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8-K - 8-K - Behringer Harvard Short-Term Liquidating Trust | v333549_8k.htm |
I
Behringer Harvard Short-Term Opportunity Fund I LP
Third Quarter Report and Update
Quarter ended September 30, 2012
Hotel Palomar in Dallas, Texas
Third Quarter Overview
As of December 20, 2012
· | The Fund continues in the disposition phase with only two remaining assets—the Hotel Palomar-Dallas and five acres of land at 1221 Coit Road. The Fund plans to wind up operations over approximately the next two to three years with the land being sold first, notwithstanding the final resolution of the back-end promoted interests on the eventual sale (by the new owners) of Landmark I & II and 5050 Quorum, which the Fund sold in 2011. |
· | As of December 14, 2012, the Fund's estimated per-unit value is $1.93, a nearly fivefold increase compared with $0.40 established on December 29, 2011. This improvement primarily reflects the resolution of deficiencies on defaulted loans, at no cost to the Fund, related to two properties that were subsequently disposed during 2012. These loan deficiencies had a negative impact on the 2011 valuation of approximately $15.6 million. Among other things, the improvement also reflects an increase in the valuation of the Hotel Palomar-Dallas. |
· | The Fund has completed the refinancing of the Hotel Palomar-Dallas. The new $31 million loan has an interest rate of 5.75% and matures in December 2015. This new debt structure provides the Fund with important immediate flexibility in our efforts to increase the value of this property in preparation for its ultimate disposition. |
· | Since inception, the Fund's sponsor has provided approximately $57 million of total financial support (including loans, accrued interest, fee deferrals, and waivers) to the Fund, which equates to approximately 52% of the original capital raise. Of this total financial support, approximately $41 million, or 71%, has been forgiven or permanently waived by the sponsor and equates to approximately 37% of the original capital raise. |
· | As the Fund has continued disposition of its assets, the actual number of investments available to create usable cash flow has declined. At the same time, however, fixed costs incurred by the Fund as a consequence of being a public company remain. The general partners continue to evaluate cost-saving initiatives to better match expenses and cash flow, including plans to convert to a liquidating trust structure. |
Financial Highlights
Some numbers | (in thousands) | 3 mos. ended | 3 mos. ended | 9 mos. ended | 9 mos. ended | |||||||||||||
have been | Sept. 30, 2012 | Sept. 30, 2011 | Sept. 30, 2012 | Sept. 30, 2011 | ||||||||||||||
rounded for | Total revenues | $ | 3,504 | $ | 5,560 | $ | 11,061 | $ | 13,754 | |||||||||
presentation | Net operating income1 | $ | 581 | $ | 328 | $ | 1,702 | $ | 1,739 | |||||||||
purposes. | ||||||||||||||||||
(in thousands) | As of Sept. 30, 2012 | As of Dec. 31, 2011 | ||||||||||||||||
Total assets | $ | 49,063 | $ | 116,026 | ||||||||||||||
Total liabilities | $ | 52,947 | $ | 136,806 |
Investor Information
A copy of the Partnership's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission, is available without charge at sec.gov or by written request to the Partnership at its corporate headquarters. For additional information about Behringer Harvard and its investment programs, please contact us at 866.655.3650.
