SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-9541
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BALCOR EQUITY PROPERTIES LTD.-VIII
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(Exact name of registrant as specified in its charter)
Illinois 36-3011615
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Balcor Plaza
4849 Golf Road, Skokie, Illinois 60077-9894
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
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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
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BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
ASSETS
1995 1994
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Cash and cash equivalents $ 3,301,122 $ 2,988,843
Escrow deposits - unrestricted 358,774 724,015
Escrow deposits - restricted 90,902 94,352
Accounts and accrued interest receivable 25,163 33,711
Deferred expenses, net of accumulated
amortization of $106,852 in 1995 and
$93,393 in 1994 489,730 503,189
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4,265,691 4,344,110
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Investment in real estate, at cost:
Land 1,325,898 1,325,898
Buildings and improvements 20,518,019 20,518,019
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21,843,917 21,843,917
Less accumulated depreciation 10,961,567 10,800,711
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Investment in real estate, net of
accumulated depreciation 10,882,350 11,043,206
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$15,148,041 $15,387,316
============ ============
LIABILITIES AND PARTNERS' DEFICIT
Accounts payable $ 47,576 $ 77,177
Due to affiliates 69,068 49,347
Accrued liabilities, principally
real estate taxes 149,905 548,122
Security deposits 102,885 100,592
Mortgage notes payable 15,294,668 15,320,720
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Total liabilities 15,664,102 16,095,958
Partners' deficit (30,005 Limited
Partnership Interests issued and
outstanding) (516,061) (708,642)
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$15,148,041 $15,387,316
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental and service $ 1,495,588 $ 1,435,356
Interest on short-term investments 51,144 4,389
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Total income 1,546,732 1,439,745
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Expenses:
Interest on mortgage notes payable 363,893 366,966
Interest on short-term loans from affiliate 3,748
Depreciation 160,856 164,028
Amortization of deferred expenses 13,459 13,459
Property operating 540,476 500,287
Real estate taxes 138,180 130,362
Property management fees 74,649 72,159
Administrative 62,638 80,951
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Total expenses 1,354,151 1,331,960
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Net income $ 192,581 $ 107,785
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Net income allocated to General
Partner $ 1,926 $ 1,078
============ ============
Net income allocated to Limited
Partners $ 190,655 $ 106,707
============ ============
Net income per Limited Partnership
Interest (30,005 issued and outstanding) $ 6.35 $ 3.56
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
For the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
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Operating activities:
Net income $ 192,581 $ 107,785
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation of properties 160,856 164,028
Amortization of deferred expenses 13,459 13,459
Net change in:
Escrow deposits -
unrestricted 365,241 370,682
Escrow deposits -
restricted 3,450
Accounts and accrued interest
receivable 8,548 (15,010)
Accounts payable (29,601) (34,962)
Due to affiliates 19,721 39,564
Accrued liabilities (398,217) (388,865)
Security deposits 2,293 (4,583)
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Net cash provided by operating activities 338,331 252,098
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Investing activity:
Additions to properties (60,134)
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Cash used in investing activity (60,134)
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Financing activities:
Repayment of loans payable - affiliate (295,371)
Principal payments on mortgage notes
payable (26,052) (23,729)
Releases from escrow deposits -
restricted 20,047
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Net cash used in financing activities (26,052) (299,053)
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Net change in cash and cash equivalents 312,279 (107,089)
Cash and cash equivalents at beginning
of period 2,988,843 591,618
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Cash and cash equivalents at end of period $ 3,301,122 $ 484,529
============ ============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1995, and all such adjustments are of a normal and recurring nature.
2. Interest Expense:
During the quarters ended March 31, 1995 and 1994, the Partnership incurred and
paid interest expense on notes payable of $363,893 and $366,966, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1995 are:
Paid Payable
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Reimbursement of expenses to
the General Partner, at cost None $69,068
During 1994, the Partnership repaid in full short-term loans of $417,775 from
the General Partner. The Partnership incurred and paid interest expense of
$3,748 for the quarter ending March 31, 1994. Interest expense was computed at
the American Express Company cost of funds rate plus a spread to cover
administrative costs.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Equity Properties Ltd.-VIII (the "Partnership") was formed in 1979 to
invest in and operate income-producing real property. The Partnership raised
$30,005,000 through the sale of Limited Partnership Interests and utilized
these proceeds to acquire thirteen real property investments. Eight of these
properties have been sold or relinquished through foreclosure. The Partnership
continues to operate the five remaining properties.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1994 for a more complete understanding of
the Partnership's financial position.
