SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended
September 30, 1997 Commission file #0-8716
JMB INCOME PROPERTIES, LTD. - V
(Exact name of registrant as specified in its charter)
Illinois 36-2897158
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
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 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 [ ]
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . 12
PART II OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 15
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 5,151,520 9,717,478
Interest, rents and other receivables . . . . . . . . . . . . . . . 211,710 273,553
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 103,761 62,341
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . 546,581 1,005,343
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . 6,013,572 11,058,715
------------ ------------
Investment property:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 801,703
Buildings and improvements. . . . . . . . . . . . . . . . . . . . -- 22,882,195
------------ ------------
-- 23,683,898
Less accumulated depreciation . . . . . . . . . . . . . . . . . . -- 12,468,511
------------ ------------
Total investment property, net of accumulated depreciation. . -- 11,215,387
Properties held for sale or disposition . . . . . . . . . . . . . 25,579,018 7,299,846
------------ ------------
Total investment properties . . . . . . . . . . . . . . . . . 25,579,018 18,515,233
------------ ------------
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 321,401 346,713
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . 304,697 337,663
------------ ------------
$ 32,218,688 30,258,324
============ ============
<PAGE>
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . $ 802,597 749,993
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . 2,451,038 2,659,268
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . 233,935 219,331
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 502,961 480,208
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . 3,990,531 4,108,800
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . 23,489 24,668
Construction loan payable . . . . . . . . . . . . . . . . . . . . . . 4,513,742 1,262,281
Long-term debt, less current portion. . . . . . . . . . . . . . . . . 24,330,781 24,939,477
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 32,858,543 30,335,226
Venture partner's subordinated equity in venture. . . . . . . . . . . 10,614,531 11,810,336
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . . 1,440,987 1,422,001
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (3,092,059) (3,092,059)
------------ ------------
(1,650,072) (1,669,058)
------------ ------------
Limited partners (38,505 interests):
Capital contributions, net of offering costs. . . . . . . . . . . 34,926,505 34,926,505
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . . 27,671,060 27,057,194
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (72,201,879) (72,201,879)
------------ ------------
(9,604,314) (10,218,180)
------------ ------------
Total partners' capital accounts (deficits) . . . . . . . . . (11,254,386) (11,887,238)
------------ ------------
$ 32,218,688 30,258,324
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . $ 2,645,636 2,308,255 7,164,231 7,011,813
Interest income . . . . . . . . . . . . . . . 70,019 131,722 258,703 362,748
----------- ---------- ---------- ----------
2,715,655 2,439,977 7,422,934 7,374,561
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . 603,764 592,314 1,639,677 1,788,350
Depreciation. . . . . . . . . . . . . . . . . 128,593 81,742 290,261 521,679
Property operating expenses . . . . . . . . . 1,407,501 1,108,907 3,772,483 3,539,221
Professional services . . . . . . . . . . . . 4,375 17,500 55,002 65,934
Amortization of deferred expenses . . . . . . 8,718 13,120 19,261 39,361
General and administrative. . . . . . . . . . 27,627 26,401 96,844 83,236
----------- ---------- ---------- ----------
2,180,578 1,839,984 5,873,528 6,037,781
----------- ---------- ---------- ----------
Operating earnings (loss). . . . . . . . 535,077 599,993 1,549,406 1,336,780
Venture partner's share of
venture's operations. . . . . . . . . . . . . (373,814) (299,780) (916,554) (819,953)
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . . . . $ 161,263 300,213 632,852 516,827
=========== ========== ========== ==========
Net earnings (loss) per
limited partnership interest . . . . . $ 4.06 7.56 15.94 13.02
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest . . . . . . . . . . . . . . . $ -- -- -- --
=========== ========== ========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 632,852 516,827
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290,261 521,679
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 19,261 39,361
Venture partner's share of venture's operations . . . . . . . . . . . . 916,554 819,953
Rental income applied to construction loan payable. . . . . . . . . . . (23,561) --
Changes in:
Interest, rents and other receivables . . . . . . . . . . . . . . . . . 61,843 75,807
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . (41,420) (76,435)
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,838) --
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 32,966 21,941
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 128,196 98,574
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 218,752 (3,872)
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . 22,753 527
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . (1,179) 952
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . 2,233,440 2,015,314
Cash flows from investing activities:
Additions to investment properties, net of related payables . . . . . . . (7,760,487) (2,049,882)
Proceeds from sale of land parcel . . . . . . . . . . . . . . . . . . . . 70,015 --
Escrow refunds (deposits) . . . . . . . . . . . . . . . . . . . . . . . . 482,600 (1,000,000)
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . (7,207,872) (3,049,882)
------------ -----------
Cash flows from financing activities:
Cash proceeds from construction loan. . . . . . . . . . . . . . . . . . . 3,070,874 288,624
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (556,092) (551,051)
Refund of deferred financing fees . . . . . . . . . . . . . . . . . . . . 6,051 --
Venture partner's contributions to venture. . . . . . . . . . . . . . . . 621,907 621,977
Distributions to venture partners . . . . . . . . . . . . . . . . . . . . (2,734,266) (701,447)
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . 408,474 (341,897)
------------ -----------
<PAGE>
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996
------------ ------------
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . . . . . . . . . . . . . . (4,565,958) (1,376,465)
Cash and cash equivalents,
beginning of year . . . . . . . . . . . . . . . . . . . . . . . 9,717,478 11,134,983
------------ -----------
Cash and cash equivalents,
end of period . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,151,520 9,758,518
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest,
net of capitalized interest . . . . . . . . . . . . . . . . . . . $ 1,606,266 1,792,463
============ ===========
Non-cash investing and financing activities:
Rental income applied to construction loan payable. . . . . . . . . . $ 23,561 --
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
JMB INCOME PROPERTIES, LTD. - V
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the year ended December 31, 1996 which are
included in the Partnership's 1996 Annual Report, as certain footnote
disclosures which would substantially duplicate those contained in such
audited financial statements have been omitted from this report.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. The Partnership's policy is to consider a property to be
held for sale or disposition when the Partnership has committed to a plan
to sell such property and active marketing activity has commenced or is
expected to commence in the near term. The Partnership has concluded that
it may dispose of a property by no longer funding operating deficits or
debt service requirements thus allowing the lender to realize upon its
security. In accordance with SFAS 121, any properties identified as "held
for sale or disposition" are no longer depreciated. As of September 30,
1997, the Partnership and its consolidated venture have or have previously
committed to plans to sell or dispose of both of their remaining investment
properties. Accordingly, both consolidated properties have been classified
as held for sale or disposition in the accompanying consolidated financial
statements as of the respective date of such plan's adoption. The results
of operations, net of venture partners' share, for these properties were
$2,031,495 and $2,011,272, respectively, for the nine months ended
September 30, 1997 and 1996.
During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. As the Partnership's
capital structure only has general and limited partnership interests, the
Partnership does not expect any significant impact on its consolidated
financial statements upon adoption of these standards when required at the
end of 1997.
Certain amounts in the 1996 consolidated financial statements have
been reclassified to conform with the 1997 presentation.
TRANSACTIONS WITH AFFILIATES
Fees, commissions and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of September
30, 1997 and for the nine months ended September 30, 1997 and 1996 were as
follows:
<PAGE>
Unpaid at
September 30,
1997 1996 1997
-------- ------- -------------
Property management
and leasing fees . . . . . . $194,563 196,966 1,414,196
Insurance commissions . . . . 24,119 22,456 --
Reimbursement (at cost)
for out-of-pocket salary
and salary-related expenses
relating to on-site and
other costs for the Part-
nership and its investment
property, and other out-of-
pocket expenses. . . . . . . 92,077 36,763 7,392
-------- ------- ---------
$310,759 256,185 1,421,588
======== ======= =========
All amounts deferred or currently payable to the General Partners and
their affiliates do not bear interest. The General Partners and their
affiliates have deferred receipt of property management and leasing fees
pursuant to the venture agreement for the Wachovia Bank Building and
Phillips Building. Prior to 1995, an affiliate of the Managing General
Partner provided management and leasing services. In December 1994, the
affiliate sold all of its assets and assigned its interest in the
management contracts, including the one for the Wachovia Bank Building and
Phillips Building to an unaffiliated third party. In connection with such
sale, an affiliate of the General Partners guaranteed payment to the
unaffiliated third party the portion of the fees currently deferred due to
the provision in the venture agreement for the Wachovia Bank Building and
Phillips Building. Such amounts are deferred until the sale or disposition
of the property and are subordinated to certain distributions of net sale
and refinancing proceeds. As of September 30, 1997, the General Partners
and their affiliates have deferred receipt of approximately $1,375,000
(approximately $35 per interest) of such fees. This amount is reflected in
accounts payable in the accompanying consolidated financial statements.
