-----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, MzI+b1eEeZFzKBhRAcgoHRNggYOu8q/5pCthMagnrqeGCpdPGu+TrpTs4JE65gTj G5sFO0PtiU7W07sFGggHGQ== 0000736908-96-000017.txt : 19960814 0000736908-96-000017.hdr.sgml : 19960814 ACCESSION NUMBER: 0000736908-96-000017 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 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: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13402 FILM NUMBER: 96610559 BUSINESS ADDRESS: STREET 1: 150 S WACKER DR 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 10QSB 1 UNITED STATES 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 June 30, 1996 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 small business issuer 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 (Issuer's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 . INDEX Page PART I Financial Information Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . .3 Consolidated Balance Sheet at June 30, 1996. . . . . . . . . .4 Consolidated Statements of Operations for the Six Months Ended June 30, 1996 and 1995. . . . . . . . . . . .5 Consolidated Statements of Operations for the Three Months Ended June 30, 1996 and 1995. . . . . . . . . . .6 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 1996 and 1995. . . . . . . . . . . .7 Notes to Consolidated Financial Statements . . . . . . . . . .8 Item 2. Management's Discussion and Analysis or Plan of Operation . . . . . . . . . . . . . . . . . . . . . . . . 10 PART II Other Information Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 14 Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . 14 Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . 14 Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . 14 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 14 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements The following Consolidated Balance Sheet as of June 30, 1996, Consolidated Statements of Operations for the six and three months ended June 30, 1996 and 1995 and Consolidated Statements of Cash Flows for the six months ended June 30, 1996 and 1995 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 1995 Annual Report on Form 10-K. CONSOLIDATED BALANCE SHEET (UNAUDITED) June 30, 1996 ASSETS Cash and cash equivalents $ 725,238 Tenant receivables (net of allowance of $80,668) 72,799 Escrow deposits 211,217 Other assets 43,662 Investment in affiliated joint venture 972,617 2,025,533 Investment in real estate, at cost: Land 4,035,301 Buildings 16,225,202 20,260,503 Less: accumulated depreciation (5,202,564) Total investment in real estate, net 15,057,939 Total Assets $17,083,472 LIABILITIES AND PARTNERS' CAPITAL Liabilities Accounts payable and accrued expenses $ 256,651 Security deposits 50,784 Mortgages payable 11,837,372 Total Liabilities 12,144,807 Minority interest in affiliated joint venture 589,324 Partners' Capital General Partners (16,710) Limited Partners (9,550 limited partnership units issued and outstanding) 4,366,051 Total Partners' Capital 4,349,341 Total Liabilities and Partners' Capital $17,083,472 See notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENTS OF OPERATIONS For the Six months Ended June 30, 1996 and 1995 (UNAUDITED) 1996 1995 INCOME Rental $ 905,929 $ 932,023 Interest 17,386 12,870 Other, primarily tenant expense reimbursements 126,647 88,331 Total income 1,049,962 1,033,224 EXPENSES Interest 492,194 546,379 Depreciation 224,705 219,380 Real estate taxes 137,580 134,182 Repairs and maintenance 15,600 21,480 Operating 122,210 108,109 General and administrative 153,658 116,689 Total expenses 1,145,947 1,146,219 Equity in net income from affiliated joint venture 39,157 56,720 Loss before minority interest's share in affiliated joint venture (56,828) (56,275) Minority interest's share of affiliated joint venture 21,166 40,853 Net Loss $ (35,662) $ (15,422) Net Loss Per Limited Partnership Interest (9,550 Units) $(3.70) $(1.60) See notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended June 30, 1996 and 1995 (UNAUDITED) 1996 1995 INCOME Rental $431,507 $478,881 Interest 9,050 7,433 Other, primarily tenant expense reimbursements 53,421 19,982 Total income 493,978 506,296 EXPENSES Interest 243,476 272,809 Depreciation 114,347 110,581 Real estate taxes 67,080 66,982 Repairs and maintenance 8,172 5,518 Operating 54,799 54,541 General and administrative 85,835 62,046 Total expenses 573,709 572,477 Equity in net (loss) income from affiliated joint venture (20,672) 4,511 Loss before minority interest's share in affiliated joint venture (100,403) (61,670) Minority interest's share of affiliated joint venture 9,298 18,599 Net Loss $(91,105) $(43,071) Net Loss Per Limited Partnership Interest (9,550 Units) $(9.44) $(4.47) See notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1996 and 1995 (UNAUDITED) 