-----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, QMqwur8LAFpVBbNRKD9/5I3Ur0/U/NLWmGD0DJFCntexPpNkAHdXK34zLNDZ5SuH j+axaT9kjUkQ5a3ykgmj5A== 0000913762-96-000007.txt : 19961115 0000913762-96-000007.hdr.sgml : 19961115 ACCESSION NUMBER: 0000913762-96-000007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961113 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: 96660873 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 September 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 September 30, 1996 . . . . . . . 4 Consolidated Statements of Operations for the Nine Months Ended September 30, 1996 and 1995. . . . . . . . . 5 Consolidated Statements of Operations for the Three Months Ended September 30, 1996 and 1995 . . . . . . . . 6 Consolidated Statements of Cash Flows for the Nine Months Ended September 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. . . . . . . . . . . . . . . . . . . . . . . 15 Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . . 15 Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . . 15 Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . . 15 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 15 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements The following Consolidated Balance Sheet as of September 30, 1996, Consolidated Statements of Operations for the nine and three months ended September 30, 1996 and 1995 and Consolidated Statements of Cash Flows for the nine months ended September 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 September 30, 1996 (Unaudited) ASSETS Cash and cash equivalents $ 293,724 Tenant receivables (net of allowance of $16,452) 81,623 Escrow deposits 193,315 Other assets 94,879 Due from affiliates 5,880 Investment in affiliated joint venture 588,151 1,257,572 Investment in real estate, at cost: Land 2,411,849 Buildings 9,737,955 12,149,804 Less: Accumulated depreciation (2,681,647) Total investment in real estate, net 9,468,157 Total Assets $10,725,729 LIABILITIES AND PARTNERS' CAPITAL Liabilities Accounts payable and accrued expenses $ 168,180 Security deposits 40,985 Mortgages payable 6,318,972 Total Liabilities 6,528,137 Minority interest in affiliated joint venture 947,593 Partners' Capital General Partners (33,343) Limited Partners (9,914.5 limited partnership units issued and outstanding) 3,283,342 Total Partners' Capital 3,249,999 Total Liabilities and Partners' Capital $10,725,729 See notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENTS OF OPERATIONS For the Nine Months Ended September 30, 1996 and 1995 (Unaudited) 1996 1995 INCOME Rental $ 995,316 $1,230,385 Interest 5,953 6,685 Other, primarily tenant expense reimbursements 118,063 239,802 Total income 1,119,332 1,476,872 EXPENSES Interest 418,005 473,174 Depreciation 201,826 201,494 Real estate taxes 101,768 219,840 Repairs and maintenance 19,681 52,663 Operating 114,083 177,159 General and administrative 148,402 348,790 Provision for investment property impairment -- 2,702,083 Total expenses 1,003,765 4,175,203 Equity in net loss from affiliated joint venture (22,337) (65,719) Income (loss) before minority interest's share in affiliated joint ventures 93,230 (2,764,050) Minority interest's share of Sabal Palm's net income (39,982) (53,436) Minority interest's share of Annex's net income -- (231,115) Income (loss) before extraordinary item 53,248 (3,048,601) Extraordinary gain on extinguishment of Annex debt -- 3,177,788 Net Income $ 53,248 $ 129,187 Net Income Per Limited Partnership Interest (9,914.5 Units) $ 5.32 $ 12.90 See notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended September 30, 1996 and 1995 (Unaudited) 1996 1995 INCOME Rental $280,611 $315,117 Interest 3,532 2,208 Other, primarily tenant expense reimbursements 41,885 41,589 Total income 326,028 358,914 EXPENSES Interest 138,998 153,968 Depreciation 67,386 16,519 Real estate taxes 33,063 31,350 Repairs and maintenance 7,556 29,080 Operating 33,373 34,923 General and administrative 50,850 225,964 Provision for investment property impairment -- 53,037 Total expenses 331,226 544,841 Equity in net loss from affiliated joint venture (1,172) (24,867) Loss before minority interest's share in affiliated joint ventures (6,370) (210,794) Minority interest's share of Sabal Palm's net (income) loss (825) 3,284 Loss before extraordinary item (7,195) (207,510) Extraordinary gain on extinguishment of Annex debt -- 156,022 Net Loss $ (7,195) $(51,488) Net Loss Per Limited Partnership Interest (9,914.5 Units) $ (0.72) $ (5.14) See notes to consolidated financial statements (unaudited). CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1996 and 1995 (Unaudited) 1996 1995 Cash Flows From Operating Activities: Net income $ 53,248 $ 129,187 Adjustments to reconcile net income to net cash provided by operating activities: Provision for investment property impairment -- 2,702,083 Extraordinary gain on extinguishment of Annex debt -- (3,177,788) Equity in net loss from affiliated joint venture 22,337 65,719 Minority interest's share of Sabal Palm's net income 39,982 53,436 Minority interest's share of the Annex's net income -- 231,115 