BRISTOL MALL
During 1989, the Partnership entered into a lease with the J.C. Penney
Company ("J.C. Penney") for an 86,000 square foot addition at the Bristol
Mall shopping center. For the lease to commence, an addition and
associated mall enhancement program was required to be completed. This led
to protracted negotiations with J.C. Penney and the property's mortgage
lender to determine how these capital costs would be funded. As a result,
in July 1996, the Partnership and J.C. Penney executed an amendment to the
existing lease and the Partnership began construction of the anchor store
and the mall enhancement.
The estimated cost of the construction of the anchor store, as well as
the mall enhancement and certain anticipated tenant improvement costs is
approximately $13,960,000, of which approximately $11,150,000 (including
pre-development costs) has been funded as of September 30, 1997.
The Partnership is utilizing a construction loan provided by J.C.
Penney for certain construction costs up to $4,665,200, of which
approximately $4,330,000 has been funded at September 30, 1997. The
remaining costs not scheduled to be funded by the loan (approximately
$2,470,000) are expected to be funded by the Partnership from available
cash. The Partnership expects that a portion of the remaining costs
allocated for tenant improvements will be incurred in 1998.
In August 1997, the J.C. Penney store opened and commenced operations
at the mall and the mall enhancement was substantially completed.
<PAGE>
The construction loan bears an interest rate of 10% per annum and
interest accrues on the funds from the date of the advance. The
Partnership was not required to make any payments on the loan until the
first month after the opening date of the new anchor store (in August
1997). The Partnership is required to make monthly interest only payments
for five years on the total amount advanced under the loan plus any
accrued, but unpaid interest from the construction period. Thereafter, for
the remaining 5-year term of the loan, the Partnership will be required to
make payments of both principal and interest based on a ten-year
amortization schedule with the balance of unpaid principal due upon
maturity. All rental amounts due from the tenant to the Partnership under
the terms of the lease amendment will first be applied against these debt
service payments with any monthly rental amounts owed by J.C. Penney in
excess of the Partnership's monthly payment to be applied as a principal
reduction of the loan. On September 1, 1997, the Partnership began paying
interest on the loan. The rent owed for the period August 1 through
September 1, 1997 to the Partnership was in excess of the required interest
payment. Therefore, in accordance with the loan, the excess rental payment
was applied to principal (approximately $24,000). As of September 30, 1997
approximately $334,000 of available loan proceeds remain. The Partnership
expects to draw the remaining amount in the fourth quarter of 1997.
Additionally, in September 1996, the Partnership escrowed $1,000,000 as
required by the loan. In March 1997, the Partnership (as the anchor store
was 50% complete) was able to withdraw approximately $483,000 from the
escrow account based on the achievement of completion points (as defined).
All remaining escrowed funds plus accrued interest are expected to be
withdrawn in the fourth quarter of 1997.
Due to the J.C. Penney addition and related mall enhancement, the
Partnership has capitalized $404,511 of the $634,191 of interest expense
incurred by Bristol Mall for the nine months ended September 30, 1997. The
balance of capitalized interest as of September 30, 1997 of $512,006 is
reflected in properties held for sale or disposition in the accompanying
consolidated financial statements.
In July 1997, the Partnership sold a small outparcel at the Bristol
Mall. The Partnership received proceeds from such sale of approximately
$70,000.
As of September 30, 1997 the property is considered held for sale.
WACHOVIA BANK BUILDING AND PHILLIPS BUILDING
The Partnership is currently marketing the remaining space
(approximately 40% of the buildings vacated by Wachovia Bank at the
expiration of one of their leases in December 1995) to prospective
replacement tenants but has not been successful in its efforts due to the
lack of large space users in this market. In the fourth quarter of 1996,
Wachovia Bank notified the venture that it was exercising its option to
extend a lease (approximately 117,000 square feet) until June 1998 upon the
expiration of the current lease in December 1997. In the second and third
quarter of 1997, the Wachovia bank approached the Partnership about leasing
additional space. This resulted in the bank leasing approximately 52,000
square feet (approximately 7% of the buildings). These leases are
scheduled to expire in June 1998 with the other lease as discussed above.
