NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP - FORM 10-Q

Attached files

file	filename
EX-31.1 - NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP	v193685_ex31-1.htm
EX-31.2 - NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP	v193685_ex31-2.htm
EX-32.3 - NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP	v193685_ex32-3.htm
EX-32.1 - NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP	v193685_ex32-1.htm
EX-31.3 - NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP	v193685_ex31-3.htm
EX-32.2 - NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP	v193685_ex32-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended	June 30, 2010

	OR

o	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:

000-24816

National Property Analysts Master Limited Partnership

(Exact name of registrant as specified in its charter)

Delaware		23-2610414
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

230 South Broad Street, Mezzanine
Philadelphia, Pennsylvania		19102
(Address of principal executive offices)		(Zip Code)

(215) 790-4700

(Registrant’s telephone number, including area code)

[None]

(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class		Outstanding at August 12, 2010
Units of Limited Partnership Interest		97,752 units

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

INDEX

		Page No.
PART I. FINANCIAL INFORMATION

Item 1. Combined Condensed Financial Statements (Unaudited)

Combined Condensed Balance Sheets - June 30, 2010 and December 31, 2009		1

Combined Condensed Statements of Operations and Changes in Partners’ Deficit
- Three and six months ended June 30, 2010 and 2009		2

Combined Condensed Statements of Cash Flows
- Six months ended June 30, 2010 and 2009		3

Notes to Combined Condensed Financial Statements		4

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		8

Item 3. Quantitative and Qualitative Disclosures about Market Risk.		10

Item 4 T. Controls and Procedures.		10

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.		11

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		11

Item 3. Defaults Upon Senior Securities.		11

Item 4. Submission of Matters to a Vote of Security Holders.		11

Item 5. Other Information.		11

Item 6. Exhibits.		11

SIGNATURES

Signatures		12

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

Combined Condensed Balance Sheets

(in thousands)

	June 30,			December 31,
	2010			2009
	(Unaudited)
Assets
Rental property, at cost:
Land	$	7,568		$	7,582
Buildings		107,170			107,159
Tenant-in-common property		22,662			22,662
		137,400			137,403
Less: accumulated depreciation		76,028			74,008
Rental property, net		61,372			63,395

Cash and cash equivalents		1,190			787
Restricted cash		97			80
Investment securities available for sale, at market		2,883			3,218
Tenant accounts receivable, net of allowance of $30 as of June 30, 2010 and December 31, 2009, respectively		115			148
Unbilled rent receivable		1,237			1,215
Accounts receivable and other assets (1)		431			542

Total assets	$	67,325		$	69,385

Liabilities and Partners' Deficit
Wraparound mortgages payable (1)	$	152,673		$	156,700
Less: unamortized discount based on imputed interest rate of 12% (1)		43,726			49,298

Wraparound mortgages payable less unamortized discount (1)		108,947			107,402

Due to NPAEP (1)		3,292			3,292
Other borrowings (1)		194			194
Accounts payable and other liabilities (1)		3,167			2,944
Deferred revenue		86			197
Finance lease obligation		1,750			1,750

Total liabilities		117,436			115,779

Partners' deficit		(50,111	)		(46,394	)

Total liabilities and partners' deficit	$	67,325		$	69,385

(1) See Note 3: Related Party Transactions.

See accompanying notes to Combined Condensed Financial Statements (unaudited).

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

Combined Condensed Statements of Operations and Changes in Partners' Deficit (unaudited)

(in thousands, except per-unit data)

	Three months ended June 30,						Six months ended June 30,
	2010			2009			2010			2009
Income:
Rental income		3,175		$	3,299			6,410		$	6,547
Other charges to tenants		803			761			1,733			1,687
Interest and dividend income		39			63			74			126
Total income		4,017			4,123			8,217			8,360

