ITEM 1. BUSINESS
GENERAL
Mid-Atlantic Centers Limited Partnership (the "Partnership") was organized as a limited partnership under the Maryland Revised Uniform Limited Partnership Act on December 16, 1986. The Partnership was formed to acquire, hold, lease and ultimately sell a portfolio of community and neighborhood shopping center properties. The General Partners of the Partnership are FW Realty Limited Partnership, a limited partnership organized under the Uniform Limited Partnership Act of the District of Columbia, and Realty Capital IV Limited Partnership, a limited partnership organized under the Maryland Revised Uniform Limited Partnership Act (collectively, the "General Partners").
The Partnership now owns a real estate portfolio of nine shopping center properties in six states having sold Orchard Square Shopping Center on December 29, 1995 and Holiday Shopping Center on May 3, 1996. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this report for a discussion of the sale of Orchard Square Shopping Center and Holiday Shopping Center. The nine remaining shopping centers range in size from approximately 47,000 leasable square feet to approximately 322,000 leasable square feet, with an aggregate for all shopping centers of approximately 945,000 leasable square feet as of December 31, 1996. All of the shopping centers owned by the Partnership were purchased from unaffiliated sellers. See Item 2.
ITEM 2. PROPERTIES
The following discussion should be read in conjunction with Tables I through IV which follow the discussion below. Table I sets forth the average annual net rents and range of net rental rates per square foot for each of the shopping centers. Table II sets forth information relating to scheduled lease expirations during 1997. Table III provides information regarding tenants leasing 10% or more of the space in each shopping center as of December 31, 1996. Table IV sets forth information relating to estimated real estate taxes payable in 1997 for each shopping center.
In order to provide certain information required by retirement account investors, the nine shopping centers owned by the Partnership were appraised as of December 1, 1996 by an independent MAI appraiser. The appraisal estimates the current market value "as is" of the leased fee estate of each property. The December 1, 1996 appraised values of the shopping centers described in the Restricted Appraisal Report filed as an exhibit to this report are based upon the income capitalization approach to valuation. The Restricted Appraisal Report is the result of a limited appraisal process and is subject to the limiting conditions and assumptions stated therein.
An appraisal is only an estimate of current value and should not be relied upon as a reflection of realizable value. The value of real estate is typically driven by rent, occupancy, expense and yield expectations, measured in the form of capitalization rates. Capitalization rates depend on anticipated growth or decline in income and the degree of risk perceived. The income capitalization approach is a procedure which converts anticipated income to be derived from the Partnership's ownership in the shopping centers into a value estimate. In estimating the appraised value of the shopping centers under the income approach, projections of a stabilized level of net operating income (earnings before depreciation, interest and income taxes) were developed by the appraiser. The projected net operating income was then capitalized into an estimate of fair value utilizing overall rates of return selected by the appraiser. The appraiser also utilized a discounted cash flow analysis whereby the anticipated cash flows were discounted at a yield rate selected by the appraiser to determine estimated present value. The overall rates of return and yield rates used in such calculations are determined by the appraiser based on rates derived from selected current sales of comparable properties as well as investor surveys,
and are therefore deemed by the appraiser to be reflective of current investor expectations. The appraised value of the Partnership's shopping centers should not be relied upon as an indication of realizable value at the present time or at any time in the future. The appraisals reflect value to the owner, and therefore do not make allowance for expenses that would be incurred in selling the properties. Furthermore, the methods and assumptions used by the appraiser in preparing the appraisal report are those that the appraiser, in its professional judgment, concluded were appropriate. There is no assurance that such assumptions will materialize or that other or different methods or assumptions that would result in lower values might be appropriate.
The following table sets forth the appraised value (free and clear of all mortgages or other financing secured by the shopping centers) of each shopping center owned by the Partnership as of December 1, 1996 and December 31, 1995:
APPRAISED VALUE PROPERTY 12/01/96 12/31/95 Woodlawn Village $ 2,375,000 $ 2,375,000 Lynnwood Place 6,450,000 6,950,000 Highlandtown Village 4,550,000 5,000,000 Jackson Heights 4,800,000 4,700,000 Holiday (1) - 1,200,000 Cloister 2,550,000 2,700,000 Edgewood 2,150,000 2,470,000 Tarrytown Mall 4,500,000 6,100,000 Berkeley Square 3,000,000 3,075,000 Quality Center 3,950,000 4,500,000
Total $34,325,000 $39,070,000
(1) - Holiday was sold in May 1996.
The resulting aggregate appraised value of the Partnership's shopping centers as of December 1, 1996, less the Partnership's mortgages and after certain other adjustments resulted in a valuation of the Partnership's net assets at approximately $12,223,000. Based on 1,200,000 Assignee Limited Partnership Units (the "Units") outstanding, this equates to approximately $10.19 per Unit. The net asset value of the Partnership does not account for selling expenses.
The aggregate appraised value of the Partnership's shopping centers as of December 31, 1995, less the Partnership's mortgages and other adjustments resulted in a valuation of the Partnership's net assets at approximately $13,052,000. Based on 1,200,000 Units outstanding, this equated to approximately $10.88 per Unit.
The 6% per Unit decrease in net asset value from December 31, 1995 to December 31, 1996 was primarily attributable to declines in the appraised values of Quality Center, Lynnwood Place and Highlandtown Village. The decline in the value of Quality Center reflects a decline in the projected net operating income from that center. The decline in the value of Lynnwood Place reflects an increase in the capitalization rate and a decline in the projected net operating income for that center. The decline in the value of Highlandtown Village reflects an increase in the capitalization rate for that center. Highlandtown Village has encountered increased competition from a newly constructed free-
standing grocery store, Safeway, in its market area. The negative effects of these declines in values were offset in part by a decline in the Partnership's long-term debt and an increase in the Partnership's cash and cash equivalents. For 1996 and 1995, the Partnership's net equity in assets related to Tarrytown Mall was treated as zero, reflecting the inability to lease the vacant space at that center. For purposes of the per Unit calculation for 1996 and 1995, the value of the sum of all assets related to Tarrytown Mall is equal to the balance of the outstanding mortgage debt and accrued interest on the property. The mortgage debt is nonrecourse to the Partnership.
In the fourth quarter of 1996, the Partnership recorded an impairment charge of $2,895,000 to write-down the carrying value of Tarrytown Mall to its fair value of $4,500,000 as of December 1, 1996. In the fourth quarter of 1995, the Partnership wrote down assets related to Tarrytown Mall by $2,606,156. In the fourth quarter of 1994, the Partnership wrote down assets related to Tarrytown Mall and Holiday totalling $1,587,746. See the discussions under the caption Liquidity and Capital Resources incorporated by reference from Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and under Note H of Notes to Financial Statements incorporated by reference from Item 8. Financial Statements and Supplementary Data herein.
The Partnership sold Orchard Square shopping center on December 29, 1995 and Holiday shopping center on May 3, 1996. The General Partners continue to seek opportunities to sell Partnership properties. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 13. Certain Relationships and Related Transactions herein regarding the Partnership's activities in this regard.
Depreciation of the shopping centers is computed using the straight- line method based on the estimated useful lives of the respective assets. The General Partners believe the shopping centers are adequately insured.
The Partnership's shopping center portfolio, representing nine centers with approximately 945,000 leasable square feet, was approximately 84% leased as of December 31, 1996. As of December 31, 1995, the portfolio, which represented ten centers with approximately 1,034,000 leasable square feet, was approximately 84% leased.
WOODLAWN VILLAGE SHOPPING CENTER In December 1986, the Partnership purchased Woodlawn Village Shopping Center ("Woodlawn Village"), a 49,800 leasable square-foot shopping center anchored by a Food Lion grocery store and a Revco drugstore. Woodlawn Village is located in Fredericksburg, Virginia. Woodlawn Village was approximately 93% leased as of December 31, 1996 and 1995.
In January 1995, the Partnership executed a lease modification with Food Lion at Woodlawn Village for an expansion of its store from 25,000 to 32,744 square feet. The expansion, which was substantially complete in February 1997, added 4,444 square feet to the center and converted 3,300 square feet of in-line space to Food Lion use. A discussion of the Food Lion expansion is incorporated by reference from Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations herein.
LYNNWOOD PLACE SHOPPING CENTER In July 1987, the Partnership purchased Lynnwood Place Shopping Center ("Lynnwood Place"), a 96,666 leasable square-foot shopping center anchored by a Kroger grocery store. Lynnwood Place is located in Jackson, Tennessee. As of December 31, 1996, Lynnwood Place was approximately 95% leased, a decrease from approximately 98% as of December 31, 1995.
