes without any corresponding distributable proceeds in 1996 due to the transfer of title as discussed above. The accompanying consolidated financial statements include $8,107,825 (net of venture partners' share of $8,116) of extraordinary gain on extinguishment of debt upon the lender taking title to the property for the twelve months ended December 31, 1996.
In addition, the Partnership recorded a provision for value impairment of $3,248,506 (net of venture partners' share of $751,494) as of January 1, 1996 to reflect the then estimated fair value of the property based upon the use of an appropriate capitalization rate on the property's net operating income. As the Partnership had previously committed to a plan to sell or dispose of the property, such provision has been reflected as the cumulative effect of an accounting change (related to the adoption of SFAS 121, as described above) in the accompanying consolidated financial
statements. In addition, as the property was classified as held for sale or disposition January 1, 1996, the property was no longer subject to continued depreciation.
SUNRISE MALL
The Partnership was conducting a feasibility study to determine a financially competitive expansion and renovation of Sunrise Mall to accommodate certain retail tenants who had indicated an interest in possibly opening stores at the mall. Given the complexity of an expansion and renovation, the lengthy time span likely needed to complete the project and the Partnership's desire to wind up its affairs, the Partnership determined it would be better for a buyer with a longer-term ownership perspective to undertake the expansion and renovation.
As the Partnership had committed to a plan to sell or dispose of the property, the property was classified as held for sale or disposition as of July 1, 1996 and therefore was not subject to continued depreciation.
On October 23, 1996, the Partnership, sold the land and related improvements known as the Sunrise Mall. The purchaser was not affiliated with the Partnership or its General Partners and the sale price was determined by arm's-length negotiations. The sale price of the land and improvements was approximately $12,120,000 (after deducting selling costs), which was paid in cash at closing. A significant portion of the sales proceeds was utilized to retire the mortgage debt with an outstanding balance of approximately $11,557,000. The Partnership agreed to pay the lender a portion of the net sales proceeds (after certain adjustments) as a mortgage prepayment fee. This amount was $146,982 and is reflected as an extraordinary item in 1996 in the accompanying consolidated financial statements. As a result of the sale, the Partnership realized a gain of $5,364,077 for financial reporting purposes and $5,707,893 for Federal income tax purposes in 1996.
LONG-TERM DEBT - GENERAL
Long-term debt of the Partnership and its consolidated ventures consists of the following at December 31, 1996 and 1995:
1996 1995 ----------- ----------- 11-1/2% mortgage note; secured by the Holly Pond office building in Stamford, Connecticut; payable in monthly install- ments of $53,009, (including interest) subject to call on June 1, 1997 when the remaining balance was scheduled to be payable; satisfied in full in January 1996 by the lender realizing upon its security interest in the property . . . . . . . . . . . . . . . $ -- 5,196,401
9-3/8% mortgage note; secured by the Sunrise Mall shopping center in Brownsville, Texas; payable in monthly installments of $113,415 (including interest) until January 1, 2001 when the remaining balance of $10,149,489 is payable, retired in October 1996 at sale. . . . -- 11,778,943 ---------- ---------- Total debt. . . . . . . . . . . . . -- 16,975,344 Less current portion of long-term debt . . . . . . . . -- 5,464,428 ---------- ---------- Total long-term debt. . . . . . . . $ -- 11,510,916 ========== ==========
PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits and losses of the Partnership from operations were allocated 96% to the Limited Partners and 4% to the General Partners. Profits from the sale, refinancing or other disposition of investment properties were to be allocated to the General Partners to the greater of any cash distributions of the proceeds of any such sale, refinancing or other disposition (as described below) or 1% of the profits from the sale, refinancing or other disposition. Losses from the sale, refinancing or other disposition of investment properties were to be allocated 1% to the General Partners. The remaining sale, refinancing or other disposition profits and losses were to be allocated to the Limited Partners. During 1996, a reallocation of gains was made among the partners for financial reporting purposes. Such reallocation did not have an effect on total assets, total partners' capital or net earnings.
