Back to GetFilings.com



FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001

[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________

Commission file number 0-2673

NAVARRE-500 BUILDING ASSOCIATES
(Exact name of Registrant as specified in its charter)

A New York Co-Tenancy [Formerly 13-6082674
[formerly a partnership] as partnership]
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

60 East 42nd Street, New York, New York 10165
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (212) 687-8700

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:
$3,190,000 of Participations in Co-Tenant Interests
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

The aggregate market value of the voting stock held by non-
affiliates of the Registrant: Not applicable, but see Items 5 and
10 of this report.

Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ___

An Exhibit Index is located on pages 27 through 29 of this Report.
Number of pages (including exhibits) in this filing: 29

PART I

Item 1. Business.

(a) General

Registrant was organized as a partnership on March 21,
1958. Registrant owned the tenant's interest in the long-term
ground lease (the "Lease") of the buildings located at 500 and 512
Seventh Avenue and 228 West 38th Street, New York, New York (the
"Property") until Registrant sold the Lease on December 23, 1999
on the economic terms described in the accompanying financial
statements. Registrant ceased to be a partnership on December 23,
1999 when the interests of its partner Agents were redeemed by
conveyance to them of direct pro rata interests in the Property.
The partnership's final tax return was filed for the period ending
December 23, 1999. After December 23, 1999, such former partners
(the "Agents") continued the ownership of the Lease as co-tenants
for the benefit of the Participants, and the co-tenancy has
conducted its business under the name "Navarre-500 Building
Associates, a co-tenancy", all for the benefit of the Participants
on all the same pre-existing economic and investment terms through
the date of such sale and thereafter. Accordingly, reference
herein to Registrant is a reference to Navarre-500 Building
Associates, a co-tenancy. Registrant's Agents were Peter L.
Malkin and Thomas N. Keltner, Jr., who are now the co-tenant
Agents. The land underlying the buildings was owned by an
unaffiliated third party and was leased to Registrant under the
Lease. The current term of the Lease as extended was to expire on
May 1, 2024. The Lease provided for one additional 21-year
renewal option. The annual rent payable by Registrant under the
Lease was $487,500 during the current and each renewal term.

Registrant did not operate the Property, but subleased
the Property to 500-512 Seventh Avenue Associates (the
"Sublessee") pursuant to a net operating sublease (the
"Sublease"). The current renewal term, as extended, of the
Sublease was to expire on April 30, 2024. The Sublease provided
for one renewal option for a term co-extensive with the Lease.
Peter L. Malkin, an Agent in Registrant, has also been a partner
and now a co-tenant in Sublessee. The Agents in Registrant are
also members of Wien & Malkin LLP, which provides supervisory and
other services to Registrant and to Sublessee (the "Supervisor").
See Items 10, 11, 12 and 13 hereof for a description of the

-1-
services rendered by, and compensation paid to, Supervisor and for
a discussion of certain relationships which may pose actual or
potential conflicts of interest among Registrant, Sublessee and
certain of their respective affiliates. Registrant did not
maintain a full-time staff. See Item 2 hereof for additional
information concerning the Property, which has been sold by
Registrant.

(b) The Sublease

Under the Sublease, Sublessee was required to pay (i)
annual basic rent of $1,167,500 during the current renewal term
and the additional renewal term (the "Basic Rent") and (ii)
additional rent to Registrant during the current term and the
renewal term equal to 50% of Sublessee's net operating profit in
excess of $620,000 for each lease year ending June 30 (the
"Additional Rent").

There was no Additional Rent paid for the lease year
ended June 30, 1999 by Sublessee and for the short-period of the
final lease year ended 12/23/99.

Additional Rent income was recognized when earned from
the Sublessee, at the close of the lease year ending June 30.
Such income was not determinable until the Sublessee, pursuant to
the Sublease, rendered to Registrant a certified report on the
Sublessee's operation of the Property. The Sublease required that
this report be delivered to Registrant annually within 60 days
after the end of each such lease year. Accordingly, all
Additional Rent income and certain supervisory service expense
could only be determined after the receipt of such report. The
Lease does not provide for the Lessee to render interim reports to
Registrant, so no Additional Rent income was reflected for the
period between the end of the lease year and the end of
Registrant's fiscal year. See Note 3 of the Notes to the
Financial Statements filed under Item 8 hereof (the "Notes")
regarding Additional Rent payments by Sublessee for the fiscal
years ended December 31, 2001, 2000, and 1999.

(c) Competition

Pursuant to tenant space leases at the Property, the
annual base rentals payable to Sublessee averaged $14.85 per
square foot (exclusive of electricity charges and escalation) when
the Property was sold. Registrant no longer has any direct or
indirect interest in the operation of the Property, so local real
estate competition is no longer relevant to Registrant's operation
or financial results.

(d) Tenant Leases

Prior to the sale of the Property, Sublessee operated
the Property free from any federal, state or local government
restrictions involving rent control or other similar rent
regulations which may be imposed upon residential real estate in
Manhattan. Any increase or decrease in the amount of rent payable
by a tenant was governed by the provisions of the tenant's lease.
-2-
Item 2. Property.