Operating expenses:
Interest expense (1)		3,315			3,183			6,511			6,313
Real estate taxes		753			743			1,512			1,485
Management fees (1)		149			154			294			302
Common area maintenance expenses		356			338			916			906
Ground rent (1)		195			194			389			387
Repairs and maintenance		86			85			221			180
General and administrative (1)		142			185			269			318
Depreciation		1,010			1,008			2,020			2,011
Amortization		19			17			37			37
Total operating expenses		6,025			5,907			12,169			11,939
Operating loss		(2,008	)		(1,784	)		(3,952	)		(3,579	)

Other gain (loss):
Realized gain (loss) on investment securities		(9	)		46			29			24
Gain on disposition of properties		54			-			54			-
Gain from litigation settlement		175			-			175			-
Loss from continuing operations		(1,788	)		(1,738	)		(3,694	)		(3,555	)

Partners' deficit:
Beginning of period		(48,284	)		(41,664	)		(46,394	)		(39,822	)
Net change in unrealized loss on investment securities		(39	)		207			(23	)		182

End of period	$	(50,111	)	$	(43,195	)	$	(50,111	)	$	(43,195	)

Net loss per unit	$	(18.30	)	$	(17.78	)	$	(37.79	)	$	(36.37	)
Weighted average units outstanding		97,752			97,752			97,752			97,752

(1) See Note 3: Related Party Transactions.

See accompanying notes to Combined Condensed Financial Statements (unaudited).

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

Combined Condensed Statements of Cash Flows (unaudited)

(in thousands, except per-unit data)

	Six months ended June 30,
	2010			2009
Cash flows from operating activities:
Net loss	$	(3,694	)	$	(3,555	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		2,057			2,048
Amortization of discount (1)		5,572			5,278
Net gain on disposition of properties		(54	)		-
Realized gain on investment securities		(29	)		(24	)
Change in assets and liabilities
Decrease (increase) in tenant accounts receivable		33			(84	)
Increase in unbilled rent receivable		(22	)		(49	)
Decrease in accounts receivable and other assets (1)		74			308
Increase in accounts payable and other liabilities (1)		223			213
Decrease in deferred revenue		(111	)		(76	)
Net cash provided by operating activities		4,049			4,059

Cash flows from investing activities:
Proceeds from disposition of properties		68			-
Improvements to rental property		(11	)		(43	)
(Increase) decrease in restricted cash		(17	)		26
Purchase of investment securities		(1,757	)		(1,881	)
Sale of investment securities		2,098			1,894
Net cash provided (used ) by investing activities		381			(4	)

Cash flows from financing activities:
Payments on wraparound mortgages (1)		(4,027	)		(4,025	)
Net cash used in financing activities		(4,027	)		(4,025	)

Increase in cash and cash equivalents		403			30

Cash and cash equivalents:
Beginning of period		787			1,272

End of period	$	1,190		$	1,302

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	774		$	914

(1) See Note 3: Related Party Transactions.

See accompanying notes to Combined Condensed Financial Statements (unaudited).

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

Notes to Combined Condensed Financial Statements (Unaudited)

June 30, 2010

(dollars in thousands)

Note 1: Basis of Presentation

The accompanying unaudited Combined Condensed Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America and with the instructions to Form 10-Q. Certain information and accounting policies and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such instructions, although NPAMLP believes that the included disclosures are adequate for a fair presentation. The information furnished reflects all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary for a fair summary of the financial position, results of operations and cash flows for the interim periods presented. These Combined Condensed Financial Statements should be read in conjunction with the Combined Condensed Financial Statements and notes thereto filed with our Form 10-K for the year ended December 31, 2009.

Note 2: Formation and Description of Business

National Property Analysts Master Limited Partnership (NPAMLP), a limited partnership, was formed effective January 1, 1990. NPAMLP is owned 99% by the limited partners and 1% collectively by EBL&S, Inc., the managing general partner, and Feldman International, Inc. (“FII”), the equity general partner.

The properties included in NPAMLP consist primarily of regional shopping centers or malls with national retailers as anchor tenants. The ownership and operations of these properties have been combined in NPAMLP.