HIGHLANDTOWN VILLAGE SHOPPING CENTER In September 1987, the Partnership purchased Highlandtown Village Shopping Center ("Highlandtown Village"), a 56,200 leasable square- foot shopping center anchored by a Santoni's grocery store and a Rite-Aid drugstore. Highlandtown Village is located in Baltimore, Maryland. Highlandtown Village was 100% leased as of December 31, 1996 and 1995.
JACKSON HEIGHTS PLAZA SHOPPING CENTER In September 1987, the Partnership purchased Jackson Heights Plaza Shopping Center ("Jackson Heights"), a 155,878 leasable square-foot shopping center. The larger tenants at Jackson Heights include a health spa, a Carmike Theater, Badcock Furniture, Goodyear and Dollar General. Jackson Heights is located in Murfreesboro, Tennessee. As of December 31, 1996, Jackson Heights was 100% leased, an increase from 99% leased as of December 31, 1995.
On October 7, 1996, the Partnership sold a parcel of excess land of approximately 4,400 square feet at Jackson Heights to an unrelated third party for $40,000. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations herein for information regarding that transaction.
CLOISTER SHOPPING CENTER In December 1987, the Partnership purchased Cloister Shopping Center ("Cloister"), a 53,610 leasable square-foot shopping center anchored by a Rite-Aid drugstore and a Family Dollar discount store. Cloister is located in Ephrata, Pennsylvania. As of December 31, 1996, Cloister was approximately 95% leased, an increase from 90% as of December 31, 1995.
EDGEWOOD PLAZA SHOPPING CENTER In April 1988, the Partnership purchased Edgewood Plaza Shopping Center ("Edgewood") a 47,112 leasable square-foot shopping center anchored by a Santoni's grocery store and a Rite-Aid drugstore. Edgewood is located in Harford County, Maryland. Edgewood was 100% leased as of December 31, 1996 and 1995.
In 1996, Rite-Aid, a tenant leasing 6,400 square feet, acquired property and constructed a free-standing retail store directly across Route 755 from Edgewood Plaza. The free-standing Rite-Aid opened in October 1996 and Rite-Aid at Edgewood closed its store at that time. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations herein for information regarding Rite-Aid's lease obligation.
In September 1995, the Partnership obtained a loan in the amount of $1,400,000 secured by a mortgage on Edgewood. Approximately $452,000 was placed in escrow for a capital improvement
plan at Edgewood which was substantially complete in July 1996. The improvements included a new facade, roof and parking lot resurfacing. A description of the Edgewood Plaza improvements and financing are incorporated by reference from Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
On September 25, 1996, the Partnership sold a pad site at Edgewood Plaza to an unrelated third party for approximately $220,000. On December 5, 1996, the Partnership sold a parcel of excess land of approximately .83 acres at this center to an unrelated third party for a price of $29,900. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations herein for information regarding these transactions.
TARRYTOWN MALL SHOPPING CENTER In September 1988, the Partnership purchased Tarrytown Mall Shopping Center ("Tarrytown Mall"), a 322,081 leasable square-foot enclosed mall anchored by Montgomery Ward and Goody's Family Clothing. Tarrytown Mall is located in Rocky Mount, North Carolina. As of December 31, 1996, Tarrytown Mall was approximately 61% leased, a decrease from approximately 64% as of December 31, 1995.
On August 6, 1996, the Partnership sold a pad site of approximately 1.15 acres of land at Tarrytown Mall to an unrelated third party for a price of $330,000. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations herein for information regarding the sale of the pad site.
BERKELEY SQUARE SHOPPING CENTER In October 1988, the Partnership purchased Berkeley Square Shopping Center ("Berkeley Square"), a 101,858 leasable square-foot shopping center. The larger tenants at Berkeley Square include Dollar General, Advanced Auto, Educational Wonderland and a bingo emporium. Berkeley Square is located in Goose Creek, South Carolina. As of December 31, 1996, Berkeley Square was approximately 97% leased, an increase from approximately 95% as of December 31, 1995.
In November 1995, the Partnership completed the sale of a pad site at Berkeley Square to an existing tenant. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this report for information regarding the sale of the pad site.
QUALITY CENTER SHOPPING CENTER In January 1989, the Partnership purchased Quality Center Shopping Center ("Quality Center"), a 62,234 leasable square-foot shopping center. The largest tenant at Quality Center is a Mikasa china outlet. Quality Center is located in Lancaster, Pennsylvania. Quality Center was approximately 73% leased as of December 31, 1996, an increase from approximately 70% as of December 31, 1995.
The Partnership continues its attempt to reposition Quality Center from a factory outlet center to a neighborhood and community convenience center.
The following shopping centers have been sold by the Partnership:
HOLIDAY SHOPPING CENTER In October 1987, the Partnership purchased Holiday Shopping Center ("Holiday"), an 82,185 leasable square-foot shopping center anchored by a Family Dollar discount store. Holiday is located in Collinsville, Virginia. On May 3, 1996, the Partnership sold Holiday to an unrelated third party for $1,200,000. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this report for information regarding the sale of Holiday.
ORCHARD SQUARE SHOPPING CENTER In December 1987, the Partnership purchased Orchard Square Shopping Center ("Orchard Square"), an 85,940 leasable square- foot shopping center. Orchard Square is located in Cobb County, Georgia. On December 29, 1995, the Partnership sold Orchard Square to an unrelated third party for $5,250,000. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this report for information regarding the sale of Orchard Square.
TABLE I. AVERAGE ANNUAL NET RENTS AND RANGE OF NET RENTAL RATES PER SQUARE FOOT
AVERAGE ANNUAL RANGE OF NET RENT (1) NET RENTAL RATES(2) CENTER (PER SQUARE FOOT) (PER SQUARE FOOT) Woodlawn Village $6.36 $5.88 to $9.96 Lynnwood Place 8.64 6.94 to 15.49 Highlandtown Village 10.50 7.85 to 20.42 Jackson Heights 4.67 .80 to 11.11 Cloister 8.06 3.77 to 12.84 Edgewood 6.60 4.90 to 15.16 Tarrytown Mall 4.51 1.96 to 21.92 Berkeley Square 4.96 3.04 to 11.16 Quality Center 12.43 9.00 to 18.23
(1) Average annual net rent is calculated based on the shopping center's aggregate annual net rent (prior to assessments for pass-throughs) for leases in place as of December 31, 1996 divided by the total leased square feet for the shopping center as of that date. (2) For purposes of this table net rental rates do not include net rental rates for kiosks.
TABLE II. SCHEDULE OF LEASES EXPIRING IN 1997 BY SHOPPING CENTER
(1) This table has been adjusted for lease renewals which were executed in the first quarter of 1997. (2) Total rent for purposes of this table does not include tenant reimbursement income or rental income accrued for rent adjustments related to rent abatements and scheduled rent increases.
TABLE III. SCHEDULE OF TENANTS LEASING 10% OR MORE OF THE SPACE IN EACH SHOPPING CENTER AS OF DECEMBER 31, 1996
(1) Renewal options with rent at escalating rates per square foot. (2) Renewal options with rent at identical rate per square foot as original lease. (3) Carmike Theater leases two spaces at different annual rents. The annual rent per square foot for purposes of this schedule is an average of the two annual rents. (4) Rite-Aid constructed a free-standing store directly across the street from Edgewood Plaza and closed its store at that shopping center in October 1996. The Partnership is currently negotiating a lease termination agreement with Rite-Aid.
TABLE IV. SCHEDULE OF ESTIMATED REAL ESTATE TAXES PAYABLE IN
Woodlawn Village $ 41,500 Lynnwood Place 82,500 Highlandtown Village 123,700 Jackson Heights 100,100 Cloister 62,200 Edgewood 17,000 Tarrytown Mall 70,700 Berkeley Square 41,900 Quality Center 63,000
$602,600
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not party to any material pending legal proceeding. The Partnership is party to ordinary routine litigation incidental to the Partnership's business.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of investors (the "Limited Partners") holding Units during 1996.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE PARTNERSHIP'S UNITS OF ASSIGNEE LIMITED PARTNERSHIP INTERESTS AND RELATED SECURITY HOLDER MATTERS
There is no trading market for the Units and there is no present expectation that one will develop. Consequently, Limited Partners may not be able to liquidate their investment. Further, the transfer of Units is subject to certain limitations. See Page 66 of the Partnership's Prospectus dated March 25, 1987 incorporated by reference herein, for a discussion of the restrictions on transfer of the Units. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Item 13. Certain Relationships and Related Transactions herein regarding the General Partners' intention to sell the Partnership's assets.