Prior to the sale of the Property as stated in Item 1
hereof, Registrant owned the leasehold of the buildings located at
500 and 512 Seventh Avenue, New York, New York. The building at
500 Seventh Avenue contains 17 stories; the building at 512
Seventh Avenue contains 44 stories. The buildings together occupy
the entire block front on the west side of Seventh Avenue between
37th and 38th Streets in New York City's Garment District.
Pursuant to the Lease, Registrant also held a leasehold interest
in an adjacent 5-story building located at 228 West 38th Street.
The two principal buildings, erected in 1921 and 1931,
respectively, contain showroom, office and loft space.


Item 3. Legal Proceedings.

The Registrant and/or its assets are the subject of the
following pending litigation:

Wien & Malkin LLP, et. al. v. Helmsley-Spear, Inc.,
et. al. On June 19, 1997 Wien & Malkin LLP and Peter L.
Malkin filed an action in the Supreme Court of the State of
New York, against Helmsley-Spear, Inc. and Leona Helmsley
concerning various partnerships which own, lease or operate
buildings managed by Helmsley-Spear, Inc., including
Registrant's property. In their complaint, plaintiffs sought
the removal of Helmsley-Spear, Inc. as managing and leasing
agent for all of the buildings. Plaintiffs also sought an
order precluding Leona Helmsley from exercising any partner
management powers in the partnerships. In August, 1997, the
Supreme Court directed that the foregoing claims proceed to
arbitration. As a result, Mr. Malkin and Wien & Malkin LLP
filed an arbitration complaint against Helmsley-Spear, Inc.
and Mrs. Helmsley before the American Arbitration
Association. Helmsley-Spear, Inc. and Mrs. Helmsley served
answers denying liability and asserting various affirmative
defenses and counterclaims; and Mr. Malkin and Wien & Malkin
LLP filed a reply denying the counterclaims. By agreement
dated December 16, 1997, Mr. Malkin and Wien & Malkin LLP
(each for their own account and not in any representative
capacity) reached a settlement with Mrs. Helmsley of the
claims and counterclaims in the arbitration and litigation
between them. Mr. Malkin and Wien & Malkin LLP then
continued their prosecution of claims in the arbitration for
relief against Helmsley-Spear, Inc., including its
termination as the leasing and managing agent for various

-3-
entities and properties, including the Registrant's Lessee.
The arbitration hearings were concluded in June 2000, and the
arbitrators issued their decision on March 30, 2001, ordering
that the termination of Helmsley-Spear, Inc. would require a
new vote by the partners in the Lessee, setting forth
procedures for such a vote, and denying the other claims of
all parties. Following the decision, Helmsley-Spear, Inc.
applied to the court for confirmation of the decision, and
Mr. Malkin and Wien & Malkin LLP applied to the court for an
order setting aside that part of the decision regarding the
procedure for partnership voting to terminate Helmsley-Spear,
Inc. and various other parts of the decision on legal
grounds. The court granted the motion to confirm the
arbitrators' decision and denied the application to set aside
part of the arbitrators' decision. Mr. Malkin and Wien &
Malkin LLP have served notice of appeal of the court's
determination.


PART II


Item 5. Market for the Registrant's Common Equity and Related
Security Holder Matters.

Registrant was a partnership and is now a co-tenancy.

Registrant did not issue any common stock. The
securities registered by it under the Securities Exchange Act of
1934, as amended, consisted of participations in the interests of
the Agents in Registrant (the "Participations") and are not shares
of common stock nor their equivalent. The Participations
represent each Participant's fractional share in an Agent's
undivided interest in Registrant, and are divided approximately
equally among the Agents. A full unit of the Participations was
offered originally at a purchase price of $5,000; fractional units
were also offered at proportionate purchase prices. Registrant
has not repurchased Participations in the past and it is not
likely to change its policy in the future.

(a) The Participations neither were traded on an
established securities market nor were readily tradable on a
secondary market or the substantial equivalent thereof. Based on
Registrant's transfer records, Participations were sold from time
to time in privately negotiated transactions and, in many
instances, Registrant is not aware of the prices at which such
transactions occur.

(b) As of December 31, 2001, there were 609
Participants of record.

-4-
(c) Registrant did not pay dividends. On January
1, 2000, a regular distribution of $36,882 was made to
Participants, and a distribution of sales proceeds of
$47,080,000 was made on January 14, 2000. On October 3, 2001,
a distribution of $2,000,000 was made to Participants.