The financial statements include the accounts of partnerships that contributed their interests to NPAMLP and certain partnerships whose partnership interests were not contributed as of the effective date of NPAMLP’s formation on January 1, 1990, but were allocated their interests in NPAMLP as if their partnership interests had been contributed on January 1, 1990.

Note 3: Related Party Transactions

Management fees, leasing commissions and certain administrative services, including legal fees are paid to EBL&S Property Management, Inc (“EBL&S”), which is owned entirely by E&H Properties, Inc (“E&H”), a corporation owned and controlled by Edward B. Lipkin (“Lipkin”), a related party. Management fees are paid exclusively to EBL&S and are included in Management fees in the Combined Condensed Statements of Operations. Leasing commissions are deferred over the life of their respective leases and are included in Accounts receivable and other assets on the Combined Condensed Balance Sheet at June 30, 2010. Certain administrative services, including legal fees, are reimbursed to EBL&S and are included in General and administrative expense on the Combined Condensed Statements of Operations. National Property Analysts Employee Partnership (“NPAEP”) holds the Wraparound mortgages payable. Lipkin controls NPAEP, which owns 100% of the outstanding balance of the Wraparound mortgages payable. Due to NPAEP, unamortized discount and interest expense are all financial statement accounts that relate directly to the Wraparound mortgages payable. Other borrowings represent amounts due to E&H Properties of Delaware, Inc, (“EHD”), an affiliate of E&H, and controlled by Lipkin. Included within Accounts payable and other liabilities is $2,477 and $2,382 due EBL&S at June 30, 2010 and December 31, 2009, respectively.

As of June 30, 2010, NPAMLP had an outstanding line of credit (the “NPAMLP Line”) with EHD, under which EHD has agreed to advance up to $2,500 to NPAMLP for the purposes of making capital and tenant improvements to the properties. The line bears interest at a variable rate, based on the prime rate (3.25% at June 30, 2010), and expires in May 2011. Any amounts advanced to NPAMLP are not directly secured by any collateral. Pursuant to the terms of the NPAMLP Line, the obligation of EHD to make advances to NPAMLP is at all times in the sole and absolute discretion of EHD. As of June 30, 2010, there were $194 of advances and $129 of related accrued interest due under the NPAMLP Line.

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

Notes to Combined Condensed Financial Statements (Unaudited)

June 30, 2010

(dollars in thousands)

In October 2007, NPAEP acquired from the unrelated third party owners, approximately 82% of the undivided interest in one of the parcels in Marquette, Michigan that is ground leased by NPAMLP. The terms of the ground lease were unchanged. As a result of the purchase, NPAEP receives $18 annually in ground rental payments from NPAMLP.

Note 4: Major Tenants

NPAMLP’s primary anchor tenants are Sun Microsystems (the tenant at the tenant-in-common property), Sears Holdings Corporation and its subsidiaries (“Sears”) and CVS Corporation (“CVS”). The number of locations, gross leasable area (“GLA”) and percentage of minimum rent for these tenants for the six-month period ended June 30, 2010 and 2009 are detailed in the table below. As of June 30, 2010, Sears owed approximately $54 under its leases with NPAMLP. Neither Sun Microsystems nor CVS had any outstanding balances due under its lease with NPAMLP at June 30, 2010.

	As of June 30, 2010							As of June 30, 2009
Tenant	No. Locations		GLA		% of Minimum Rent			No. Locations		GLA		% of Minimum Rent
Sun Microsystems		1		249,832		24	%		1		249,832		23	%
Sears		6		619,120		17	%		7		703,300		18	%
CVS		5		56,770		14	%		5		56,770		14	%

