8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 10, 1995 Brauvin Real Estate Fund L. P. 5 (Exact name of registrant as specified in its charter) Delaware 0-14481 36-3432071 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification organization) Number) 150 South Wacker Drive, Suite 3200, Chicago, Illinois 60606 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (312) 443-0922 Not Applicable (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets As reported on the Current Report on Form 8-K filed with the Securities and Exchange Commission dated August 23, 1994, Brauvin/The Annex of Schaumburg Associates, a joint venture (the "Joint Venture") filed a voluntary petition for bankruptcy (Chapter 11) in the United States Bankruptcy Court in the Northern District of Illinois. The Joint Venture has two partners, Brauvin Real Estate Fund L.P. 5 ( the "Partnership") and Brauvin Income Properties L.P. 6 ("BIP 6"), both Delaware limited partnerships. The Partnership is a 54% partner of the Joint Venture and BIP 6 is a 46% partner of the Joint Venture. On February 10, 1995, the Bankruptcy Court ordered the dismissal of the voluntary petition for bankruptcy effectively eliminating the protection of the property from its creditors. As reported on the Current Report on Form 8-K filed with the Securities and Exchange Commission dated February 15, 1995, AUSA Life Insurance Company ("AUSA") filed a motion for appointment of a receiver against the Joint Venture. On February 17, 1995, the motion was granted and an order was issued. The receiver had full power and authority to operate, manage and conserve the mortgage real estate, commonly know as the Annex of Schaumburg (the "Annex"), pursuant to the order. On February 15, 1995, the Joint Venture received an amended notice of mortgage foreclosure from AUSA. The Joint Venture had until March 17, 1995 to file an answer to the amended notice. Since the Joint Venture did not answer on or before March 17, 1995, default was entered against the Joint Venture and ajudgement in accordance with the request for relief. On April 3, 1995, a judgment of foreclosure and sale was entered into against the Joint Venture. On May 10, 1995, the Annex was sold to AUSA in a foreclosure sale, conducted by the Sheriff of Cook County, pursuant to the judgement of foreclosure, however, the Joint Venture did not receive notice of sale until May 22, 1995. Item 7. Financial Statements and Exhibits (b) Pro Forma Financial Statements. The pro forma information included herein is presented for the year ended December 31, 1994 and the three months ended March 31, 1995, corresponding to the periods of the Partnership's annual and quarterly financial statements most recently filed with the Securities and Exchange Commission. The pro forma income statements and balance sheets reflect the Partnership's operations, assets and liabilities as originally reported and then as revised to exclude the Annex. BRAUVIN REAL ESTATE FUND L.P. 5 PRO FORMA BALANCE SHEET (Disposition of Brauvin/The Annex of Schaumburg) March 31, 1995 (Unaudited) Historical Pro Forma Pro Forma Results Adjustments Results ASSETS Cash and cash equivalents $ 217,867 $ 7,079 $210,788 Cash held by receiver 64,072 64,072 -- Tenant receivables 41,916 30,142 11,774 Escrow and other deposits 27,404 679 26,725 Other assets 9,859 -- 9,859 Investment in affiliated joint venture 689,925 -- 689,925 Deposit with title company 2,918,479 2,918,479 -- 3,969,522 3,020,451 949,071 Investment in real estate, at cost: Land 3,716,151 1,304,302 2,411,849 Buildings 15,353,131 5,320,037 10,033,094 19,069,282 6,624,339 12,444,943 Less: accumulated depreciation (4,205,154) (1,607,614) (2,597,540) Total investment in real estate, net 14,864,128 5,016,725 9,847,403 Total Assets $18,833,650 $8,037,176 $10,796,474 LIABILITIES AND PARTNERS' CAPITAL Liabilities Accounts payable and accrued expenses $ 563,181 $ 507,850$ 55,331 Due to affiliates 22,686 -- 22,686 Security deposits 60,910 22,598 38,312 Note payable 2,918,479 2,918,479 -- Mortgages payable 11,407,275 5,040,583 6,366,692 Total Liabilities 14,972,531 8,489,510 6,483,021 Minority Interest in Sabal Palm 1,015,584 -- 1,015,584 Minority Interest (deficit) in