[SELECTED FINANCIAL DATA]

Item 6.
NAVARRE-500 BUILDING ASSOCIATES

SELECTED FINANCIAL DATA



Year ended December 31,
2001 2000 1999 1998 1997


Basic rent income................. $ - $ - $ 1,139,254 $1,167,500 $1,167,500
Additional rent income............ - - - - 914,282

Total revenues................. - $ - $ 1,139,254 $1,167,500 $2,081,782


Gain on sale of leasehold and
related investment income.. ..... $ 106,650 $ 211,402 $49,685,371 $ - $ -


Net income........................ $ 83,876 $ 170,687 $50,302,553 $ 633,475 $1,465,929


Earnings per $5,000 participation
unit, based on 640 participation
units outstanding during the
year:
Income (loss) from operations. $ (36) $ (64) $ 964 $ 990 $ 2,291
Gain on sale of leasehold and
related investment income.... 167 330 77,634 - -

Net income................. 131 $ 266 $ 78,598 $ 990 $ 2,291


Total assets...................... $ 1,018,852 $ 2,934,976 $52,619,753 $ 218,618 $ 225,143


Long-term obligations............. None None None None None


Distributions per $5,000
participation unit, based on
640 participation units
outstanding during the year:
Income.......................... $ 131 $ 266 $ 1,306 $ 990 $ 2,291
Return of capital............... 2,994 73,354 - 10 10

Total distributions............ $ 3,125 $ 73,620 $ 1,306 $ 1,000 $ 2,301


-5-


Item 7.
NAVARRE-500 BUILDING ASSOCIATES

QUARTERLY RESULTS OF OPERATIONS




The following table presents Associates' operating results for each of the eight
fiscal quarters in the period ended December 31, 2001. The information for
each of these quarters is unaudited and has been prepared on the same basis
as the audited financial statements included in this Annual Report on Form
10-K. In the opinion of management, all necessary adjustments, which consist
only of normal and recurring accruals, have been included to present fairly
the unaudited quarterly results. This data should be read together with the
financial statements and the notes thereto included in this Annual Report on
Form 10-K.




Three Months Ended

March 31, June 30, September 30, December 31,
2000 2000 2000 2000

Statement of Income Data:
Dividend and
interest income $ 58,538 $ 40,385 $ 91,523 $ 45,431
Total revenues 58,538 40,385 91,523 45,431

Professional fees - - 34,715 6,000
Cost of sale of
leasehold - 11,635 9,454 3,386
Total expenses - 11,635 44,169 9,386

Net income $ 58,538 $ 28,750 $ 47,354 $ 36,045

Earnings per $5,000
participation unit, based
on 640 participation
units outstanding during
each period $ 91 $ 45 $ 74 $ 56



Earnings per $5,000
participation unit,
consists of the
following:
Loss from operations $ - $ - $ (54) $ (10)
Investment income on
proceeds from sale
of leasehold $ 91 45 $ 128 $ 66
$ 91 $ 45 $ 74 $ 56




-6-


Item 7.
NAVARRE-500 BUILDING ASSOCIATES

QUARTERLY RESULTS OF OPERATIONS (Continued)


Three Months Ended
March 31, June 30, September 30, December 31,
2001 2001 2001 2001

Statement of Income Data:
Dividend and
interest income $ 40,478 $ 32,738 $ 26,935 $ 6,499
Total revenues 40,478 32,738 26,935 6,499

Professional fees 13,753 321 8,700 -
Total expenses 13,753 321 8,700 -

Net income $ 26,725 $ 32,417 $ 18,235 $ 6,499

Earnings per $5,000
participation unit, based
on 640 participation
units outstanding during
each period $ 42 $ 51 $ 28 $ 10

Earnings per $5,000
participation unit,
consists of the
following:
Loss from operations $ (21) $ - $ 15 $ -
Investment income on
proceeds from sale
of leasehold (63) 51 43 $ 10
$ 42 $ 51 $ 28 $ 10

-7-




Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operation.

Registrant was a partnership and is now a co-tenancy.
Registrant was organized for the purpose of acquiring the Master
Lease subject to the Sublease. Basic Rent received under the
Sublease was used to pay annual rent due under the Master Lease
and the Basic Payment to Supervisor for supervisory services. The
balance of the Basic Rent was distributed to the Participants.
Additional Rent was distributed to the Participants after the
Additional Payment to Supervisor. Pursuant to the Sublease,
Sublessee had assumed sole responsibility for the condition,
operation, repair, maintenance and management of the Property.
Registrant did not need to maintain substantial liquid assets to
defray any operating expenses of the Property.


Item 8. Professional Fees

During the twelve months ended December 31, 2001, fees
totaling $15,253 were paid to Wien & Malkin LLP, a related party


Inflation

Inflationary trends in the economy did not directly
impact Registrant's operations, since as noted above, Registrant
did not actively engage in the operation of the Property.
Inflation could impact the operations of Sublessee prior to the
1999 sale of the Property. Sublessee was required to pay Basic
Rent, regardless of the results of its operations. Inflation and
other operating factors affected only the amount of Additional
Rent payable by Sublessee, which was based on Sublessee's net
operating profit.


Item 9. Financial Statements and Supplementary Data.

The financial statements, together with the accompanying
report by, and the consent to the use thereof, of J.H. Cohn LLP
immediately following, are being filed in response to this item.


Item 10. Disagreements on Accounting and Financial Disclosure.

Not applicable.
-8-

PART III


Item 10. Directors and Executive Officers of the Registrant.