Re-leasing the remaining space in the building or any additional extensions
of the Wachovia Bank lease would likely require major renovation to the
building as well as significant tenant improvements which, in turn, would
be contingent upon the Partnership obtaining financing for these tenant
replacement costs. Unless replacement tenants are secured on acceptable
terms for the remaining space, it is unlikely that the Partnership will
commit any additional funds to the property. This may result in the
Partnership no longer having an ownership interest in the two office
buildings. This action would result in a gain for financial reporting and
Federal income tax purposes with no corresponding distributable proceeds.
Additionally, the Partnership could be required to remit to the state tax
authorities withholding for taxes due as a result of this action. This
withholding amount is currently estimated to be approximately $500,000.
<PAGE>
The mortgage loan secured by the property matured in October 1996.
Wachovia reached an agreement with the current mortgage lender to modify
and extend the existing mortgage note effective November 1, 1996. The loan
modification requires principal and interest payments based on a 22 year
amortization at an interest rate of 9.55% per annum and matures on November
1, 2001, when all remaining principal and unpaid interest is due. The
venture paid loan commitment fees in 1996 of approximately $105,000 to the
lender in conjunction with the modification and extension.
The Partnership's venture partner had agreed to contribute
$10,700,000, before applicable interest, to the venture pursuant to a
payment schedule from the closing date through August 1, 1996, when it
would owe the balance of its obligation (approximately $7,600,000). The
venture partner has continued to make contributions based on the old
payment schedule rather than making the balloon payment in August 1996 as
required. As a result, the venture partner is currently approximately
$7,400,000 in arrears for such contributions as of the date of this report.
The venture partner's obligation to make such payment is secured only by
its interest in the venture. In the fourth quarter of 1996, the
Partnership notified the venture partner of its default effective August
1996. As a result of the extension of the first mortgage loan securing the
property as discussed above, the Partnership is currently negotiating a
possible extension of the payment schedule with the venture partner.
However, there can be no assurance that any such agreement will be reached.
The accompanying consolidated financial statements include
approximately $2,208,000 of undistributed operating cash flow related to
the Wachovia Building Associates. Such funds are distributable to the
Partnership and the unaffiliated joint venture partner in the amounts of
approximately $1,402,000 and $806,000, respectively. In addition, in
January 1997, the venture distributed approximately $2,773,000 and
$2,112,000 to the Partnership and the venture partner, respectively. Such
funds did not secure the venture partner's obligations discussed above and
consequently the venture could not offset such distributions against the
venture partner's unfunded capital commitment.
ADJUSTMENTS
In the opinion of the Managing General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of September 30,
1997 and for the three and nine months ended September 30, 1997 and 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investments.
During 1996 and 1997, some of the Limited Partners in the Partnership
received from unaffiliated third parties unsolicited tender offers to
purchase up to 4.9% of the Interests in the Partnership at prices ranging
from between $100 and $160 per Interest. The Partnership recommended
against acceptance of these offers on the basis that, among other things,
the offer prices were inadequate. Certain of such offers have expired and
two others are currently scheduled to expire in November, 1997. As of the
date of this report, the Partnership is aware that 10.76% of the Interests
in the Partnership have been purchased by such unaffiliated third parties
either pursuant to such tender offers or through negotiated purchases. In
addition, it is possible that other offers for Interests may be made by
unaffiliated third parties in the future, although there is no assurance
that any other third party will commence an offer for Interests, the terms
of any such offer or whether any such offer, if made, will be consummated,
amended or withdrawn. The board of directors of JMB Realty Corporation
("JMB") the managing general partner of the Partnership, has established a
special committee (the "Special Committee") consisting of certain directors
of JMB to deal with all matters relating to tender offers for Interests in
the Partnership, including any and all responses to such tender offers.
The Special Committee has retained independent counsel to advise it in
connection with any potential tender offers for Interests and has retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to these and any additional potential tender
offers for Interests.