Consolidated Balance Sheets (Unaudited)
(in thousands, except unit amounts) | As of Sept. 30, 2012 | As of Dec. 31, 2011 | ||||||
Assets | ||||||||
Real estate | ||||||||
Land | $ | 5,569 | $ | 13,459 | ||||
Buildings and improvements, net | 27,364 | 60,946 | ||||||
Total real estate | 32,933 | 74,405 | ||||||
Real estate inventory, net | - | 28,849 | ||||||
Cash and cash equivalents | 13,414 | 3,296 | ||||||
Restricted cash | 532 | 2,731 | ||||||
Accounts receivable, net | 1,058 | 2,912 | ||||||
Prepaid expenses and other assets | 737 | 828 | ||||||
Furniture, fixtures, and equipment, net | 260 | 330 | ||||||
Deferred financing fees, net | 45 | 591 | ||||||
Lease intangibles, net | 84 | 2,084 | ||||||
Total assets | $ | 49,063 | $ | 116,026 | ||||
Liabilities and Equity (deficit) | ||||||||
Liabilities | ||||||||
Notes payable | 33,509 | 111,724 | ||||||
Note payable to related party | 12,018 | 12,018 | ||||||
Accounts payable | 190 | 692 | ||||||
Payables to related parties | 4,360 | 3,424 | ||||||
Accrued liabilities | 2,870 | 8,948 | ||||||
Total liabilities | 52,947 | 136,806 | ||||||
Commitments and contingencies | ||||||||
Equity (deficit) | ||||||||
Partners' capital (deficit) | ||||||||
Limited partners-11,000,000 units authorized, 10,803,839 units issued and outstanding at September 30, 2012, and December 31, 2011 | $ | (35,069 | ) | $ | (52,909 | ) | ||
General partners | 38,437 | 38,437 | ||||||
Partners' capital (deficit) | 3,368 | (14,472 | ) | |||||
Noncontrolling interest (deficit) | (7,252 | ) | (6,308 | ) | ||||
Total equity (deficit) | (3,884 | ) | (20,780 | ) | ||||
Total liabilities and equity (deficit) | $ | 49,063 | $ | 116,026 |
Consolidated Statements of Cash Flows (Unaudited)
(in thousands) | 9 mos. ended Sept. 30, 2012 | 9 mos. ended Sept. 30, 2011 | ||||||
Cash flows from operating activities | ||||||||
Net income (loss) | $ | 17,895 | $ | (44,631 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Depreciation and amortization | 2,596 | 4,615 | ||||||
Asset impairment loss | - | 21,278 | ||||||
Inventory valuation adjustment | - | 21,475 | ||||||
Gain on sale of assets | (162 | ) | - | |||||
Gain on troubled debt restructuring | (8,145 | ) | (8,002 | ) | ||||
Gain on sale of discontinued operations | (15,629 | ) | - | |||||
Changes in operating assets and liabilities: | ||||||||
Real estate inventory | (182 | ) | (136 | ) | ||||
Accounts receivable | (804 | ) | 264 | |||||
Prepaid expenses and other assets | 91 | 86 | ||||||
Lease intangibles | - | (884 | ) | |||||
Accounts payable | (503 | ) | 215 | |||||
Accrued liabilities | (225 | ) | 1,039 | |||||
Payables or receivables with related parties | 937 | 922 | ||||||
Cash used in operating activities | (4,131 | ) | (3,759 | ) | ||||
Cash flows from investing activities | ||||||||
Proceeds from sale of assets | 44,466 | 16,963 | ||||||
Capital expenditures for real estate | (1,050 | ) | (390 | ) | ||||
Change in restricted cash | 2,199 | 967 | ||||||
Cash provided by investing activities | 45,615 | 17,540 | ||||||
Cash flows from financing activities | ||||||||
Proceeds from notes payable | 3,669 | 1,767 | ||||||
Proceeds from note payable to related party | - | 325 | ||||||
Payments on notes payable | (34,036 | ) | (19,226 | ) | ||||
Payments on capital lease obligations | - | (54 | ) | |||||
Financing costs | - | (2 | ) | |||||
Distributions to noncontrolling interest holders | (999 | ) | - | |||||
Contributions from general partners | - | 3,400 | ||||||
Cash used in financing activities | (31,366 | ) | (13,790 | ) | ||||
Net change in cash and cash equivalents | 10,118 | (9 | ) | |||||
Cash and cash equivalents at beginning of period | 3,296 | 2,040 | ||||||
Cash and cash equivalents at end of period | $ | 13,414 | $ | 2,031 | ||||
Supplemental disclosure | ||||||||
Interest paid, net of amounts capitalized | $ | 2,150 | $ | 4,845 | ||||
Income tax paid | $ | 81 | $ | 178 | ||||
Non-cash investing activities | ||||||||
Notes receivable from noncontrolling interest holder | $ | 2,656 | $ | 307 | ||||
Capital expenditures for real estate in accrued liabilities | $ | - | $ | 1,352 | ||||
Transfer of real estate and lease intangibles through cancellation of debt | $ | 15,542 | $ | 6,277 | ||||
Non-cash financing activities | ||||||||
Contributions from noncontrolling interest holder | $ | 2,656 | $ | 307 | ||||
Cancellation of debt through discounted payoff | $ | - | $ | 4,845 | ||||