The General Partners were not required to make any capital contributions except under certain limited circumstances upon dissolution and termination of the Partnership. Accordingly, immediately prior to termination and dissolution, the General Partners contributed $48,935 to the Partnership which was included in the final liquidating distribution to the Limited Partners. Distributions of "net cash receipts" of the Partnership were to be allocated 90% to the Limited Partners and 10% to the General Partners (of which 6.25% constitutes a management fee to the Corporate General Partner for services in managing the Partnership).
The Partnership Agreement provided that the General Partners were to receive as a distribution from the sale of a real property by the Partnership 3% of the selling price, and that the remaining proceeds (net after expenses and retained working capital) be distributed 85% to the Limited Partners and 15% to the General Partners. However, the Limited Partners were to receive 100% of such net sale proceeds until the Limited Partners (i) received cash distributions of sale or refinancing proceeds in an amount equal to the Limited Partners' aggregate initial capital investment in the Partnership and (ii) received cumulative cash distributions from the Partnership's operations which, when combined with sale or refinancing proceeds previously distributed, equal a 6% annual return on the Limited Partners' average capital investment for each year (their initial capital investment as reduced by sale or refinancing proceeds previously distributed) commencing with the third calendar quarter of 1981. The Limited Partners did not receive cash distributions to satisfy these requirements.
In addition, the Partnership Agreement provided that notwithstanding any allocation contained in the Agreement, if, at any time profits are realized by the Partnership, any current or anticipated event would cause the deficit balance in absolute amount in the Capital Account of the General Partners to be greater than their share of the Partnership's indebtedness (as defined) after such event, then the allocation of Profits to the General Partners shall be increased to the extent necessary to cause the deficit balance in the Capital Account of the General Partners to be no less than their respective shares of the Partnership's indebtedness after such event. A portion of the 1996, 1995 and 1994 Partnership gains for Federal income tax purposes were reallocated to the General Partners in accordance with this provision. In general, the effect of this provision was to allow the deferral of recognition of taxable gain to the Limited Partners.
MANAGEMENT AGREEMENTS
Physical management of the properties was performed by the joint venture partners or their affiliates or by an affiliate of the General Partners. Cash flow deficits were normally the responsibility of each of the ventures and compensation to the managers was generally calculated at a percentage of gross receipts, a portion of which was subordinated to the Partnership's receipt of its preferential returns.
An affiliate of the General Partners of the Partnership managed the Sunrise Mall in Brownsville, Texas. Management fees were calculated at a percentage of the certain gross revenues from the property.
LEASES - AS PROPERTY LESSOR
The Partnership had determined that all leases relating to Sunrise Mall were properly classified as operating leases; therefore, rental income was reported when earned, and the cost of each of the properties, excluding the cost of land, was depreciated over their estimated useful lives.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, was permitted to engage in various transactions involving the Corporate General Partner and its affiliates including the reimbursement for salaries and salary- related expenses of its employees, certain of its officers, and other direct expenses relating to the administration of the Partnership and the operation of the Partnership's investments. Fees, commissions and other expenses required to be paid by the Partnership to the General Partners and their affiliates as of December 31, 1996, 1995 and 1994 are as follows:
UNPAID AT DECEMBER 31, 1996 1995 1994 1996 -------- -------- -------- ------------ Property management and leasing fees . . . . $130,425 183,387 178,247 -- Management fees to corporate general partner. . . . . . . . . -- 52,081 41,669 -- Insurance commissions . . 6,018 13,310 (3,924) -- Reimbursement (at cost) for accounting services. 11,568 76,361 81,796 -- Reimbursement (at cost) for portfolio manage- ment services. . . . . . 24,874 30,497 5,537 -- Reimbursement (at cost) for legal services . . . 8,932 2,906 8,768 -- Reimbursement (at cost) for administrative charges and other out-of-pocket expenses . 11,467 71,941 4,397 -- -------- -------- -------- ----- $193,284 430,483 316,490 -- ======== ======== ======== =====