Note 5: Future Interest Agreement

In March 2003, NPAMLP, NPAEP and PVPG, entered into an Agreement, effective as of January 1, 2003 (the “2003 Agreement”), in which NPAEP and PVPG agreed with NPAMLP to modify the terms of Wrap Mortgages held by NPAEP and PVPG. The terms of the 2003 Agreement provided that NPAEP and PVPG: (a) reduce to 4.1% per year the annual interest rate payable on any NPAEP Wrap Note or PVPG Wrap Note that bears a stated annual interest rate in excess of that amount (the reduction in the interest rate was evaluated by NPAMLP in accordance with FASB authoritative guidance, and was determined not to be a substantial modification of terms as defined therein); (b) remove certain of the properties secured by the NPAEP and PVPG Wrap Mortgages from the burden of the cross-default and cross-collateralization provisions currently contemplated by the Restructuring Agreement effective as of January 1, 1990 by and among MLPG, NPAMLP, National Property Analysts, Inc. and others; and (c) agree to release the lien of the Wrap Mortgages from the Properties upon a sale of or the agreement of a leasehold estate in any Property prior to the maturity of the applicable Wrap Note. In consideration for the above, NPAMLP modified the NPAEP Wrap Mortgages and the PVPG Wrap Mortgages to provide that (i) there is an event of default under the applicable NPAEP Wrap Mortgages or PVPG Wrap Mortgages, as the case may be, if a judgment or other lien is entered against the title or lease-holding entity thereby entitling NPAEP or PVPG, as the case may be, to avail itself of the post-default rights or remedies under the relevant security document; and (ii) for cross-default and cross-collateralization among certain partnerships comprising NPAMLP. In addition NPAMLP shall execute and deliver to NPAEP or PVPG, as the case may be, a currently recordable deed of future interest (or assignment of future leasehold interest) sufficient to convey to NPAEP or PVPG, as the case may be, all of NPAMLP’s right, title, interest and estate in and to its fee or leasehold interest in the encumbered properties effective upon the maturity on December 31, 2013 of the NPAEP Wrap Mortgages and the PVPG Wrap Mortgages unless the Wrap Mortgages have previously been paid in full.

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

Notes to Combined Condensed Financial Statements (Unaudited)

June 30, 2010

(dollars in thousands)

The Managing General Partner believes that the execution and delivery of the 2003 Agreement has had the following effects for NPAMLP as a result of the reduction in the annual interest rate on the NPAEP Wrap Notes and The PVPG Wrap Notes (i) NPAMLP has realized reductions in interest that it otherwise would have been obligated to pay during the period between January 1, 2003 and December 31, 2013 when these loans mature and (ii) NPAMLP will be able to allocate a greater portion of its available cash flow to principal repayments. As a result of the faster repayment of principal, the Limited Partners will recognize additional taxable income (or smaller tax losses) in each year from 2003 until the maturity of the NPAEP Wrap Mortgages and the PVPG Wrap Mortgages. In addition, the anticipated date of dissolution of NPAMLP will now occur in 2013 rather than 2015. Further, because the reduced interest rate is below the Applicable Federal Rate (“AFR”) prescribed under Section 1274, Internal Revenue Code of 1986, as amended, investors in certain Partnerships recognized non-recurring ordinary income (forgiveness of indebtedness) in 2003. The tax impact of this recognition depended upon numerous factors related to each investor’s particular tax situation, including his marginal tax rate and his suspended passive losses from prior years.

The Wrap Mortgages owned by NPAEP or PVPG are due and payable in substantial “balloon” amounts on December 31, 2013. Assuming no sales of Properties by NPAMLP in the interim period (2010 through 2013) the projected balance due for all of the Wrap Mortgages at December 31, 2013 is expected to approximate $109,000. As described above, in return for the reduction in interest rate and other consideration set forth above, including the satisfaction of the Wrap Mortgages due on December 31, 2013, NPAMLP’s Managing General Partner has agreed to deliver deeds of future interest and assignments of leasehold interest, to be recorded currently, effective December 31, 2013, to NPAEP and PVPG. NPAMLP’s Managing General Partner has determined that it is in the best interests of NPAMLP and its partners to do so. The effect of these deeds and assignments will be to facilitate a transfer of fee and leasehold ownership to the holders of the Wrap Mortgages at maturity (unless the Wrap Mortgages have been previously paid in full). Notwithstanding the foregoing, NPAEP and PVPG have agreed in the 2003 Agreement to (a) release the liens of the Wrap Mortgages and (b) deliver such deeds of future interest, assignments of leasehold interests, or other documents or instruments as are necessary to facilitate or effect such sales of the Properties prior to December 31, 2013 as the Managing General Partner shall otherwise deem desirable. The costs incurred arising from the recordation of any of the documents described in the 2003 Agreement shall be borne by NPAEP or PVPG, as the case may be. The Managing General Partner believes that the result of the forgoing actions taken pursuant to the 2003 Agreement will preserve all rights of the Limited Partners under the Restructuring Agreement, including their right to share in certain sales proceeds or cash flows prior to maturity of the Wrap Mortgages.