Registrant has no directors or officers or any other
centralization of management. There is no specific term of office
for any Agent. The table below sets forth, as to each Agent as of
December 31, 2001, the following: name, age, nature of any family
relationship with any other Agent, business experience during the
past five years and principal occupation and employment during
such period, including the name and principal business of any
corporation or any organization in which such occupation and
employment was carried on and the date such individual became an
Agent:

Principal Date
Nature of Occupation Individual
Family Business and became
Name Age Relationship Experience Employment Agent

Peter L. Malkin 67 None Real Estate Senior Partner 1988
Supervision and Chairman
Wien & Malkin
LLP
Thomas N. Keltner,
Jr. 55 None Real Estate Partner 1996
Supervision Wien & Malkin
LLP

Mr. Malkin and Mr. Keltner are also members of
Supervisor. See Items 11, 12 and 13 hereof for a description of
the services rendered by, and the compensation paid to, Supervisor
and for a discussion of certain relationships which may pose
actual or potential conflicts of interest among Registrant,
Sublessee and certain of their respective affiliates.

The names of entities which have a class of securities
registered pursuant to Section 12 of the Securities Exchange Act
of 1934 or are subject to the requirements of Section 15(d) of
that Act, and in which the Agents are either a joint venturer or
general partner are as follows:

Peter L. Malkin is a joint venturer in 250 West 57th St.
Associates L.L.C.; and a general partner in Empire State
Building Associates L.L.C., Garment Capitol Associates
and 60 East 42nd St. Associates L.L.C.
-9-
Thomas N. Keltner, Jr. is a general partner in 60 East
42nd St. Associates L.L.C., Empire State Building
Associates L.L.C. and Garment Capitol Associates.



Item 11. Executive Compensation.

As stated in Item 10 hereof, Registrant has no directors
or officers or any other centralization of management.

No remuneration was paid during the current fiscal year
ended December 31, 2001 by Registrant to any of the Agents as
such. As accrued through the 1999 sale of the Property,
Registrant paid Supervisor, for supervisory services and
disbursements, fees of $40,000 per annum, plus 10% of all
distributions to Participants in any year in excess of the amount
representing 23% per annum on the Participants' remaining cash
investment in Registrant. The supervisory services provided to
Registrant by Supervisor included real estate supervisory, legal,
administrative and financial services. The services included, but
were not limited to, providing or coordinating with counsel to
Registrant, maintaining all of its partnership and Participant
records, performing physical inspections of the Building,
reviewing insurance coverage and conducting annual supervisory
review meetings. Financial services included monthly receipt of
rent from Sublessee, payment of monthly rent to the fee owner,
payment of monthly and additional distributions to the
Participants, payment of all other disbursements, confirmation of
the payment of real estate taxes, review of financial statements
submitted to Registrant by Sublessee, review of financial
statements and tax information prepared by Registrant's
independent certified public accountant, and distribution of such
materials to the Participants. Supervisor also prepares
quarterly, annual and other periodic filings with the Securities
and Exchange Commission and applicable state authorities.


Item 12. Security Ownership of Certain Beneficial Owners
and Management.

(a) Registrant has no voting securities (see Item 5
hereof).

(b) At December 31, 2001, the Agents in Registrant (see
Item 10 hereof) beneficially owned, directly or
indirectly, the following Participations:

-10-

Name and
Address of Amount of
Beneficial Beneficial Percent
Title of Class Owners Ownership of Class

Participations in Peter L. Malkin $ 8,125 .254%
Agent Interests 60 East 42nd Street
New York, NY 10165

At such date, certain of the Agents (or their respective
spouses) held additional Participations as follows:


Peter L. Malkin, Trustee of Mattie Saunders 1983 Trust,
owned $7,500 of Participations. Mr. Malkin disclaims
any beneficial ownership of such Participations.

Entities for the benefit of members of Peter L. Malkin's
family own of record and beneficially $35,000 of
Participations. Mr. Malkin disclaims any beneficial
ownership of such Participations, except that related
Trusts are required to complete scheduled payments to
Mr. Malkin.

In accordance with the provisions of the respective
participating agreements, Peter L. Malkin, in his capacity as
agent, purchased from non-consenting Participants $1,875 of
participations for the benefit of consenting Participants,
all on the terms described in the Agents' Consent
Solicitations dated July 15, 1999. Each such purchase may be
revised at the discretion of the Agent upon receipt of the
consent from the applicable non-consenting Participant.


(c) Not applicable.

Item 13. Certain Relationships and Related Transactions.

(a) As stated in Items 1 and 10 hereof, Messrs. Peter
L. Malkin and Thomas N. Keltner, Jr. are the Agents in Registrant
acting for the Participants. Mr. Malkin's family have also owned
equity interests in Sublessee. As a consequence of Mr. Malkin's
family having an interest in Sublessee and both Mr. Malkin and Mr.
Keltner being members of Supervisor, certain actual or potential
conflicts of interest may arise with respect to the management and
administration of the business of Registrant. However, under the
respective participating agreements pursuant to which Mr. Malkin
and Mr. Keltner act as agents for the Participants, certain
transactions require the prior consent from Participants owning a
-11-

specified interest under the Agreements in order for them to act
on their behalf. Such transactions included modifications and
extensions of the Lease and the Sublease or the sale of the
Property or substantially all of Registrant's other assets.

