-----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, FOCb+VVAjTY9k37YOwMnA5c1R7+RjbXUayVJrqMghgz7/ez6zLErmA1LLhSMcdUA rVE0e9lSh97RBBChu/RvMg== 0000356472-96-000001.txt : 19960809 0000356472-96-000001.hdr.sgml : 19960809 ACCESSION NUMBER: 0000356472-96-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960808 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MULTI BENEFIT REALTY FUND 87-1 CENTRAL INDEX KEY: 0000802200 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 943026785 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16684 FILM NUMBER: 96606136 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINNACIAL PLAZA STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report (As last amended by 34-32231, eff. 6/3/93.) U. S. 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 0-16684 MULTI-BENEFIT REALTY FUND '87-1 (Exact name of small business issuer as specified in its charter) California 94-3026785 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Check whether the issuer (1) 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 . PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) MULTI-BENEFIT REALTY FUND '87-1 CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1996 Assets Cash and cash equivalents: Unrestricted $ 1,308 Restricted--tenant security deposits 143 Investments 108 Accounts receivable 49 Escrows for taxes 174 Restricted escrows 110 Other assets 187 Investment properties: Land $ 1,742 Buildings and related personal property 21,444 23,186 Less accumulated depreciation (9,504) 13,682 $ 15,761 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 76 Accrued taxes 248 Tenant security deposits 144 Other liabilities 318 Mortgage notes payable 11,245 Partners' Capital (Deficit) General Partner $ (114) Limited Partner "A" Unitholders - 96,284 units outstanding 1 Limited Partner "B" Unitholders - 75,152 units outstanding 3,843 3,730 $ 15,761 See Accompanying Notes to Consolidated Financial Statements b) MULTI-BENEFIT REALTY FUND '87-1 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 Revenues: Rental income $ 1,144 $ 1,060 $ 2,275 $ 2,125 Other income 64 82 132 179 Casualty gain -- -- -- 539 Total revenues 1,208 1,142 2,407 2,843 Expenses: Operating 395 332 814 711 General and administrative 58 59 92 120 Partnership management fee -- -- 20 33 Maintenance 138 121 243 209 Depreciation 245 231 487 459 Interest 262 265 524 530 Property taxes 64 108 156 207 Total expenses 1,162 1,116 2,336 2,269 Net income $ 46 $ 26 $ 71 $ 574 Net income allocated to general partner (1%) $ -- $ -- $ 1 $ 6 Net income allocated to limited partners (99%) 46 26 70 568 $ 46 $ 26 $ 71 $ 574 Net income per A Unit: $ .27 $ .15 $ .41 $ 3.31 Net income per B Unit: $ .27 $ .15 $ .41 $ 3.31 See Accompanying Notes to Consolidated Financial Statements
c) MULTI-BENEFIT REALTY FUND '87-1 CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
LIMITED PARTNERS Total Partners' General Equity Partner "A" Units "B" Units (Deficit) Original capital contributions $ 1 $ 9,706 $ 7,538 $ 17,245 Limited partnership units at December 31, 1995 and June 30, 1996 -- 96,284 75,152 171,436 Partners' capital (deficit) at December 31, 1995 $ (113) $ 190 $ 3,812 $ 3,889 Distributions to partners (2) (228) -- (230) Net income for the six months ended June 30, 1996 1 39 31 71 Partners' capital (deficit) at June 30, 1996 $ (114) $ 1 $ 3,843 $ 3,730 See Accompanying Notes to Consolidated Financial Statements
d) MULTI-BENEFIT REALTY FUND '87-1 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1996 1995 Cash flows from operating activities: Net income $ 71 $ 574 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 487 459 Amortization of loan costs 21 21 Casualty gain -- (539) Change in accounts: Restricted cash (11) (72) Accounts receivable 66 (55) Escrows for taxes 34 (157) Other assets 16 35 Accounts payable (261) 368 Tenant security deposit liabilities 12 (5) Accrued taxes (15) 32 Other liabilities (65) 84 Net cash provided by operating activities 355 745 Cash flows from investing activities: Property improvements and replacements (116) (405) Deposits to restricted escrows (21) (17) Receipts from restricted escrows -- 66 Proceeds from sale of investments 197 2,342 Purchase of investments -- (1,753) Net cash provided by investing activities 60 233 Cash flows from financing activities: Payments on mortgage notes payable (86) (66) Distributions to partners (230) (918) Loan costs paid (25) -- Net cash used in financing activities (341) (984) Net increase (decrease) in cash 74 (6) Cash and cash equivalents at beginning of period 1,234 850 Cash and cash equivalents at end of period $ 1,308 $ 844 Supplemental disclosure of cash flow information: Cash paid for interest $ 500 $ 424 See Accompanying Notes to Consolidated Financial Statements
