-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PIVp144qCnYmetZrCWy/X19RumPlIHd1A+XTPPvzyHC6qMv3Ib+2rXsWfqxkIJeD 0CaWsk03FV9IkbW+NmtHRA== 0000725614-97-000001.txt : 19970512 0000725614-97-000001.hdr.sgml : 19970512 ACCESSION NUMBER: 0000725614-97-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970509 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL PROPERTIES V CENTRAL INDEX KEY: 0000725614 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 942918560 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13083 FILM NUMBER: 97599928 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: POST OFFICE BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period.........to......... Commission file number 0-13083 CONSOLIDATED CAPITAL PROPERTIES V (Exact name of small business issuer as specified in its charter) California 94-2918560 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) CONSOLIDATED CAPITAL PROPERTIES V CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1997 Assets Cash and cash equivalents: Unrestricted $ 562 Restricted - tenant security deposits 87 Investments 107 Accounts receivable 45 Escrows for taxes and insurance 55 Restricted escrows 783 Other assets 301 Investment properties: Land $ 1,969 Buildings and related personal property 18,508 20,477 Less accumulated depreciation (13,339) 7,138 $ 9,078 Liabilities and Partners' Deficit Liabilities Accounts payable $ 79 Tenant security deposits 87 Accrued taxes 384 Other liabilities 127 Mortgage notes payable 11,247 Partners' Deficit General partner $ (20) Special limited partners (53) Limited partners (179,617 units issued and outstanding) (2,773) (2,846) $ 9,078 See Accompanying Notes to Consolidated Financial Statements b) CONSOLIDATED CAPITAL PROPERTIES V CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1997 1996 Revenues: Rental income $1,084 $ 978 Other income 65 31 Total revenues 1,149 1,009 Expenses: Operating 402 367 General and administrative 41 56 Maintenance 205 99 Depreciation 268 282 Interest 206 249 Property taxes 110 114 Total expenses 1,232 1,167 Net loss $ (83) $ (158) Net loss allocated to general partner (.2%) $ -- $ -- Net loss allocated to limited partners (99.8%) (83) (158) $ (83) $ (158) Net loss per limited partnership unit: $ (.46) $ (.88) See Accompanying Notes to Consolidated Financial Statements c) CONSOLIDATED CAPITAL PROPERTIES V CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) For the Three Months Ended March 31, 1997 (in thousands, except unit data) Limited Special Partnership General Limited Limited Units Partner Partners Partners Total Original capital contributions 180,037 $ 1 $ -- $45,009 $45,010 Partners' deficit at December 31, 1996 179,617 $ (20) $ (54) $(2,689) $(2,763) Amortization of timing difference (Note D) -- -- 1 (1) -- Net loss for the three months ended March 31, 1997 -- -- -- (83) (83) Partners' deficit at March 31, 1997 179,617 $ (20) $ (53) $(2,773) $(2,846) See Accompanying Notes to Consolidated Financial Statements d) CONSOLIDATED CAPITAL PROPERTIES V CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net loss $ (83) $ (158) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 268 282 Amortization of lease commissions, discounts, and loan costs 17 42 Interest added to mortgage notes payable -- 3 Change in accounts: Restricted cash 6 1 Accounts receivable (15) -- Escrows for taxes and insurance 181 (59) Other assets 1 51 Accounts payable (3) (111) Tenant security deposit liabilities (8) (8) Accrued taxes (21) 67 Other liabilities (20) (76) Net cash provided by operating activities 323 34 Cash flows from investing activities: Property improvements and replacements (115) (44) Deposits to restricted escrows (39) (16) Receipts from restricted escrows 160 -- Net cash provided by (used in) investing activities 6 (60) Cash flows from financing activities: Payments on mortgage notes payable (47) (52) Repayment of mortgage note payable -- (700) Loan costs paid (10) -- Net cash used in financing activities (57) (752) Net increase (decrease) in cash and cash 272 (778) equivalents Cash and cash equivalents at beginning of period 290 1,078 Cash and cash equivalents at end of period $ 562 $ 300 Supplemental disclosure of cash flow information: Cash paid for interest $ 206 $ 244 See Accompanying Notes to Consolidated Financial Statements e) CONSOLIDATED CAPITAL PROPERTIES V NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Consolidated Capital Properties V ("the Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of ConCap Equities, Inc. (the "General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the fiscal year ended December 31, 1996. Investments Investments consisting primarily of U.S. Treasury Notes with original maturities of more than ninety days, are considered to be held-to-maturity securities. NOTE B - TRANSACTIONS WITH RELATED PARTIES The Partnership has no employees and is dependent on the General Partner and affiliates of Insignia for the management and administration of all of the Partnership activities, as provided for in the Partnership agreement. The Partnership has paid property management fees based upon collected gross rental revenues for property management services in each of the three months ended March 31, 1997 and 1996. Property management fees of approximately $53,000 and $50,000 were paid to affiliates of the General Partner for each of the three months ended