See Item 1 for a description of the terms of the
Sublease. The interest of Mr. Malkin in the Sublease arose solely
from the ownership of his family's interest in Sublessee, and he
received no extra or special benefit not shared on a pro rata
basis with all other equity owners in Sublessee, except that Mr.
Malkin and Mr. Keltner, by reason of their respective interests in
Supervisor, were entitled to receive their pro rata share of any
supervisory, service or other remuneration paid to Supervisor for
services rendered to Registrant and Sublessee. See Item 11 hereof
for a description of the remuneration arrangements between
Registrant and Supervisor relating to supervisory services
provided by Supervisor.

See Items 1 and 10 hereof for a description of the
relationship between Registrant and Supervisor, of which the
Agents in Registrant are among its members. The interest of each
of Mr. Malkin and Mr. Keltner in any remuneration paid or given by
Registrant to Supervisor arose solely from such person's ownership
of an interest in Supervisor. See Item 11 hereof for a
description of the remuneration arrangements between Registrant
and Supervisor relating to supervisory services provided by
Supervisor.

(b) Reference is made to paragraph (a) above.

(c) Not applicable.

(d) Not applicable.

-12-

PART IV

Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 10-K.

(a)(1) Financial Statements:

Consent of J.H. Cohn LLP, Certified Public Accountants,
dated February 26, 2002.

Accountant's Report of J.H. Cohn LLP, Certified Public
Accountants, dated February 26, 2002.

Balance Sheets at December 31, 2001 and at December 31,
2000 (Exhibit A).

Statements of Income for the fiscal years ended December
31, 2001, 2000 and 1999 (Exhibit B).

Statement of Partners' Capital for the fiscal year ended
December 31, 2001 (Exhibit C-1).

Statement of Partners' Capital for the fiscal year ended
December 31, 2000 (Exhibit C-2).

Statement of Partners' Capital for the fiscal year ended
December 31, 1999 (Exhibit C-3).

Statements of Cash Flows for the fiscal years ended
December 31, 2001, 2000 and 1999 (Exhibit D).

Notes to Financial Statements for the fiscal years ended
December 31, 2001, 2000 and 1999.

(2) Financial Statement Schedules:

List of Omitted Schedules.

(3) Exhibits: See Exhibit Index.

(b) No report on Form 8-K was filed by Registrant
during the last quarter of the period covered by
this report.


-13-


[LETTERHEAD OF J.H. COHN
ACCOUNTANTS & CONSULTANTS]






February 26, 2002



Navarre-500 Building Associates (A Co-Tenancy)
New York, N.Y.


We consent to the use of our independent accountants' report dated
February 26, 2002 covering our audits of the accompanying financial
statements of Navarre-500 Building Associates in connection with and as
part of your December 31, 2001 annual report (Form 10-K) to the
Securities and Exchange Commission.





J.H. Cohn LLP



New York, N.Y.






-14-

[J.H. COHN LLP
ACCOUNTANTS & CONSULTANTS]





INDEPENDENT ACCOUNTANTS' REPORT


To the participants in Navarre-500 Building Associates
(a general partnership converted in 1999 to a co-tenancy)
New York, N. Y.


We have audited the accompanying balance sheets of Navarre-500 Building
Associates (the "Company") as of December 31, 2001 and 2000, and the
related statements of income, partners' capital and cash flows for each
of the three years in the period ended December 31, 2001. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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.

As more fully described in Note 1 to the financial statements the
Company ceased to be a general partnership on December 23, 1999, when it
was dissolved coincidental with an in-kind liquidating distribution to
its partners of all of the Company's assets, and converted to a co-
tenancy. On that date, the co-tenants, operating as Navarre-500
Building Associates, the co-tenancy, sold their individual interests in
the leasehold property and received in exchange a purchase money note
due on January 4, 2000. After December 23, 1999, the co-tenancy
conducted its business as Navarre-500 Building Associates for the
benefit of each of the co-tenants, on the same respective economic and
investment terms as had existed before the partnership's legal
dissolution. As a result of the foregoing and in order to reflect the
substance of the conveyance of the property, the co-tenancy's
transactions for the period subsequent to the dissolution of the general
partnership have been combined in the accompanying financial statements
with those of the general partnership.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Navarre-500
Building Associates as of December 31, 2001 and 2000, and the results of
its operations and its cash flows for each of the three years in the
period ended December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America.



J.H. Cohn LLP

New York, N. Y.
February 26, 2002

-15-
EXHIBIT A

NAVARRE-500 BUILDING ASSOCIATES

BALANCE SHEETS


A S S E T S




December 31,

2001 2000

Current Assets:

Escrow account held by Wien & Malkin LLP
Notes 1 and 9) $1,018,852 $2,934,976

TOTAL ASSETS $1,018,852 $2,934,976



LIABILITIES AND PARTNERS' CAPITAL



Current Liabilities (Note 1) $ - $ -

Partners' Capital (Exhibit C) 1,018,852 2,934,976


TOTAL LIABILITIES AND PARTNERS' CAPITAL $1,018,852 $2,934,976










See accompanying notes to financial statements.