Note 6: Commitments and Contingencies

In June 2006, NPAMLP and a limited liability company controlled by Lipkin (ARJAX) entered into an agreement with an anchor tenant (the “Agreement”), whereby the lease with the anchor tenant would be assigned to NPAMLP or ARJAX effective February 2009 (the “Effective Date”). In June 2008, the Agreement was amended extending the Effective Date to January 31, 2011. In June 2010, the Agreement was further amended extending the Effective Date to February 29, 2012. In consideration for the assignment, the anchor tenant would receive payments totaling $2,550 during the period from June 2006 through the Effective Date. To date, ARJAX has remitted $1,400 to the anchor tenant in accordance with the terms of the Agreement. In addition, the anchor tenant will be obligated to complete, by the Effective Date, $500 in repairs or improvements which would otherwise be the responsibility of NPAMLP to six other stores leased from NPAMLP. Under the Agreement, the commitment to the anchor tenant is borne by ARJAX and NPAMLP, however it is anticipated that ARJAX shall fund all of the consideration due. In September 2006, NPAMLP sold the property encumbered by the affected anchor tenant lease to ARJAX. NPAMLP would be liable for the payments required under the Agreement should ARJAX fail to do so. Lipkin has personally guaranteed the obligations to the anchor tenant under the Agreement.

As of June 30, 2010, NPAMLP was obligated for $161 in capital commitments, primarily for asphalt repairs.

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

Notes to Combined Condensed Financial Statements (Unaudited)

June 30, 2010

(dollars in thousands)

Note 7: Recent Accounting Pronouncements

In January 2010, the FASB issued authoritative guidance to enhance the usefulness of fair value measurements. This guidance amends the disclosures about fair value measurements in the FASB Accounting Standards Codification. The amended guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disaggregation requirement for the reconciliation disclosure of Level 3 measurements, which is effective for fiscal years beginning after December 15, 2010 and for interim periods within those years. NPAMLP has adopted the provisions of this guidance which did not have a significant impact on our combined condensed financial statements.

In June 2009, the FASB issued authoritative guidance to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about (1) a transfer of its financial assets, (2) the effects of such a transfer on its financial position, financial performance, and cash flows, and (3) a reporting entity’s continuing involvement, if any, in the transferred financial assets. The guidance is effective for annual reporting periods beginning after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter, with early adoption prohibited. NPAMLP has adopted the provisions of the FASB guidance which did not have a material impact on its combined condensed financial statements.

In June 2009, the FASB issued authoritative guidance to improve financial reporting disclosure by companies involved with variable interest entities and to provide more relevant and reliable information to users of financial statements. The guidance is effective for annual reporting periods beginning after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter, with early adoption prohibited. NPAMLP has adopted the provisions of the FASB guidance which did not have a material impact on its combined condensed financial statements.

Note 8: Disclosure of Fair Value of Financial Instruments

The following disclosure of estimated fair value was determined by NPAMLP using available market information and appropriate valuation methodologies. However, considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts NPAMLP could realize on disposition of the financial instruments at June 30, 2010 and December 31, 2009. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash equivalents, marketable securities, receivables, accounts payable, and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of June 30, 2010 and December 31, 2009.