e) MULTI-BENEFIT REALTY FUND '87-1 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited consolidated financial statements of Multi-Benefit Realty Fund '87-1 ("Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. 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 ConCap Equities, Inc. ("General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the year ended December 31, 1995. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Limited Partnership Units The Partnership has issued two classes of Units, "A" Units and "B" Units. The two classes of Units are entitled to different rights and priorities as to cash distributions and partnership allocations. The Units represent economic rights attributable to the limited partnership interests in the Partnership and entitle the holders thereof ("Unitholders") to participate in certain allocations and distributions of the Partnership. Investments Investments consisting primarily of U.S. Treasury Notes with original maturities of more than ninety days are considered to be held-to-maturity securities. Note B - Related Party Transactions The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all partnership activities. The Partnership paid property management fees based upon collected gross rental revenues for property management services as noted below for the six month periods ended June 30, 1996 and 1995, respectively. Such fees are included in operating expense on the consolidated statement of operations and are reflected in the following table. The Limited Partnership Agreement ("Agreement") provides for reimbursement to the General Partner and its affiliates for costs incurred in connection with the administration of Partnership activities. The General Partner and its current and former affiliates received reimbursements and fees as reflected in the following table: For the Six Months Ended June 30, 1996 1995 (in thousands) Property management fees $119 $108 Reimbursements for services of affiliates (2) 106 83 Partnership management fees (1) 20 33 (1) The Agreement provides that a fee equal to 9% of distributable cash from operations (as defined in the Agreement) received by the limited partners be paid to the General Partner for executive and administrative management services. (2) Included in "reimbursements for services of affiliates" for 1996 is approximately $49,000 in reimbursements for construction oversight costs. On July 1, 1995, the Partnership began insuring its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the master policy. The current agent assumed the financial obligations to the affiliate of the General Partner who receives payments on these obligations from the agent. The amount of the partnership's insurance premiums accruing to the benefit of the affiliate of the General Partner by virtue of the agent's obligations is not significant. Note C - Commitment The Partnership is required by the Agreement to maintain working capital reserves of not less than 5% of Net Invested Capital, as defined in the Agreement. In the event expenditures are made from this reserve, operating revenue shall be allocated to such reserve to the extent necessary to maintain the foregoing level. Reserves, including cash and cash equivalents and investments totaling approximately $1,400,000, exceeded the reserve requirement of approximately $754,000 at June 30, 1996. Note D - Casualty Gain Shadow Brook Apartments experienced fire damage which destroyed twelve units and damaged twelve other units in 1995. At June 30, 1995, the fire resulted in a casualty gain of approximately $539,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of three apartment complexes. The following table sets forth the average occupancy of the properties for each of the six months ended June 30, 1996 and 1995: Average Occupancy Property 1996 1995 Carlin Manor Apartments Columbus, Ohio 89% 85% Hunt Club Apartments Indianapolis, Indiana 95% 87% Shadow Brook Apartments West Valley City, Utah 98% 98% The General Partner attributes the increase in occupancy at Carlin Manor Apartments and Hunt Club Apartments to the fact that the General Partner has made improvements to the appearance of the properties as well as increasing the advertising of the properties. Both of these factors are believed to have contributed to the increase in occupancy. Results of Operations The Partnership's net income for the six months ended June 30, 1996, was approximately $71,000 as compared to net income of approximately $574,000 for the corresponding period in 1995. The Partnership recorded net income of approximately $46,000 for the three month period ended June 30, 1996, as compared to net income of $26,000 for the corresponding period in 1995. The decrease in net income for the six month period ended June 30, 1996, is primarily attributable to the $539,000 casualty gain recognized in the first quarter of 1995 due to the fire damage at Shadow Brook Apartments which destroyed twelve apartments and damaged twelve others. Furthermore, the decrease in net income for six months ended June 30, 1996, is attributable to the decrease in other income, the increase in operating expenses, and the increase in maintenance expenses. Other income decreased as a result of a decrease in the interest income earned on investments and a decrease in dividends received on an investment in Southmark Corporation. The decrease in other income is also attributable to the receipt of approximately $21,000 in 1995 of insurance proceeds related to a 1993 fire at Carlin Manor Apartments. At the time of the receipt all costs associated with the fire damages and the related repairs had been expensed or