-16-
EXHIBIT B

NAVARRE-500 BUILDING ASSOCIATES

STATEMENTS OF INCOME






Year ended December 31,
2001 2000 1999

Revenues:

Rent income, from a related party (Note 3) $ - $ - $ 1,139,254


Expenses:

Leasehold rent (Note 4) - - 475,706

Supervisory services, to a related party (Note 5a) - - 40,000

Amortization of leasehold - - 6,366

Professional fees, including amounts to
a related party (Note 5b) 22,774 40,715 -

22,774 40,715 522,072

INCOME (LOSS) FROM OPERATIONS .. (22,774) (40,715) 617,182

Gain on (cost of)sale of leasehold (Note 1) - (24,475) 49,628,434

Interest and dividend income on purchase money
note receivable and on proceeds thereof (Note 5c) 106,650 235,877 56,937
106,650 211,402 49,685,371
NET INCOME, CARRIED TO
PARTNERS' CAPITAL (NOTE 8) $ 83,876 $ 170,687 $50,302,553


Earnings per $5,000 participation
unit, based on 640 participation
units outstanding during each year:

Income (loss) from operations $ (36) $ (64) $ 964
Gain on or cost of sale of leasehold
and interest and dividend income 167 330 77,634

NET INCOME $ 131 $ 266 $ 78,598


















See accompanying notes to financial statements.
-17-
EXHIBIT C-3

NAVARRE-500 BUILDING ASSOCIATES

STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 1999


Peter L. Thomas N.
Malkin Keltner,
Total Group Jr. Group

Partners' capital, January 1, 1999... $ 218,618 $ 109,309 $ 109,309


Share of net income of partnership... 617,182 308,591 308,591


Share of net income of co-tenancy... 49,685,371 24,842,686 24,842,685

50,521,171 25,260,586 25,260,585

Distributions of partnership:

Cash distributions................. (640,000) (320,000) (320,000)

In-kind liquidating distribution to partners of
their undivided interests of partnership
assets on December 23, 1999, at cost.........
.....................................(195,800) (97,900) (97,900)

TOTAL DISTRIBUTIONS......... (835,800) (417,900) (417,900)

Contribution, on December 23, 1999 to capital of
co-tenancy of cost basis of co-tenants'
undivided interests in assets received on
dissolution of partnership........... 195,800 97,900 97,900

CO-TENANT PARTNERS' CAPITAL,
DECEMBER 31, 1999......... $49,881,171 $24,940,586 $24,940,585
























See accompanying notes to financial statements.
-18-
EXHIBIT C-2

NAVARRE-500 BUILDING ASSOCIATES

STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 2000






Peter L. Thomas N.
Malkin Keltner,
Total Group Jr. Group


Partners' capital, January 1, 2000................... $49,881,171 $24,940,586 $24,940,585


Share of net income.................................. 170,687 85,343 85,344

50,051,858 25,025,929 25,025,929

Distributions........................................ 47,116,882 23,558,441 23,558,441


PARTNERS' CAPITAL, DECEMBER 31, 2000........ $ 2,934,976 $ 1,467,488 $ 1,467,488

































See accompanying notes to financial statements.

- 19 -
EXHIBIT C-1

NAVARRE-500 BUILDING ASSOCIATES

STATEMENT OF PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 2001




Peter L. Thomas N.
Malkin Keltner
Total Group Jr. Group


Partners' capital, January 1, 2001.................. $2,934,976 $1,467,488 $1,467,488


Share of net income................................. 83,876 41,938 41,938

3,018,852 1,509,426 1,509,426


Distributions....................................... 2,000,000 1,000,000 1,000,000


PARTNERS' CAPITAL, DECEMBER 31, 2001...... $1,018,852 $ 509,426 $ 509,426


































See accompanying notes to financial statements.

-20 -
EXHIBIT D

NAVARRE-500 BUILDING ASSOCIATES

STATEMENTS OF CASH FLOWS





Year ended December 31,
2001 2000 1999

Cash flows from operating activities:
Net income........................................ $ 83,876 $ 170,687 $ 50,302,553
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Amortization of leasehold...................... - - 6,366
(Gain on) cost of sale of leasehold............. - 24,475 (49,628,434)
Accrued interest on purchase
money note receivable......................... - - (56,937)
Interest and dividend income on purchase
money note receivable and on proceeds thereof. (106,650) (235,877) -

Net cash provided by (used in)
operating activities..................... (22,774) (40,715) 623,548


Cash flows from investing activities:
Payments of expenses of sale of leasehold......... - (246,664) (2,500,000)
Proceeds from purchase money note receivable
and interest and dividend income thereon......... 106,650 52,802,356 -


Net cash provided by (used in)
investing activities..................... 106,650 52,555,692 (2,500,000)


Cash flows from financing activities:
Cash distributions................................ (2,000,000) (47,116,882) (640,000)
Short-term advances from (repayment to) partner... - (2,525,935) 2,525,935

Net cash provided by (used in)
financing activities..................... (2,000,000) (49,642,817) 1,885,935

Net change in cash........................ (1,916,124) 2,872,160 9,483

Cash, beginning of year............................. 2,934,976 62,816 53,333

Cash, end of year......................... $ 1,018,852 $ 2,934,976 $ 62,816



Cash paid during year for interest.................. $ - $ 9,542 $ -



Supplemental disclosure of noncash investing and financing activities:

On December 23, 1999, in connection with the dissolution of the partnership and
its conversion to a co-tenancy, the partnership made an in-kind distribution
of all its assets to the partners, which had a cost basis of $195,800. On that
same date, the co-tenancy sold its leasehold in exchange for a purchase money
note receivable in the amount of $52,500,000.







