-----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, DAXAOJiRJPbJYESnfwjHNBMF5iX4q8hWqf7XKbAYivQN0Z14q5sA9sWbjBZmQzKM dpuKiyPCzWFQY9p3hxvrzw== 0000808420-97-000003.txt : 19970520 0000808420-97-000003.hdr.sgml : 19970520 ACCESSION NUMBER: 0000808420-97-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASSOCIATED PLANNERS REALTY FUND CENTRAL INDEX KEY: 0000785791 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 954036980 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16805 FILM NUMBER: 97606009 BUSINESS ADDRESS: STREET 1: 5933 W CENTURY BLVD STREET 2: 9TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90045-5454 BUSINESS PHONE: 3106700800 MAIL ADDRESS: STREET 1: 5933 W CENTURY BLVD STREET 2: 9TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90045-5454 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1997 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 0-16805 ASSOCIATED PLANNERS REALTY FUND (Exact name of registrant as specified in its charter) CALIFORNIA 95-4036980 (State or other Jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5933 W. CENTURY BLVD., SUITE 900 LOS ANGELES, CALIFORNIA 90045 (Address of principal executive offices) (Zip Code) (310) 670-0800 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) 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 ITEM 1. FINANCIAL STATEMENTS In the opinion of the General Partner of Associated Planners Realty Fund (the "Partnership"), all adjustments necessary for a fair presentation of the Partnership's results for the three months ended March 31, 1997 and 1996, have been made in the following financial statements which are normal recurring entries in nature. However, such financial statements are unaudited and are subject to any year-end adjustments that may be necessary. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS MARCH 31, 1997 (UNAUDITED) AND DECEMBER 31, 1996
March 31, 1997 December 31, 1996 ASSETS Rental real estate, less accumulated depreciation (Note 2) $5,888,844 $5,909,116 Cash and cash equivalents 205,013 206,413 Other assets 31,407 31,086 TOTAL ASSETS $6,125,264 $6,146,615 LIABILITIES AND PARTNERS' EQUITY LIABILITIES Accounts payable: Trade $15,847 $4,989 Related party (Note 3) 12,488 6,894 Notes payable (Note 4) 1,491,027 1,497,782 Security deposits and prepaid rent 29,622 31,424 TOTAL LIABILITIES 1,548,984 1,541,089 Minority interest 212,241 213,418 PARTNERS' EQUITY (NOTES 6 AND 7) Limited partners: $1,000 stated value per unit - authorized 7,500 units;issued and outstanding 7,499 4,321,183 4,350,158 General partner 42,856 41,950 TOTAL PARTNERS' EQUITY 4,364,039 4,392,108 TOTAL LIABILITIES AND PARTNERS' EQUITY $6,125,264 $6,146,615
[FN] See accompanying notes to financial statements. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF PARTNERS' EQUITY THREE MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
LIMITED PARTNERS GENERAL TOTAL UNITS AMOUNT PARTNER BALANCE AT DECEMBER 31, 1996 $4,392,108 7,499 $4,350,158 $41,950 Net income 48,588 -- 40,016 8,572 Distributions to limited partners (68,991) -- (68,991) -- Distributions to general partner (7,666) -- -- (7,666) BALANCE AT MARCH 31, 1997 $4,364,039 7,499 $4,321,183 $42,856 THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED) LIMITED PARTNERS GENERAL TOTAL UNITS AMOUNT PARTNER BALANCE AT DECEMBER 31, 1995 $4,478,268 7,499 $4,133,882 $344,386 Net income 47,250 -- 39,659 7,591 Reallocation of balances prior to January 1, 1996 (Note 6) -- -- 305,548 (305,548) Distributions to limited partners (53,543) -- (53,543) -- Distributions to general partner (5,949) -- -- (5,949) BALANCE AT MARCH 31, 1996 $4,466,026 7,499 $4,425,546 $40,480
[FN] See accompanying notes to financial statements. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF INCOME THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED)
Three Three Months Months Ended Ended March 31, March 31, 1997 1996 REVENUES Rental (Note 2) $188,956 $173,965 Interest 2,388 983 191,344 174,948 COSTS AND EXPENSES Operating 33,086 31,209 Property taxes 9,646 7,631 Property management fees (Note 3(c)) 9,303 8,576 General and administrative 16,802 11,438 Depreciation and amortization 41,253 31,842 Interest expense 34,024 19,409 144,114 110,105 INCOME FROM OPERATIONS 47,230 64,843 Minority interest in net loss (income) of joint ventures (1,358) 17,593 NET INCOME $48,588 $47,250 NET INCOME PER LIMITED PARTNERSHIP UNIT (Note 5) $5.34 $5.29
[FN] See accompanying notes to financial statements. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED)
