-----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, QY0pW4xmayEzAws3QCER8LsvIimP7P1Si4Bq38I9162OSLhMGkzM7cpOt1GJINCQ OQ906dEL0NOHeCXgrqfoeg== 0000802200-95-000001.txt : 19951212 0000802200-95-000001.hdr.sgml : 19951212 ACCESSION NUMBER: 0000802200-95-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951108 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MULTI BENEFIT REALTY FUND 87-1 CENTRAL INDEX KEY: 0000802200 STANDARD INDUSTRIAL CLASSIFICATION: 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: 95588209 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 September 30, 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 0-16684 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 (803) 239-1000 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the 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 . PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) MULTI-BENEFIT REALTY FUND '87-1 CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data)
September 30, 1995 Assets Cash and cash equivalents $ 1,401 Securities available for sale 305 Prepaid expenses and other assets 792 Investment properties: Land $ 1,742 Buildings and related personal property 21,067 22,809 Less accumulated depreciation (8,780) 14,029 $ 16,527 Liabilities and Partners' Capital (Deficit) Liabilities Mortgage notes and interest payable $ 11,457 Accrued taxes 377 Other liabilities 674 Partners' Capital (Deficit) General Partner $ (112) Limited Partner "A" Unitholders - 96,284 units outstanding) 262 Limited Partner "B" Unitholders - 75,152 units outstanding) 3,869 4,019 $ 16,527
[FN] 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 Nine Months Ended September 30, September 30, 1995 1994 1995 1994 Revenues: Rental income $ 1,180 $ 1,053 $ 3,374 $ 3,145 Interest and dividend income on investments 18 31 81 100 Total revenues 1,198 1,084 3,455 3,245 Expenses: Operating 712 604 1,793 1,860 General and administrative 46 48 198 179 Depreciation 237 251 696 745 Interest 264 267 794 803 Total expenses 1,259 1,170 3,481 3,587 Casualty gain -- -- 539 -- Other income -- -- -- 56 Net (loss) income $ (61) $ (86) $ 513 $ (286) Net (loss) income allocated to general partners (1%) $ (1) $ (1) $ 5 $ (3) Net (loss) income allocated to limited partners (99%) (60) (85) 508 (283) $ (61) $ (86) $ 513 $ (286) Net (loss) income per "A" Unit $ (.35) $ (.49) $ 2.96 $ (1.65) Net (loss) income per "B" Unit $ (.35) $ (.49) $ 2.96 $ (1.65)
[FN] 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, 1994 and September 30, 1995 -- 96,284 75,152 171,436 Partners' capital (deficit) at December 31, 1994 $ (108) $ 886 $ 3,646 $ 4,424 Net income for the nine months ended September 30, 1995 5 285 223 513 Distributions for the nine months ended September 30, 1995 (9) (909) -- (918) Partners' capital (deficit) at September 30, 1995 $ (112) $ 262 $ 3,869 $ 4,019
[FN] See Accompanying Notes to Consolidated Financial Statements d) MULTI-BENEFIT REALTY FUND '87-1 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Nine Months Ended September 30, 1995 1994 Cash flows from operating activities: Net income (loss) $ 513 $ (286) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 696 745 Amortization of loan costs 32 32 Casualty gain (539) -- Change in accounts: Prepaid expenses and other assets (248) (282) Accrued taxes 131 61 Other liabilities 134 212 Interest payable 85 -- Net cash provided by operating activities 804 482 Cash flows from investing activities: Property improvements and replacements (925) (56) Proceeds from sale of securities available for sale 2,894 645 Purchase of securities available for sale (1,753) (145) Net insurance proceeds from property damage 555 -- Net cash provided by investing activities 771 444 Cash flows from financing activities: Payments on mortgage notes payable (106) (110) Distributions paid (918) (505) Net cash used in financing activities (1,024) (615) Net increase in cash and cash equivalents 551 311 Cash and cash equivalents at beginning of period 850 441 Cash and cash equivalents at end of period $ 1,401 $ 752 Supplemental disclosure of cash flow information: Cash paid for interest $ 677 $ 771
[FN] 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 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 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 and nine month periods ended September 30, 1995, are not necessarily indicative of the results that may be expected for the fiscal year ending 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. Certain reclassifications have been made to the 1994 information to conform to the 1995 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. Note B - Related Party Transactions Multi-Benefit Realty Fund '87-1 ("Partnership") paid property management fees based upon collected gross rental revenues for property management services as noted below for the nine month periods ended September 30, 1995, and September 30, 1994, respectively. Such fees are included in operating expense on the statement of operations. For the nine months ended September 30, 1994, a portion of such property management fees were paid to property management companies for day-to-day property management services and a portion was paid to Partnership Services, Inc. ("PSI") for advisory services related to day-to-day property operations. Coventry Properties, Inc. ("Coventry"), an affiliate of the General Partner, provided day-to-day property management responsibilities for one of the Partnership's properties under the same management fee arrangement as the unaffiliated management companies. Affiliates of Insignia Financial Group, Inc. ("Insignia"), an affiliate of the General Partner, assumed day-to-day management responsibilities for all the Partnership's properties in late December 1994. Note B - Related Party Transactions - continued Fees paid to affiliates of Insignia during the nine months ended September 30, 1995, and fees paid to Coventry and PSI during the nine months ended September 30, 1994, are reflected in the following table: For the Nine Months Ended September 30, 1995 1994 (in thousands) Property management fees $170 $85 Partnership management fees 33(1) 45(1) (1)The Limited Partnership Agreement ("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. The Agreement also 