As of December 31, 1996, there were approximately 2,700 holders of 1,200,000 Units of the Partnership.
One of the objectives of the Partnership is to generate cash to be distributed to Limited Partners. No cash distributions have been made to Limited Partners since 1990. A discussion of cash flow is incorporated by reference from Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations herein. See Pages 59 through 62 of the Partnership's Prospectus dated March 25, 1987 incorporated by reference herein, for a discussion of the manner in which distributions of cash flow, sale, or refinancing proceeds and allocations of the net income
or net loss from operations and gain or loss from a sale or refinancing are to be made by the Partnership.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial information relating to the Partnership's financial position and operating results. This information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Financial Statements and Supplementary Data which are included in ITEMS 7 and 8, respectively, herein.
(1) - The 1996, 1995 and 1994 operating results and the financial position as of December 31, 1996, 1995 and 1994 reflect the effect of write-downs of assets totalling $2,895,000 in 1996 and $2,606,156 in 1995 related to Tarrytown Mall and $1,587,746 in 1994 related to Tarrytown Mall and Holiday. See Item 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Partnership completed its public offering of Units on November 11, 1987. The Partnership accepted subscriptions for 1,200,000 Units, representing capital contributions from Limited Partners of approximately $29,997,000. The capital contributions from Limited Partners have been fully invested by the Partnership.
The Partnership's financial statements are prepared based on the accrual method of accounting. The Partnership's rental income from its shopping center properties consists of base rents from tenants occupying space in each shopping center. In addition, certain leases provide for additional rent computed based on a percentage of gross sales in excess of specified levels. In some cases, leases provide for rent abatements and scheduled rent increases over the life of the lease. To the extent a
lease provides for rent abatements or adjustments, the Partnership, in accordance with generally accepted accounting principles, recognizes rental income on the basis of equal monthly payments over the term of such lease. Market conditions have dictated offering a wide variety of concessions to prospective tenants, which most frequently include a combination of free rent and reduced rental rate.
The Partnership wrote off tenant rent receivables and charged the allowance for doubtful accounts in 1994, 1995 and 1996 in the amounts of $261,363, $198,993, and $171,281, respectively. During the year ended December 31, 1995, the Partnership decreased its year-end allowance for doubtful accounts by $26,834 to $326,673. During the year ended December 31, 1996, the Partnership decreased its year-end allowance for doubtful accounts by $97,682 to $228,991. The allowance for doubtful accounts represents an allowance for tenant rent receivables that may become uncollectible in the future. The Partnership makes adjustments quarterly to the allowance for doubtful accounts based on its analysis of tenant rent receivables.
As of December 31, 1996, tenant rent receivables prior to the allowance for doubtful accounts totaled $996,214 of which $317,688 represented receivables required to be accrued in accordance with applicable accounting principles to reflect scheduled rent increases over the terms of the applicable leases and $678,526 represented the balance. As of December 31, 1995, comparative tenant rent receivables totaled $1,117,704 of which $313,259 represented receivables required to be accrued and $804,445 represented the balance. The decline in tenant rent receivables from December 31, 1995 to December 31, 1996 can primarily be attributed to the sale of Orchard Square and Holiday.
Tenant reimbursement income includes payments made by tenants under leases representing payment of a tenant's agreed share of real estate taxes, insurance, utility charges and common area maintenance expenses. With the exception of Berkeley Square and Jackson Heights, a majority of the tenant leases at the Partnership's shopping centers provide for reimbursement by tenants for some or all such expenses. In most cases, tenant reimbursement payments are payable monthly, although in some cases such payments are to be made annually.
Other expenses include the balance of utility expenses, leasing expenses (other than commissions) and miscellaneous expenses such as legal and accounting fees and administrative and travel expenses.
The Partnership's shopping centers are held subject to mortgages with principal balances as of December 31, 1994, 1995 and 1996 as described in the following chart:
MORTGAGE LOANS SECURED BY SHOPPING CENTERS
(1) - Interest rate at the prime rate plus 1.25%, with a floor of 7.25%. (2) - Interest rate at the prime rate plus 1.50%, with a floor of 7.5%. (3) - The Quality Center loan was scheduled to mature on February 1, 1997. The lender has agreed to extend the term of the loan for one year subject to completion of the required documentation.
The mortgage loans are generally without recourse to the assets of the Partnership other than the particular property (and related receivables, leases, personal property and certain escrows) securing such mortgage loans. The mortgages are not cross-collaterized.
The Woodlawn Village mortgage, which had an outstanding principal balance of $1,810,780 at December 31, 1996, matured December 1, 1996. In October 1996, the Partnership applied to extend the full principal balance of the loan for a 10 year term at an interest rate of 8.5%. The mortgage extension was completed in March 1997. Level payments of approximately $189,000 annually based on a 20 year principal amortization were effective January 1, 1997. The extended mortgage is designed to be assumable by a buyer of the property. To obtain this extension, the Partnership paid the lender a fee of approximately $18,000.
The Lynnwood Place mortgage, which had an outstanding principal balance of $6,220,016 at December 31, 1996, was scheduled to mature on July 10, 1996. The lender extended the term of this loan to December 31, 1996 on the same terms and conditions previously existing under the loan. On January 29, 1997, the lender renewed the mortgage for three years to February 10, 2000. The Lynnwood Place mortgage has an interest rate of 9.5% and requires level payments of approximately $652,000 annually based on a 21 year principal amortization. The renewed mortgage is prepayable without penalty in the event of sale of the center. To obtain the mortgage extension on the terms described, the Partnership paid the lender $300,000 in reduction of the principal balance of this loan and a fee of approximately $59,000. The Partnership incurred additional legal and closing fees totalling approximately $70,000.
Tarrytown Mall's first trust mortgage required principal payments of $19,000 per month until June 30, 1996, when required principal payments were scheduled to increase to $44,000 per month. The first trust lender agreed to reduce the required payment schedule of principal payments to $22,500 per month effective July 1, 1996 until June 30, 1997 or such earlier date as a replacement tenant is found for the Wholesale Depot space. All other loan terms remain unchanged. Monthly principal payments are scheduled to increase to $49,000 on July 1, 1997 and to $54,000 on February 1, 1998. Net cash flow from operations at Tarrytown Mall currently would be insufficient to meet the July 1997 scheduled increase in the monthly principal payments under the first trust mortgage.
The second trust mortgage requires that after payment of first trust debt service and capital improvements made with respect to Tarrytown Mall, net cash flow from operations from that center be applied to second trust mortgage interest and principal curtailments. To the extent that net cash flow is insufficient to make second trust debt service payments, unpaid interest on the second trust loan is accrued rather than paid. The Partnership accrued approximately $431,000 in unpaid interest in 1996. Accrued and unpaid interest bears interest at 8% per annum and is due at the maturity of the loan or earlier to the extent net cash flow is available.
The Quality Center mortgage, which had an outstanding principal balance of $3,692,436 at December 31, 1996, was scheduled to mature on February 1, 1997. The lender has agreed to extend the term of this loan for one year to February 1, 1998 on the same terms and conditions as currently exist, subject to completion of the required documentation.
Approximately $5,527,000 of the Partnership's mortgage debt matures during 1997. This debt relates to the mortgages on Highlandtown Village and Berkeley Square. The Highlandtown Village mortgage, which had an outstanding principal balance of $3,136,332 at December 31, 1996, matures
on December 21, 1997. The Partnership currently anticipates that the Partnership will refinance the Highlandtown Village mortgage at maturity. The Berkeley Square mortgage, which had an outstanding principal balance of $1,385,065 at December 31, 1996, matures on December 31, 1997. The Partnership currently anticipates that the Partnership will exercise its option to extend the Berkeley Square mortgage to December 1998. If the Partnership is unable to extend these loans or refinance on acceptable terms, the Partnership may be required to seek additional borrowing, sell one or more of its shopping center properties, or default on its obligations.