1996 1995 Cash Flows From Operating Activities: Net loss $(35,662) $(15,422) Adjustments to reconcile net loss to net cash provided by operating activities: Equity in affiliated joint venture's net loss (39,157) (56,720) Minority interest's share of affiliated joint venture net loss (21,166) (40,853) Provision for doubtful accounts 36,213 6,405 Depreciation 224,705 219,380 Normalized rental revenue 4,850 2,494 Changes in operating assets and liabilities: Decrease (increase) in tenant receivables, net 53,434 (21,162) Increase in escrow deposits (114,469) (52,422) Increase in other assets (2,666) (35,499) Decrease in due from affiliate 52,901 -- Increase in accounts payable and accrued expenses 137,503 93,822 Increase in security deposits 7,300 4,521 Net cash provided by operating activities 303,786 104,544 Cash Flows From Investing Activities: Capital expenditures (11,347) (16,547) Cash distribution from affiliated joint venture 70,500 56,400 Net cash provided by investing activities 59,153 39,853 Cash Flows From Financing Activities: Repayment of mortgages (146,005) (68,862) Cash used in financing activities (146,005) (68,862) Net increase in cash and cash equivalents 216,934 75,535 Cash and cash equivalents at beginning of period 508,304 404,347 Cash and cash equivalents at end of period $725,238 $479,882 See notes to consolidated financial statements (unaudited). 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-QSB 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 six month period ended June 30, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. 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, 1995. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reclassifications Certain amounts in the 1995 financial statements have been reclassified to conform to the 1996 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 their affiliates for the six months ended June 30, 1996 and 1995, were as follows: 1996 1995 Management fees $62,693 $61,269 Reimbursable office expenses 52,500 50,100 Legal fees 257 281 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 $7,265 and $7,822 for legal services, as of June 30, 1996 and 1995, respectively. (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: Six Months Ended June 30, 1996 1995 Rental income $407,191 $459,746 Interest income 1,624 1,167 408,815 460,913 Mortgage and other interest 149,987 151,140 Depreciation 67,312 67,718 Operating and administrative expenses 108,204 121,374 325,503 340,232 Net income $ 83,312 $120,681 ITEM 2. Management's Discussion and Analysis or Plan of Operation. 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 at more favorable interest rates. The occupancy level at Fortune at June 30, 1996 was 96% as compared to 86% at December 31, 1995 and 93% at June 30, 1995. The Partnership is continuing to work to sustain the occupancy level of Fortune. Fortune operated at a positive cash flow for the six months ended June 30, 1996. Raleigh operated at a positive cash flow for the six months ended June 30, 1996. The occupancy level at Raleigh at June 30, 1996 was 75% compared to 94% at December 31, 1995 and 98% at June 30, 1995. The decline in occupancy at Raleigh was due to a major tenant, T.J. Maxx, vacating during the first quarter of 1996. T.J. Maxx vacated its space in January 1996 but continued to pay rent through its lease expiration, March 31, 1996. The space is currently being marketed both regionally and nationally. There has been an expression of interest by a health group for approximately 37% of the T.J. Maxx space. A proposal has been received from this prospective tenant and in return has received a lease for approval. A carpet store has expressed an interest in the remaining portion of the T. J. Maxx space but no agreement has been reached at this time. Due to the vacancy of this space, which occupies 21% of the center, the Partnership anticipates a significant decrease in cash flow. Management of the Partnership continues to actively market this space to alleviate this situation. Strawberry Fields operated at a positive cash flow for the six months ended June 30, 1996. The occupancy level at Strawberry Fields at June 30, 1996 was 90% as compared to 83% at December 31, 1995 and 82% at June 30, 1995. At Sabal Palm, the Partnership and its joint venture partner are continuing to work to sustain the occupancy level, which stood at 97% at June 30, 1996 as compared to 99% at December 31, 1995 and June 30, 1995. Although the Sabal Palm retail market appears to be overbuilt, the property has operated at a 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 - Six months Ended June 30, 1996 and 1995 (Amounts rounded to 000's) The Partnership generated a net loss of $36,000 for the six months ended June 30, 1996 as compared to a net loss of $15,000 for the six months