Cancellation of debt through transfer of real estate | $ | 47,848 | $ | 9,366 |
Consolidated Statements of Operations (Unaudited)
(in thousands, except per unit amounts) | 3 mos. ended Sept. 30, 2012 | 3 mos. ended Sept. 30, 2011 | 9 mos. ended Sept. 30, 2012 | 9 mos. ended Sept. 30, 2011 | ||||||||||||
Revenues | ||||||||||||||||
Rental revenue | $ | 145 | $ | 194 | $ | 511 | $ | 605 | ||||||||
Hotel revenue | 3,359 | 3,356 | 10,550 | 10,814 | ||||||||||||
Real estate inventory sales | - | 2,010 | - | 2,335 | ||||||||||||
Total revenues | 3,504 | 5,560 | 11,061 | 13,754 | ||||||||||||
Expenses | ||||||||||||||||
Property operating expenses | 2,669 | 2,960 | 8,460 | 8,852 | ||||||||||||
Asset impairment loss | - | 925 | - | 925 | ||||||||||||
Inventory valuation adjustment | - | 21,475 | - | 21,475 | ||||||||||||
Interest expense, net | 679 | 1,287 | 2,831 | 3,190 | ||||||||||||
Real estate taxes, net | 145 | 175 | 553 | 490 | ||||||||||||
Property and asset management fees | 162 | 230 | 597 | 656 | ||||||||||||
General and administrative | 274 | 226 | 864 | 690 | ||||||||||||
Depreciation and amortization | 253 | 547 | 764 | 1,678 | ||||||||||||
Cost of real estate inventory sales | - | 1,984 | - | 2,310 | ||||||||||||
Total expenses | 4,182 | 29,809 | 14,069 | 40,266 | ||||||||||||
Interest income | 111 | 28 | 162 | 130 | ||||||||||||
Other income | - | - | 200 | - | ||||||||||||
Gain on troubled debt restructuring | - | - | 7,228 | - | ||||||||||||
Income (loss) from continuing operations before income taxes | (567 | ) | (24,221 | ) | 4,582 | (26,382 | ) | |||||||||
Provision for income taxes | (57 | ) | (50 | ) | (125 | ) | (119 | ) | ||||||||
Income (loss) from continuing operations | (624 | ) | (24,271 | ) | 4,457 | (26,501 | ) | |||||||||
Discontinued operations | ||||||||||||||||
Loss from discontinued operations | (185 | ) | (297 | ) | (2,191 | ) | (18,130 | ) | ||||||||
Gain on sale of discontinued operations | 15,629 | - | 15,629 | - | ||||||||||||
Income (loss) from discontinued operations | 15,444 | (297 | ) | 13,438 | (18,130 | ) | ||||||||||
Net Income (loss) | 14,820 | (24,568 | ) | 17,895 | (44,631 | ) | ||||||||||
Noncontrolling interest in continuing operations | 219 | 299 | 619 | 751 | ||||||||||||
Noncontrolling interest in discontinued operations | (1,060 | ) | 247 | (674 | ) | 573 | ||||||||||
Net (income) loss attributable to noncontrolling interest | (841 | ) | 546 | (55 | ) | 1,324 | ||||||||||
Net income (loss) attributable to the Partnership | $ | 13,979 | $ | (24,022 | ) | $ | 17,840 | $ | (43,307 | ) | ||||||
Amounts attributable to the Partnership | ||||||||||||||||
Continuing operations | $ | (405 | ) | $ | (23,972 | ) | $ | 5,076 | $ | (25,750 | ) | |||||
Discontinued operations | 14,384 | (50 | ) | 12,764 | (17,557 | ) | ||||||||||
Net income (loss) attributable to the Partnership | $ | 13,979 | $ | (24,022 | ) | $ | 17,840 | $ | (43,307 | ) | ||||||
Basic and diluted weighted average limited partnership units outstanding | 10,804 | 10,804 | 10,804 | 10,804 | ||||||||||||
Net income (loss) per limited partnership unit-basic and diluted | ||||||||||||||||
Income (loss) from continuing operations attributable to Partnership | $ | (0.04 | ) | $ | (2.22 | ) | $ | 0.47 | $ | (2.38 | ) | |||||
Income (loss) from discontinued operations attributable to Partnership | 1.33 | (0.01 | ) | 1.18 | (1.63 | ) | ||||||||||
Basic and diluted net income (loss) per limited partnership unit | $ | 1.29 | $ | (2.23 | ) | $ | 1.65 | $ | (4.01 | ) |
This quarterly report summary contains forward-looking statements, including discussion and analysis of the financial condition of Behringer Harvard Short-Term Opportunity Fund I LP (which may be referred to as the "Fund," the "Partnership," "we," "us," or "our") and our subsidiaries, our anticipated improvements to, and disposition of, properties, amounts of anticipated cash distributions to our investors in the future and other matters. These forward-looking statements are not historical facts but are the intent, belief, or current expectations of management based on their knowledge of the business and industry. Words such as "may," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "would," "could," "should," and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Such factors include those described in the Risk Factors section of the Fund's filings with the Securities and Exchange Commission. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future event, or otherwise.
