-----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, UY1eAAoyB43v6P2MJI5ecgGF/jrJoTxWfiTetl0VxdZ1V6nEfO5nnV3ZDDLKzBdX oGDYoiow8quUz71dEfoJpQ== 0000802200-97-000003.txt : 19970811 0000802200-97-000003.hdr.sgml : 19970811 ACCESSION NUMBER: 0000802200-97-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970808 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: 97654068 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 UNITED STATES 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, 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 0-16684 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 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 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) June 30, 1997 Assets Cash and cash equivalents: Unrestricted $ 1,616 Restricted--tenant security deposits 133 Accounts receivable 10 Escrow for taxes and insurance 77 Restricted escrows 401 Other assets 365 Investment properties: Land $ 1,742 Buildings and related personal property 22,049 23,791 Less accumulated depreciation (10,484) 13,307 $ 15,909 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 85 Accrued taxes 259 Tenant security deposits 133 Other liabilities 221 Mortgage notes payable 12,319 Partners' Capital (Deficit) General Partner $ (124) Limited Partner "A" Unitholders - 96,284 units outstanding (862) Limited Partner "B" Unitholders - 75,152 units outstanding 3,878 2,892 $ 15,909 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, 1997 1996 1997 1996 Revenues: Rental income $ 1,173 $ 1,144 $ 2,337 $ 2,275 Interest income 19 20 45 40 Other income 54 44 110 92 Total revenues 1,246 1,208 2,492 2,407 Expenses: Operating 376 395 818 814 General and administrative 48 58 71 92 Partnership management fee -- -- 61 20 Maintenance 141 138 271 243 Depreciation 242 245 481 487 Interest 251 262 502 524 Property taxes 91 64 183 156 Total expenses 1,149 1,162 2,387 2,336 Net income $ 97 $ 46 $ 105 $ 71 Net income allocated to general partner (1%) $ 1 $ -- $ 1 $ 1 Net income allocated to limited partners (99%) 96 46 104 70 $ 97 $ 46 $ 105 $ 71 Net income per A Unit: $ .55 $ .27 $ .60 $ .41 Net income per B Unit: $ .55 $ .27 $ .60 $ .41 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) Total Partners' General Limited Partners Equity Partner "A" Units "B" Units (Deficit) Original capital contributions $ 1 $ 9,706 $ 7,538 $ 17,245 Limited partnership units at December 31, 1996 and June 30, 1997 -- 96,284 75,152 171,436 Partners' capital (deficit) at December 31, 1996 $ (118) $ (238) $ 3,832 $ 3,476 Distributions to partners (7) (682) -- (689) Net income for the six months ended June 30, 1997 1 58 46 105 Partners' capital (deficit) at June 30, 1997 $ (124) $ (862) $ 3,878 $ 2,892 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, 1997 1996 Cash flows from operating activities: Net income $ 105 $ 71 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 481 487 Amortization of loan costs 31 21 Change in accounts: Restricted cash 7 (11) Accounts receivable 37 66 Escrow for taxes and insurance 132 34 Other assets (27) 16 Accounts payable (79) (261) Tenant security deposit liabilities (7) 12 Accrued taxes (5) (15) Other liabilities 3 (65) Net cash provided by operating activities 678 355 Cash flows from investing activities: Property improvements and replacements (236) (116) Deposits to restricted escrows (112) (21) Receipts from restricted escrows 148 -- Proceeds from sale of investments -- 197 Net cash (used in) provided by investing activities (200) 60 Cash flows from financing activities: Payments on mortgage notes payable (32) (86) Distributions to partners (689) (230) Loan costs paid (1) (25) Net cash used in financing activities (722) (341) Net (decrease) increase in cash (244) 74 Cash and cash equivalents at beginning of period 1,860 1,234 Cash and cash equivalents at end of period $ 1,616 $ 1,308 Supplemental disclosure of cash flow information: Cash paid for interest $ 471 $ 500 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 (the "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. (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 six month periods ended June 30, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. 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, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 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 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, 1997 and 1996, 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 affiliates received reimbursements and fees as reflected in the following table: For the Six Months Ended June 30, 1997 1996 (in thousands) Property management fees $122 $119 Reimbursements for services of affiliates (1) 54 106 Partnership management fees (2) 61 20 (1) Included in "reimbursements for services of affiliates" for 1996 is approximately $49,000 in reimbursements for construction oversight costs. (2) 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. The Partnership insures 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 $1,616,000, exceeded the reserve requirement of approximately $759,000 at June 30, 1997. 