Provision for doubtful accounts 11,822 4,861 Depreciation 201,826 201,494 Normalized rental revenue 7,123 4,636 Changes in operating assets and liabilities: Decrease (increase) in tenant receivables, net 36,703 (26,498) (Increase) decrease in escrow deposits (97,766) 12,172 Decrease (increase) in other assets 14,387 (23,055) (Increase) decrease in due from affiliates (58,613) 193,095 Increase (decrease) in accounts payable and accrued expenses 88,799 (48,465) Increase in due to affiliates -- 26,008 Increase in security deposits -- 3,586 Net cash provided by operating activities 319,848 351,586 Cash Flows From Investing Activities: Capital expenditures (3,003) (11,500) Cash distribution to Minority Partner-Sabal Palm (96,350) (82,250) Cash used in investing activities (99,353) (93,750) Cash Flows From Financing Activities: Repayment of mortgages (69,091) (204,177) Cash used in financing activities (69,091) (204,177) Net increase in cash and cash equivalents 151,404 53,659 Cash and cash equivalents at beginning of period 142,320 106,289 Cash and cash equivalents at end of period $293,724 $ 159,948 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 nine month period ended September 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 nine months ended September 30, 1996 and 1995, were as follows: 1996 1995 Management fees $69,808 $74,576 Reimbursable office expenses 63,025 70,605 Legal fees 4,746 1,084 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 $2,728 for legal services, as of September 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: Nine Months Ended September 30, 1996 1995 Rental and other income $644,797 $ 584,631 Interest income 420 540 645,217 585,171 Interest expense 337,029 411,211 Depreciation 150,186 149,523 Operating and administrative expenses 211,186 180,912 698,401 741,646 Net loss $(53,184) $(156,475) (5) SABAL PALM'S MORTGAGE PAYABLE The Sabal Palm's mortgage loan matures on February 1, 1997. The General Partners are currently working with third party lenders to refinance this loan when it matures. There is no assurance that the General Partners will be successful in their refinancing efforts in which case the Partnership would sustain a loss upon foreclosure. 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 September 30, 1996 and at December 31, 1995 was 98% as compared to 95% at September 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 nine months ended September 30, 1996. At Sabal Palm the occupancy level at September 30, 1996 was 91% as compared to 99% at December 31, 1995 and at September 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 Sabal Palm's mortgage loan matures on February 1, 1997. The General Partners are currently working with third party lenders to refinance this loan when it matures. There is no assurance that the General Partners will be successful in their refinancing efforts in which case the Partnership would sustain a loss upon foreclosure. Strawberry Fields operated at a positive cash flow for the nine months ended September 30, 1996. The occupancy level at Strawberry Fields at September 30, 1996 was 90% as compared to 83% at December 31, 1995 and at September 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-Nine Months Ended September 30, 1996 and 1995 (Amounts rounded to 000's) The Partnership generated net income of $53,000 for the nine months ended September 30, 1996 as compared to net income of $129,000 for the same nine month period in 1995. The $76,000 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 nine months ended September 30, 1996 was $1,119,000 as compared to $1,477,000 for the same nine month period in 1995, a decrease of $358,000. The $358,000 decrease resulted primarily from the foreclosure of the Annex on May 15, 1995. Total income for the Annex for the nine months ended September 30, 1995 was $343,000. Total income for the remaining properties for the nine months ended September 30, 1995 was $1,134,000 as compared to the total income for the nine months ended September 30, 1996 of $1,119,000, a decrease of $15,000. The decrease of $15,000 in total income was mainly due to a $5,000 decrease in rental income and a $11,000 decrease in tenant expense reimbursements. Total income at Crown Point increased $39,000 and Sabal Palm's total income decreased $52,000. The $39,000 increase in total income at Crown Point consisted primarily of a $22,000 increase in rental income and a $15,000 increase in tenant expense reimbursements. Crown Point's $22,000 increase in rental income was a result of rent increases implemented in 1996. The $15,000 increase in Crown Point's tenant expense reimbursements for the nine months ended September 30, 1996 as compared to the nine months ended September 30, 1995 occurred because the estimate of tenant expense reimbursements at nine months ended September 30, 1995 was lower than the actual tenant expense reimbursements incurred at December 31, 1995. The $52,000 decrease in total income at Sabal Palm consisted primarily of a $27,000 decrease in rental income and a $26,000 decrease in tenant expense reimbursements. Sabal Palm's $27,000 decrease in rental