The General Partners and their affiliates have deferred payment of
certain fees of approximately $1,375,000 (approximately $35 per interest)
as of September 30, 1997 pursuant to the venture agreement for the Wachovia
Bank Building and Phillips Building.
The General Partners of the Partnership expect to be able to conduct
an orderly liquidation of its remaining investment portfolio as quickly as
practicable. Therefore, the affairs of the Partnership are expected to be
wound up no later than December 31, 1999 (sooner, if the properties are
sold or disposed of in the near term), barring unforeseen economic
developments. The Partnership's only remaining real estate assets are its
joint venture interest in the Wachovia Bank and Phillips Buildings, and its
interest in Bristol Mall. The Partnership does not expect to realize any
proceeds from the disposition of the Wachovia Bank and Phillips Buildings.
However, the Partnership does expect to realize net proceeds from the sale
of Bristol Mall.
RESULTS OF OPERATIONS
The increase in property held for sale or disposition and the related
decrease in total investment property, net of accumulation depreciation as
of September 30, 1997 as compared to December 31, 1997 is due to the
classification of the Bristol Mall as assets held for sale or disposition
at September 30, 1997.
The increase in total investment properties, construction loan
payable, and related decreases in cash and cash equivalents and escrow
deposits as of September 30, 1997 as compared to December 31, 1996 is
primarily due to the construction (substantially complete as of August 31,
1997) of the addition and related mall enhancement at the Bristol Mall.
Additionally, the increase in construction loan payable is due to the
addition of all accrued but unpaid interest when payment on the loan
commenced on September 1, 1997.
<PAGE>
In the third quarter of 1997, the Partnership sold a small outparcel
at the Bristol Mall. The Partnership received proceeds from such sale of
approximately $70,000. The amount received was applied against the
carrying value of the land. Therefore, there is no gain or loss related to
the transaction recognized for financial reporting purposes.
The increase in prepaid expenses as of September 30, 1997 as compared
to December 31, 1996 is primarily due to the timing of payments for
insurance at the Bristol Mall and Wachovia Bank Building.
The decrease in accounts payable as of September 30, 1997 as compared
to December 31, 1996 is due to the timing of payments for amounts related
to the construction of the addition and related mall enhancement at the
Bristol Mall.
The decrease in venture partner's subordinated equity in venture at
September 30, 1997 as compared to December 31, 1996 is primarily due to the
1997 distribution of approximately $2,112,000 of previously undistributed
operating cash flow to the venture partner related to the Wachovia Bank
Building.
The increase in rental income and related increase in venture
partner's share of ventures operations for the three and nine months ended
September 30, 1997 as compared to the same periods in 1996 is primarily due
to an increase in rental income due to a adjustment made every five years
based on the consumer price index for a tenant at the Wachovia Bank
Building. The increase is also a result of additional rents received due
to an increase in occupancy at the Wachovia Bank Building.
The decrease in interest income for the three and nine months ended
September 30, 1997 as compared to the same periods in 1996 is primarily due
to the 1997 distribution of approximately $2,112,000 of previously
undistributed operating cash flow to the venture partner related to the
Wachovia Bank Building and payment of costs related to the addition and
related mall enhancement at the Bristol Mall resulting in a lower average
cash balance in 1997 available for temporary investment.
The decrease in mortgage and other interest for the nine months ended
September 30, 1997 as compared to the same period in 1996 is primarily due
to the capitalization of approximately $200,000 of interest on certain
construction costs incurred at the Bristol Mall through August 1997.
The decrease in depreciation for the nine months ended September 30,
1997 as compared to the same period in 1996 is due to the classification of
the Wachovia Bank Building and Phillips Building as assets held for sale or
disposition at July 1, 1996 and therefore not subject to continued
depreciation. The increase in depreciation for the three months ended
September 30, 1997 as compared to the same period in 1996 is due to
approximately $11,000,000 of capital additions, related to the construction
of the addition and related mall enhancement at the Bristol Mall, placed in
service in August 1997.
The increase in property operating expense for the three and nine
months ended September 30, 1997 as compared to the same period in 1996 is
primarily due to additional advertising costs incurred as a result of the
opening of the J.C. Penney store and unanticipated costs incurred for
repairs of the parking lot at the Bristol Mall.
