-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, s7Saca96wFCuTTjcZa+MRDaAeDx2sxVGbPJW1szxkh3FoE8Db4j+K+mYth5QDCK0 6VkKYoi1PFBLrry1S8EOqA== 0000797331-95-000001.txt : 19950505 0000797331-95-000001.hdr.sgml : 19950505 ACCESSION NUMBER: 0000797331-95-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950504 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURED INVESTMENT RESOURCES FUND LP II CENTRAL INDEX KEY: 0000797331 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 363451000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16798 FILM NUMBER: 95534500 BUSINESS ADDRESS: STREET 1: 5453 W 61ST PL CITY: MISSION STATE: KS ZIP: 66205 BUSINESS PHONE: 9133845700 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period to Commission file number 0-16798 SECURED INVESTMENT RESOURCES FUND, L.P. II (Exact name of registrant as specified in its charter) Delaware 36-3451000 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5453 W. 61st Place, Mission, Kansas 66205 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (913) 384-5700 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Interests ("Units") 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 such shorter periods 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 SECURED INVESTMENT RESOURCES FUND, L.P. II INDEX PART I. FINANCIAL INFORMATION Page Item 1. Financial Statements (Unaudited): Balance Sheets -- March 31, 1995 and December 31, 1994 3-4 Statements of Operations -- Three Months Ended March 31, 1995 and 1994 5 Statements of Partnership Capital -- Three Months Ended March 31, 1995 and the Years Ended December 31, 1994, and 1993 6 Statements of Cash Flows -- Three Months Ended March 31, 1995 and 1994 7-8 Notes to Financial Statements 9-11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-13 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 SECURED INVESTMENT RESOURCES FUND, L.P. II BALANCE SHEETS March 31, 1995 December 31, Unaudited) 1994 ASSETS INVESTMENT PROPERTIES--Note Land and buildings $ 36,187,745 $ 36,167,642 Furniture, fixtures and equipment 1,537,013 1,488,893 __________ __________ 37,724,758 37,656,535 Less accumulated depreciation and allowance for losses 9,823,539 9,529,532 __________ __________ 27,901,219 28,127,003 RESTRICTED DEPOSITS Bond cash reserves 1,510,000 1,510,000 Bond principal reduction reserves 428,799 424,464 __________ __________ 1,938,799 1,934,464 OTHER ASSETS Cash 470,539 284,224 Rents and other receivables, less allowance of $47,300 in 1995 and $47,282 in 1994 72,691 21,472 Due from related parties--Note B 176,158 173,996 Prepaid expenses 154,980 130,672 Debt issuance costs, net of accumulated amortization of $98,619 in 1995 and $88,602 in 1994 119,759 129,775 Commercial commissions, deposits and other 169,971 161,674 __________ __________ 1,164,098 901,813 __________ __________ $ 31,004,116 $ 30,963,280 SECURED INVESTMENT RESOURCES FUND, L.P. II BALANCE SHEETS--CONT'D. March 31, 1995 December 31, (Unaudited) 1994 LIABILITIES AND PARTNERSHIP CAPITAL Mortgage debt--Note D $ 28,527,286 $ 28,555,529 Deferred interest--Note D 1,108,465 1,108,465 Accrued interest 470,171 368,403 Accounts payable and accrued expenses 525,602 391,988 Unearned revenue 14,268 14,012 Tenant security deposits 129,738 129,306 TOTAL LIABILITIES 30,775,530 30,567,703 PARTNERSHIP CAPITAL General Partners Capital contribution 1,000 1,000 Partnership deficit (186,743) (185,073) __________ __________ (185,743) (184,073) Limited Partners Capital contributions 18,901,831 18,901,831 Partnership deficit (18,487,502) (18,322,181) 414,329 579,650 TOTAL PARTNERSHIP CAPITAL 228,586 395,577 __________ __________ $ 31,004,116 $ 30,963,280 See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended March 31, 1995 1994 REVENUES Rents $1,432,728 $1,376,157 Maintenance escalations and other 22,448 24,068 __________ __________ 1,455,176 1,400,225 OPERATING AND ADMINISTRATIVE EXPENSES Property operating expenses 571,984 543,511 General and administrative expenses 29,594 31,519 Professional services 17,174 44,759 Management fees and reimbursed direct expenses 66,921 65,101 __________ _________ 685,673 684,890 NET OPERATING INCOME 769,503 715,335 NON-OPERATING EXPENSES Interest 594,670 544,111 Depreciation and amortization 341,824 350,366 __________ _________ 936,494 894,477 PARTNERSHIP INCOME (LOSS) $ (166,991) $ (179,142) Allocation of loss: General Partners (1,670) (1,791) Limited Partners (165,321) (177,351) __________ _________ $ (166,991) $ (179,142) Partnership loss per limited partnership unit $ (3.08) $ (3.31) See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF PARTNERSHIP CAPITAL (Unaudited) Three Months Ended March 31, 1995 (Unaudited) and