income was a result of occupancy decreasing from 99% at September 30, 1995 to 91% at September 30, 1996. The $26,000 decrease in Sabal Palm's tenant expense reimbursements for the nine months ended September 30, 1996 as compared to the nine months ended September 30, 1995 was a result of a $35,000 adjustment for 1995 tenant expense reimbursements being made in 1996. For the nine months ended September 30, 1996, total expenses were $1,004,000 as compared to $4,175,000 for the same nine month period in 1995, a decrease of $3,171,000. The $3,171,000 decrease in total expenses resulted primarily from the $2,702,000 provision for investment property impairment for the Annex in 1995. Total expenses for the Annex for the nine months ended September 30, 1995 were $372,000. Total expenses for the remaining properties for the nine months ended September 30, 1995 was $1,101,000 as compared to the total expenses for the nine months ended September 30, 1996 of $1,004,000, a decrease of $97,000. The $97,000 decrease in total expense primarily resulted from a $42,000 decrease in interest expense, $26,000 decrease in repairs and maintenance and a $24,000 decrease in general and administrative expense. The $42,000 decrease in interest expense was primarily a result of a $41,000 decrease in interest expense at Crown Point. This $41,000 decrease at Crown Point was a direct result of the refinancing of the mortgage loan on December 28, 1995 when the interest rate decreased from 9.69% to 7.55%. Repairs and maintenance decreased $26,000 when comparing the nine months ended September 30, 1995 (excluding the Annex) with the nine months ended September 30, 1996. This $26,000 decrease resulted mainly from a $17,000 decrease in parking lot repairs at Crown Point. The $24,000 decrease in general and administrative expense was mainly attributed to the decrease in the Partnership's administrative expenses that were associated with the Annex bankruptcy. Results of Operations-Three Months Ended September 30, 1996 and 1995 (Amounts rounded to 000's) The Partnership generated net loss of $7,000 for the three months ended September 30, 1996 as compared to a net loss of $51,000 for the same three month period in 1995. The $44,000 increase in net income resulted primarily from the decrease of $54,000 in total expenses (excludes the Annex's expenses of $160,000) and a $22,000 decrease in the Partnership's minority share of Strawberry's net loss. These decreases were offset by a decrease in total income (excludes the Annex's total income of $4,000) of $29,000. Total income for the three months ended September 30, 1996 was $326,000 as compared to $359,000 for the same three month period in 1995, a decrease of $33,000. The $33,000 decrease in total income resulted primarily from a $34,000 decrease in rental income. The $34,000 decrease in rental income was a result of a $13,000 decrease in rental income at Sabal Palm and a decrease of $21,000 in rental income at Crown Point. The $13,000 decrease in rental income at Sabal Palm was due to the occupancy rate decreasing from 98% at September 30, 1995 to 91% at September 30, 1996 while the $21,000 decrease in rental income at Crown Point was due to percentage rent decreasing $27,000. The $27,000 decrease in percentage rent was mainly due to the timing of the percentage rent calculations for 1995 and 1996. Percentage rent was billed during the second quarter in 1996 and was billed during the third quarter in 1995. For the three months ended September 30, 1996, total expenses were $331,000 as compared to $545,000 for the same three month period in 1995, a decrease of $214,000. The $214,000 decrease in total expenses consisted of $160,000 in total expenses for the Annex and $54,000 in total expenses for the remaining properties. The $54,000 decrease in total expenses for the remaining properties was mainly due to a $15,000 decrease in interest expense, a $22,000 decrease in repairs and maintenance and a $14,000 decrease in general and administrative expenses. The $15,000 decrease in interest expense was primarily due to a $14,000 decrease in interest expense at Crown Point. 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. Repairs and maintenance decreased $22,000 when comparing the three months ended September 30, 1996 to the three months ended September 30, 1995. This $22,000 decrease in repairs and maintenance was primarily due to a $17,000 decrease in parking lot repairs at Crown Point. The $14,000 decrease in general and administrative expenses was mainly attributed to the decrease in the Partnership's administrative expenses that were associated with the Annex bankruptcy. 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: November 13, 1996 BY: /s/ B. Allen Aynessazian B. Allen Aynessazian Chief Financial Officer and Treasurer DATE: November 13, 1996 EX-27 2
5 9-MOS DEC-31-1996 SEP-30-1996 293,724 588,151 81,623 0 0 0 12,149,804 2,681,647 10,725,729 0 6,318,972 0 0 3,249,999 0 10,725,729 0 1,119,332 0 1,003,765 62,319 0 418,005 0 0 0 0 0 0 53,248 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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