THREE MONTHS THREE MONTHS ENDED ENDED MARCH 31, 1997 MARCH 31, 1996 CASH FLOW FROM OPERATING ACTIVITIES: Net income $48,588 $47,250 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 41,253 31,842 Minority interest in net income (loss) 1,358 (17,593) Increase (decrease) from changes in: Other assets (321) 19,217 Accounts payable 16,452 (4,649) Security deposits (1,803) 594 NET CASH PROVIDED BY OPERATING ACTIVITIES 105,527 76,661 CASH FLOWS USED IN INVESTING ACTIVITIES: Tenant improvement additions (20,980) --- NET CASH PROVIDED BY INVESTING ACTIVITIES (20,980) --- CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES: Repayment of notes payable (6,755) --- Distributions to minority interests (2,535) --- Distributions to limited partners (68,991) (53,543) Distributions to general partner (7,666) (5,949) NET CASH USED IN FINANCING ACTIVITIES (85,947) (59,492) NET CASH INCREASE IN CASH AND CASH EQUIVALENTS (1,400) 17,169 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 206,413 103,300 CASH AND CASH EQUIVALENTS AT END OF PERIOD $205,013 $120,469
[FN] See accompanying notes to financial statements. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) SUMMARY OF ACCOUNTING POLICIES BUSINESS Associated Planners Realty Fund (the "Partnership"), a California limited partnership, was formed on November 19, 1985 under the Revised Limited Partnership Act of the State of California. The Partnership was formed to acquire income-producing real property throughout the United States with emphasis on properties located in California and southwestern states. The Partnership purchased such properties on an all cash basis, or operated them on a moderately leveraged basis, and intended to own and operate such properties for investment over an anticipated holding period of approximately five to ten years. BASIS OF PRESENTATION The consolidated financial statements do not give effect to any assets that the partners may have outside of their interest in the partnership, nor to any personal obligations, including income taxes, of the partners. The consolidated financial statements include the accounts of Associated Planners Realty Fund and all joint ventures in which it has a majority interest. RENTAL REAL ESTATE AND DEPRECIATION Assets are stated at cost. Depreciation is computed using the straight-line method over estimated useful lives ranging from five to 35 years. In the event that facts and circumstances indicate that the cost of an asset may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the carrying amount to determine if a write- down to market value is required. RENTAL INCOME Rental revenue is recognized on a straight-line basis to the extent that rental revenue is deemed collectible. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) SUMMARY OF ACCOUNTING POLICIES STATEMENTS OF CASH FLOWS For the purpose of the statements of cash flows, the Partnership considers cash in the bank and all highly liquid investments purchased with original maturities of three months or less, to be cash and cash equivalents. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NEW ACCOUNTING PRONOUNCEMENTS Statement of Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS No. 125) issued by the Financial Accounting Standards Board (FASB) is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after December 31, 1996, and is to be applied prospectively. Earlier or retroactive application is not permitted. The new standard provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. The Partnership does not expect adoption to have a material effect on its financial position or results of operations. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1996 NOTE 1- NATURE OF PARTNERSHIP The Partnership began accepting subscriptions in March 1986 and completed its funding in December 1987. Under the terms of the partnership agreement, the General Partner, West Coast Realty Advisors, is entitled to cash distributions ranging from 10% to 15%. The General Partner is also entitled to net income (loss) allocations varying from 1% to 15% and 1% depreciation and amortization in accordance with the partnership agreement. NOTE 2- RENTAL REAL ESTATE The Partnership currently has interests in the following four rental real estate properties. Two are wholly owned and two are jointly owned by the Partnership (81.2%) and an affiliate (18.8%): Location (Property Name) Date Purchased Cost Encinitas, California (179 Calle Magdalena) December 31, 1986 $ 705,918 Encinitas, California (187 Calle Magdalena) December 31, 1986 853,560 Clovis, California January 23, 1987 2,854,221 Simi Valley, California November 12, 1987 2,616,523 The major categories of property are: March 31, 1997 December 31, 1996 Land $2,361,894 $2,361,894 Building and Improvements 4,621,668 4,600,688 Furniture and Fixtures 46,660 46,660 7,030,222 7,009,242 Less accumulated depreciation 1,141,378 1,100,126 Net rental real estate $5,888,844 $5,909,116 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1996 NOTE 2- RENTAL REAL ESTATE (CONTINUED) A significant portion of the Partnership's rental revenue was earned from tenants whose individual rents represent more than 10% of total rental revenue. Specifically: Two tenants accounted for 29% and 20% in 1997; Two tenants accounted for 34% and 18% in 1996; NOTE 3 - RELATED PARTY TRANSACTIONS (a) For Partnership management services rendered to the Partnership, the General Partner is entitled to receive 10% of all distributions of cash from operations. These amounts totaled $7,666 for the quarter ended March 31, 1997 and $5,949 for the quarter ended March 31, 1996. See also Note 6. (b) For administrative services provided to the Partnership, the General Partner is entitled to reimbursement for the cost of certain personnel and relevant expenses. These amounts totaled $3,000 for the three months ended March 31, 1997 and March 31, 1996. (c) Property management fees incurred, in accordance with the Partnership Agreement, to West Coast Realty Management, Inc., an affiliate of the corporate General Partner, totaled $9,303 for the quarter ended March 31, 1997, and $8,576 for the quarter ended March 31, 1996. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1996 (continued) NOTE 4- NOTES PAYABLE In January 1995, the Partnership closed escrow on a parcel of land adjacent to the Shaw Villa Shopping Center. The purchase price of the land was $206,749, including a $13,102 acquisition fee paid to the Advisor. The purchase was financed using $23,602 in cash, and the remainder by a one year construction loan from Valliwide Bank of Fresno. The total construction loan commitment is for $1,365,000 that matured on October 5, 1996. Borrowings on the construction loan totaled $1,225,950 as of December 31, 1995. The construction was completed during 1995 and total construction costs of $1,372,900 was allocated to land, building and improvements. Included in construction costs is $87,838 in construction loan interest that was capitalized. In October 1996, the Partnership obtained permanent financing from a major insurance company to replace the construction loan with a twenty year loan. The terms of the loan are as follows: Principal - $1,500,000; Interest Rate of 9.1% fixed for five years, then may be adjusted to the weekly average of the five - year Treasury Note yield for the seventh week prior to the Adjustment Date (5th anniversary date) plus 250 basis points, but in no event less than the existing rate, nor to exceed the maximum rate allowed by law; Amortized over twenty years; due November 1, 2006; and current monthly payments of principal and interest of $14,919. The note payable balance is $1,491,027 at March 31, 1997. The carrying amount is a reasonable estimate of fair value of the construction loan payable because the interest rates approximate the borrowing rates currently available for mortgage loans with similar terms and average maturities. The aggregate annual future maturities at March 31, 1997 are as follows: 1997 ..................................$18,975 1998 .................................. 30,619 1999 .................................. 33,524 2000 .................................. 36,706 2001 .................................. 40,189 Thereafter ..........................1,331,014 Total $1,491,027 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1996 NOTE 5 - NET INCOME AND CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP LIST The Net Income per Limited Partnership Unit was computed in accordance with the partnership agreement using the weighted average number of outstanding limited partnership units of 7,499 for 1997 and 1996. The Limited Partner cash distributions, computed in accordance with the Partnership Agreement, were as follows: Outstanding Amount Total Record Date Units Per Unit Distribution September 30, 1996 7,499 $ 8.15 $ 61,117 June 30, 1996 7,499 8.15 61,117 March 31, 1996 7,499 8.15 61,117 December 31, 1995 7,499 7.14 53,543 Total $236,894 September 30, 1995 7,499 $ 7.50 $ 56,242 June 30, 1995 7,499 7.50 56,243 March 31, 1995 7,499 10.00 74,990 December 31, 1994 7,499 10.00 74,990 262,465 Additional $182.69 to Distribution 7,499 $207.39 1,506,817 upon sale of property Total $1,769,282 Distributions were paid in the fiscal quarter following the record date. NOTE 6 - REALLOCATION OF PARTNER BALANCES Per the provisions of Section 11.1 (V)(ii) of the Partnership Agreement, the General Partner determined that action was necessary to "cure the ambiguities" caused by the Agreement itself. The ambiguity involved the treatment of the partnership management fee, being paid to the General Partner, as an expense of the Partnership, when in fact, it should have been treated as a general partner withdrawal of capital. In order to properly reflect this inception to date correction, a transfer of $305,548 was made from the General Partner's capital account to the Limited Partners capital account during the quarter ended March 31, 1996. NOTE 7 - SUBSEQUENT EVENTS The Partnership distributed $68,991 ($9.20 per unit) on May 9, 1997 to Limited Partners of record as of March 31, 1997. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION Associated Planners Realty Fund (the "Partnership") was organized in November 1985, under the California Revised Limited Partnership Act. The Partnership began offering units for sale on March 28, 1986. As of December 27, 1987, the Partnership had raised $7,499,000 in gross capital contributions. The Partnership netted approximately $6,720,000 after sales commissions and syndication costs. The Partnership was organized for the purpose of investing in, holding, and managing improved, leveraged income-producing property, such as residential property, office buildings, commercial buildings, industrial properties, and shopping centers. The Partnership intended to own and operate such properties for investment over an anticipated holding period of approximately five to ten years. The Partnership's principal investment objectives are to invest in rental real estate properties which will: (1) Preserve and protect the Partnership's invested capital; (2) Provide for cash distributions from operations; (3) Provide gains through potential appreciation; and (4) Generate Federal income tax deductions so that during the early years of property operations, a portion of cash distributions may be treated as a return of capital for tax purposes and, therefore, may not represent taxable income to the limited partners. The ownership and operation of any income-producing real estate is subject to those risks inherent in all real estate investments, including national and local economic conditions, the supply and demand for similar types of properties, competitive marketing conditions, zoning changes, possible casualty losses, increases in real estate taxes, assessments, and operating expenses, as well as others. The Partnership is operated by the General Partner subject to the terms of the Amended and Restated Agreement of Limited Partnership. The Partnership has no employees, and all administrative services are provided by West Coast Realty Advisors, Inc., the General Partner. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) RESULTS OF OPERATIONS Operations for the quarter ended March 31, 1997, reflect an entire period of operations for the Partnership's properties. Rental revenue for the three months ended March 31, 1997 increased from that for the three months ended March 31, 1996 by approximately $15,000, due to increased occupancy at the Shaw Villa Shopping Center, which pertains to the completion of the construction-in- progress in 1995 and subsequent leasing of the additional 8,000 square feet of rentable space, and additionally improved occupancy at the multi-tenant Santa Fe Business Park Building. Interest income increased $1,405 (143%) during the quarter ended March 31, 1997 when compared to the quarter ending March 31, 1995. This increase is due to larger amounts of cash held in interest bearing accounts during the quarter ending March 31, 1997 as opposed to March 31, 1996. The Partnership generated $89,841 in income from operations before depreciation of $41,253 for the three months ended March 31, 1997 compared to $79,092 in income from operations before depreciation of $31,842 for the three months ended March 31, 1996. Depreciation expense increased $9,411 due to the completion of construction-in-progress of the Clovis property. The completion was completed during 1995 and total construction costs of $1,372,000 was allocated to land, building and improvements. Costs and expenses related to the properties operation increased for the three months ended March 31, 1997 compared to the three months ended March 31, 1996 by $24,598 due primarily to an increase in interest expense of $14,615 that was incurred after the completion of construction at the Shaw Villa Shopping Center. Additionally, total operating and general and administrative expenses increased by $7,241 (17%) for the three months ended March 31, 1997 compared to the three months ended March 31, 1996, primarily due to increased repair and maintenance expenditures, consulting services, legal and accounting fees and property management fees. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) LIQUIDITY AND CAPITAL RESOURCES The Partnership began offering for sale limited partnership units on March 28, 1986. On July 16, 1986, the Partnership reached its minimum offering level of $1,200,000, and funds were released from an escrow account to the Partnership. The Partnership sold units throughout the remainder of the year, and raised $3,397,000 in gross proceeds or $3,025,961 net of syndication costs and sales commissions as of December 31, 1986. During 1986, the Partnership purchased two properties for $1,525,254 cash (the Santa Fe Business Park (two buildings)). During 1987, the Partnership purchased two additional properties for $3,829,207 cash (the Shurgard Mini-Warehouse and the Shaw Villa Shopping Center). The Partnership filed Post-Effective Amendment No. 1 to the Form S-18 used to register the Partnership. This filing was done to extend the period that units could be offered for sale by registrant to March 28, 1988. On December 30, 1987, the sale of units ended with $7,499,000 raised or $6,725,211 net of syndication costs and sales commissions. During 1988, the Partnership acquired its last and final property for $1,603,144 cash (the Pacific Bell Building). As of December 31, 1988, the Partnership completed its property acquisition phase. In May 1995, the Partnership began the first step of the disposition phase of the Partnership's life