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes of or disagreements with accountants during fiscal year 1996 and 1995.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Corporate General Partner of the Partnership was JMB Realty Corporation ("JMB"), a Delaware corporation, substantially all of the outstanding stock of which is owned, directly or indirectly, by certain of its officers, directors, members of their families and their affiliates. JMB had responsibility for all aspects of the Partnership's operations, subject to the requirement that sales of real property must be approved by the Associate General Partner of the Partnership, ABPP Associates, L.P. ABPP Associates, L.P., an Illinois limited partnership with JMB as its sole general partner, was directed by a majority in interest of its limited partners (who are generally officers, directors and affiliates of JMB or its affiliates) as to whether to provide its approval of any sale of real property (or any interest therein) of the Partnership. The Partnership was subject to certain conflicts of interest arising out of its relationships with the General Partners and their affiliates as well as the fact that the General Partners and their affiliates are engaged in a range of real estate activities. Certain services have been provided to the Partnership or its investment properties by affiliates of the General Partners, including property management services and insurance brokerage services. In general, such services were provided on terms no less favorable to the Partnership than could be obtained from independent third parties and were otherwise subject to conditions and restrictions contained in the Partnership Agreement. The Partnership Agreement permitted the General Partners and their affiliates to provide services to, and otherwise deal and do business with, persons who may be engaged in transactions with the Partnership, and permitted the Partnership to borrow from, purchase goods and services from, and otherwise to do business with, persons doing business with the General Partners or their affiliates. The General Partners and their affiliates may have been in competition with the Partnership under certain circumstances, including, in certain geographical markets, for tenants for properties and/or for the sale of properties. Because the timing and amount of cash distributions and profits and losses of the Partnership may have been affected by various determinations by the General Partners under the Partnership Agreement, including whether and when to sell or refinance a property, the establishment and maintenance of reasonable reserves, the timing of expenditures and the allocation of certain tax items under the Partnership Agreement, the General Partners may have had a conflict of interest with respect to such determinations.
The names, positions held and length of service therein of each director and the executive and certain other officers of the Corporate General Partner of the Partnership are as follows:
SERVED IN NAME OFFICE OFFICE SINCE - ---- ------ ------------
Judd D. Malkin Chairman 5/03/71 Director 5/03/71 Chief Financial Officer 2/22/96 Neil G. Bluhm President 5/03/71 Director 5/03/71 Burton E. Glazov Director 7/01/71 Stuart C. Nathan Executive Vice President 5/08/79 Director 3/14/73 A. Lee Sacks Director 5/09/88 John G. Schreiber Director 3/14/73 H. Rigel Barber Chief Executive Officer 8/01/93 Executive Vice President 1/02/87 Glenn E. Emig Executive Vice President 1/01/93 Chief Operating Officer 1/01/95 Gary Nickele Executive Vice President 1/01/92 General Counsel 2/27/84 Gailen J. Hull Senior Vice President 6/01/88 Howard Kogen Senior Vice President 1/02/86 Treasurer 1/01/91
There is no family relationship among any of the foregoing directors or officers. The foregoing directors have been elected to serve a one-year term until the annual meeting of the Corporate General Partner to be held on June 7, 1997. All of the foregoing officers have been elected to serve one-year terms until the first meeting of the Board of Directors held after the annual meeting of the Corporate General Partner to be held on June 7, 1997. There are no arrangements or understandings between or among any of said directors or officers and any other person pursuant to which any director or officer was elected as such.