CASH FLOW
The Partnership recorded a $1,386,227 net increase in cash and cash equivalents in 1996, with $1,149,435 in net cash provided by operating activities and $1,567,189 provided by investing activities, partially offset by $1,330,397 used in financing activities. The increase in cash and cash equivalents is primarily attributable to the sale of Holiday, the sale of a pad site and land parcel at Edgewood Plaza and the release of a mortgage escrow deposit to the Partnership related to Edgewood Plaza. The sale of Holiday on May 3, 1996 contributed approximately $858,000 to the increase in cash and cash equivalents after payment of mortgage debt and transaction expenses related to the sale. The sales of a pad site and land parcel at Edgewood Plaza contributed approximately $238,000 after payment of sale expenses. The release of an escrow for completion of the environmental remediation at Edgewood Plaza contributed $130,000. The net proceeds from the sale of a pad site at Tarrytown Mall of $324,394 did not increase cash and cash equivalents since the proceeds were placed in escrow with the first trust lender. The net proceeds of approximately $35,000 from the sale of a parcel of land at Jackson Heights did not increase cash and cash equivalents since the proceeds were applied to reduce the mortgage on that center.
The principal differences between the net loss of $3,225,468 and net cash provided by operating activities of $1,149,435 were the non-cash charge of $1,494,716 for depreciation and amortization, a write-down of assets of $2,895,000 and an increase in accrued interest payable of $415,069. See the discussions of the write- down of assets related to Tarrytown Mall, the sale of Holiday and the sales of pad sites or land parcels at Edgewood Plaza, Tarrytown Mall and Jackson Heights incorporated by reference from Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources herein.
In connection with investing activities, in addition to $108,447 expended for improvements of real estate, the Partnership expended $278,972 from a capital improvement escrow related to Edgewood Plaza during 1996. Net cash used in financing activities of $1,330,397 primarily resulted from monthly principal payments on long-term debt totalling $643,988, the retirement of debt related to Holiday of $232,726, the payment of $115,025 to reduce the principal balance of the Quality Center mortgage in connection with a loan extension, and the establishment of a mortgage escrow deposit of $324,394 from proceeds of the pad site sale at Tarrytown Mall. Principal payments on long-term debt included $249,000 with respect to the Tarrytown Mall first trust loan. For purposes of the statement of cash flows, the net use of cash for mortgage escrow deposits of $194,394 represented the establishment of the mortgage escrow deposit at Tarrytown Mall of $324,394, net of the release of the $130,000 escrow for completion of the environmental remediation work at Edgewood Plaza.
LIQUIDITY AND CAPTIAL RESOURCES
At the conclusion of its public offering, the Partnership established a working capital reserve of 3% of the net proceeds of the offering, or $900,000, an amount that was expected to be sufficient to satisfy general liquidity requirements. The working capital reserve was utilized to fund the build-up of the tenant rent receivables and to pay for renovation and construction expenses at various shopping centers and other expenses.
In the past, liquidity has been adversely affected by lower than anticipated rental income and higher than anticipated tenant rents receivable. The cash and cash equivalents position of the Partnership at December 31, 1996 increased approximately $1,386,000 from that at December 31, 1995, with approximately $1,096,000 of that increase resulting from the sales of Holiday and a pad site and land parcel at Edgewood Plaza. The Partnership's cash and cash equivalents position fluctuates from quarter to quarter as follows: (i) decreasing with the funding of lease-up costs and tenant improvements; (ii) decreasing with the funding of renovation and expansion costs of the shopping centers; (iii) increasing as borrowing proceeds, sale proceeds, net rental income and interest income are received; (iv) decreasing as expenses (including debt service requirements) are paid; and (v) decreasing by any payment of Partnership distributions.
As of December 31, 1996, cumulative cash distributions of $6,647,888 and $62,391 had been made to Limited Partners and the General Partners, respectively. These cash distributions represented a 7% annualized return for each calendar quarter through and including the quarter ended June 30, 1990. The distribution for the quarter ended September 30, 1990 represented a 5.8% annualized return. The cumulative distributions for 1990 represented a 5% annualized return to Limited Partners. No distributions have been made to Limited Partners since the distribution for the quarter ended September 30, 1990.
Under the Cash Flow Protector, the General Partners agreed to loan to the Partnership, without interest, up to a maximum amount equal to 50% of the acquisition fees actually paid to them at the time the loan was made in the event the annual cumulative non- compounded return to Limited Partners fell below 7% of the allocable invested capital for the period from February 1, 1989 through January 31, 1992. In 1990, the General Partners fulfilled their obligation under the Cash Flow Protector provisions. As of December 31, 1996, Cash Flow Protector loans totalling $789,203 are payable to FW Realty Limited Partnership in the amount of $599,794 and to Realty Capital IV Limited Partnership in the amount of $189,409. The loans are non- interest bearing and are to be repaid from distributable cash flow or sale or refinancing proceeds only after the payment of a preferred return equal to a 10% annual cumulative non-compounded return on invested capital to Limited Partners.
The ability of the Partnership to distribute cash flow cannot be predicted, as it depends upon future events, such as the profitability of future operations, requirements for cash expenditures to attract and retain tenants, and the requirements of lenders as mortgages become payable and loans are extended, modified and refinanced. It has been the policy of the Partnership to apply any increase in cash to increase Partnership working capital reserves, to provide for shopping center
improvements if and when necessary, and to repay and refinance debt as required. That policy reflects the General Partners' belief that maintenance of adequate cash reserves is prudent in view of the current real estate and general economic environments and is consistent with the Partnership's objective to maintain and increase the value of its shopping centers. Consequently, there has been no assurance as to the availability of cash flow to make distributions to partners. However, in light of the consummation of the sales of Orchard Square and Holiday, the extensions of the Lynnwood Place and Woodlawn mortgages and other developments, the General Partners anticipate that the Partnership will make a cash distribution to Unitholders in the amount of $2 per Unit payable upon the close of the sale of Cloister Shopping Center in the second quarter of 1997. In the event such sale does not occur, the distribution will be $1 per Unit. The Partnership's Statements of Cash Flows is incorporated by reference from Item 8.
ITEM 8. FINANCIAL STATMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements and Financial Statement Schedules
Page
Report of Independent Public Accountants......................36
Financial Statements: Balance Sheets..............................................37 Statements of Operations....................................38 Statements of Partners' Equity..............................39 Statements of Cash Flows....................................40 Notes to Financial Statements...............................41
Financial Statement Schedules: Schedule II - Valuation and Qualifying Account............51 Schedule III - Real Estate and Accumulated Depreciation and Notes to Schedule.......................52 Schedule IV - Mortgage Loans on Real Estate and Notes to Schedule....................................55
All other schedules are omitted since they are not required, are not applicable, or the financial information required is included in the financial statements or the notes thereto.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Mid-Atlantic Centers Limited Partnership:
We have audited the accompanying balance sheets of MID-ATLANTIC CENTERS LIMITED PARTNERSHIP (a Maryland limited partnership) as of December 31, 1996 and 1995, and the related statements of operations, partners' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements and the schedules referred to below are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements and schedules 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 management, 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 financial statements referred to above present fairly, in all material respects, the financial position of Mid-Atlantic Centers Limited Partnership as of December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the index to financial statements are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state, in all material respects, the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
/s/ ARTHUR ANDERSEN L.L.P.
Baltimore, Maryland February 10, 1997
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP BALANCE SHEETS December 31, 1996 and 1995
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS for the years ended December 31, 1996, 1995, and 1994
The accompanying notes are an integral part of these statements.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP STATEMENT OF PARTNERS' EQUITY for the years ended December 31, 1996, 1995 and 1994
The accompanying notes are an integral part of these statements.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS for the years ended December 31, 1996, 1995, and 1994
The accompanying notes are an integral part of these statements.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements December 31, 1996 -------------------------
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Mid-Atlantic Centers Limited Partnership (the "Partnership") was organized under the laws of the State of Maryland on December 16, 1986. The Partnership was formed to acquire, hold, lease and ultimately sell income-producing community and neighborhood shopping centers.
The following is a summary of the significant accounting policies followed in the preparation of the Partnership's financial statements.
LAND, BUILDINGS AND IMPROVEMENTS. The cost of land, buildings and improvements are capitalized, while expenditures for maintenance and repairs are charged to operations as incurred. Depreciation is computed using the straight-line method based on the estimated useful lives of the respective assets.
AMORTIZATION. Deferred financing costs are amortized over the term of the respective mortgage loans using the straight-line method. Deferred leasing commissions are amortized over the term of the respective tenant leases using the straight-line method.
INCOME TAXES. No provision for or benefit from income taxes has been included in these financial statements since taxable income or loss passes through to, and is reportable by, the partners individually.
RENTAL INCOME. Certain leases provide for either abatement of rents or scheduled rent increases over the life of the lease. Rental income is recorded on a straight-line basis of equal monthly payments over the respective terms of such leases. The receivables related to the recording of rental income on a straight-line basis totalled $317,688 and $313,259 at December 31, 1996 and 1995, respectively.