the Years Ended December 31, 1994 and 1993 General Limited Partners Partners Total Balances at January 1, 1993 $ (186,964) $ 293,378 $ 106,414 Partnership income 11,783 1,166,558 1,178,341 Balances at December 31, 1993 (175,181) 1,459,936 1,284,755 Partnership loss (8,892) (880,286) (889,178) Balances at December 31, 1994 (184,073) 579,650 395,577 Partnership loss (1,670) (165,321) (166,991) Balances at March 31, 1995 $ (185,743) $ 414,329 $ 228,586 See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 1995 1994 OPERATING ACTIVITIES Partnership income (loss) $ (166,991) $ (179,142) Adjustments to reconcile partnership loss to net cash provided by (used in) operating activities: Depreciation and amortization 304,024 350,366 Amortization of bond discount 37,800 Provision for losses on rents and other receivables 7,500 (5,340) Changes in assets and liabilities: Rents and other receivables (58,719) 17,568 Prepaid expenses (24,308) (2,687) Due from related parties (2,162) 15,025 Debt issuance costs --- (19,867) Commercial commissions, deposits and other (8,297) 10,181 Accounts payable and accrued expenses 133,614 82,655 Accrued interest 101,768 (67,863) Unearned revenue 256 (3,509) Tenant security deposits 432 (4,899) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 324,917 192,488 INVESTING ACTIVITIES Purchases of and improvements to investment properties (68,223) (17,180) Purchase of restricted bond cash reserves (4,335) (3,608) NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (72,558) (20,788) SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D. Three Months Ended March 31, 1995 1994 FINANCING ACTIVITIES Deferral of long-term interest payable $ --- $ 37,508 Principal payments on long-term debt (66,044) (89,716) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (66,044) (52,208) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 186,315 119,492 CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD 284,224 208,515 CASH AND CASH EQUIVALENTS END OF PERIOD $ 470,539 $ 328,007 See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II NOTES TO FINANCIAL STATEMENTS (Unaudited) March 31, 1995 NOTE A--BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q 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 three month period ended March 31, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 1994. NOTE B--DUE FROM RELATED PARTY Affiliates of the General Partners are entitled to receive payments from the Partnership for management and other services. Specs, Inc. (a corporation in which the General Partner has a minority interest) receives property management fees for providing property management services and direct cost reimbursements based upon time allocated to performing certain Partnership functions. Amounts paid or accrued by the Partnership to affiliates of the General Partners are as follows: Three Months Ended March 31, 1995 1994 Property Management Fees $ 66,921 $ 65,101 Amounts due from related parties consist of the following: March 31, December 31, 1995 1994 Secured Investment Resources II, Inc. $ 124,422 $ 124,422 The Hoyt Group, Ltd. 51,736 49,574 __________ __________ $ 176,158 $ 173,996 NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D. NOTE B--RELATED PARTY TRANSACTIONS--CONT'D. The net amount due from related parties represents excess syndication costs, management fees payable and other advances. The terms of repayment are discretionary and have not been formalized at this time. The General Partners are entitled to receive a Partnership Management Fee equal to 5% of Cash Flow From Operations (as defined) for managing the normal operations of the Partnership. There was no management fee due as of March 31, 1995 or December 31, 1994. NOTE C--CASH DISTRIBUTIONS No cash distributions have been made since April 1990. Future distributions will only be made from excess cash flow not needed for working capital reserves. NOTE D--MORTGAGE DEBT Mortgage debt consists of the following: March 31, December 31, 1995 1994 Collateralized by Investment Property: First Mortgages: Sunwood Village Apartments $ 8,233,326 $ 8,264,056 Bayberry Crossing Shopping Ctr. 835,292 835,292 Thomasbrook Apartments 4,991,896 4,995,784 Oak Terrace Active Retirement Center and Healthcare Center 12,800,000 12,800,000 Less bond discount (2,466,442) (2,504,242) Forest Park Shopping Ctr. 1,361,780 1,383,627 Second Mortgages: Bayberry Crossing Shopping Ctr. 1,921,434 1,931,012 Thomasbrook Apartments 850,000 850,000 __________ __________ $28,527,286 $28,555,529 Related to the Sunwood Village Apartments purchase money note is a credit enhancement fee which is due at maturity. As of March 31, 1995 and December 31, 1994, $371,095 of credit enhancement fees have been accrued and are reflected in long-term accrued interest. NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D. NOTE D--MORTGAGE DEBT--CONT'D. The Partnership has the option to currently pay or defer payment of interest due on the hedged portion ($8,400,000) of the Oak Terrace Active Retirement Center and Healthcare Center bond financing. As of March 31, 1995 and December 31, 1994, $737,370 of deferred interest has been accrued and is reflected in long-term accrued interest. Cash paid for interest totaled $490,702 and $568,135 during the first three months of 1995 and 1994, respectively. (The remainder of this page intentionally left blank.) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations Revenues for the first quarter of 1995 increased by $55,000 (3.9%) compared to the same quarter of last year. The revenue increased approximately $40,000 in multifamily housing, $17,000 at Oak Terrace Active Retirement Center and declined by $2,000 in the commercial properties. The stronger apartment markets allowed the Partnership to continue increasing rental rates, discontinue rent concessions and maintain high occupancy levels. The commercial property remained strong at Forest Park Center in St Louis, however the rental income at Bayberry Center declined slightly, due to a weaker tenant mix. The Partnership has also increased the rental rates at Oak Terrace, resulting in higher revenue, but also higher vacancy rates. The Partnership feels that the strong apartment market will continue through 1995 into 1996. Total Operating and Administrative expenses remained relatively unchanged when comparing the first quarter of 1995 with the same quarter of 1994. Slightly higher property operating expenses due to higher resident turnover, was offset by lower professional services. Interest expense for the first quarter increased $51,000 (9.3%) over the 1994 first quarter expense. This is due primarily to higher interest rates, and increased bond collateral fees. The Partnership anticipates that operating results for the first quarter will be representative of the results for the remainder of the year. Liquidity and Capital Reserves During the first quarter $325,000 of cash was provided by operating activities, $73,000 was used for investing activities and $66,000 was used to reduce long term debt. Although the cash position has improved during the quarter, the Partnership is past due on the Thomasbrook Apartment first and second mortgages and real estate taxes. The General Partners believe that working capital will be available during the remainder of the year to reduce this past due balance and fund known, on-going operating and capital requirements. The General Partners also anticipate that 1995 cash flow from operations will continue to improve because of strong occupancy, continued rental rate increases, and stablized expenses. It is the General Partners' intent to evaluate the Partnership's portfolio to determine if it is prudent to offer one or more properties for sale or possible restructure the related financing packages. Any unleveraged portion of the net sales proceeds or favorable refinancing terms could generate additional working capital. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.-- Cont'd. Liquidity & Capital Reserves -- Cont'd. At the present time, contract negotiations are continuing with a potential buyer for Sunwood Village Apartments. The General Partners have determined it prudent to discontinue cash distributions until such time that adequate working capital and capital improvement reserves are in place. (The remainder of this page intentionally left blank.) PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None. Item 2. CHANGES IN SECURITIES Inapplicable. Item 3. DEFAULTS UPON SENIOR SECURITIES None. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Inapplicable. Item 5. OTHER INFORMATION Inapplicable. Item 6. EXHIBIT AND REPORTS ON FORM 8-K (a) Exhibits None. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended March 31, 1995. 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. SECURED INVESTMENT RESOURCES FUND, L.P. II A Delaware Limited Partnership (Registrant) By: James R. Hoyt as Individual General Partner Date: April 20, 1995 By: Secured Investment Resources II, Inc. as Corporate General Partner By: James R. Hoyt, President Date: April 20, 1995 EX-27 2
5 Unaudited. 1 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 470,539 1,938,799 119,991 47,300 0 1,164,098 37,724,758 9,823,539 31,004,116 2,248,244 28,527,286 0 0 0 0 31,004,116 0 1,455,176 0 685,673 341,824 0 594,670 0 0 0 0 0 0 (166,991) (3.08) 0
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