JMB is the corporate general partner of Carlyle Real Estate Limited Partnership-VII ("Carlyle-VII"), Carlyle Real Estate Limited Partnership-IX ("Carlyle -IX"), Carlyle Real Estate Limited Partnership-XI ("Carlyle-XI"), Carlyle Real Estate Limited Partnership-XII ("Carlyle-XII"), Carlyle Real Estate Limited Partnership-XIII ("Carlyle-XIII"), Carlyle Real Estate Limited Partnership-XIV ("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV ("Carlyle-XV"), Carlyle Real Estate Limited Partnership-XVI ("Carlyle-XVI"), Carlyle Real Estate Limited Partnership-XVII ("Carlyle- XVII"), JMB Mortgage Partners, Ltd.-III ("Mortgage Partners-III"), JMB Mortgage Partners, Ltd.-IV ("Mortgage Partners-IV"), Carlyle Income Plus, Ltd. ("Carlyle Income Plus"), Carlyle Income Plus, Ltd.-II ("Carlyle Income Plus-II"), and the managing general partner of JMB Income Properties, Ltd.- IV ("JMB Income-IV"), JMB Income Properties, Ltd.-V ("JMB Income-V"), JMB Income Properties, Ltd.-VI ("JMB Income-VI"), JMB Income Properties, Ltd.- VII ("JMB Income-VII"), JMB Income Properties, Ltd. -X ("JMB Income-X"), JMB Income Properties, Ltd.-XI ("JMB Income-XI"), JMB Income Properties, Ltd.-XII ("JMB Income-XII") and JMB Income Properties, Ltd.-XIII ("JMB Income-XIII"). JMB is also the sole general partner of the associate general partner of most of the foregoing partnerships. Most of the foregoing directors and officers are also officers and/or directors of various affiliated companies of JMB including Income Growth Managers, Inc. (the corporate general partner of IDS/JMB Balanced Income Growth, Ltd. ("IDS/BIG")), Arvida/JMB Managers, Inc. (the general partner of Arvida/JMB Partners, L.P. ("Arvida")) and Arvida/JMB Managers-II, Inc. (the general partner of Arvida/JMB Partners, L.P.-II ("Arvida-II")). Most of such directors and officers are also partners of certain partnerships which are associate general partners in the following real estate limited partnerships: Carlyle-VII, Carlyle-IX, Carlyle-XI, Carlyle-XII, Carlyle- XIII, Carlyle-XIV, Carlyle-XV, Carlyle-XVI, Carlyle-XVII, JMB Income-VI, JMB Income-VII, JMB Income-X, JMB Income-XI, JMB Income-XII, JMB Income- XIII, Mortgage Partners-III, Mortgage Partners-IV, Carlyle Income Plus, Carlyle Income Plus-II and IDS/BIG.
The business experience during the past five years of each such director and officer of the Corporate General Partner of the Partnership in addition to that described above is as follows:
Judd D. Malkin (age 59) is an individual general partner of JMB Income-IV and JMB Income-V. Mr. Malkin has been associated with JMB since October 1969. Mr. Malkin is a director of Urban Shopping Centers, Inc. ("USC, Inc."), an affiliate of JMB that is a real estate investment trust in the business of owning, managing and developing shopping centers. He is a Certified Public Accountant.
Neil G. Bluhm (age 59) is an individual general partner of JMB Income- IV and JMB Income-V. Mr. Bluhm has been associated with JMB since August 1970. Mr. Bluhm is a director of USC, Inc. He is a member of the Bar of the State of Illinois and a Certified Public Accountant.
Burton E. Glazov (age 58) has been associated with JMB since June 1971 and served as an Executive Vice President of JMB until December 1990. He is a member of the Bar of the State of Illinois and a Certified Public Accountant.
Stuart C. Nathan (age 55) has been associated with JMB since July 1972. Mr. Nathan is also a director of Sportmart Inc., a retailer of sporting goods. He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 63) (President and Director of JMB Insurance Agency, Inc.) has been associated with JMB since December 1972.
John G. Schreiber (age 50) has been associated with JMB since December, 1970 and served as an Executive Vice President of JMB until December 1990. Mr. Schreiber is President of Schreiber Investments, Inc., a company which is engaged in the real estate investing business. He is also a senior advisor and partner of Blackstone Real Estate Partners, an affiliate of the Blackstone Group, L.P. Since 1994, Mr. Schreiber has also served as a Trustee of Amli Residential Property Trust, a publicly-traded real estate investment trust that invests in multi-family properties. Mr. Schreiber is also a director of USC, Inc. and also a director of a number of investment companies advised or managed by T. Rowe Price Associates and affiliates. He holds a Masters degree in Business Administration from Harvard University Graduate School of Business.
H. Rigel Barber (age 47) has been associated with JMB since March, 1982. He holds a J.D. degree from the Northwestern Law School and is a member of the Bar of the State of Illinois.