Certain leases provide for additional rent computed on the basis of a percentage of gross sales in excess of specified levels. Rental income for the years ended December 31, 1996, 1995 and 1994 included income with respect to these percentage rentals of $292,698, $272,895 and $254,577, respectively.
STATEMENTS OF CASH FLOWS. For purposes of the statements of cash flows, the Partnership considers cash in banks, commercial paper and repurchase agreements with original maturities of less than three months to be cash and cash equivalents.
RECLASSIFICATIONS. Certain amounts from the prior year financial statements have been reclassified in order to conform with the current year presentation.
USE OF ESTIMATES. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
FINANCIAL INSTRUMENTS. The carrying values of the Partnership's cash and cash equivalents, tenant accounts receivable, accounts payable, due to related parties and long-term debt approximate the fair values. As the cash flow protector loans are non-interest bearing and will only be paid after certain returns to assignee limited partners, the fair value of the cash flow protector loans are not readily determinable.
LONG-LIVED ASSETS. Effective January 1, 1996, the Partnership adopted Statement of Financial Accounting Standards ("SFAS") No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". SFAS No. 121 requires that long-lived assets and certain identifiable intangibles to be held and used or disposed of by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The adoption on January 1, 1996 had no effect on the financial statements of the Partnership. Management reviews the Partnership's assets for impairment on a property by property basis at year end when the third party appraisals have been completed and whenever circumstances occur which indicate that the carrying amount of the assets may be impaired.
The Partnership considers its properties to be long-lived assets to be held and used. The Partnership's policy is to classify its assets as held for sale when the Partnership has formally committed to dispose of the properties whether by sale or abandonment if suitable offers are not received, and that it is unlikely that the plan would be withdrawn.
Certain properties are listed for sale with brokers with the intent that if acceptable offers are received, the Partnership would consider selling the property or properties. In the meantime, the Partnership will continue to operate the properties. To the extent some properties are sold there may be losses recognized from the sales because the net proceeds from the sale of certain properties may be below the carrying values. The estimated future cash flows from all properties are expected to be in excess of the carrying values as of December 31, 1996. The carrying value of one property, which is not listed for sale, is approximately $1,200,000 above its appraised value, however, the carrying value is below the property's estimated future net cash flows. As such the property is not considered impaired for SFAS No. 121 purposes.
NEW ACCOUNTING PRONOUNCEMENT. During 1997, the Financial Accounting Standards Board issued SFAS No. 128, "Earnings Per Share", which becomes effective December 31, 1997, and which early adoption is not permitted. Under SFAS No. 128, a company would disclose basic earnings per share (the principal difference being that common share equivalent would not be considered in the compilation of basic earnings per share) and diluted earnings per share. Because this pronouncement was recently issued, the Partnership has not completely determined the effect of adopting this pronouncement, however, the effect of the adoption is not expected to be material.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE B - PARTNERS' CAPITAL CONTRIBUTIONS:
The Partnership has two general partners -- Realty Capital IV Limited Partnership and FW Realty Limited Partnership, and one assignor limited partner -- LM Unit Trust, Inc. Each general partner and the assignor limited partner have made capital contributions of $500 and $100, respectively. Under the terms of the Partnership Agreement, the general partners have no obligation to make additional capital contributions to the Partnership, except under certain circumstances upon liquidation.
The assignor limited partner has assigned all of its rights in its limited partnership interests to the assignee limited partners. Total assignee limited partners' contributions in accordance with the Partnership Agreement were $29,997,125 (which excludes volume purchase discounts of $2,875). Offering costs of $2,802,312 were funded from such contributions.
NOTE C - RENTALS UNDER OPERATING LEASES:
The Partnership has leased space in its shopping center properties under noncancellable operating leases. The following table summarizes future minimum rental receipts due on noncancellable operating leases as of December 31, 1996:
1997 $4,223,547 1998 3,428,260 1999 2,595,165 2000 2,050,870 2001 1,630,649 Thereafter 6,439,856
$20,368,347
These minimum future rentals do not include additional rent which may be received from tenants for pass-through provisions in leases related to increases in operating expenses and percentage rentals.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE D - LONG-TERM DEBT:
Long-term debt consists of the following at December 31, 1996 and 1995:
(1) - The Partnership currently anticipates the lender will agree to renew this mortgage. (2) - This mortgage loan has an extension option, exercisable by the Partnership, to extend the term of such loan for one year. The interest rate payable during the extension period is adjusted to 2.75% over the one year U.S. Treasury bill. (3) - The Quality Center loan was scheduled to mature on February 1, 1997. The lender has agreed to extend the term of this loan for one year, subject to the completion of the required documentation.
The mortgage loans are non-recourse obligations secured by deeds of trust on the related real estate held for lease and by assignments of rents. Interest paid on these mortgages was $2,343,956, $2,993,485, and $3,278,358 for the years ended December 31, 1996, 1995 and 1994, respectively.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE D - LONG-TERM DEBT: (continued)
The general partners anticipate that the balloon or principal balance payments required on the mortgage loans at maturity will require an extension of the existing mortgage loan or sale or refinancing of the property to which it relates at such time. Maturities of long-term debt at December 31, 1996 are as follows:
1997 $5,527,446 1998 7,781,486 1999 878,570 2000 12,270,223 2001 50,564 Thereafter 1,595,824
$28,104,113
FORGIVENESS OF DEBT
On December 29, 1995, at the time of sale of Orchard Square Shopping Center, the holder of the Orchard Square mortgage accepted $3,900,000 in satisfaction of its mortgage, the principal balance and accrued interest of which was $5,748,344 and $29,558, respectively. The mortgage was previously due and payable on December 31, 1994. For financial reporting purposes, the forgiveness of principal and accrued interest, net of transaction expenses, was recorded as an extraordinary gain of $1,602,902 in the fourth quarter of 1995.
NOTE E - RELATED PARTY TRANSACTIONS:
MANAGEMENT FEES
In accordance with the Partnership Agreement, management fees (at the rate of 6% of gross leasing receipts) of $386,327, $428,756, and $456,981 in 1996, 1995 and 1994, respectively, were expensed for amounts due to First Washington Management, Inc., an affiliate of FW Realty Limited Partnership, for services rendered in connection with the leasing and operation of the shopping centers. A portion of these fees were paid by First Washington Management, Inc. to Legg Mason Realty Capital, Inc. in consideration of its performance of certain administrative services.
AMOUNTS DUE TO RELATED PARTIES
At December 31, 1996, $28,297 and $25,052 were payable to First Washington Management, Inc. and Legg Mason Realty Capital, Inc., respectively, for management fees and reimbursement of operating expenses. At December 31, 1995, $576 and $16,896 were payable to First Washington Management, Inc. and Legg Mason Realty Capital, Inc., respectively, for the aforementioned expenses.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE E - RELATED PARTY TRANSACTIONS: (continued)
The General Partners agreed to lend the Partnership, without interest, up to 50% of the acquisition fees actually paid to them at the time the loan was made in the event the annual cumulative non-compounded return to assignee limited partners fell below 7% of the allocable invested capital for the period from February 1, 1989 through January 31, 1992. In 1990, the General Partners fulfilled their obligation under the cash flow protector provisions. As of December 31, 1996 and 1995, cash flow protector loans totalling $789,203 are payable to FW Realty Limited Partnership in the amount of $599,794 and to Realty Capital IV Limited Partnership in the amount of $189,409. The loans are non-interest bearing and will be repaid from distributable cash flow or sale or refinancing proceeds after the payment of a preferred return equal to a 10% annual cumulative non-compounded return on invested capital to assignee limited partners.
In addition, acquisition fees totalling $73,431 were payable as of December 31, 1996 and 1995 to FW Realty Limited Partnership in the amount of $55,808 and to Realty Capital IV Limited Partnership in the amount of $17,623.
OTHER
In 1996, 1995 and 1994, the Partnership paid or accrued approximately $38,000, $25,000, and $20,000, respectively, to First Washington Management, Inc. for legal and architectural services related to the renovation, leasing, rent collections and other matters of the shopping centers. The Partnership paid or accrued approximately $75,000, $71,000, and $68,000, in 1996, 1995 and 1994, respectively, to Legg Mason Realty Capital, Inc. for reimbursement of operating expenses.