The accompanying unaudited, consolidated financial statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America (GAAP). The financial statements include all adjustments (of a normal recurring nature) necessary to present fairly our consolidated financial position as of September 30, 2012, and December 31, 2011, and our unaudited, consolidated results of operations and cash flows for the periods ended September 30, 2012, and 2011.
Net Operating Income (NOI)1
(in thousands) | 3 mos. ended Sept. 30, 2012 | 3 mos. ended Sept. 30, 2011 | 9 mos. ended Sept. 30, 2012 | 9 mos. ended Sept. 30, 2011 | ||||||||||||
Total revenues | $ | 3,504 | $ | 5,560 | $ | 11,061 | $ | 13,754 | ||||||||
Operating expenses | ||||||||||||||||
Property operating expenses | 2,669 | 2,960 | 8,460 | 8,852 | ||||||||||||
Real estate taxes, net | 145 | 175 | 553 | 490 | ||||||||||||
Property and asset management fees | 162 | 230 | 597 | 656 | ||||||||||||
Cost of real estate inventory sales | - | 1,984 | - | 2,310 | ||||||||||||
Less: Asset management fees | (53 | ) | (117 | ) | (251 | ) | (293 | ) | ||||||||
Total operating expenses | 2,923 | 5,232 | 9,359 | 12,015 | ||||||||||||
Net operating income | $ | 581 | $ | 328 | $ | 1,702 | $ | 1,739 |
Reconciliation to Net Income (Loss)
Net operating income | $ | 581 | $ | 328 | $ | 1,702 | $ | 1,739 | ||||||||
Less: Depreciation and amortization | (253 | ) | (547 | ) | (764 | ) | (1,678 | ) | ||||||||
General and administrative expenses | (274 | ) | (226 | ) | (864 | ) | (690 | ) | ||||||||
Interest expense, net | (679 | ) | (1,287 | ) | (2,831 | ) | (3,190 | ) | ||||||||
Asset management fees | (53 | ) | (117 | ) | (251 | ) | (293 | ) | ||||||||
Asset impairment loss | - | (925 | ) | - | (925 | ) | ||||||||||
Inventory valuation adjustment | - | (21,475 | ) | - | (21,475 | ) | ||||||||||
Provision for income taxes | (57 | ) | (50 | ) | (125 | ) | (119 | ) | ||||||||
Add: Interest income | 111 | 28 | 162 | 130 | ||||||||||||
Other income | - | - | 200 | - | ||||||||||||
Gain on troubled debt restructuring | - | - | 7,228 | - | ||||||||||||
Income (loss) from discontinued operations | 15,444 | (297 | ) | 13,438 | (18,130 | ) | ||||||||||
Net income (loss) | $ | 14,820 | $ | (24,568 | ) | $ | 17,895 | $ | (44,631 | ) |
1Net operating income (NOI), a non-GAAP financial measure, is defined as total revenue less property operating expenses, real estate taxes, property management fees, advertising costs, and cost of real estate inventory sales. Management believes that NOI provides an accurate measure of the Partnership's operating performance because NOI excludes certain items that are not associated with management of our properties. NOI should not be considered as an alternative to net income (loss) or an indication of our liquidity. NOI is not indicative of funds available to fund our cash needs or our ability to make distributions and should be reviewed in connection with other GAAP measurements. To facilitate understanding of this financial measure, a reconciliation of NOI to GAAP net income (loss) has been provided.
Q32012
behringerharvard.com
Date Published 01/13 | |
© 2013 Behringer Harvard | 1665-1 ST Q3 Report 2012 |