the Annex of Schaumburg (233,753) (233,753) -- Partners' Capital General Partners (35,051) (2,186) (32,865) Limited Partners (9,914.5 limited partnership units issued and outstanding) 3,114,339 (216,395) 3,330,734 Total Partners' Capital 3,079,288 (218,581) 3,297,869 Total Liabilities and Partners' Capital $18,833,650 $8,037,176 $10,796,474 See Notes to Pro Forma Financial Statements BRAUVIN REAL ESTATE FUND L.P. 5. PRO FORMA STATEMENT OF INCOME (Disposition of Brauvin/The Annex of Schaumburg) For the Three Months Ended March 31, 1995 (Unaudited) Historical Pro Forma Pro Forma Results Adjustments Results INCOME Rental $524,082 $130,887 $393,195 Interest 2,108 1,203 905 Other, primarily expense reimbursements 114,506 61,936 52,570 Total income 640,696 194,026 446,670 EXPENSES Mortgage and other interest 165,927 12,677 153,250 Depreciation 101,427 35,358 66,069 Real estate taxes 154,700 119,100 35,600 Repairs and maintenance 2,925 -- 2,925 Other property operating 72,690 20,902 51,788 General and administrative 52,414 11,724 40,690 Total expenses 550,083 199,761 350,322 Income before affiliated joint venture participation and minority interests 90,613 (5,735) 96,348 Equity interest in affiliated joint venture's net loss (22,254) -- (22,254) Minority interest's share of Sabal Palm's net income (52,209) -- (52,209) Minority interest's share of the Annex's net loss 2,638 2,638 -- Net Income $ 18,788 $ (3,097) $21,885 Net Income Per Limited Partnership Interest (9,914.5 Units): $1.88 $(0.31) $2.19 See Notes to Pro Forma Financial Statements. BRAUVIN REAL ESTATE FUND L.P. 5 PRO FORMA BALANCE SHEET (Disposition of Brauvin/The Annex of Schaumburg) December 31, 1994 (Unaudited) Historical Pro Forma Pro Forma Results Adjustments Results ASSETS Cash and cash equivalents $ 106,289$ 30,743$ 75,546 Due from affiliates 587 -- 587 Tenant receivables 93,422 22,326 71,096 Escrow and other deposits 83,199 83,636 (437) Other assets 12,539 586 11,953 Investment in affiliated joint venture 712,179 -- 712,179 Deposit with title company 2,929,581 2,929,581 -- 3,937,796 3,066,872 870,924 Investment in real estate, at cost: Land 3,716,151 1,304,302 2,411,849 Buildings 15,341,631 5,308,537 10,033,094 19,057,782 6,612,839 12,444,943 Less: accumulated depreciation (4,103,727) (1,572,256) (2,531,471) Total investment in real estate, net 14,954,055 5,040,583 9,913,472 Total Assets $18,891,851 $ 8,107,455 $10,784,396 LIABILITIES AND PARTNERS' CAPITAL Liabilities Accounts payable and accrued expenses $ 602,607 $ 563,292 $ 39,315 Due to affiliates 25,988 -- 25,988 Security deposits 56,772 20,598 36,174 Note payable 2,929,581 2,929,581 -- Mortgages payable 11,427,743 5,040,583 6,387,160 Total Liabilities 15,042,691 8,554,054 6,488,637 Minority Interest in Sabal Palm 1,019,775 -- 1,019,775 Minority Interest (deficit) in the Annex of Schaumburg (231,115) (231,115) -- Partners' capital General Partners (35,239) (2,155) (33,084) Limited Partners (9,914.5 limited partnership units issued and outstanding) 3,095,739 (213,329) 3,309,068 Total Partners' Capital 3,060,500 (215,484) 3,275,984 Total Liabilities and Partners' Capital $18,891,851 $ 8,107,455 $10,784,396 See Notes to Pro Forma Financial Statements. BRAUVIN REAL ESTATE FUND L.P. 5. PRO FORMA STATEMENT OF INCOME (Disposition of Brauvin/The Annex of Schaumburg) For the Year Ended December 31, 1994 (Unaudited) Historical Pro Forma Pro Forma Results Adjustments Results INCOME Rental $1,708,963 $549,029 $1,159,934 Interest 8,186 4,220 3,966 Other, primarily tenant expense reimbursements 543,922 388,813 155,109 Total income 2,261,071 942,062 1,319,009 EXPENSES Mortgage and other interest 842,751 224,604 618,147 Depreciation 423,829 161,553 262,276 Real estate taxes 570,682 445,220 125,462 Repair and maintenance 144,835 64,139 80,696 Other property operating 255,183 117,978 137,205 General and administrative 307,140 98,155 208,985 Provision for investment property impairment 882,709 882,709 -- Total expenses 3,427,129 1,994,358 1,432,771 Loss before affiliated joint venture participation and minority interests (1,166,058) (1,052,296) (113,762) Equity interest in affiliated joint venture's net loss (98,150) -- (98,150) Minority interest's