<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties owned during 1997:
<CAPTION>
1996 1997
-------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Wachovia Bank Building and
Phillips Building
Winston-Salem,
North Carolina. . . . . . . 67% 69% 65% 63% 63% 65% 70%
2. Bristol Mall
Bristol, Virginia (a). . . . 81% 81% 81% 80% 85% 84% 89%
<FN>
(a) Occupancy in 1996 is calculated based on total gross leasable area ("GLA") of 426,963 square feet. Due
to the addition and related mall enhancement, GLA used in the calculation of occupancy was reduced to 401,582
square feet in 1997 until the opening of the J. C. Penney store in August 1997 when total GLA increased to 487,502
square feet.
</TABLE>
<PAGE>
PART IV
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3-A.* The Prospectus of the Partnership dated August 15,
1977, as supplemented September 20, 1977, filed with the Commission
pursuant to Rules 424(b) and 424(c), is hereby incorporated herein by
reference. Certain pages of the Prospectus are incorporated herein by
reference.
3-B.* Amended and Restated Agreement of Limited Partnership
set forth as Exhibit A to the Prospectus, which is incorporated herein by
reference and which agreement is hereby incorporated herein by reference.
4-A. Documents relating to the refinancing of the mortgage
loan, dated October 17, 1986, secured by the Wachovia Bank Building and
Phillips Building office buildings in Winston-Salem, North Carolina are
hereby incorporated herein by reference to the Partnership's Report for
December 31, 1992 on Form 10-K (File No. 0-8716) dated March 19, 1993.
4-B. Documents relating to the mortgage loan secured by the
Bristol Mall shopping center in Bristol, Virginia are hereby incorporated
herein by reference to the Partnership's Report on Form 8-K (File No. 0-
8716) dated October 17, 1977.
4-C. Documents relating to the construction loan, dated
July 25, 1996 secured by the Bristol Mall shopping center in Bristol,
Virginia are hereby incorporated herein by reference to the Partnership's
Report for September 30, 1996 on Form 10-Q (File No. 0-8716) dated November
8, 1996.
4-D. Modification and extension agreement related to the
mortgage loan secured by the Wachovia Bank Building and Phillips Building,
office buildings in Winston Salem, North Carolina, effective November 1,
1996 is hereby incorporated herein by reference to the Partnership's Report
for December 31, 1996 on Form 10-K (File No. 0-8716) dated March 21, 1997.
10-A. Acquisition documents relating to the purchase by the
Partnership of an interest in the Wachovia Bank Building and Phillips
Building in Winston Salem, North Carolina are hereby incorporated herein by
reference to the Partnership's Registration Statement on Form S-11 (File
No. 2-58026) dated September 20, 1977.
10-B. Acquisition documents relating to the purchase by the
Partnership of the Bristol Mall shopping center in Bristol, Virginia are
hereby incorporated herein by reference to the Partnership's Report on Form
8-K (File No. 0-8716) dated October 17, 1977.
27. Financial Data Schedule
--------------------
* Previously filed as Exhibits 3-A and 3-B, respectively, to the
Partnership's Report for December 31, 1992 on Form 10-K of the Securities
Exchange Act of 1934 (File No. 0-8716) filed on March 19, 1993 and hereby
incorporated herein by reference.
(b) No Reports on Form 8-K have been filed during the last quarter
of the period covered by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - V
BY: JMB Realty Corporation
(Managing General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: November 12, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
By: GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: November 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,151,520
<SECURITIES> 0
<RECEIVABLES> 862,052
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,013,572
<PP&E> 25,579,018
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,218,688
<CURRENT-LIABILITIES> 3,990,531
<BONDS> 24,330,781
<COMMON> 0
0
0
<OTHER-SE> (11,254,386)
<TOTAL-LIABILITY-AND-EQUITY>32,218,688
<SALES> 7,164,231
<TOTAL-REVENUES> 7,422,934
<CGS> 0
<TOTAL-COSTS> 4,082,005
<OTHER-EXPENSES> 151,846
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,639,677
<INCOME-PRETAX> 1,549,406
<INCOME-TAX> 0
<INCOME-CONTINUING> 632,852
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 632,852
<EPS-PRIMARY> 15.94
<EPS-DILUTED> 15.94
</TABLE>