ended June 30, 1995. The $21,000 increase in net loss resulted primarily from a $18,000 decrease in the Partnership's equity interest in Sabal Palm's net income. Total income for the six months ended June 30, 1996 was $1,050,000 as compared to $1,033,000 for the same six month period in 1995, an increase of $17,000. The $17,000 increase resulted primarily from a $39,000 increase in other tenant reimbursements which was offset by a $26,000 decrease in rental income. The $39,000 increase in other tenant reimbursements was mainly attributed to an increase of $45,000 at Raleigh. The decrease of $26,000 in rental income was mainly attributed to a decrease of $75,000 at Raleigh which was offset by an increase at Fortune ($16,000) and Strawberry ($33,000). The increase in rental income at Fortune and Strawberry was the result of increased rental rates at both properties while the decrease at Raleigh was a result of T.J. Maxx vacating its space in the first quarter of 1996. This space occupies approximately 21% of the center. For the six months ended June 30, 1996 total expenses were $1,146,000 as compared to the same for the six months ended June 30, 1995. Although total expenses for the six months ended June 30, 1996 and 1995 stayed constant interest expense decreased $54,000 and repairs and maintenance decreased $5,000. These decreases were partially offset by an increase in operating expense of $14,000 and an increase in general and administrative expenses of $37,000. The decrease in interest expense was due primarily to a $49,000 decrease in interest expense at Strawberry as a result of the decrease in the interest rate from 9.0% to 7.55% on November 1, 1995 when the loan was restructured. General and administrative expenses increased by a total of $37,000 which was primarily due to a $30,000 increase in provision for bad debts. Provision for bad debts increased $7,000 at Raleigh, $8,000 at Fortune and $15,000 at Strawberry Fields. Results of Operations - Three months Ended June 30, 1996 and 1995 (Amounts rounded to 000's) The Partnership generated a net loss of $91,000 for the three months ended June 30, 1996 as compared to a net loss of $43,000 for the three months ended June 30, 1995. The $48,000 increase in net loss resulted primarily from a $26,000 decrease in the Partnership's equity interest in Sabal Palm's net income. Total income for the three months ended June 30, 1996 was $494,000 as compared to $506,000 for the three months ended June 30, 1995, a decrease of $12,000. The $12,000 decrease was a result of a decrease of $47,000 in rental income offset by an increase in tenant reimbursables of $33,000. The $47,000 decrease in rental income was attributable to a $59,000 decrease in Raleigh's rental income due to the T.J. Maxx vacant space. The decrease in Raleigh's rental income was offset by a $15,000 increase in rental income at Strawberry. The $33,000 increase in tenant reimbursables resulted from a $36,000 increase at Raleigh and $3,000 decrease at Strawberry. For the three months ended June 30, 1996 total expenses were $574,000 as compared to $572,000 for the same three month period in 1995, an increase of $2,000. The $2,000 increase in total expenses was the result of a decrease in interest expense of $30,000 which was offset by an increase in general and administrative expenses of $24,000, an increase of repairs and maintenance of $3,000 and an increase of $4,000 in depreciation expense. The decrease in interest expense was due primarily to a $27,000 decrease in interest expense at Strawberry as a result of the decrease in the interest rate from 9.0% to 7.55% on November 1, 1995 when the loan was restructured. General and administrative expenses increased by a total of $24,000 which was primarily due to a $16,000 increase in provision for bad debts. Provision for bad debts increased $7,000 at Fortune and $8,000 at Strawberry Fields. 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. Exhibit 27. Financial Data Schedule 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: August 13, 1996 BY: /s/ B. Allen Aynessazian B. Allen Aynessazian Chief Financial Officer and Treasurer DATE: August 13, 1996 EX-27 2
5 6-MOS DEC-31-1996 JUN-30-1996 725,238 972,617 72,799 0 0 0 20,260,503 (5,202,564) 17,083,472 0 11,837,372 0 0 4,349,341 0 17,083,472 0 1,049,962 0 1,145,947 (60,323) 0 224,705 0 0 0 0 0 0 (35,662) 0 0 "SECURITIES" REPRESENTS INVESTMENT IN JOINT VENTURE "PP&E" REPRESENTS INVESTMENT IN REAL ESTATE [LAND AND BUILDING] "BONDS" REPRESENTS MORTGAGES PAYABLE "COMMON" REPRESENTS TOTAL PARTNERS' CAPITAL "TOTAL REVENUES" REPRESENTS RENTAL, INTEREST, AND OTHER INCOME "TOTAL COSTS" REPRESENTS TOTAL EXPENSES "OTHER EXPENSES" REPRESENTS EQUITY AND MINORITY INTEREST IN JOINT VENTURES' NET (INCOME)/LOSS
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