The fair value of the NPAMLP’s wraparound mortgages aggregate approximately $109 million and $107 million as of June 30, 2010 and December 31, 2009, respectively. Management estimates that the carrying value approximates the estimated fair value of the wraparound mortgages at June 30, 2010 and December 31, 2009. In accordance with FASB authoritative guidance, NPAMLP has determined the estimated fair value of its wraparound mortgages based on discounted future cash flows at a current market rate.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2010 and December 31, 2009. Although NPAMLP is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2009 and current estimates of fair value may differ significantly from the amounts presented herein.

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

June 30, 2010

(dollars in thousands)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

Net cash provided by operating and investing activities for the six-month period ended June 30, 2010 was $4,049 and $381, respectively. Net cash used in financing activities was $4,027. As a result of the above, there was a $403 increase in cash and cash equivalents for the six months ended June 30, 2010. The increase in cash was primarily due to a settlement of litigation with a prior tenant at the Lake Mary, Florida property and the receipt of a $67 net eminent domain award arising from the loss of a small portion of the Taylorville, Illinois property.

As of June 30, 2010, NPAMLP had an outstanding line of credit (the “NPAMLP Line”) with EHD, a related party, under which EHD has agreed to advance up to $2,500 to NPAMLP for the purposes of making capital and tenant improvements to the properties. The line bears interest at a variable rate, based on the prime rate (3.25% at March 31, 2010), and expires in May 2011. Any amounts advanced to NPAMLP are not directly secured by any collateral. Pursuant to the terms of the NPAMLP Line, the obligation of EHD to make advances to NPAMLP is at all times in the sole and absolute discretion of EHD. As of June 30, 2010, there were $194 of advances and $129 of related accrued interest under the NPAMLP Line.

As of June 30, 2010, the third party underlying mortgages were current for all the properties.

As of June 30, 2010, NPAMLP was obligated for $161 in capital commitments, primarily for asphalt repairs.

Critical Accounting Policies

There were no significant changes to NPAMLP’s critical accounting policies and estimates during the six-month period ended June 30, 2010.

Results of Operations

NPAMLP owned 24 properties at June 30, 2010 and June 30, 2009.

The loss from continuing operations for the three and six-month periods ended June 30, 2010 versus June 30, 2009 increased by $50 and $139, respectively. The increase in the loss from continuing operations was primarily due to an increase in interest expense, and loss of the anchor tenant at the Kalamazoo, Michigan property. The increase in interest expense for the three and six-month periods ended June 30, 2010 versus June 30, 2009 was $132 and $198, respectively, and is consistent with an increase in the balance of the wraparound mortgages as the amortization of the discount on wraparound mortgages was greater than the principal reduction on wraparound mortgages payable for the three and six month periods ending June 30, 2010. The anchor tenant’s lease at the Kalamazoo, Michigan property ended on February 28, 2010, resulting in a reduction in rental income for the three and six month periods ended June 30, 2010 of $62 and $83, respectively. NPAMLP is actively marketing this vacant space to major regional and national retailers. The two factors were partially offset by the receipt of the eminent domain award, mentioned above, and a litigation settlement from a prior tenant at the Lake Mary, Florida property of $175, which is included in Gain from litigation settlement in the Combined Statement of Operations and Changes in Partners’ Deficit for the six month period ending June 30, 2010.

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

June 30, 2010

(dollars in thousands)

Factors That May Influence Future Results of Operations

Economic Conditions. In the United States, recent market and economic conditions have resulted in tighter credit conditions and limited growth through the second quarter of 2010. As a result of these market conditions, the cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets. Concern about the stability of the markets has led many lenders and institutional investors to reduce, and in some cases, cease to provide funding to borrowers. Since there are no balloon payments due on the third party underlying mortgages until 2012, NPAMLP has less exposure to these credit conditions. Continued turbulence in the U.S. and international markets and economies may adversely affect the liquidity and financial condition of our tenants and consequently, NPAMLP’s liquidity. If these market conditions continue, they may limit the ability of our tenants, to timely refinance maturing liabilities and access the capital markets to meet liquidity needs.