share of Sabal Palm's net (income) loss (22,991) -- (22,991) Minority interest's share of the Annex of Schaumburg's net loss 484,056 484,056 -- Net loss $ (803,143) $ (568,240) $(234,903) Net Loss Per Limited Partnership Interest (9,914.5 Units): $(80.20) $(56.74) $(23.46) See Notes to Pro Forma Financial Statements. BRAUVIN REAL ESTATE FUND L.P. 5 NOTES TO PRO FORMA FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The unaudited pro forma condensed financial statements are based upon the Brauvin Real Estate Fund L.P. 5's (the "Partnership") audited financial statements for the year ended December 31, 1994 with pro forma adjustments based on the Partnership's disposition of the Brauvin/The Annex of Schaumburg (the "Annex"). The pro forma adjustments reflect the financial effect of the disposition as if it had been consummated on January 1, 1994 and are described in detail by the following footnotes. 2. Joint Venture Partnerships The Partnership owns 42%, 53% and 54% interests in joint ventures which acquired three shopping centers, Strawberry Fields, Sabal Palm and the Annex, respectively. The accompanying financial statements have consolidated 100% of the assets and liabilities of Sabal Palm and the Annex and are reported as investments in real estate. The investment in Strawberry Fields has been recorded using the equity method and is reported as an investment in an affiliated joint venture. The minority interest of the consolidated joint ventures are recorded as minority interests and adjusted for the respective joint venture partner's share of income or loss and any cash contributions from or distributions to the joint venture partner. 3. Property The Annex is stated at cost including adjustments for acquisition costs, leasing commissions and tenant improvements. Depreciation and amortization are recorded on a straight-line basis over the estimated economic lives of the properties, which approximate 38 years, and applicable lease terms, respectively. The Partnership makes periodic assessments concerning possible permanent impairment to the value of its properties. In the event that the Partnership determines that a permanent impairment in value has occurred, the carrying basis of that property is reduced to its estimated fair value. 4. Cash Equivalents The Partnership considers all highly liquid investments with a maturity of 90 days or less when purchased to be a cash equivalent. 5. Mortgage Payable On August 23, 1994, the Brauvin/The Annex of Schaumburg (the "Joint Venture") filed a voluntary petition for bankruptcy (Chapter 11) in the United States Bankruptcy Court in the Northern District of Illinois. The Joint Venture has two partners, the Partnership and Brauvin Income Properties L.P. 6 ("BIP 6"), both Delaware limited partnerships. The Partnership is a 54% partner of the Joint Venture and BIP 6 is a 46% partner of the Joint Venture. On February 10, 1995, the Bankruptcy Court ordered the dismissal of the voluntary petition for bankruptcy effectively eliminating the protection of the property from its creditors. Also on February 10, 1995, AUSA Life Insurance Company ("AUSA") filed a motion for appointment of a receiver against the Joint Venture. On February 17, 1995, the motion was granted and an order was issued. The receiver will have full power and authority to operate, manage and conserve the Annex pursuant to the order. On February 15, 1995, the Joint Venture received an amended notice of mortgage foreclosure from AUSA. The Joint Venture had until March 17, 1995 to file an answer to the amended notice. Since the Joint Venture did not answer on or before March 17, 1995, default was entered against the Joint Venture and a judgement in accordance with the request for relief. On April 3, 1995, a judgment of foreclosure and sale was entered into against the Joint Venture. On May 10, 1995, the Annex was sold to AUSA in a foreclosure sale, conducted by the Sheriff of Cook County, pursuant to the judgement of foreclosure. 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. BRAUVIN REAL ESTATE FUND L.P. 5 By: Brauvin Ventures, Inc. Corporate General Partner By: /s/ Jerome J. Brault President and Chief Executive Officer Dated: May 24, 1995