-----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, BQWeCeF9dotGJKjEMwgsiokPzaEILIXLHTN0uMEYep+R53yuhr5Ui3u/2YLV1bDt MhJGCcIDf6e3b+WYxjWQAw== 0000736908-96-000018.txt : 19960814 0000736908-96-000018.hdr.sgml : 19960814 ACCESSION NUMBER: 0000736908-96-000018 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 5 CENTRAL INDEX KEY: 0000762848 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 363432071 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14481 FILM NUMBER: 96610563 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 0-14481 Brauvin Real Estate Fund L.P. 5 (Exact name of small business issuer as specified in its charter) Delaware 36-3432071 (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. . . . . . . . . . . . . . . . . . . . . . 13 Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . 13 Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . 13 Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . 13 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 13 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 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. 5 (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 $ 270,759 Tenant receivables (net of allowance of $26,903) 85,547 Escrow deposits 156,078 Other assets 103,101 Due from affiliates 5,880 Investment in affiliated joint venture 589,324 1,210,689 Investment in real estate, at cost: Land 2,411,849 Buildings 10,038,514 12,450,363 Less: accumulated depreciation (2,914,821) Total investment in real estate, net 9,535,542 Total Assets $10,746,231 LIABILITIES AND PARTNERS' CAPITAL Liabilities Accounts payable and accrued expenses $ 130,979 Security deposits 40,985 Mortgages payable 6,344,455 Total Liabilities 6,516,419 Minority interest in affiliated joint venture 972,617 Partners' Capital General Partners (33,272) Limited Partners (9,914.5 limited partnership units issued and outstanding) 3,290,467 Total Partners' Capital 3,257,195 Total Liabilities and Partners' Capital $10,746,231 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 $714,706 $ 915,268 Interest 2,421 4,477 Other, primarily tenant expense reimbursements 76,178 198,213 Total income 793,305 1,117,958 EXPENSES Interest 279,007 319,206 Depreciation 134,440 184,974 Real estate taxes 68,705 188,490 Repairs and maintenance 12,124 23,584 Operating 80,711 142,236 General and administrative 97,553 122,825 Provision for investment property impairment -- 2,649,046 Total expenses 672,540 3,630,361 Equity in net loss from affiliated joint venture (21,166) (40,853) Income (loss) before minority interest's share in affiliated joint ventures 99,599 (2,553,256) Minority interest's share of Sabal Palm's net income (39,157) (56,720) Minority interest's share of Annex's net income -- (231,115) Income (loss) before extraordinary item 60,442 (2,841,091) Extraordinary gain on extinguishment of Annex debt -- 3,021,766 Net Income $ 60,442 $ 180,675 Net Income Per Limited Partnership Interest (9,914.5 Units) $6.04 $18.04 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 $310,649 $ 391,186 Interest 1,497 2,369 Other, primarily tenant expense reimbursements 6,332 83,707 Total income 318,478 477,262 EXPENSES Interest 138,726 153,279 Depreciation 67,303 83,547 Real estate taxes 32,850 33,790 Repairs and maintenance 7,069 19,818 Operating 34,476 70,449 General and administrative 48,233 70,349 Provision for investment property impairment -- 2,649,046 Total expenses 328,657 3,080,278 Equity in net loss from affiliated joint venture (9,298) (18,599) Loss before minority interest's share in affiliated joint ventures (19,477) (2,621,615) Minority interest's share of Sabal Palm's net loss (income) 20,672 (4,511) Minority interest's share of Annex's net income -- (233,753) Income(loss) before extraordinary item 1,195 (2,859,879) Extraordinary gain on extinguishment of Annex debt -- 3,021,766 Net Income $ 1,195 $ 161,887 Net Income Per Limited Partnership Interest (9,914.5 Units) $0.12 $16.16 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 income $ 60,442 $ 180,675 Adjustments to reconcile net income to net cash provided by operating activities: Provision for investment property impairment -- 2,649,046 Extraordinary gain on extinguishment of Annex debt -- (3,021,766) Equity in affiliated joint venture's net loss 21,166 40,853 Minority interest's share of Sabal Palm's net income 39,157 56,720 Minority interest's share of the Annex's net income -- 231,115 Provision for doubtful accounts 8,217 3,061 Depreciation 134,440 184,974 Normalized rental revenue 5,625 1,130 Changes in operating assets and liabilities: Decrease (increase) in tenant receivables, net 37,883 (10,007) (Increase) decrease in escrow deposits (60,529) 100,946 Decrease in other assets 6,165 2,888 (Increase) decrease in due from affiliates (5,880) 36,258 Increase (decrease) in accounts payable and accrued expenses 51,598 (108,234) Decrease in due to affiliates (52,733) (20,102) Increase in security deposits -- 3,586 Net cash provided by operating activities 245,551 331,143 Cash Flows From Investing Activities: Capital expenditures (3,003) (11,500) Cash distribution to Minority Partner- Sabal Palm (70,500) (56,400) Cash used in investing activities (73,503) (67,900) Cash Flows From Financing Activities: Repayment of mortgages (43,609) (186,585) Cash used in financing activities (43,609) (186,585) Net increase in cash and cash equivalents 128,439 76,658 Cash and cash equivalents at beginning of period 142,320 106,289 Cash and cash equivalents at end of period $270,759 $182,947 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 $49,387 $53,525 Reimbursable office expenses 38,400 48,105 Legal fees 4,723 382 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 $2,193 and $3,028 for legal services, as of June 