Glenn E. Emig (age 49) has been associated with JMB since December, 1979. Prior to becoming Executive Vice President of JMB in 1993, Mr. Emig was Executive Vice President and Treasurer of JMB Institutional Realty Corporation. He holds a Masters degree in Business Administration from the Harvard University Graduate School of Business and is a Certified Public Accountant.
Gary Nickele (age 44) has been associated with JMB since February, 1984. He holds a J.D. degree from the University of Michigan Law School and is a member of the Bar of the State of Illinois.
Gailen J. Hull (age 48) has been associated with JMB since March, 1982. He holds a Masters degree in Business Administration from Northern Illinois University and is a Certified Public Accountant.
Howard Kogen (age 61) has been associated with JMB since March, 1973. He is a Certified Public Accountant.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no officers or directors. The Partnership was required to pay a management fee to the Corporate General Partner and the General Partners were entitled to receive a share of cash distributions, when and as cash distributions were made to the Limited Partners, and a share of profits or losses. In 1996, 1995 and 1994, the General Partners received distributions of $0, $31,248 and $25,001, respectively. Management fees earned by the Corporate General Partner in 1996, 1995 and 1994 were $0, $52,081 and $41,669, respectively. In addition, the General Partners received $930,513 of Partnership income for Federal income tax purposes in 1996.
The Partnership was permitted to engage in various transactions involving affiliates of the Corporate General Partner of the Partnership. The relationship of the Corporate General Partner to its affiliates is set forth in Item 10 above.
An affiliate of the Corporate General Partner provided property management services to the Partnership in 1996 for the Sunrise Mall. In 1996, such affiliate earned property management fees amounting to $130,425 for such services, all of which were paid as of December 31, 1996. As set forth in the Prospectus of the Partnership, the Corporate General Partner must negotiate such agreements on terms no less favorable to the Partnership than those customarily charged for similar services in the relevant geographical area (but in no event at rates greater than 5% of the gross income from a property), and such agreements must be terminable by either party thereto, without penalty, upon 60 days' notice.
JMB Insurance Agency, Inc., an affiliate of the Corporate General Partner of the Partnership, is entitled to receive insurance brokerage commissions in connection with providing insurance coverage for certain of the real property investments of the Partnership. Such commissions are at rates set by insurance companies for the classes of coverage involved. Fees of $6,018 were received by the Corporate General Partner in 1996.
The General Partners were reimbursed for their direct expenses relating to the administration of the Partnership and the operation of the Partnership's real property investments. In 1996, the Corporate General Partner of the Partnership was due reimbursement for such out-of-pocket expenses in the amount of $11,467, all of which was paid at December 31, 1996.
Additionally, the General Partners were reimbursed for salaries, salary-related expenses and direct expenses of officers and employees of the Corporate General Partner and its affiliates while directly engaged in the administration of the Partnership and in the operation of the Partnership's real property investments. In 1996, such costs were $45,374, all of which was paid as of December 31, 1996.
The General Partners contributed $48,935 in 1996 to the Partnership which was included in the final liquidating distribution to the Limited Partners.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with the Corporate General Partner, affiliates or their management other than those described in Items 10 and 11 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial Statements filed with this annual report).
(2) Exhibits.
3-A. The Prospectus of the Partnership dated May 29, 1980, as supplemented on August 4, 1980, November 12, 1980, November 24, 1980, January 30, 1981 and February 10, 1981, as filed with the Commission pursuant to Rules 424(b) and 424(c), is incorporated herein by reference to Exhibit 3-A to the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-9726) dated March 19, 1993. Copies of pages 6-13, 101-103, A-5 to A-9 and A-11 to A-17 are hereby incorporated herein by reference to Exhibit 3-A to the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-9726) dated March 19, 1993.
3-B. Amended and Restated Agreement of Limited Partnership set forth as Exhibit A to the Prospectus incorporated herein by reference to the Partnership's Registration Statement on Form S-11 (File No. 0-9726) dated November 24, 1980.
