-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, PNUmlAZMcPZvE+ybUQuBY1Fqy6VPMyW38DpmcoQ7UJlU9v1mAagWPkx+B/DyqSJF pmtX8Xjwdrp+WAP1i0kv+w== 0000736908-95-000001.txt : 19950516 0000736908-95-000001.hdr.sgml : 19950516 ACCESSION NUMBER: 0000736908-95-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRAUVIN REAL ESTATE FUND LP 4 CENTRAL INDEX KEY: 0000736908 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 363304339 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13402 FILM NUMBER: 95538372 BUSINESS ADDRESS: STREET 1: 150 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124430922 MAIL ADDRESS: STREET 1: 150 S WACKER DR STREET 2: SUITE 3200 CITY: CHICAGO STATE: IL ZIP: 60606 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1995 or [ ] 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 0-13402 Brauvin Real Estate Fund L.P. 4 (Exact name of registrant as specified in its charter) Delaware 36-3304339 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 150 South Wacker Drive, Chicago, Illinois 60606 (Address of principal executive offices) (Zip Code) (312) 443-0922 (Registrant's telephone number, including area code) 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 BRAUVIN REAL ESTATE FUND L.P. 4 INDEX Page PART I Financial Information Item 1. Financial Statements. . . . . . . . . . . . . . . . . 3 Consolidated Balance Sheets at March 31, 1995 and December 31, 1994 . . . . . . . . . . . . . . . . . . . . 4 Consolidated Statements of Operations for the three months ended March 31, 1995 and 1994. . . . . . . . . . . 5 Consolidated Statement of Partners' Capital for the period January 1, 1995 to March 31, 1995 . . . . . . . . . . . . 6 Consolidated Statements of Cash Flows for the three months ended March 31, 1995 and 1994. . . . . . . . . . . 7 Notes to Consolidated Financial Statements. . . . . . . . 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . 10 PART II Other Information Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . 12 Item 2. Changes in Securities. . . . . . . . . . . . . . . . . 12 Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . 12 Item 4. Submissions of Matters to a Vote of Security Holders . 12 Item 5. Other Information. . . . . . . . . . . . . . . . . . . 12 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 12 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements Except for the December 31, 1994 Consolidated Balance Sheet, the following Consolidated Balance Sheet as of March 31, 1995, Consolidated Statements of Operations for the three months ended March 31, 1995 and 1994, Consolidated Statement of Partners' Capital for the period January 1, 1995 to March 31, 1995 and Consolidated Statements of Cash Flows for the three months ended March 31, 1995 and 1994 for Brauvin Real Estate Fund L.P. 4 (the "Partnership") are unaudited but reflect, in the opinion of the management, all adjustments necessary to present fairly the information required. All such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Partnership's 1994 Annual Report on Form 10-K. BRAUVIN REAL ESTATE FUND L.P. 4 (a Delaware limited partnership) CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 1995 1994 ASSETS Cash and cash equivalents $ 437,996 $ 404,347 Tenant receivables (net of allowance of $19,476 and $19,204, respectively) 96,927 45,979 Escrow and other deposits 210,443 147,988 Other assets 50,022 56,922 Investment in affiliated joint venture 1,015,584 1,019,775 1,810,972 1,675,011 Investment in real estate, at cost: Land 4,035,301 4,035,301 Buildings 16,201,324 16,195,230 20,236,625 20,230,531 Less: accumulated depreciation (4,645,710) (4,536,911) Total investment in real estate, net 15,590,915 15,693,620 Total Assets $17,401,887 $17,368,631 LIABILITIES AND PARTNERS' CAPITAL Liabilities Accounts payable and accrued expenses $ 185,809 $ 124,588 Security deposits 40,827 40,013 Mortgages payable 12,120,853 12,155,027 Total Liabilities 12,347,489 12,319,628 Minority interest in affiliated joint venture 689,925 712,179 Partners' Capital General Partners (16,559) (16,835) Limited Partners (9,550 limited partnership units issued and outstanding) 4,381,032 4,353,659 Total Partners' Capital 4,364,473 4,336,824 Total Liabilities and Partners' Capital $17,401,887 $17,368,631 See notes to consolidated financial statements (unaudited). BRAUVIN REAL ESTATE FUND L.P. 4 (a Delaware limited partnership) CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 1995 and 1994 (UNAUDITED) 1995 1994 INCOME Rental $453,142 $449,223 Interest 5,437 653 Other, primarily expense reimbursements 68,349 62,739 Total income 526,928 512,615 EXPENSES Mortgage and other interest 