cycle through the sale of the mini-warehouse located in Puyallup, Washington to Shurgard Storage Centers, Inc. The Partnership received approximately $1,510,976 in cash in connection with the sale (there was no debt assumed in connection with the sale). The General Partner did not receive any compensation in connection with its services provided in selling the property. The sale of the Shurgard property resulted in a gain of $116,749. In January 1995, the Partnership closed escrow on a parcel of land adjacent to the Shaw Villa Shopping Center. The purchase price of the land was $206,749, including a $13,102 acquisition fee paid to the Advisor. The purchase was financed using $23,602 in cash, and the remainder by a one year construction loan from Valliwide Bank of Fresno. The total construction loan commitment was $1,365,000 that matured on October 5, 1996. The construction was completed during 1995 and total construction costs of $1,372,900 were allocated to land, building and improvements. Included in construction costs was $87,838 in construction loan interest that was capitalized. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) LIQUIDITY AND CAPITAL RESOURCES (CONT.) In October 1996, the Partnership obtained permanent financing from a major insurance company to replace the construction loan with a twenty year loan. The terms of the loan are as follows: Principal - $1,500,000; Interest Rate of 9.1% fixed for five years then may be adjusted to the weekly average of the five - year Treasury Note yield for the seventh week prior to the Adjustment Date (5th anniversary date) plus 250 basis points, but in no event less than the existing rate, nor to exceed the maximum rate allowed by law; Amortized over twenty years; due November 1, 2006; and current monthly payments of principal and interest of $14,919. The note payable balance is $1,491,027 at March 31, 1997. The Pacific Bell Building was vacated by its tenant (Pacific Bell) in August 1995. However, the tenant continues to pay its rental obligation on the building. The Pacific Bell lease ends September 1997. The Partnership has an ongoing effort to locate a suitable tenant for the building prior to the termination of this lease. The Partnership is currently not actively marketing any of the Partnership's remaining properties for sale at this time. During the quarter ended March 31, 1997, the Partnership made distributions to the general and limited partners totaling $76,657 of which $28,069 constituted a return of capital. The $76,657 in distributions compared favorably to the $89,841 in cash generated from property operations (net income plus depreciation expense). On May 9, 1997, the Partnership made a distribution to limited partners totaling $68,991. Additionally, the partnership distributed $4,076 to the minority interest partner during the quarter ended March 31, 1997. Distributions are determined by management based on cash flow and the liquidity position of the Partnership. It is the intention of management to make quarterly distributions of cash, subject to the maintenance of reasonable reserves. Management uses cash as its primary measure of a partnership's liquidity. The amount of cash that represents adequate liquidity for a real estate limited partnership, in the short-term and long-term, depends on several factors. Among them are: 1. Relative risk of the partnership; 2. Condition of the partnership's properties; 3. Stage in the partnership's life cycle (e.g., money-raising, acquisition, operating or disposition phase); and 4. Distributions to partners. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) LIQUIDITY AND CAPITAL RESOURCES (CONT.) The Partnership believes it has the ability to generate sufficient cash to meet both short-term and long-term liquidity needs, based upon the above four points. The first point refers to the risk of Partnership investments. The Partnership's investments in properties were originally paid for in cash. Subsequent debt was taken on by the Partnership is relatively moderate in size. The second point relates to the condition of the Partnership's properties. All Partnership properties are in good condition. There is no foreseeable need to increase reserves to fund deferred or unusual maintenance and repair expenditures. However, the Partnership realizes that a vacancy at the Pacific Bell Building might require the expenditure of funds for leasehold improvements, and has appropriately allocated a portion of revenues towards that purpose. The third point relates to life cycle. The Partnership completed its funding and acquisition of property in previous years. Thus, the Partnership is in the property operating stage. As part of these operating activities, the partnership was involved in purchasing and developing the aforementioned parcel in Clovis in 1994 and 1995. This activity is expected to enhance rental revenues and increase the value of the Shaw Villa Shopping Center. The Partnership believes that cash flows provided by operating activities will continue. Although