See accompanying notes to financial statements.

-21 -
NAVARRE-500 BUILDING ASSOCIATES

NOTES TO FINANCIAL STATEMENTS



1. Business Activity, Sale of Leasehold and Basis of Presentation

Until its dissolution on December 23, 1999 Navarre-500 Building Associates
("Associates") conducted its business as a general partnership which held the
tenant's position in the master leasehold of property situated at 500 and 512
Seventh Avenue, New York, New York.

On December 23, 1999, the general partnership was dissolved coincidental with
an in-kind liquidating distribution to its partners of all of Associates'
assets, and was converted to a co-tenancy. Also, on that date, the co-
tenants, operating as Navarre-500 Building Associates, the co-tenancy, sold
their individual interests in the leasehold property for $52,500,000 and
received in exchange a 5% purchase money note due on January 4, 2000. After
December 23, 1999, the co-tenancy conducted its business as Navarre-500
Building Associates for the benefit of each of the co-tenants, on the same
respective economic and investment terms as had existed before the
partnership's legal dissolution. As a result of the foregoing and in order to
reflect the substance of the conveyance of the property, the co-tenancy's
transactions for the period subsequent to the dissolution of the general
partnership have been combined in the accompanying financial statements with
those of the general partnership.

The sale of the leasehold on December 23, 1999 resulted in a gain, computed as
follows:

Sales proceeds allocated to co-tenants $52,500,000
Less costs of sale:
Unamortized cost of leasehold $ 158,919
Expenses of sale 2,712,647 2,871,566

Gain on sale of leasehold,
reported in 1999 $49,628,434


In 1999 the co-tenancy borrowed $2,525,935 from a partner, Peter L. Malkin.
All of these funds were used to pay the above expenses of sale.

In 2000, the purchase money note receivable and accrued interest was collected
in full, and additional expenses of sale were incurred by the co-tenancy,
totaling $24,475.

Associates continues to have held in escrow a reserve for contingencies
associated with the operations of the leasehold property (see Note 9).



2. Summary of Significant Accounting Policies

Use of Estimates:

In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date
of the financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
-22 -
NAVARRE-500 BUILDING ASSOCIATES

NOTES TO FINANCIAL STATEMENTS
(continued)




3. Related Party Transactions - Rent Income

Rent income for the period January 1, 1999 to December 23, 1999 represents the
annual basic rent of $1,167,500, under an operating sublease, as modified,
with 500-512 Seventh Avenue Associates (the "Sublessee"). The term of the
sublease was to expire in 2024. For 1999 the rent income of $1,139,254 is the
annual basic rent, prorated through December 23, 1999, the date the leasehold
was sold (Note 1).

A partner in Associates is also a partner in the Sublessee.

The sublease also provided for additional rent to be paid to Associates based
on the Sublessee's net operating profit as defined. No additional rent was
earned by Associates in 1999.


4. Leasehold Rent

Leasehold rent paid during the year ended December 31, 1999 consisted of the
annual net rent of $487,500 under an operating leasehold, as modified, with
GSL Enterprises, Inc. For 1999 the annual net rent expense of $475,706 was
prorated through December 23, 1999. Leasehold rent was paid pursuant to an
operating lease whose term was to expire 2024.




5a. Related Party Transactions - Supervisory Services

Supervisory services (including disbursements and cost of regular accounting
services) during the year ended December 31, 1999, totaling $40,000, was paid
to the firm of Wien & Malkin LLP. Some members in that firm are partners in
Associates. Fees for supervisory services were paid pursuant to an agreement,
which amount was based on a rate of return of investment achieved by the
participants of Associates each year.

5b. Related Party Transactions - Professional Fees

Professional fees paid in 2001 and 2000 include $15,253 and $31,715,
respectively, paid to the firm of Wien & Malkin LLP.

5c. Related Party Transactions - Interest Expense

Interest income in 2000 as shown net of interest expense of $9,542, paid to a
partner on his advance in 1999 (Note 1) to cover expenses of sale of the
leasehold.




6. Number of Participants

There were approximately 600 participants in the two participating groups at
December 31st of each period presented.

- 23 -
NAVARRE-500 BUILDING ASSOCIATES

NOTES TO FINANCIAL STATEMENTS
(continued)




7. Determination of Distributions to Participants

Cash distributions to participants during 2001 and 2000 represent mainly the
net proceeds, including investment income thereon, from the purchase money
note after sale of the leasehold (Note 1), less the co-tenancy's outstanding
liabilities at December 31, 1999, and an amount held in escrow.

Cash distributions to participants during 1999 represent mainly the excess of
rent income received over the cash expenses.