In the fourth quarter of 1995, discussions between Realty Capital IV Limited Partnership on behalf of the Partnership and a real estate investment trust ("FWREIT") formed by affiliates of FW Realty Limited Partnership were reopened regarding the possible sale for cash of the Partnership's shopping centers to an affiliate of FWREIT. In 1996, these discussions were deferred while the possibility of selling certain of the Partnership's shopping centers through third party brokers is explored. If a sale or disposition of all of the Partnership's properties were to occur, it would be followed by a distribution of net proceeds to partners and liquidation of the Partnership.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE F - PARTNERSHIP PROFITS, LOSSES AND DISTRIBUTIONS:
All profits and losses prior to the first date on which assignee limited partners were admitted to the Partnership were allocated 99.9% to the general partners and .1% to the assignor limited partner. Upon admission of the assignee limited partners, the interest of the general partners was reduced to 1% and the interest of the assignor limited partner was reduced to zero.
Distributable cash flow is defined in the Partnership Agreement as the sum of all cash receipts from operations and the principal amount of loans from the general partners less disbursements for operating cash expenses. Cash receipts under the master leaseback agreements are treated as operating receipts in determining distributable cash flow.
Distributable cash flow is payable quarterly as follows: 1. 99% to the assignee limited partners and 1% to the general partners until each assignee limited partner has received an annual cumulative return equal to 10% of invested capital; and 2. the balance is distributable 98% to the assignee limited partners and 2% to the general partners.
Income and loss from operations for each fiscal year is allocated as follows: 1. If there has been a distribution of distributable cash flow during such fiscal year, net income from operations shall be allocated to the assignee limited partners and general partners in proportion to such distribution of distributable cash flow. 2. If there has been no distribution of distributable cash flow during such fiscal year, net income from operations shall be allocated 99% to the assignee limited partners and 1% to the general partners. 3. Net loss from operations for each fiscal year shall be allocated 99% to the assignee limited partners and 1% to the general partners.
Sale or refinancing proceeds are distributed first to meet the debts and obligations of the Partnership and to fund reserves for contingent liabilities to the extent deemed reasonable by the general partners and then to the assignee limited partners and general partners in the order described in section 4.4 of the Partnership Agreement.
Any gain from a sale or refinancing is allocated as follows: 1. To the assignee limited partners and general partners having negative balances in their capital accounts, prior to distribution of sale or refinancing proceeds, an amount of such gain sufficient to increase their negative balances to zero. 2. To each assignee limited partner and general partner who has received or will receive a distribution out of the sale or refinancing proceeds, the amount of and in proportion to the
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE F - PARTNERSHIP PROFITS, LOSSES AND DISTRIBUTIONS: (continued)
excess of such distribution over the positive balance in his capital account, determined after any allocation of gain from a sale or refinancing pursuant to (1) above; and 3. The balance, 75% to the assignee limited partners and 25% to the general partners.
Any loss from a sale or refinancing shall be allocated 99% to the assignee limited partners and 1% to the general partners.
NOTE G - SALES OF ASSETS
On May 3, 1996, the Partnership sold Holiday shopping center to an unrelated third party for a price of $1,200,000. For financial reporting purposes, the Partnership recorded a loss, after transaction expenses, of $78,687 in May 1996. For federal income tax purposes, the Partnership recorded a loss, after transaction expenses, of approximately $728,000.
On August 6, 1996, the Partnership sold a pad site of approximately 1.15 acres of land at Tarrytown Mall to an unrelated third party for a price of $330,000. For financial reporting purposes, the Partnership recorded a gain, after transaction expenses, of $154,079 in August 1996. For federal income tax purposes, the Partnership recorded a gain, after transaction expenses, of approximately $105,000. The net proceeds from the sale, after payment of transaction expenses, of approximately $324,000 were placed in escrow with the first trust lender to be used for one of the following three purposes: (i) to fund tenant improvement work if a replacement tenant is found for the Wholesale Depot space, (ii) to acquire an adjoining parcel of land to enhance visibility and provide additional customer parking at Tarrytown Mall or (iii) to reduce the principal amount of the first trust loan.
On September 25, 1996, the Partnership sold a pad site at Edgewood Plaza to an unrelated third party for a price of approximately $220,000. For financial reporting purposes, the Partnership recorded a gain, after transaction expenses, of $75,903 in September 1996. For federal income tax purposes, the Partnership recorded a gain, after transaction expenses, of approximately $82,000. The pad site was not secured by the Edgewood Plaza mortgage.
On October 7, 1996, the Partnership sold a parcel of excess land at Jackson Heights shopping center to an unrelated third party for $40,000. For financial reporting and federal income tax purposes, the Partnership recorded a gain, after transaction expenses, of $22,208 in 1996. The net proceeds of approximately $35,000 were applied to reduce the mortgage on Jackson Heights.
On December 5, 1996, the Partnership sold a parcel of excess land at Edgewood Plaza to an unrelated third party for a price of $29,900. For financial reporting and federal income tax purposes, the Partnership recorded a loss, after transaction expenses, of $10,900 in 1996. The
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE G - SALES OF ASSETS: (continued)
parcel of land was not secured by the Edgewood Plaza mortgage.
On December 29, 1995, the Partnership sold Orchard Square shopping center to an unrelated third party for a contract price of $5,250,000. At the time of sale, the holder of the Orchard Square mortgage accepted $3,900,000 in satisfaction of its mortgage, the principal balance and accrued interest of which were $5,748,344 and $29,558, respectively. The mortgage on Orchard Square was due and payable on demand. The Partnership recorded the forgiveness of debt, net of transaction expenses, as an extraordinary gain of $1,602,902 in the fourth quarter of 1995. For financial reporting purposes, the Partnership recorded a loss, after transaction expenses, of $2,271,249 in the fourth quarter of 1995 in connection with the sale of the Orchard Square property. For federal income tax purposes, the Partnership recorded a loss, after transaction expenses, of approximately $2,404,000 in 1995.
On November 17, 1995, the Partnership completed the sale of a pad site at its Berkeley Square property to an existing tenant. The contract price was $217,000, of which $192,000 was applied to pay down the principal balance of the mortgage debt on Berkeley Square. A gain for financial reporting and federal income tax purposes of approximately $172,000 was recorded in the fourth quarter of 1995 in connection with this sale.
NOTE H - WRITE-DOWNS OF ASSETS
In the fourth quarter of 1996, the Partnership recorded an impairment charge of $2,895,000 to write-down the carrying value of Tarrytown Mall to its fair value of $4,500,000 as of December 1, 1996. In accordance with SFAS No. 121, the assets, which include the land, building and improvements and intangibles related to Tarrytown Mall, were determined to be impaired because recent downward revisions in estimates indicated future net cash flows would be insufficient to fully recover the carrying value of this property. The revisions in estimates were received in the fourth quarter of 1996, were not known before the fourth quarter, and resulted in a lower valuation for Tarrytown Mall in comparison to the prior year's valuation. Fair value was determined by an independent appraisal based on an income capitalization approach. The Partnership plans to continue to operate Tarrytown Mall and considers the center to be an asset to be held and used until an offer is received that is deemed satisfactory by the Partnership regarding disposal of the property with a capable buyer. Any plan is contingent upon the outcome of discussions with that center's first trust mortgage lender which the Partnership intends to initiate in the second quarter of 1997 regarding the required principal payments on the first trust mortgage. The payments are scheduled to increase July 1, 1997. In January 1997, the Partnership initiated discussions with Tarrytown Mall's second trust mortgage lender regarding the disposition of that center. No definitive plan of disposition has been adopted.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE H - WRITE-DOWNS OF ASSETS: (continued)
In the fourth quarter of 1995, the Partnership recorded a charge of $2,606,156 to reflect the Partnership's revised estimate of net realizable value of Tarrytown Mall based on the decline in the appraisal value at that time to $6,100,000 which was below the outstanding balance of the mortgage debt and accrued interest on the property. The $2,606,156 represented the sum of the difference of $2,542,295 between the net book value of Tarrytown Mall's land, building and improvements and the balance of the mortgage debt and accrued interest as of December 31, 1995, plus the write-off of $63,861 in tenant rent receivables related to the recording of rental income on a straight-line basis.
In the fourth quarter of 1994, the Partnership wrote down assets totalling $1,587,746 related to Tarrytown Mall and Holiday Shopping Center. The Partnership recorded a net charge of $1,047,746 for the write-down of leasehold improvements related to Wholesale Depot, a former anchor tenant which leased 79,066 square feet at Tarrytown Mall. The leasehold improvements which were placed in service in December 1993 were incurred as a direct result of specifications within the Partnership's lease with Wholesale Depot. Wholesale Depot filed for reorganization under the provisions of Chapter XI of the U.S. Bankruptcy Code in May 1994. Wholesale Depot vacated its space at Tarrytown Mall in late June 1994 and rejected its lease on October 7, 1994.