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, 1997 and 1996: Average Occupancy Property 1997 1996 Carlin Manor Apartments Columbus, Ohio 90% 89% Hunt Club Apartments Indianapolis, Indiana 92% 95% Shadow Brook Apartments West Valley City, Utah 97% 98% Results of Operations The Partnership's net income for the three and six month periods ended June 30, 1997, was approximately $97,000 and $105,000, respectively, compared to net income of approximately $46,000 and $71,000, respectively, for the same periods of 1996. The increase in net income is primarily due to increases in revenues. The increase in revenues is due to an increase in rental income, interest income and other income. The increase in rental income is primarily due to an increase in rental rates at Shadow Brook Apartments which more than offset the slight decrease in average occupancy. Additionally, Carlin Manor Apartments also had increased rental income caused by the increase in occupancy. The increase in other income is due to an increase in deposit forfeitures, lease cancellation fees, and cleaning and damage fees primarily due to an increase in turnover at Shadow Brook Apartments. Interest income increased due to an increase in invested cash and cash equivalents. In addition to the increase in revenues, the Partnership had a decrease in general and administrative expense. The decrease in general and administrative expense is due to a decrease in legal expense. Offsetting the above increases to net income were increases in partnership management fees, maintenance expense, and tax expense. The increase in partnership management fees is the result of an increase in distributions made to the limited partners from "cash available for distribution" (as defined in the Agreement, see "Item 1. Note B - Related Party Transactions"). Maintenance expense increased due to a paving project at Hunt Club. Included in maintenance expense for the six months ended June 30, 1997, is approximately $41,000 of major repairs and maintenance comprised primarily of parking lot paving, major landscaping and window coverings. For the six months ended June 30, 1996, approximately $49,000 of major repairs and maintenance is included in maintenance expense comprised primarily of swimming pool repairs, window coverings, and exterior and interior building repairs. The increase in tax expense is due to the fact that the June 1996 accrual for Hunt Club was based on a reduced 1995 tax bill. The actual 1996 tax bill was more than estimated, thereby increasing the basis for the 1997 accrual. 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 for 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 June 30, 1997, the Partnership had unrestricted cash of approximately $1,616,000 compared to approximately $1,308,000 at June 30, 1996. Net cash provided by operating activities increased primarily due to the decrease in cash used for payment of accounts payable and a decrease in the escrow for taxes and insurance. Net cash used in investing activities increased due to a decrease in proceeds from the sale of investments and increases in property improvements and replacements and deposits to restricted escrows. These increases were partially offset by increases in receipts from restricted escrows. Net cash used in financing activities increased due to an increase in distributions to partners. This increase was partially offset by decreases in the payments made on mortgage notes payable and in loan costs paid. The Partnership has no material capital projects scheduled to be performed in 1997, 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, received from the capital reserve account or 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 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 $12,319,000 is amortized over varying periods and requires balloon payments in October 2000 and November 2003 at which time the properties will be refinanced or sold. During the first six months of 1997, a distribution of approximately $682,000 was made to the "A" Unit limited partners, and a distribution of approximately $7,000 was made to the General Partner. A distribution of approximately $228,000 was made to the "A" Unit limited partners and a distribution of approximately $2,000 was made to the General Partner during the first six months of 1996. 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 June 30, 1997. 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/ William H. Jarrard, Jr. William H. Jarrard, Jr. President By: /s/ Ronald Uretta Ronald Uretta Vice President/Treasurer Date: August 8, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Multi-Benefit Realty Fund '87-1 1997 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-31-1997 JUN-30-1997 1,619 0 7 0 0 0 23,791 10,484 15,909 0 12,319 0 0 0 2,892 15,909 0 2,337 0 0 2,387 0 502 0 0 105 0 0 0 105 .60 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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