the Partnership did sell the Shurgard Property in 1995, there are currently no plans to sell additional properties in 1997. However, the General Partner will review any unsolicited offers for the purchase of the Partnership's properties to determine if a negotiated sale would be in the Partnership's best interests. The fourth point relates to partner distributions. The Partnership makes quarterly distributions from operations. Such distributions are subject to payment of Partnership expenses and reasonable reserves for expenses, maintenance, and replacements. Adding to the liquidity is that at least one quarter's cash profits are reflected on the Partnership's balance sheet at each quarter end, since the Partnership makes distributions to the partners one month after quarter end. In the absence of any unforeseeable catastrophic event, the General Partner believes that the Partnership will have the ability to meet its cash requirements in the short-term and long-term. During the quarter ended March 31, 1997, the General Partner earned partnership management fees of $7,666. Partnership management fees were paid and calculated in accordance with the partnership agreement. The Tax Reform Acts of 1986 and 1987 and the Revenue Reconciliation Acts of 1990 and 1993 did not have a material impact on the Partnership's operations. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) LIQUIDITY AND CAPITAL RESOURCES (CONT.) The slowdown in the economy, inflation and changing prices have had a nominal effect on the Partnership's revenues and income from continuing operations. During the eight years of the Partnership's existence, inflationary pressures in the U.S. economy have been minimal, and this has been consistent with the experience of the Partnership in operating rental real estate in California. The Partnership has several lease clauses with its properties' tenants that will help alleviate much of the negative impact of inflation. Among these are: A. Several month-to-month leases at the Santa Fe Business Park that would allow the Partnership to raise rents on a monthly basis. B. Triple net leases at the Shaw Villa Shopping Center and Pacific Bell Building that give the Partnership an ability to pass on higher operating costs to its tenants. CASH FLOWS - MARCH 31, 1997 VS. MARCH 31, 1996 Cash resources decreased $1,400 during the three months ended March 31, 1997 compared to a $17,169 increase in cash resources for the three months ended March 31, 1996. Cash provided by operating activities increased by $105,527 with the largest contributor being $89,841 in cash basis net income for the three months ended March 31, 1997. In contrast, the three months ended March 31, 1996 provided $76,661 in cash from operating activities due primarily to $79,092 in cash basis net income. The sole use of cash in investing activities for the three months ended March 31, 1997 was $20,980 expended for tenant improvements to an existing tenant at the Shaw Villa Shopping Center. In contrast, the three months ended March 31, 1996 did not have any investing activities. For the three months ended March 31, 1997, financing activities used $85,947 via distributions to limited, general and minority partners totaling $79,192 and repayments on notes payable of $6,755. In contrast, the three months ended March 31, 1996, financing activities used an additional $59,492 via distributions to these same parties. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) NEW ACCOUNTING PRONOUNCEMENTS Statement of Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS No. 125) issued by the Financial Accounting Standards Board (FASB) is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after December 31, 1996, and is to be applied prospectively. Earlier or retroactive application is not permitted. The new standard provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. The Company does not expect adoption to have a material effect on its financial position or results of operations. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) PART II O T H E R I N F O R M A T I O N 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.EXHIBIT AND REPORTS ON FORM 8-K (a) Information required under this section has been included in the financial statements. (b) Reports on Form 8-K None ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) S I G N A T U R E S 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. ASSOCIATED PLANNERS REALTY FUND A California Limited Partnership (Registrant) May 14, 1997 By: WEST COAST REALTY ADVISORS, INC. A California Corporation, General Partner Neal E. Nakagiri Director and Executive Vice President/Secretary May 14, 1997 Michael G. Clark Vice President/Treasurer EX-27 2
5 0000785791 ASSOCIATED PLANNERS REALTY FUND LP 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 205,013 0 0 0 0 229,790 7,030,222 (1,141,378) 6,125,264 270,197 1,491,027 0 0 0 4,364,039 6,125,264 188,956 191,344 108,732 0 0 0 34,024 48,588 0 0 0 0 0 48,588 5.34 5.34
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