The additional charge of $540,000 in 1994 represented an adjustment to the carrying value of Holiday to the Partnership's revised estimate of the center's net realizable value at that time. This write-down reflected the Partnership's intention to offer this property for sale in 1995. The $540,000 represented the difference between Holiday's book value as of December 31, 1994 and estimated net realizable value from the sale of the center and operating the center until the sale.
The treatment of these write-downs of assets does not affect cash flow or taxable income (loss) of the Partnership.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP Notes to Financial Statements -------------------------
NOTE I - FEDERAL TAXABLE NET LOSS:
A reconciliation of the financial statement net loss to the federal taxable net loss for the years ended December 31, 1996, 1995 and 1994 is as follows:
Because many types of transactions are susceptible to varying interpretations under federal and state income tax laws and regulations, the amounts reported above may be subject to change at a later date upon final determination by the taxing authorities.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP SCHEDULE II - VALUATION AND QUALIFYING ACCOUNT -------------------------
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)
NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION --------------------------------------
NOTE 1. CARRYING COSTS ADJUSTMENTS:
For financial reporting purposes, payments received pursuant to master leaseback agreements are treated as an adjustment to the carrying value of the property. Column D - Carrying Costs also includes adjustments to investments in real estate for sales of property or portions thereof and write-downs of assets.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued) -------------------------------------
NOTE 2. RECONCILIATION OF REAL ESTATE:
In 1994, the Partnership wrote down assets totalling $1,669,320 and accumulated depreciation of $81,574. The Partnership recorded a net charge of $1,047,746 for the write-down of leasehold improvements related to Wholesale Depot at Tarrytown Mall. The Partnership recorded an additional charge of $540,000 to adjust the carrying value of Holiday to the Partnership's revised estimate of the center's net realizable value as a result of the expected sale of the center.
NOTE 3. RECONCILIATION OF ACCUMULATED DEPRECIATION:
In the fourth quarter of 1996, the Partnership recorded an impairment charge of $2,895,000 to write-down the carrying value of Tarrytown Mall to its fair value of $4,500,000 as of December 1, 1996. In accordance with SFAS No. 121, the assets, which include the land, building and improvements and intangibles related to Tarrytown Mall, were determined to be impaired because recent downward revisions in estimates indicated future net cash flows would be insufficient to fully recover the carrying value of this property.
In the fourth quarter of 1995, the Partnership recorded a charge of $2,542,295 to reflect the Partnership's revised estimate of net realizable value of Tarrytown Mall based on the decline in the appraisal value. The $2,542,295 represented the sum of the difference between the net book value of Tarrytown Mall's land, building and improvements and the balance of the mortgage debt and accrued interest as of December 31, 1995.
NOTE 4. FEDERAL INCOME TAX COST OF INVESTMENT IN REAL ESTATE:
The aggregate cost of land and buildings and improvements for federal income tax purposes is $8,724,880 and $44,395,771, respectively, for a total cost of $53,120,651 at December 31, 1996.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
See notes attached.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE - (Continued)
See notes attached.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
(1) See Note 1 attached. (2) Prepayment penalty of the amount by which the loan rate exceeds the yield on U.S. Treasury Notes with a maturity date closest to the loan maturity date multiplied by the outstanding principle balance due multiplied by the number of years remaining in the original term. Minimum prepayment of 1% of prepayment unless total payoff is made during the final 60 days of the original loan term. (3) Prepayment penalty of 1% of prepayment. (4) The interest rate changes based on the three year treasury constant maturity as published by the Federal Reserve, plus 2.75%. (5) Prepayment penalty equal to the present value of the difference between interest to be paid on the loan to maturity (or the next Interest Change Date) and the interest payments (less 1%) which would be paid on Treasury Securities issued at the rate available on the prepayment date, with the same principal and remaining maturity. (6) The Quality Center loan was scheduled to mature on February 1, 1997. The lender has agreed to extend the term of this loan for one year, subject to the completion of the required documentation.
NOTE 1. RECONCILIATION OF MORTGAGE LOANS:
All of the FW Corporation individuals have served in the capacities indicated above since 1987 (with the exception of Mr. Wolfe who served as Vice President until March 31, 1995 when at that time he became President). The LMRC IV, Inc. individuals have served in the capacities indicated above since 1990 (with the exception of Gerard F. Petrik, Jr. and L. Kay Strohecker who were elected to their respective positions in June 1995). All of the directors and executive officers will continue to serve in their current capacities until their successors are elected and qualified.
The following discussion provides certain information regarding the principal employment and business experience of the executive officers and directors of the General Partners.
Officers and Directors of FW Corporation
William J. Wolfe is President of FW Corporation, having assumed that office on March 31, 1995. He has served as a director of FW Corporation since 1987 and was a Vice President of that
company from 1987 until becoming its President. Mr. Wolfe is President, Chief Executive Officer and a director of First Washington Realty Trust, Inc., a publicly held real estate investment trust formed in 1994. He is also President, Chief Executive Officer and a director of First Washington Management, Inc. Mr. Wolfe is responsible for the day to day operations of the companies and the leasing of First Washington Realty Trust, Inc. and First Washington Management, Inc. properties. He has concentrated on the leasing of newly constructed shopping centers as well as renovations and expansions. Mr. Wolfe was President of JNC Enterprises, a diversified real estate development company, from 1979 until December 1983 when he co-founded First Washington Development Group, Inc. Mr. Wolfe is a member of the International Council of Shopping Centers.
Marvin Fabrikant is Vice President and a director of FW Corporation. Mr. Fabrikant retired from active participation in the operations of FW Corporation in 1991. Prior to joining First Washington Development Group, Inc. in June 1984, Mr. Fabrikant was engaged from 1979 to 1984 in commercial real estate acquisition and development with Fabrikant and Kain, a real estate development firm.
Stuart D. Halpert is Secretary and a director of FW Corporation and Chairman of First Washington Management, Inc. He is Chairman of First Washington Realty Trust, Inc., a publicly held real estate investment trust formed in 1994. Mr. Halpert is involved in the day to day operations of the companies and in project analysis, selection and financing. From 1982 until joining First Washington in June 1984, Mr. Halpert was a practicing attorney with a major Washington, D.C. law firm. Prior to entering the private practice of law, Mr. Halpert served as Counsel to the House Committee on Banking and Currency, United States Congress. Mr. Halpert is a member of the International Council of Shopping Centers.
Lester Zimmerman is Treasurer and a director of FW Corporation and Vice President of First Washington Management, Inc. He is Executive Vice President and a director of First Washington Realty Trust, Inc., a publicly held real estate investment trust formed in 1994. Mr. Zimmerman specializes in market analysis, project selection and sales. He is a licensed real estate broker and has had experience in commercial brokerage, specializing in the sale of major office and apartment projects. Mr. Zimmerman also serves as President and a director of First Capital Realty, Inc., an affiliated entity. Mr. Zimmerman was a real estate broker with Carey Winston, a commercial real estate brokerage company, from 1978 to 1981, and from 1981 until joining First Washington in 1984 was employed as an independent real estate broker.
Jack E. Spector is a director of FW Corporation, having served as a director since 1987. From 1987 to March 31, 1995, he was the President of FW Corporation. Mr. Spector was Executive Vice President of First Washington Management, Inc. from 1984 until March 31, 1995 when he resigned to become a business and real estate consultant. He was Executive Vice President of First Washington Realty Trust, Inc., a publicly held real estate investment trust formed in 1994 until March 1995. Mr. Spector is a Certified Public Accountant and prior to joining First Washington Management, Inc., he was associated with Grant Thornton, a national accounting firm. Mr. Spector is a member of the American Institute of Certified Public Accountants.
Officers and Directors of LMRC IV, Inc. and LM Unit Trust, Inc.
Richard J. Himelfarb is President and a director of LMRC IV, Inc. and Legg Mason Realty Capital, Inc. He is a Senior Executive Vice President and a director of Legg Mason, Inc. and Legg Mason Wood Walker, Inc. Mr. Himelfarb has senior management responsibility for the Corporate Finance, Real Estate Finance and Direct Investments Departments of Legg Mason Wood Walker, Inc. From 1972 until he joined Legg Mason, Inc. in 1983, Mr. Himelfarb was a partner in a major Baltimore law firm, where he served as senior outside counsel for Legg Mason, Inc. He is a graduate of the Johns Hopkins University and the Yale Law School.