March 31, 1997 and 1996, respectively. These fees are included in operating expenses. The Partnership Agreement also provides for reimbursement to the General Partner and its affiliates for costs incurred in connection with the administration of Partnership activities. Reimbursements for services of affiliates of approximately $35,000 and $34,000 were paid to the General Partner and its affiliates during each of the three months ended March 31, 1997 and 1996, respectively. These reimbursements are included in general and administrative expenses. Also during the three months ended March 31, 1997 and 1996, approximately $14,000 and $2,000, respectively, of leasing commissions were paid to an affiliate of Insignia. Leasing commissions are capitalized and included in other assets. Approximately $2,000 during the three months ended March 31, 1997, was paid to affiliates for construction oversight costs incurred in conjunction with improvements made at Aspen Ridge and Sutton Place. These amounts are included in maintenance expense. During the three months ended March 31, 1997, the Partnership paid an affiliate of the General Partner approximately $6,000 for loan costs which were capitalized and included in other assets in the accompanying Consolidated Balance Sheet. These loan costs related to the refinancing of the Aspen Ridge Apartments during the fourth quarter of 1996. In July 1995, the Partnership began insuring its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the General Partner who receives payment on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the General Partner by virtue of the agent's obligations is not significant. NOTE C - COMMITMENT The Partnership is required to maintain working capital reserves for normal repairs, replacements, working capital and contingencies of not less than 5% of Net Invested Capital as defined in the Partnership Agreement. In the event expenditures are made from these reserves, operating revenue shall be allocated to such reserves to the extent necessary to maintain the foregoing level. Cash and cash equivalents, tenant security deposits and investments totaling approximately $756,000, are less than the reserve requirement of approximately $1,761,000 at March 31, 1997. The Partnership intends to replenish the working capital reserve from cash flow from operations after consideration of any capital improvement needs of the properties. The Partnership's recent cash flows from operations, however, have not been sufficient to replenish the reserve and there is no assurance that future levels of cash flow from operations will be adequate to accomplish this objective. The working capital requirement must be met prior to any consideration for distributions to the partners. NOTE D - CHANGE IN STATUS OF NON-CORPORATE GENERAL PARTNER In the year ended December 31, 1991, the Partnership Agreement was amended to convert the General Partner interests held by the non-corporate General Partner, Consolidated Capital Group ("CCG"), to that of special limited partners ("Special Limited Partners"). The Special Limited Partners do not have a vote and do not have any of the other rights of a Limited Partner except the right to inspect the Partnership's books and records; however, the Special Limited Partners will retain the economic interest in the Partnership which it previously owned as general partner. ConCap Equities, Inc. ("CEI") became the sole general partner of the Partnership effective December 31, 1991. In connection with CCG's conversion, a special allocation of gross income was made to the Special Limited Partners in order to eliminate their tax basis negative capital accounts. After the conversion, the various owners of interests in the Special Limited Partner transferred portions of their interests to CEI so that CEI now holds a .2% interest in all allocable items of income, loss and distribution. The difference between the Special Limited Partners' capital accounts for financial statement and tax reporting purposes is being amortized as the components of the timing differences which created the balance reverse. NOTE E - DEBT RESTRUCTURING The Partnership restructured the debt on the 51 North High Building and made a principal prepayment (without penalty) of $700,000 in January 1996. In addition to this payment, the lender reduced the note's face amount by an additional $700,000 and the stated interest rate of the note was reduced from 13.5% to 9%. The maturity date of June 1, 2004, was unchanged. The debt restructuring was accounted for as a modification of terms. The total future cash payments under the restructured loan exceed the carrying value of the loan as of the date of restructure. Consequently, the carrying amount of the loan was reduced only by the $700,000 principal prepayment actually paid with no gain being recognized on the restructuring. Interest on the restructured debt accrues at an imputed rate of 4%, the rate required to equate the present value of the total future cash payments under the new terms to the carrying amount of the loan at the date of restructure. To facilitate the debt restructuring of the 51 North High Building in 1996, the property was placed into a lower-tier partnership known as 51 North High Street, L.P. in which the Partnership is the 99.99% limited partner. The Partnership retained substantially all economic benefits from the property. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two apartment complexes and one commercial property. The following table sets forth the average occupancy of the properties for the three months ended March 31, 1997 and 1996: Occupancy for the Three Months Ended March 31, 1997 1996 Aspen Ridge Apartments Chicago, Illinois 94% 89% Sutton Place Apartments Corpus Christi, Texas 95% 90% 51 North High Street Building Columbus, Ohio 94% 88% The increase in occupancy at the Aspen Ridge Apartments is primarily due to rental concessions offered during 1996 which increased occupancy throughout 1996 and the first quarter of 1997. The increase in occupancy at the Sutton Place Apartments resulted from additional military troops being relocated to Corpus Christi as well as improved curb appeal of the property resulting from the exterior building improvements made at the property from funds received from the debt refinancing in September 1996. The increase in occupancy at the 51 North High Street Building is due to existing tenants leasing additional space and the addition of a new tenant. The Partnership realized a net loss of approximately $83,000 during the three months ended March 31, 1997, compared to a net loss of approximately $158,000 during the three months ended March 31, 1996. The decreased loss primarily resulted from increased rental and other income and decreased interest expense partially offset by increased maintenance expenses. The increase in rental income is due to rental rate increases at the Partnership's properties and due to higher occupancy levels at all of the Partnership's properties as discussed above. The increase in other income resulted from interest earned on the capital improvement and replacement reserve escrows established in the 1996 Sutton Place and Aspen Ridge refinancings, increased lease cancellation fees at Sutton Place and increased reimbursements for tenant improvements at the 51 North High Street Building. General and administrative costs decreased as a result of decreased audit and tax return fees and a decrease in legal costs. The increase in maintenance expense is primarily due to the project at Sutton Place for exterior building improvements and parking lot repairs. The decrease in interest expense is due to a debt restructure which lowered the imputed interest rate substantially and a principal payment of $700,000 at 51 North High in January of 1996. Also, the mortgage notes secured by Sutton Place and Aspen Ridge were refinanced during the third and fourth quarters of 1996, respectively, at lower interest rates. Included in maintenance expense is approximately $82,000 of major repairs and maintenance comprised primarily of gutter repairs, exterior building improvements and exterior painting at Sutton Place Apartments for the three months ended March 31, 1997. For the three month ended March 31, 1996, approximately $4,000 of major repairs and maintenance comprised primarily of swimming pool repairs are included in maintenance expense. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the General Partner will be able to sustain such a plan. At March 31, 1997, the Partnership held cash and cash equivalents of approximately $562,000 compared to approximately $300,000 at March 31, 1996. Net cash provided by operating activities increased due to the timing of tax payments from escrows and due to the increased rental income discussed above. Net cash provided by investing activities increased as a result of receipts from the capital improvement escrow for Sutton Place for exterior capital improvements to the property. A related increase in property improvements and replacements partially offset the impact of the escrow receipts. Net cash used in financing activities decreased as a result of the non-recurring nature of the $700,000 debt reduction at 51 North High during January 1996. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the property to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of approximately $11,247,000, net of discount, matures at various times with balloon payments due at maturity, at which time the properties will either be sold or the mortgages refinanced. Future cash distributions will depend on the levels of net cash generated from operations, capital expenditure requirements, property sales and the availability of cash reserves. During the three months ended March 31, 1997, and March 31, 1996, no distributions were declared or paid. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a)Exhibits. Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. (b)Reports on Form 8-K. None. SIGNATURES In accordance with the requirements of the Exchange Act, the Partnership caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CONSOLIDATED CAPITAL PROPERTIES V By: CONCAP EQUITIES, INC. General Partner By: /s/ William H. Jarrard, Jr. William H. Jarrard, Jr. President By: /s/ Ronald Uretta Ronald Uretta Vice President/Treasurer Date: May 9, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Consolidated Capital Properties V 1997 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000725614 CONSOLIDATED CAPITAL PROPERTIES V 1,000 3-MOS DEC-31-1997 MAR-31-1997 562 0 45 0 0 0 20,477 13,339 9,078 0 11,247 0 0 0 (2,846) 9,078 0 1,149 0 1,232 0 0 206 0 0 0 0 0 0 (83) (.46) 0 Partnership has an unclassified balance sheet. Multiplier is 1.
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