3-C. Acknowledgement of rights and duties of the General Partners of the Partnership between ABPP Associates, L.P. (a successor Associated General Partner of the Partnership) and JMB Realty Corporation as of December 31, 1995 is incorporated herein by reference to the Partnership's Report for September 30, 1996 on Form 10-Q/A (File No. 0- 9726) dated November 25, 1996.
4. Long-term mortgage note documents relating to the note secured by the Sunrise Mall located in Brownsville, Texas are incorporated herein by reference to the Partnership's Registration Statement on Post-Effective Amendment No. 2 dated November 24, 1980 to Form S-11 (File No. 0-9726).
10-A. Acquisition documents relating to the purchase by the Partnership of an interest in the Sunrise Mall located in Brownsville, Texas are incorporated herein by reference to the Partnership's Registration Statement on Post-Effective Amendment No. 2 dated November 24, 1980 to Form S-11 (File No. 0-9726).
10-B. Agreement for Purchase and Sale of Real Estate and Related Property, dated October 13, 1994, by and between DMC-Silvermine Apartments limited ("Seller") and TGM Realty Corp. #3 ("Purchaser") is incorporated herein by reference to the Partnership's Report for November 29, 1994 on Form 8-K (File No. 0-9726) dated March 23, 1995.
10-C. Letter regarding Sale/Option and Partnership Amendment, dated May 15, 1994, between Carlyle Seattle Associates and 999 Third Avenue, Ltd. relating to the first Interstate Center in Seattle, Washington is hereby incorporated herein by reference to the Partnership's Report for June 30, 1994 on Form 10-Q (File No. 0-9726) dated August 12, 1994.
10-D. Agreement of Limited Partnership of Wright-Carlyle Seattle Limited Partnership, dated November 30, 1994, between Wright Runstad Properties L.P., and Carlyle Seattle Associates is incorporated herein by reference to the Partnership's Report for December 1, 1994 on Form 10-Q (File No. 0-9726) dated March 23, 1995.
10-E. Documents relating to the sale of the Partnership's interest in the Garret Mountain venture are incorporated herein by reference to the Partnership's report for March 31, 1995 on Form 10-Q (File No. 0-9726) dated May 11, 1995.
10-F. Agreement by and among The Prudential Insurance Company of America and Holly Pond Associates Limited Partnership relating to the disposition of Holly Pond Office Center dated January 16, 1996 is incorporated herein by reference to the Partnership's Report for December 31, 1995 on Form 10-K (File No. 0-9726) dated March 25, 1996.
10-G. Documents relating to the sale of Sunrise Mall in Brownsville, Texas are incorporated herein by reference to the Partnership's Report for October 23, 1996 on Form 8-K (File No. 0-9726) dated November 7, 1996.
10-H. Documents relating to the sale of the Partner- ship's interest in the Greenway Tower Joint Venture dated December 26, 1996 are filed herewith.
24. Powers of Attorney
27. Financial Data Schedule
---------------
(b) The following report on Form 8-K was filed since the beginning of the last quarter of the period covered by this report.
(i) The Partnership's Report on Form 8-K (File No. 0-9726) for October 23, 1996 (describing the sale transaction of Sunrise Mall in Brownsville, Texas) was filed. This report was dated November 7, 1996.
No annual report for the fiscal year 1996 or proxy material has been sent to the Partners of the Partnership. An annual report will be sent to the Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X By: JMB Realty Corporation Corporate General Partner
GAILEN J. HULL By: Gailen J. Hull Senior Vice President Date: March 21, 1997
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 and on the dates indicated.