30, 1996 and 1995, respectively. (4) INVESTMENT IN AFFILIATED JOINT VENTURE The Partnership owns a 42% interest in Strawberry Fields and accounts for its investment under the equity method. The following are condensed statements of operations for Strawberry Fields: STATEMENTS OF OPERATIONS: Six Months Ended June 30, 1996 1995 Rental income $420,825 $398,406 Interest income 174 79 420,999 398,485 Interest 225,219 274,140 Depreciation 100,074 99,682 Operating and administrative expenses 146,101 121,931 471,394 495,753 Net loss $(50,395) $(97,268) 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 Crown Point at June 30, 1996 and December 31, 1995 was 98% as compared to 95% at June 30, 1995. The Partnership is continuing to work to sustain the occupancy level of Crown Point. Crown Point operated at a positive cash flow for the six months ended June 30, 1996. At Sabal Palm the occupancy level at June 30, 1996 was 97% as compared to 99% at June 30, 1995 and December 31, 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. 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. 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 net income of $60,000 for the six months ended June 30, 1996 as compared to net income of $180,000 for the same six month period in 1995. The $120,000 decrease in net income resulted primarily from the decrease in the Partnership's share of the Annex income due to its foreclosure on May 15, 1995. Total income for the six months ended June 30, 1996 was $793,000 as compared to $1,118,000 for the same six month period in 1995, a decrease of $325,000. The $325,000 decrease resulted primarily from the foreclosure of the Annex on May 15, 1995. Total income for the Annex for the six months ended June 30, 1995 was $340,000. This $340,000 decrease in the Annex income was offset by a $68,000 increase in total income at Crown Point and a $52,000 decrease in total income at Sabal Palm. The increase at Crown Point was primarily due to a $43,000 increase in rental income which was a result of the occupancy rate increasing from 95% at June 30, 1995 to 98% at June 30, 1996. The $52,000 decrease in total income at Sabal was a result of a $39,000 decrease in tenant reimbursables. The $39,000 decrease was the result of an adjustment from a prior period. Due to the slight decrease in occupancy at Sabal, rental income decreased $13,000. For the six months ended June 30, 1996, total expenses were $673,000 as compared to $3,630,000 for the same six month period in 1995, a decrease of $2,957,000. The $2,957,000 decrease in total expenses resulted primarily from the $2,649,000 provision for investment property impairment for the Annex in 1995. Total expenses for the Annex for the six months ended June 30, 1995 were $266,000. The total expenses at the remaining properties for the six months ended June 30, 1996 held constant with the total expenses for the same six month period in 1995. Interest expense at Crown Point decreased $26,000 due to the decrease of the interest rate from 9.69% to 7.55% as a result of the refinancing of its mortgage loan on December 28, 1995. This decrease in interest expense at Crown Point was offset by slight increases in real estate taxes, operating expenses and general and administrative expenses. Results of Operations - Three Months Ended June 30, 1996 and 1995 (Amounts rounded to 000's) The Partnership generated net income of $1,000 for the three months ended June 30, 1996 as compared to net income of $162,000 for the same three month period in 1995. The $161,000 decrease in net income resulted primarily from the decrease in the Partnership's share of the Annex income due to its foreclosure on May 15, 1995. Total income for the three months ended June 30, 1996 was $318,000 as compared to $477,000 for the same three month period in 1995, a decrease of $159,000. The $159,000 decrease resulted primarily from the foreclosure of the Annex on May 15, 1995. Total income for the Annex for the period April 1, 1995 to May 15, 1995 was $146,000. This decrease in the Annex income was partially offset by a $34,000 increase in rental income at Crown Point. The increase at Crown Point was primarily due to the occupancy rate increasing from 95% at June 30, 1995 to 98% at June 30, 1996. For the three months ended June 30, 1996, total expenses were $329,000 as compared to $3,080,000 for the same three month period in 1995, a decrease of $2,751,000. The $2,751,000 decrease in total expenses resulted primarily from the $2,649,000 provision for investment property impairment for the Annex in 1995. All expenses decreased for the three months ended June 30, 1996 as compared to the three months ended June 30, 1995 due to the foreclosure of the Annex on May 15, 1995. Total expenses for the Annex for the period April 1, 1995 to May 15, 1995 was $66,000. General and administrative expenses decreased $22,000 for the three months ended June 30, 1996 as compared to the three months ended June 30, 1995. This decrease was due to the $20,000 decrease in administrative costs associated with the foreclosure of the Annex in 1995. Interest expense at Crown Point decreased $14,000 due to the decrease of the interest rate from 9.69% to 7.55% as a result of the refinancing of its mortgage loan on December 28, 1995. This decrease in interest expense at Crown Point was offset by slight increases in operating and repairs and maintenance expenses. 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. 5 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 270,759 589,324 85,547 0 0 0 12,450,363 (2,914,821) 10,746,231 0 6,344,455 0 0 3,257,195 0 10,746,231 0 793,305 0 672,540 (60,323) 0 279,007 0 0 0 0 0 0 60,442 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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