273,570 263,530 Depreciation 108,799 115,514 Real estate taxes 67,200 69,600 Repairs and maintenance 15,962 14,441 Other property operating 53,568 58,317 General and administrative 54,643 57,740 Total expenses 573,742 579,142 Loss before participation in affiliated joint ventures (46,814) (66,527) Equity in net income from affiliated joint venture 52,209 43,506 Minority interest's share of affiliated joint venture net loss 22,254 23,755 Net Income $ 27,649 $ 734 NET INCOME PER LIMITED PARTNERSHIP INTEREST (9,550 UNITS): $ 2.87 $ .08 See notes to consolidated financial statements (unaudited). BRAUVIN REAL ESTATE FUND L.P. 4 (a Delaware limited partnership) CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL For the Period January 1, 1995 to March 31, 1995 (UNAUDITED) General Limited Partners Partners Total BALANCE at January 1, 1995 $(16,835) $4,353,659 $4,336,824 Net income 276 27,373 27,649 BALANCE at March 31, 1995 $(16,559) $4,381,032 $4,364,473 See notes to consolidated financial statements (unaudited). BRAUVIN REAL ESTATE FUND L.P. 4 (a Delaware limited partnership) CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 1995 and 1994 (UNAUDITED) 1995 1994 Cash Flows From Operating Activities: Net income $ 27,649 $ 734 Adjustments to reconcile net income to net cash provided by operating activities: Equity in net income from affiliated joint venture (52,209) (43,506) Minority interest's share of affiliated joint venture net loss (22,254) (23,755) Provision for doubtful accounts 300 7,050 Depreciation 108,799 115,514 Amortization 4,729 4,729 Normalized rental revenue 780 3,233 Changes in operating assets and liabilities: (Increase) decrease in tenant receivables (52,028) 71,458 Increase in escrow and other deposits (62,455) (38,521) Decrease in other assets 2,171 12,779 Increase (decrease) in accounts payable and accrued expenses 61,221 (41,628) Increase (decrease) in security deposits 814 (889) Net cash provided by operating activities 17,517 67,198 Cash Flows From Investing Activities: Capital expenditures (6,094) (35,683) Cash distribution from affiliated joint venture 56,400 44,650 Net cash provided by investing activities 50,306 8,967 Cash Flows From Financing Activities: Repayment of mortgages (34,174) (59,717) Contribution from minority partner of affiliated joint venture -- 16,799 Net cash used in financing activities (34,174) (42,918) Net increase in cash and cash equivalents 33,649 33,247 Cash and cash equivalents at beginning of period 404,347 276,652 Cash and cash equivalents at end of period $ 437,996 $ 309,899 See notes to consolidated financial statements (unaudited). BRAUVIN REAL ESTATE FUND L.P. 4 (a Delaware limited partnership) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. 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 management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K for the year ended December 31, 1994. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reclassifications Certain amounts in the 1994 financial statements have been reclassified to conform to the 1995 presentation. This has not affected the previously reported results of operations. (3) TRANSACTIONS WITH AFFILIATES Fees and other expenses paid to the General Partners or its affiliates for the three months ended March 31, 1995 and 1994, were as follows: 1995 1994 Management fees $30,532 $35,122 Reimbursable office expenses 25,050 32,154 The Partnership believes the amounts paid to affiliates are representative of amounts which would have been paid to independent parties for similar services. The Partnership had made all payments to affiliates, except for $8,103 for legal services, as of March 31, 1995. (4) INVESTMENT IN AFFILIATED JOINT VENTURE The Partnership owns a 47% interest in Sabal Palm and accounts for its investment under the equity method. The following are condensed income statements for Sabal Palm: INCOME STATEMENTS: Three Months Ended March 31, 1995 1994 Rental income $281,813 $261,205 Interest income 402 425 282,215 261,630 Mortgage and other interest 75,694 76,409 Depreciation 33,959 33,827 Operating and administrative expenses 61,478 58,832 171,131 169,068 Net income $111,084 $92,562 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources The Partnership intends to satisfy its short-term liquidity needs through cash flow from the properties. Long-term liquidity needs are expected to be satisfied through modification of the mortgages. In November 1991, the Partnership reached an agreement with the lender to modify the terms of the Fortune mortgage loan in a manner which has allowed the property to operate at a break-even or positive cash flow level (the "Second Loan Modification"). Pursuant to the Second Loan Modification, the annual interest rate was reduced from 11.875% to 3% effective as of July 1, 1991. The Partnership makes monthly principal and interest payments based upon a 15-year amortization schedule plus 50% of available cash flow for the period from July 1, 1993 through July 1, 1997. Fortune is currently operating at a positive cash flow level and the Partnership is current on its mortgage payments for the Fortune loan. The lender had the option to accelerate the loan maturity beginning on July 1, 1994, and each anniversary thereafter, if the property is not: (i) in good condition and repair; (ii) occupied at a rate that is equal to the prevailing occupancy rate for similar properties in the same locale; and (iii) leased at rental rates which are at least 90% of the prevailing rate for similar properties in the same locale. The Partnership believes that the property currently meets these standards and will continue to meet these standards. In November 1992, the Partnership negotiated a modification of the terms of the mortgage on Raleigh Springs Marketplace with the lender (the "Modified Loan"). In October 1992, the interest rate was reduced from 12.75% to 10.00%. Since November 1992 and through September 1999, principal and interest payments are based on a 25-year amortization schedule. The Modified Loan capitalized the August, September and October 1992 mortgage payments with the final payment due on October 1, 1999. The Partnership is current on its mortgage payments for the Raleigh Springs loan. The occupancy level at Fortune at March 31, 1995 was 93% as compared to 79% at December 31, 1994. The Partnership is continuing to work to sustain the occupancy level of Fortune. Fortune operated at a positive cash flow for the three months ended March 31, 1995. Raleigh continued to generate positive cash flow for the three months ended March 31, 1995. The occupancy level at Raleigh at March 31, 1995 was 98% compared to 92% at December 31, 1994. Strawberry Fields continued to generate negative cash flow for the three months ended March 31, 1995. The occupancy level at Strawberry Fields at March 31, 1995 was 85% compared to 78% at December 31, 1994. At Sabal Palm, the Partnership and its joint venture partner are continuing to work to sustain the occupancy level, which stood at 99% at March 31, 1995 and December 31, 1994. Although the Sabal Palm retail market appears to be overbuilt, the property has continued to generate positive cash flow since its acquisition in 1986. The General Partners of the Partnership expect to distribute proceeds from operations, if any, and from the sale of real estate, to Limited Partners in a manner that is consistent with the investment objectives of the Partnership. Management of the Partnership believes that cash needs may arise from time to time which will have the effect of reducing distributions to Limited Partners to amounts less than would be available from refinancings or sale proceeds. These cash needs include, among other things, maintenance of working capital reserves in compliance with the partnership agreement as well as payments for major repairs, tenant improvements and leasing commissions in support of real estate operations. Results of Operations - Three Months Ended March 31, 1995 and 1994 (Amounts rounded to 000's) The Partnership generated a net income of $28,000 in the first quarter of 1995 as compared to a net income of $1,000 in 1994. The $27,000 increase in net income resulted primarily from a $14,000 increase in total income and a $5,000 decrease in total expenses. First quarter total income was $527,000 in 1995 as compared to $513,000 in 1994, an increase of $14,000. The $14,000 increase in rental income resulted primarily from a $9,000 increase in rental income at Fortune, due to an increase in occupancy. First quarter expenses were $574,000 in 1995 as compared to $579,000 in 1994, a decrease of $5,000. PART II - OTHER INFORMATION ITEM 1. Legal Proceedings. None. ITEM 2. Changes in Securities. None. ITEM 3. Defaults Upon Senior Securities. None. ITEM 4. Submission Of Matters To a Vote of Security Holders. None. ITEM 5. Other Information. None. ITEM 6. Exhibits and Reports On Form 8-K. None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BY: Brauvin Ventures, Inc. Corporate General Partner of Brauvin Real Estate Fund L.P. 4 BY: /s/ Jerome J. Brault Jerome J. Brault Chairman of the Board of Directors and President DATE: May 12, 1995 BY: /s/ Thomas J. Coorsh Thomas J. Coorsh Chief Financial Officer and Treasurer DATE: May 12, 1995 -----END PRIVACY-ENHANCED MESSAGE-----