By: JMB Realty Corporation Corporate General Partner
JUDD D. MALKIN* By: Judd D. Malkin, Chairman and Chief Financial Officer Date: March 21, 1997
NEIL G. BLUHM* By: Neil G. Bluhm, President and Director Date: March 21, 1997
H. RIGEL BARBER* By: H. Rigel Barber, Chief Executive Officer Date: March 21, 1997
GLENN E. EMIG* By: Glenn E. Emig, Chief Operating Officer Date: March 21, 1997
GAILEN J. HULL By: Gailen J. Hull, Senior Vice President Principal Accounting Officer Date: March 21, 1997
A. LEE SACKS* By: A. Lee Sacks, Director Date: March 21, 1997
STUART C. NATHAN* By: Stuart C. Nathan, Executive Vice President and Director Date: March 21, 1997
*By: GAILEN J. HULL, Pursuant to Power of Attorney
GAILEN J. HULL By: Gailen J. Hull, Attorney-in-Fact Date: March 21, 1997
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
EXHIBIT INDEX
DOCUMENT INCORPORATED BY REFERENCE PAGE ------------ ----
3-A. Pages 6-13, 101-103, A-5 to A-9 and A-11 to A-17 of the Prospectus of the Partnership dated May 29, 1980 Yes
3-B. Amended and Restated Agreement of Limited Partnership Yes
3-C. Acknowledgement of rights and duties of the General Partners of the Partnership Yes
4. Long-term mortgage note documents related to the Sunrise Mall Yes
10-A. Acquisition documents related to the Sunrise Mall Yes
10-B. Agreement related to Silvermine Sale Yes
10-C. Letter regarding sale of interest in First Interstate Yes
10-D. Agreement of Limited Partnership of Wright Carlyle Seattle Yes
10-E. Documents relating to sale of Garret Mountain Office Center Yes
10-F. Agreement relating to disposition of Holly Pond Yes
10-G. Documents relating to sale of Sunrise Mall Yes
10-H. Documents relating to sale of interest in Greenway Tower Joint Venture No
24. Powers of Attorney No
27. Financial Data Schedule No
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with the Corporate General Partner, affiliates or their management other than those described in Items 10 and 11 above.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements (See Index to Financial Statements filed with this annual report).
(2) Exhibits.
3-A. The Prospectus of the Partnership dated May 29, 1980, as supplemented on August 4, 1980, November 12, 1980, November 24, 1980, January 30, 1981 and February 10, 1981, as filed with the Commission pursuant to Rules 424(b) and 424(c), is incorporated herein by reference to Exhibit 3-A to the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-9726) dated March 19, 1993. Copies of pages 6-13, 101-103, A-5 to A-9 and A-11 to A-17 are hereby incorporated herein by reference to Exhibit 3-A to the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-9726) dated March 19, 1993.
3-B. Amended and Restated Agreement of Limited Partnership set forth as Exhibit A to the Prospectus incorporated herein by reference to the Partnership's Registration Statement on Form S-11 (File No. 0-9726) dated November 24, 1980.
3-C. Acknowledgement of rights and duties of the General Partners of the Partnership between ABPP Associates, L.P. (a successor Associated General Partner of the Partnership) and JMB Realty Corporation as of December 31, 1995 is incorporated herein by reference to the Partnership's Report for September 30, 1996 on Form 10-Q/A (File No. 0- 9726) dated November 25, 1996.
4. Long-term mortgage note documents relating to the note secured by the Sunrise Mall located in Brownsville, Texas are incorporated herein by reference to the Partnership's Registration Statement on Post-Effective Amendment No. 2 dated November 24, 1980 to Form S-11 (File No. 0-9726).
10-A. Acquisition documents relating to the purchase by the Partnership of an interest in the Sunrise Mall located in Brownsville, Texas are incorporated herein by reference to the Partnership's Registration Statement on Post-Effective Amendment No. 2 dated November 24, 1980 to Form S-11 (File No. 0-9726).
10-B. Agreement for Purchase and Sale of Real Estate and Related Property, dated October 13, 1994, by and between DMC-Silvermine Apartments limited ("Seller") and TGM Realty Corp. #3 ("Purchaser") is incorporated herein by reference to the Partnership's Report for November 29, 1994 on Form 8-K (File No. 0-9726) dated March 23, 1995.
10-C. Letter regarding Sale/Option and Partnership Amendment, dated May 15, 1994, between Carlyle Seattle Associates and 999 Third Avenue, Ltd. relating to the first Interstate Center in Seattle, Washington is hereby incorporated herein by reference to the Partnership's Report for June 30, 1994 on Form 10-Q (File No. 0-9726) dated August 12, 1994.