Gerard F. Petrik, Jr. is Vice President and a director of LMRC IV, Inc. and Legg Mason Realty Capital, Inc. He is a Vice President of Legg Mason Wood Walker, Inc. Mr. Petrik joined Legg Mason in April 1987 and serves as manager of the Direct Investments Department. Prior to his employment at Legg Mason, Mr. Petrik was a senior associate at Paine Webber Properties, Inc. Mr. Petrik received his undergraduate and graduate degrees from Loyola College.
L. Kay Strohecker is Treasurer of LMRC IV, Inc. She is Assistant Vice President of Legg Mason Wood Walker, Inc. Ms. Strohecker joined Legg Mason in 1988 and serves as a senior analyst and assistant to the Chief Financial Officer of Legg Mason, Inc.. Prior to joining Legg Mason, Ms. Strohecker was controller for a private corporation in Baltimore. Ms. Strohecker is a graduate of the University of Baltimore and is a Certified Public Accountant.
C. Gregory Kallmyer is Secretary of LMRC IV, Inc. He is Vice President of Legg Mason Wood Walker, Inc. Mr. Kallmyer joined Legg Mason in October 1985 and serves as the assistant to the Director of Compliance. Prior to his employment at Legg Mason, Mr. Kallmyer was Vice President, Secretary and Director of Legal Affairs at Union Trust Bancorp. Mr. Kallmyer is a graduate of Mt. St. Mary's College and the University of Baltimore School of Law.
Robert Kleinpaste is a director of LMRC IV, Inc. He is President of Regency Homes Corporation, an Annapolis, Maryland based home builder. From 1990 until 1994, he was President of Legg Mason Realty Group, Inc. which is the real estate consulting and appraisal subsidiary of Legg Mason, Inc. Prior to joining Legg Mason Realty Group, Inc. as a Vice President in 1986, he was President and founder of Real Property Research Group, Inc. That firm was acquired by Legg Mason, Inc. in December 1986. Before founding Real Property Research Group, Inc. in 1978, Mr. Kleinpaste was Vice President of Marketing for Chesapeake Homes, Inc. and prior to that served as Executive Vice President of Briggs Napier Consultants, Inc., a real estate marketing consulting firm. He is a graduate of the University of Maryland.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership is a limited partnership and therefore has no directors or executive officers.
The General Partners and their affiliates are entitled to receive various fees, distributions of distributable cash flow and sale or refinancing proceeds and allocations of net income and net loss
from operations and gain or loss from a sale or refinancing from the Partnership. Pages 10-14 of the Prospectus under the caption MANAGEMENT COMPENSATION describe the manner in which fees are to be paid, and pages 59-62 of the Prospectus under the caption PARTNERSHIP DISTRIBUTIONS AND ALLOCATIONS describe the manner in which cash distributions are to be made to the General Partners and their Affiliates. These sections of the Prospectus are incorporated by reference herein.
A description of the amounts, and sources of payment of, the fees and other compensation paid or accrued by the Partnership to the General Partners and their affiliates for the fiscal year ended December 31, 1996 is included in Note E of Notes to Financial Statements incorporated by reference from Item 8. Financial statements and Supplementary Data herein.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 1, 1997, with respect to the beneficial ownership of the Units by individuals who are officers and/or directors of the corporate general partners of the General Partners:
Number of Percent of Name Units Class
Richard J. Himelfarb 80 (1) Legg Mason Tower 111 South Calvert Street Baltimore, Maryland 21202
Jack E. Spector 200 (2) (1) c/o First Washington Management, Inc. 4350 East-West Highway Bethesda, Maryland 20814
All executive officers and directors as a group 280 (1)
(1) Indicates less than 1%. (2) Mr. Spector disclaims direct beneficial ownership of these Units owned by his wife as custodian for their minor child.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions With Management and Others
The Partnership is a limited partnership and therefore has no directors or officers. The Partnership has engaged in no transactions with individual officers or directors of FW Corporation or LMRC IV, Inc., the General Partners of the Partnership. Those officers and directors may have indirect interests in amounts paid to the General Partners and their affiliates for services rendered by them to
the Partnership. A description of the amounts of and sources of payment of the fees and other compensation paid or accrued by the Partnership to the General Partners and their affiliates for the fiscal year ended December 31, 1996 is incorporated by reference from Item 11. Executive Compensation herein.
During late 1993 and into 1994, affiliates of Realty Capital IV Limited Partnership discussed the possible sale of the Partnership's shopping centers to a limited partnership, of which a real estate investment trust ("FWREIT") formed by affiliates of FW Realty Limited Partnership serves as the sole general partner. These discussions were discontinued without reaching agreement as the stock market valuations of real estate investment trusts owning strip and neighborhood shopping centers fell and the Partnership's portfolio faced significant issues potentially affecting values at Tarrytown Mall, Quality Center and Orchard Square.
In the fourth quarter of 1995, discussions between Realty Capital IV Limited Partnership on behalf of the Partnership and FWREIT were reopened regarding the possible sale for cash of the Partnership's shopping centers to an affiliate of FWREIT. In 1996, these discussions were deferred while the possibility of selling certain of the Partnership's shopping centers through third party brokers is explored.
(b) Certain Business Relationships
The Partnership has entered into certain arrangements with the General Partners and their affiliates whereby they will receive fees, commissions, compensation and other income from transactions that have not and will not be determined on the basis of arms-length negotiations. The Partnership Agreement generally requires the terms of such transactions to be no less favorable to the Partnership than the terms obtainable from nonaffiliated entities rendering similar services on an ongoing basis in the same geographic region. The types of business transactions and the amounts payable in connection therewith are described on pages 10-14 of the Prospectus under the caption Management Compensation, pages 14-17 of the Prospectus under the caption Conflicts of Interest, pages 24-26 of the Prospectus under the caption Management, and pages 37-39 of the Prospectus under the caption Investment Objectives and Policies. These sections of the Prospectus are incorporated by reference herein. A description of the amounts paid to the General Partners or their affiliates during the fiscal year ended December 31, 1996 are set forth in Note E of the Notes to Financial Statements incorporated by reference from Item 8. Financial Statements and Supplementary Data herein.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules (1) See Index to Financial Statements and Financial Statement Schedules on Page 35.
(1) Incorporated by reference to the Registrant's Registration Statement on Form S-11 under the Securities Act of 1933 (File No. 33-11086). (2) Incorporated by reference to Amendment No. 3 to the Registrant's Registration Statement on Form S-11 under the Securities Act of 1933 (File No. 33-11086). (3) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (File No. 0-16285). (4) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1989 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (File No. 0-16285). (5) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1990 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (File No. 0-16285). (6) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (File No. 0-16285). (7) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1993 pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 (File No. 0-16285). (8) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (File No. 0-16285). (9) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1994 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (File No. 0-16285). (10)Incorporated by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (File No. 0-16285).
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Partnership during the quarter ended December 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
By: Realty Capital IV Limited Partnership, General Partner By: LMRC IV, Inc., General Partner
/s/ Richard J. Himelfarb
Richard J. Himelfarb, President
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.
Title Signature (Position held with LMRC IV, Inc.) Date
President and Director /s/ Richard J. Himelfarb (Principal Executive Officer) March 27, 1997 Richard J. Himelfarb
Vice President and /s/ Gerard F. Petrik, Jr. Director March 27, 1997 Gerard F. Petrik, Jr.
Treasurer (Principal Financial /s/ L. Kay Strohecker and Accounting Officer) March 27, 1997 L. Kay Strohecker
/s/ Robert T. Kleinpaste Director March 27, 1997 Robert T. Kleinpaste
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
MID-ATLANTIC CENTERS LIMITED PARTNERSHIP
By: FW Realty Limited Partnership, General Partner By: FW Corporation, General Partner
/s/ William J. Wolfe
William J. Wolfe, President
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.
Title Signature (Position held with FW Corporation) Date
President and Director /s/William J. Wolfe (Principal Executive Officer) March 27, 1997 William J. Wolfe
/s/ Marvin Fabrikant Vice President and Director March 27, 1997 Marvin Fabrikant
/s/ Stuart D. Halpert Secretary and Director March 27, 1997 Stuart D. Halpert
/s/ Lester Zimmerman Treasurer and Director March 27, 1997 Lester Zimmerman
/s/ Jack E. Spector Director March 27, 1997 Jack E. Spector