Summary of Operations
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The Partnership received a repayment of its interest in the Sherwood Lake
Apartments wrap-around note receivable in November 1994 and invested the
proceeds in short-term investments. The increase in interest earned on short-
term investments as well as slightly improved property operations caused net
income to increase during the quarter ended March 31, 1995 as compared to the
same period in 1994. Further discussion of the Partnership's operations is
summarized below.
1995 Compared to 1994
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Rental rates and/or average occupancy levels increased at all of the
Partnership's five properties resulting in an increase in rental and service
income during the quarter ended March 31, 1995 as compared to the same period
in 1994.
Due to higher average cash balances resulting from the repayment of the
Sherwood Lake Apartments wrap-around note receivable and higher interest rates
earned on short-term investments, interest income on short-term investments
increased during the quarter ended March 31, 1995 as compared to the same
period in 1994.
Decreased professional fees, legal fees and data processing costs resulted in a
decrease in administrative expenditures during the quarter ended March 31, 1995
as compared to the same period in 1994.
An increase in landscaping maintenance expense at Walnut Hills - Phase I and
Phase II, and higher expenditures for appliances and asphalt\paving at
Greentree Village, which were partially offset by lower roof repair
expenditures at Cedar Creek - Phase II, resulted in an increase in property
operating expenses during the quarter ended March 31, 1995 as compared to the
same period in 1994.
<PAGE>
Liquidity and Capital Resources
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The cash position of the Partnership at March 31, 1995 increased when compared
to December 31, 1994. Operating activities consisted primarily of cash flow
generated from property operations and short-term investments, which were
partially offset by the payment of administrative expenses. A portion of this
cash flow was used to fund financing activities, which consisted of principal
payments on mortgage notes payable.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit, or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered significant if it exceeds $250,000 annually or 20% of the property's
rental and service income. The Partnership defines cash flow generated from its
properties as an amount equal to the property's revenue receipts less property
related expenditures. During the quarter ended March 31, 1995, four of the
Partnership's five properties generated positive cash flow after debt service
as compared to all five properties during the quarter ended March 31, 1994. The
Walnut Hills - Phase I Apartments generated a marginal cash flow deficit in
1995 primarily due to a decrease in laundry service income and an increase in
landscaping maintenance expense. As of March 31, 1995, the occupancy rates of
the Partnership's properties ranged from 92% to 95%. Many rental markets
continue to remain extremely competitive; therefore, the General Partner's
goals are to maintain high occupancy levels while increasing rents where
possible and to monitor and control operating expense and capital improvement
requirements at both of the properties.
Each of the Partnership's properties is owned through the use of third-party
mortgage loan financing and, therefore, the Partnership is subject to the
financial obligations required by such loans. As a result of the General
Partner's efforts to obtain refinancing of existing loans with new lenders, the
Partnership has no third-party financing which matures prior to 2002.
To date, investors have received distributions of Net Cash Receipts of $125.00
and Net Cash Proceeds of $82.50, totaling $207.50 per $1,000 Interest, as well
as certain tax benefits. The General Partner is currently performing an
analysis of the Partnership's portfolio to determine a disposition strategy for
the remaining assets. This analysis will determine the remaining holding period
for the Partnership's assets as well as provide a basis for future
distributions.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
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Sherwood Lakes Apartments
As previously described, in November 1994 the Partnership's interest in the
wrap-around mortgage note received from the purchaser of the Sherwood Lakes
Apartments was repaid. The foreclosure suit filed by the holder of the second
mortgage note collateralized by the property, in which the Partnership was a
defendant, has been dismissed, which concludes all legal proceedings relating
to the Partnership's interest in the property.
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
(4) Certificate of Limited Partnership set forth as Exhibit 4 to Amendment
No. 2 to the Registrant's Registration Statement on Form S-11 dated
February 26, 1980 (Registration No. 2-63821) and Form of Confirmation regarding
Interests in the Registrant set forth as Exhibit 4.2 to the Registrant's Report
on Form 10-Q for the quarter ended June 30, 1992 (Commission File No. 0-9541)
are incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the three month period
ending March 31, 1995 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended March 31, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR EQUITY PROPERTIES LTD.-VIII
By: /s/Thomas E. Meador
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Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of BRI
Partners-79, the General Partner
By: /s/Brian Parker
-----------------------------
Brian Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of BRI Partners-79, the General
Partner
Date: May 12, 1995
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<PAGE>
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