Real Estate Asset Valuation. General economic conditions and the resulting impact on market conditions or a downturn in tenants’ businesses may adversely affect the value of NPAMLP’s assets. Periods of economic slowdown or recession in the U.S., a decrease in market rental rates and/or market values of real estate assets, could have a negative impact on the value of NPAMLP properties and related tenant improvements. If NPAMLP was required under Generally Accepted Accounting Pronouncements to write down the carrying value of any properties to the lower of cost or market due to impairment, or if as a result of an early lease termination we were required to remove and dispose of material amounts of tenant improvements that are not reusable to another tenant, NPAMLP’s results of operations would be negatively affected.

Leasing Activity and Rental Rates. The amount of net rental income generated by NPAMLP properties depends principally on the ability to maintain the occupancy rates of currently leased space and to lease currently available space, and space available from unscheduled lease terminations. The amount of rental income generated also depends on the ability to maintain or increase rental rates at the properties. Negative trends in one or more of these factors could adversely affect rental income in future periods.

Forward Looking Statements

From time to time, management may provide information, whether orally or in writing, including certain statements in this Quarterly Report on Form 10-Q, which are deemed to be “forward-looking” within the meaning of the federal securities laws. These forward-looking statements reflect management’s current beliefs and expectations with respect to future events and are based on assumptions and are subject to risks and uncertainties and other factors outside management’s control that may cause actual results to differ materially from those projected.

The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such statements reflect management’s current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended or using other similar expressions. Management does not intend to update these forward-looking statements, except as required by law. In accordance with the provisions of the federal securities laws, we are making the limited partners aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated by the forward-looking statements contained in this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K and any exhibits hereto or thereto. Such factors include, but are not limited to: the outcome of litigation and regulatory proceedings to which NPAMLP may be a party; actions of competitors; changes and developments affecting our industry; quarterly or cyclical variations in financial results; the ability to attract and retain tenants at market rates; interest rates and cost of borrowing; management’s ability to maintain and improve cost efficiency of operations; changes in economic conditions, political conditions, and other factors that are set forth in the “Legal Proceedings” section, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other sections of this Quarterly Report on Form 10-Q, as well as in our Annual Report on Form 10-K and Current Reports on Form 8-K.

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP

(a limited partnership)

June 30, 2010

(dollars in thousands)

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4 T. Controls and Procedures

NPAMLP’s managing general partner, equity general partner and its agent’s chief financial officer, after evaluating the effectiveness of the design and operation of NPAMLP’s disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this quarterly report, have concluded, based on the evaluation of these controls and procedures required by paragraph (b) of the Exchange Act Rules 13a-15 or 15d-15, that NPAMLP’s disclosure controls and procedures were effective. Disclosure controls and procedures ensure that information to be disclosed in reports that the NPAMLP files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and terms of the Securities and Exchange Commission, and ensure that information required to be disclosed in the reports that NPAMLP files or submits under the Exchange Act is accumulated and communicated to NPAMLP's management, including its managing general partner, equity general partner and its agent's chief financial officer, to allow timely decisions regarding required disclosure.

There were no changes in NPAMLP’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during NPAMLP’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, NPAMLP’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

NPAMLP is involved in various claims and legal actions arising in the ordinary course of property operations. In the opinion of the General Partners, the ultimate disposition of these matters will not have a material adverse effect on NPAMLP's financial position, results of operations or liquidity.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No.		Description

31.1		Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

31.2		Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

31.3		Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

32.1		Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

32.2		Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

32.3		Certification Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	National Property Analysts Master Limited Partnership
	(Registrant)

	Date:	August 12, 2010

	By:	EBL&S, Inc., its managing general partner

	By:	/s/ Edward B. Lipkin
	Name:	Edward B. Lipkin
	Title:	President

	By:	Feldman International, Inc., its equity general partner

	By:	/s/ Robert McKinney
	Name:	Robert McKinney
	Title:	President

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP - FORM 10-Q - August 16, 2010

Attached files

NATIONAL PROPERTY ANALYSTS MASTER LIMITED PARTNERSHIP Reports