10-D. Agreement of Limited Partnership of Wright-Carlyle Seattle Limited Partnership, dated November 30, 1994, between Wright Runstad Properties L.P., and Carlyle Seattle Associates is incorporated herein by reference to the Partnership's Report for December 1, 1994 on Form 10-Q (File No. 0-9726) dated March 23, 1995.
10-E. Documents relating to the sale of the Partnership's interest in the Garret Mountain venture are incorporated herein by reference to the Partnership's report for March 31, 1995 on Form 10-Q (File No. 0-9726) dated May 11, 1995.
10-F. Agreement by and among The Prudential Insurance Company of America and Holly Pond Associates Limited Partnership relating to the disposition of Holly Pond Office Center dated January 16, 1996 is incorporated herein by reference to the Partnership's Report for December 31, 1995 on Form 10-K (File No. 0-9726) dated March 25, 1996.
10-G. Documents relating to the sale of Sunrise Mall in Brownsville, Texas are incorporated herein by reference to the Partnership's Report for October 23, 1996 on Form 8-K (File No. 0-9726) dated November 7, 1996.
10-H. Documents relating to the sale of the Partner- ship's interest in the Greenway Tower Joint Venture dated December 26, 1996 are filed herewith.
24. Powers of Attorney
27. Financial Data Schedule
---------------
(b) The following report on Form 8-K was filed since the beginning of the last quarter of the period covered by this report.
(i) The Partnership's Report on Form 8-K (File No. 0-9726) for October 23, 1996 (describing the sale transaction of Sunrise Mall in Brownsville, Texas) was filed. This report was dated November 7, 1996.
No annual report for the fiscal year 1996 or proxy material has been sent to the Partners of the Partnership. An annual report will be sent to the Partners subsequent to this filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X By: JMB Realty Corporation Corporate General Partner
GAILEN J. HULL By: Gailen J. Hull Senior Vice President Date: March 21, 1997
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 and on the dates indicated.
By: JMB Realty Corporation Corporate General Partner
JUDD D. MALKIN* By: Judd D. Malkin, Chairman and Chief Financial Officer Date: March 21, 1997
NEIL G. BLUHM* By: Neil G. Bluhm, President and Director Date: March 21, 1997
H. RIGEL BARBER* By: H. Rigel Barber, Chief Executive Officer Date: March 21, 1997
GLENN E. EMIG* By: Glenn E. Emig, Chief Operating Officer Date: March 21, 1997
GAILEN J. HULL By: Gailen J. Hull, Senior Vice President Principal Accounting Officer Date: March 21, 1997
A. LEE SACKS* By: A. Lee Sacks, Director Date: March 21, 1997
STUART C. NATHAN* By: Stuart C. Nathan, Executive Vice President and Director Date: March 21, 1997
*By: GAILEN J. HULL, Pursuant to Power of Attorney
GAILEN J. HULL By: Gailen J. Hull, Attorney-in-Fact Date: March 21, 1997
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - X
EXHIBIT INDEX
DOCUMENT INCORPORATED BY REFERENCE PAGE ------------ ----
3-A. Pages 6-13, 101-103, A-5 to A-9 and A-11 to A-17 of the Prospectus of the Partnership dated May 29, 1980 Yes
3-B. Amended and Restated Agreement of Limited Partnership Yes
3-C. Acknowledgement of rights and duties of the General Partners of the Partnership Yes
4. Long-term mortgage note documents related to the Sunrise Mall Yes
10-A. Acquisition documents related to the Sunrise Mall Yes
10-B. Agreement related to Silvermine Sale Yes
10-C. Letter regarding sale of interest in First Interstate Yes
10-D. Agreement of Limited Partnership of Wright Carlyle Seattle Yes
10-E. Documents relating to sale of Garret Mountain Office Center Yes
10-F. Agreement relating to disposition of Holly Pond Yes
10-G. Documents relating to sale of Sunrise Mall Yes
10-H. Documents relating to sale of interest in Greenway Tower Joint Venture No
24. Powers of Attorney No
27. Financial Data Schedule No