capitalized. Operating expense increased due to an increase in advertising and concessions at Carlin Manor Apartments, which were given in an attempt to increase occupancy, and an increase in utility bills at Carlin Manor Apartments and Hunt Club Apartments due to the unusually cold winter and spring weather. Finally, maintenance expense increased due to an increase in snow removal expense, landscaping and parking area expense and pool expense. Snow removal expense increased as a result of the unusually cold winter and spring weather. Landscaping and parking area expense increased due to projects completed at Shadow Brook Apartments to improve the appearance of the property. Pool expense increased due to the resurfacing project completed at Hunt Club Apartments. Offsetting the items noted above for the six months ended June 30, 1996, are a decrease in general and administrative expense, a decrease in partnership management fees, and a decrease in property taxes. The decrease in general and administrative expense is due to the additional costs associated with the combined efforts of the Dallas and Greenville offices during the transition efforts that ended June 30, 1995. The increased costs related to the transition efforts were incurred to minimize any disruption in the 1994 year-end reporting function, including K-1 preparation and distribution. Partnership management fees decreased as a result of the decrease in distributable cash from operations (as defined in the Limited Partnership Agreement). The decrease in property tax expense is due to the fact that the actual 1995 tax invoice was reduced from the amount accrued at June 30, 1995, which was based on prior year amounts. The increase in net income for the three month period ended June 30, 1996, is due primarily to the decrease in property taxes as explained above. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of its investment property to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership for increases in expense. As part of this plan, the General Partner attempts to protect the Partnership for the burden of inflation- related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the General Partner will be able to sustain such a plan. Liquidity and Capital Resources At June 30, 1996, the Partnership had unrestricted cash of approximately $1,308,000 compared to approximately $844,000 at June 30, 1995. Net cash provided by operating activities decreased due to a decrease in accounts payable and a decrease in other liabilities. This decrease in net cash provided by operating activities was partially offset by a decrease in accounts receivable and a decrease in deposits to the escrows for taxes. Net cash provided by investing activities decreased as a result of a decrease in cash received from restricted escrows and a decrease in net cash received from investments. This decrease in net cash provided by investing activities was partially offset by decreased purchases of property improvements and replacements during the six months ended June 30, 1996. Net cash used in financing activities decreased due to a decrease in distributions during the six months ended June 30, 1996, versus the six months ended June 30, 1995. The Partnership has no material capital programs scheduled to be performed in 1996, although certain routine capital expenditures and maintenance expenses have been budgeted. These capital expenditures and maintenance expenses will be incurred only if cash is available from operations, is received from the capital reserve account or from cash and cash equivalents on hand. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of approximately $11,245,000 is amortized over varying periods and requires balloon payments in June 1997 and October 2000 at which time the properties will be refinanced or sold. During the first six months of 1996, a distribution of approximately $228,000 or $2.36 per "A" Unit was made to the "A" Unit limited partners, and a distribution of approximately $2,000 was made to the General Partner. Distributions of approximately $909,000 or $9.44 per "A" Unit were made to the "A" Unit limited partners during the first six months of 1995. Distributions of approximately $9,000 were also made to the General Partner. Future cash distributions will depend on the level of net cash generated from operations, refinancings, property sales, and the availability of cash reserves. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: None filed for the quarter ended June 30, 1996. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MULTI-BENEFIT REALTY FUND '87-1 By: CONCAP EQUITIES, INC. General Partner By:/s/ Carroll D. Vinson Carroll D. Vinson President By:/s/ Robert D. Long, Jr. Robert D. Long, Jr. Vice President/CAO Date: August 8, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Multi-Benefit Realty Fund '87-1 1996 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000802200 MULTI-BENEFIT REALTY FUND '87-1 1,000 6-MOS DEC-31-1996 JUN-30-1996 1,308 108 49 0 0 0 23,186 9,504 15,761 0 11,245 0 0 0 3,730 15,761 0 2,407 0 0 2,336 0 524 0 0 0 0 0 0 71 .41 0 The Registrant has an unclassified balance sheet. Multiplier is 1.
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