-----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, WfzasKjDbaXquFrjnnP5oak9XGEgEejU9Bd8kRSOmVLC6SZ6BC4jLVzq/mbb85bq RmpjqHEJy1WLLjSYw7X8rg== 0000768834-96-000001.txt : 19960513 0000768834-96-000001.hdr.sgml : 19960513 ACCESSION NUMBER: 0000768834-96-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960510 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: 96559843 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 March 31, 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) March 31, 1996 Assets Cash and cash equivalents: Unrestricted $ 992 Restricted--tenant security deposits 133 Investments 305 Accounts receivable 48 Escrows for taxes 220 Restricted escrows 99 Other assets 174 Investment properties: Land $ 1,742 Buildings and related personal property 21,383 23,125 Less accumulated depreciation (9,262) 13,863 $ 15,834 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 88 Accrued taxes 306 Tenant security deposits 133 Other liabilities 335 Mortgage notes payable 11,288 Partners' Capital (Deficit) General Partner $ (115) Limited Partner "A" Unitholders - 96,284 units outstanding (24) Limited Partner "B" Unitholders - 75,152 units outstanding 3,823 3,684 $ 15,834 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 March 31, 1995 1995 Revenues: Rental income $ 1,131 $ 1,065 Other income 68 97 Casualty gain -- 539 Total revenues 1,199 1,701 Expenses: Operating 419 379 General and administrative 34 61 Partnership management fees 20 33 Maintenance 105 88 Depreciation 242 228 Interest 262 265 Property taxes 92 99 Total expenses 1,174 1,153 Net income $ 25 $ 548 Net income allocated to general partner (1%) $ -- $ 5 Net income allocated to limited partners (99%) 25 543 $ 25 $ 548 Net income per A Unit: $ .14 $ 3.16 Net income per B Unit: $ .14 $ 3.16 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 March 31, 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 three months ended March 31, 1996 -- 14 11 25 Partners' capital (deficit) at March 31, 1996 $ (115) $ (24) $ 3,823 $ 3,684 See Accompanying Notes to Consolidated Financial Statements
d) MULTI-BENEFIT REALTY FUND '87-1 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1996 1995 Cash flows from operating activities: Net income $ 25 $ 548 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 242 228 Amortization of discounts and loan costs 11 11 Casualty gain -- (539) Change in accounts: Restricted cash (2) (1) Accounts receivable 67 (15) Escrows for taxes (12) (112) Other assets 14 (14) Accounts payable (249) 50 Tenant security deposit liabilities 2 1 Accrued taxes 43 51 Other liabilities (48) 177 Net cash provided by operating activities 93 385 Cash flows from investing activities: Property improvements and replacements (52) (25) Deposits to restricted escrows (11) (7) Proceeds from sale of investments -- 246 Purchase of investments -- (150) Net cash (used in) provided by investing activities (63) 64 Cash flows from financing activities: Payments on mortgage notes payable (42) (26) Distributions to partners (230) (367) Net cash used in financing activities (272) (393) Net (decrease) increase in cash (242) 56 Cash and cash equivalents at beginning of period 1,234 850 Cash and cash equivalents at end of period $ 992 $ 906 Supplemental disclosure of cash flow information: Cash paid for interest $ 251 $ 170 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 the General Partner, 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, 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 three month periods ended March 31, 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. Such reimbursements are included in general and administrative expense on the consolidated statement of operations. The General Partner and its current and former affiliates received reimbursements and fees as reflected in the following table: For the Three Months Ended March 31, 1996 1995 (in thousands) Property management fees $ 59 $ 53 Reimbursements for services of affiliates 29 38 Partnership management fees (1) 20 33 (1) The Agreement provides for 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. 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 $1.4 million, exceeded the reserve requirement of approximately $754,000 at March 31, 1996. Note D - Casualty Gain Shadow Brook Apartments experienced fire damage which destroyed twelve units and damaged twelve other units in 1995. At March 31, 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 the three months ended March 31, 1996 and 1995: Average Occupancy Property 1996 1995 Carlin Manor Apartments Columbus, Ohio 89% 86% Hunt Club Apartments Indianapolis, Indiana 93% 86% Shadow Brook Apartments West Valley City, Utah 99% 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 as shown in the financial statements for the three months ended March 31, 1996, was approximately $25,000 as compared to net income of approximately $548,000 for the three months ended March 31, 1995. The decrease in net income 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. Operating expenses have increased during the three months ended March 31, 1996, as compared to the three months ended March 31, 1995, due to increased utility costs, advertising, personnel and service costs. Utility costs increased as a result of the severe winter experienced in the property locales. Advertising increased as a result of the General Partner's efforts to increase occupancy. Personnel and service costs are up as a result of additional personnel at the properties and bonuses paid to property personnel. Also, net income decreased due to the decrease in other income and an increase in maintenance expense. Other income decreased due to a decrease in interest income which resulted from a decrease in investment balances during the three months ended March 31, 1996, as compared to the three months ended March 31, 1995. Maintenance expense increased due to an increase in snow removal expense as a result of the severe winter weather. Also, maintenance expense increased due to increases in interior and exterior building improvements such as ceiling fan installation and skylight repairs. Furthermore, the decrease in net income was offset by decreases in general and administrative expenses and partnership management fees for the three months ended March 31, 1996, as compared to the three months ended March 31, 1995. 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 due to the decrease in distributions made to the limited partners from "cash available for distribution" (as defined in the Agreement). As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expense. As part of this plan, the General Partner attempts to protect the Partnership from 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 March 31, 1996, the Partnership had unrestricted cash of approximately $992,000 versus approximately $906,000 at March 31, 1995. Net cash provided by operating activities decreased primarily due to a decrease in accounts receivable, a decrease in the deposits to the escrows for taxes and a decrease in other liabilities. These were partially offset by a decrease in accounts payable due to the timing of payments to vendors. Net cash used in investing activities increased due to net cash received in 1995 from the sale of investments and an increase in property improvements and replacements during the three months ended March 31, 1996. Net cash used in financing activities decreased primarily due to a decrease in distributions during the first quarter of 1996 versus the first quarter of 1995. This decrease was partially offset by increased payments on mortgage notes payable. The Partnership has no material capital projects 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 is available 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 property 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. Near-term needs include all operating, maintenance, and other expenses which are needed to operate the Partnership's investment properties in the near future. The mortgage indebtedness of approximately $11,288,000 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. A distribution of approximately $363,000 or $3.77 per A Unit was made to the A Unit limited partners in March 1995. A distribution of approximately $4,000 was also made to the General Partner. During March 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. Future cash distributions will depend on the levels of net cash generated from operations, refinancings, property sales and 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 March 31, 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: May 10, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Multi Benefit Realty Fund '87-1 1996 First 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 3-MOS DEC-31-1996 MAR-31-1996 992 305 48 0 0 0 23,125 9,262 15,834 0 11,288 0 0 0 3,684 15,834 0 1,199 0 0 1,174 0 262 0 0 0 0 0 0 25 .14 0 The Registrant has an unclassified balance sheet.
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