8. Distributions and Amount of Income per $5,000 Participation Unit

Distributions per $5,000 participation unit during the years 2001, 2000 and
1999, based on 640 participation units outstanding during each year, consisted
of the following:
Year ended December 31,

2001 2000 1999

Income.......................... $ 131 $ 266 $1,306
Return of capital............... 2,994 73,354 -

TOTAL DISTRIBUTIONS......... $3,125 $73,620 $1,306


Distributions in 1999 include non-cash distributions of $306 and cash
distributions of $1,000. Income in 1999 per $5,000 participation unit
includes $342 from gain on sale of leasehold and related income (Note 1).

Net income is computed without regard to income tax expense since Associates
does not pay a tax on its income; instead, any such taxes are paid by the
participants in their individual capacities.




9. Concentration of Credit Risk

At December 31, 2001 the money held by Wien & Malkin LLP as escrow agent was
not insured.

-24 -


NAVARRE-500 BUILDING ASSOCIATES

OMITTED SCHEDULES




The following schedules have been omitted as not applicable in the present
instance:




SCHEDULE I - Condensed financial information of registrant.

SCHEDULE II - Valuation and qualifying accounts.

SCHEDULE III - Real estate and accumulated depreciation.

SCHEDULE IV - Mortgage loans on real estate.




-25 -











SIGNATURE

Pursuant to the requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, Registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

The individual signing this report on behalf of
Registrant is Attorney-in-Fact for Registrant and each of the
Agents in Registrant, pursuant to Powers of Attorney, dated
August 6, 1996 and May 14, 1998 (collectively, the "Power").



NAVARRE-500 BUILDING ASSOCIATES (Registrant)


By:/s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*



Date: April 15, 2002


Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed by the
undersigned as Attorney-in-Fact for each of the Agents in
Registrant, pursuant to the Power, on behalf of the Registrant
and as an Agent in Registrant on the date indicated.


By:/s/ Stanley Katzman
Stanley Katzman, Attorney-in-Fact*


Date: April 15, 2002









________________________
* Mr. Katzman supervises accounting functions for Registrant.

-26-
EXHIBIT INDEX

Number Document Page*



3(a) Partnership Agreement, dated
March 21, 1958, which was filed as
Exhibit No. 1 to Registrant's Form
S-1 Registration Statement, as
amended (the "Registration
Statement") by letter dated April 3,
1958 and assigned File No. 2-14019,
is incorporated by reference as an
exhibit hereto.

3(b) Amended Business Certificate of
Registrant filed with the Clerk of
New York County on August 10, 1998
reflecting a change in Partners
which was filed as Exhibit 3(b) to
Registrant's Report on Form 10-Q-A
for the quarter ended September 30,
1998 and is incorporated herein by
reference.

4 Form of Participating Agreement,
which was filed as Exhibit No. 4 to
Registrant's Registration Statement
by letter dated April 3, 1958 and
assigned File No. 2-14019, is
incorporated by reference as an
exhibit hereto.

10(a) Deed from Garment Center Capitol
Inc. to The Prudential Insurance
Company of America ("Prudential")
dated May 1, 1957, filed by letter
dated March 31, 1981 (Commission
File No. 0-2673) as Exhibit No.
10(a) to Registrant's Form 10-K for
the fiscal year ended December 31,
1980, is incorporated by reference
as an exhibit hereto.




_______________________
* Page references are based on a sequential numbering system
-27-

Number Document Page*


10(b) Purchase Agreement between Navarre-
500 Building Associates and 500-512
Seventh Avenue Associates, dated
March 25, 1958, which was filed as
Exhibit No. 2 to Registrant's
Registration Statement by letter
dated April 3, 1958 and assigned
File No. 2-14019, is incorporated by
reference as an exhibit hereto.

10(c) Net Lease, dated May 1, 1957, between
Prudential and 500-512, Inc., which
was filed as Exhibit No. 3 to
Registrant's Registration Statement
by letter dated April 3, 1958 and
assigned File No. 2-14019, is
incorporated by reference as an
exhibit hereto.

10(d) Assignment of Net Lease from 500-512,
Inc. to 500-512 Seventh Avenue
Associates, dated May 1, 1957, which
was filed as Exhibit No. 3(a) to
Registrant's Registration Statement
by letter dated April 3, 1958 and
assigned File No. 2-14019, is
incorporated by reference as an
exhibit hereto.

13(a) Letter to Participants, dated
January 31, 2002 for the fiscal year
ended December 31, 2001. The
foregoing material shall not be
deemed to be "filed" with the
Commission or otherwise subject to
the liabilities of Section 18 of the
Securities Exchange Act of 1934.






_______________________
* Page references are based on a sequential numbering system.
-28-

Number Document Page*


24 Powers of Attorney dated August 6, 1996
and May 14, 1998 between Peter L.
Malkin and Thomas N. Keltner, Jr. as
Agents in Registrant and Stanley
Katzman and Richard Shapiro, was
filed as Exhibit 24 to Registrant's
10-Q dated March 31, 1998 and is
incorporated herein by reference.
























_______________________
* Page references are based on a sequential numbering system

-29-