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 operating expense on the statement of operations. The General Partner and its current and former affiliates (including Coventry), received reimbursements as reflected in the following table: For the Nine Months Ended September 30, 1995 1994 (in thousands) Reimbursement for services of affiliates $97 $79 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 securities available for sale totalling approximately $1.7 million, exceeded the reserve requirement of approximately $727,000 at September 30, 1995. Note D - Casualty Gain Shadow Brook Apartments experienced fire damage which resulted in a casualty gain of approximately $539,000. Note E - Other Income In 1991, the Partnership (and simultaneously other affiliated partnerships) entered claims in Southmark's Chapter 11 bankruptcy proceeding. These claims related to Southmark's activities while it exercised control (directly, or indirectly through its affiliates) over the Partnership. The U.S. Bankruptcy Court set the Partnership's and the affiliated partnerships' allowed claim at $11 million, in the aggregate. In March 1994, the Partnership received $49,393 in cash, 901 shares of Southmark Corporation Redeemable Series A Preferred Stock and 6,591 shares of Southmark Corporation New Common Stock with an aggregate market value on the date of receipt of $6,631 representing the Partnership's share of the recovery, based on its pro rata share of the claims filed. 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 nine months ended September 30, 1995 and 1994: Average Occupancy Property 1995 1994 Carlin Manor Apartments Columbus, Ohio 85% 81% Hunt Club Apartments Indianapolis, Indiana 89% 91% Shadow Brook Apartments West Valley City, Utah 98% 97% The General Partner attributes the increase in occupancy at Carlin Manor Apartments to the efforts of the General Partner to retain tenants. The Partnership's net income for the nine months ended September 30, 1995, was $513,000 as compared to a net loss of approximately $286,000 for the nine months ended September 30, 1994. The Partnership realized a net loss of approximately $61,000 for the three months ended September 30, 1995, as compared to a net loss of approximately $86,000 for the three months ended September 30, 1994. The increase in net income for the nine months ended September 30, 1995, is primarily attributable to the casualty gain recorded for the fire at Shadow Brook Apartments which destroyed twelve units and damaged twelve more. The increase is also attributable to increased rental rates during the nine months ended September 30, 1995. The decrease in the net loss for the three months ended September 30, 1995, as compared to the net loss for the three months ended September 30, 1994, is due to increased rental income through higher rental rates. Also, interest income has decreased for the three and nine months ended September 30, 1995, due to lower investment balances for those periods as compared to the prior year. Offsetting the increase in net income is an increase in general and administrative expense for the nine months ended September 30, 1995, as compared to the nine months ended September 30, 1994. The increase in general and administrative expense is due primarily to combined efforts of the Dallas and Greenville offices during the transition period that ended June 30, 1995. These additional costs were incurred to minimize any disruption in the year-end reporting function including the financial reporting and K-1 preparation and distribution. These expenses decreased in the third quarter as the transition efforts were completed. For the three months ended September 30, 1995, operating expenses have increased due to higher maintenance expense at Shadow Brook and Hunt Club. These increased expenses were for improvements in the appearance of the properties. Other income realized in the nine months ended September 30, 1994, is due to the receipt of its pro rata share of the claims filed in Southmark's Chapter 11 bankruptcy proceedings. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of each 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. At September 30, 1995, the Partnership reported cash of approximately $1,401,000 versus approximately $752,000 for the same period in 1994. The increase in net cash provided by operating activities is primarily attributable to the increase in net income (as discussed above), interest payable and accrued taxes which was partially offset by the casualty gain. Net cash provided by investing activities increased due to an increase in insurance proceeds due to the Shadow Brook fire and an increase in proceeds from the sale of securities available for sale. These increases were partially offset by an increase in property improvement and replacement expenditures and an increase in the purchase of securities available for sale. Finally, net cash used in financing activities increased due to an increase in distributions paid. 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. The mortgage indebtedness of approximately $11,457,000, including interest payable, is amortized over varying periods and requires balloon payments in September 1997 and October 2000 at which time the properties will be refinanced or sold. For the first nine months of 1995 distributions of approximately $909,000 or $9.44 per "A" Unit were made to the "A" Unit limited partners. Matching distributions of approximately $9,000 were also made to the General Partner. Future cash distributions will depend on the levels of cash generated from operations, capital expenditure requirements, 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 September 30, 1995. 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. Controller and Principal Accounting Officer Date: November 8, 1995 EX-27 2
5 This schedule contains summary financial information extracted from Multi-Benefit Realty Fund '87-1 1995 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB. 0000802200 MULTI-BENEFIT REALT FUND 87-1 1,000 9-MOS DEC-31-1995 SEP-30-1995 1,401 305 0 0 0 0 22,809 (8,780) 16,527 0 11,457 0 0 0 4,019 16,527 0 3,455 0 0 3,481 0 794 513 0 513 0 0 0 513 2.96 0 The Registrant has an unclassified balance sheet.
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