UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
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
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
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Securities registered pursuant to Section 12(b) of the Act: None
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Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
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(Title of class)
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
<PAGE>
PART I
Item 1. Business
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Balcor Equity Properties Ltd.-VIII (the "Registrant") is a limited partnership
formed in 1979 under the laws of the State of Illinois. The Registrant raised
$30,005,000 from sales of Limited Partnership Interests. The Registrant's
operations currently consist exclusively of investment in and operation of
income-producing real property, and all financial information included in this
report relates to this industry segment.
The Registrant utilized the net offering proceeds to acquire thirteen real
property investments. The Registrant has since disposed of eight of these
properties. The Registrant currently owns the five remaining properties
described under Item 2. Properties.
During 1994, the Registrant received $2,200,000 representing its participation
in the wrap-around note receivable previously received as a portion of the
selling price of the Sherwood Lake Apartments. See Item 3. Legal Proceedings
and Item 7. Liquidity and Capital Resources for additional information.
During 1994, institutionally owned and managed multi-family residential
properties in many markets continued to experience favorable operating
conditions combined with relatively low levels of new construction. These
favorable operating conditions were supported by the strong pattern of national
economic growth which contributed to job growth and rising income levels in
most local economies. However, some 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 expenses and capital improvement requirements at the
properties. Four of the Registrant's five properties generated positive cash
flow, while one property generated a marginal cash flow deficit during 1994.
See Item 7. Liquidity and Capital Resources.
Historically, real estate investments have experienced the same cyclical
characteristics affecting most other types of long-term investments. While real
estate values have generally risen over time, the cyclical character of real
estate investments, together with local, regional and national market
conditions, has resulted in periodic devaluations of real estate in particular
markets, as has been experienced in the last few years. As a result of these
factors, it has become necessary for the Registrant to retain ownership of many
of its properties for longer than the holding period for the assets originally
described in the Prospectus. The General Partner examines the operations of
each property and each local market in conjunction with the Registrant's long-
term dissolution strategy when determining the optimal time to sell each of the
Registrant's properties. The General Partner is currently performing an
analysis of the Registrant's portfolio to determine a disposition strategy for
the remaining assets. This analysis will determine the remaining holding period
for the Registrant's assets as well as provide a basis for future
distributions. In light of results to date and current market conditions, the
General Partner does not anticipate that investors will recover all of their
original investment.
The Registrant, by virtue of its ownership of real estate is subject to federal
and state laws and regulations covering various environmental issues.
Management of the Registrant utilizes the services of environmental consultants
to assess a wide range of environmental issues and to conduct tests for
environmental contamination as appropriate. The General Partner is not aware of
any potential liability due to environmental issues or conditions that would be
material to the Registrant.
The officers and employees of BRI Partners-79, the General Partner of the
Registrant, and its affiliates perform services for the Registrant. The
Registrant currently has no employees engaged in its operations.
<PAGE>
Item 2. Properties
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As of December 31, 1994, the Registrant owns the five properties described
below:
Location Description of Property
- -------- -----------------------
San Antonio, Texas Cedar Creek Apartment Complex - Phase I: a
176-unit apartment complex located on
approximately five acres.
San Antonio, Texas Cedar Creek Apartment Complex - Phase II: a
216-unit apartment complex located on
approximately six acres.
Colorado Springs, Colorado Greentree Village Apartment Complex: a 216-unit
apartment complex located on approximately eight
acres.
San Antonio, Texas Walnut Hills Apartment Complex - Phase I: a
192-unit apartment complex located on
approximately eight acres.
San Antonio, Texas Walnut Hills Apartment Complex - Phase II: a
232-unit apartment complex located on
approximately eight acres.
In the opinion of the General Partner, the Registrant has provided for adequate
insurance coverage for its real estate investment properties.
Each of the above properties is held subject to various mortgages and other
forms of financing.
See Notes to Financial Statements for other information regarding real property
investments.
Item 3. Legal Proceedings
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Sherwood Lakes Apartments
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In January 1988, the Registrant sold to ITT Commercial Finance Corp. ("ITT") a
78.4% interest in the $16,000,000 wrap-around mortgage note (the "Note")
previously received by the Registrant from the purchaser ("Purchaser") as a
portion of the sale price of Sherwood Lake Apartments. The Registrant retained
a 21.6% junior interest in the Note pursuant to the terms of a participation
agreement.
In June 1991, the Note matured and the Purchaser failed to pay the amount due
under the Note. ITT did not make the required payment to the holder of the
underlying second mortgage wrap note ("Second Note") which also matured and, in
September 1991, the holder of the Second Note commenced foreclosure proceedings
in the Circuit Court, Lake County, Indiana, Jim P. Koufos et al. vs. Sherwood
Lake Associates, Ltd. Partnership, et al., Case No.: 45 CO 19109 CP 02085.
In November 1991, the Purchaser filed for protection under Chapter 11 of the U.
S. Bankruptcy Code in the U.S. Bankruptcy Court, Northern District of Indiana,
Hammond Division at Gary, Case No. 91-62140, In re Sherwood Lake Associates,
Ltd. Partnership, which stayed the foreclosure proceedings. A joint liquidation
plan ("Plan") was confirmed by the Bankruptcy Court in December 1993 which
allowed the Purchaser until December 30, 1994 to complete a sale or refinancing
of the property. On November 18, 1994, the Purchaser completed a refinancing
of the property and the Registrant received $2,200,000 from the proceeds. The
<PAGE>
repayment consisted of the Registrant's share of the principal balance of the
note of $1,792,575 and interest income of $407,425. The foreclosure suit, in
which the Registrant was a defendant, is expected to be dismissed during the
first half of 1995.
Item 4. Submission of Matters to a Vote of Security Holders
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No matters were submitted to a vote of the Limited Partners of the Registrant
during 1994.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
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Matters
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There has not been an established public market for Limited Partnership
Interests and it is not anticipated that one will develop; therefore, the
market value of the Limited Partnership Interests cannot reasonably be
determined. For information regarding distributions, see Item 7. Liquidity and
Capital Resources, below.
As of December 31, 1994, the number of record holders of Limited Partnership
Interests of the Registrant was 3,333.
Item 6. Selected Financial Data
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Year ended December 31,
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1994 1993 1992 1991 1990
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Total income $6,175,042 $5,290,545 $5,336,906 $5,129,643 $5,161,547
Income (loss)
before gains
on sales of
property, loss
on prepayment
of note
receivable
and extra-
ordinary
item 414,158 (327,499) (567,448) (679,607) (782,370)
Net income (loss) 700,620 (327,499) 31,753 (679,607) (704,788)
Net income (loss)
per Limited Part-
nership Interest 23.12 (10.81) 1.05 (22.42) (23.25)
Total assets 15,387,316 15,170,384 14,278,492 16,312,664 16,211,899
Mortgage notes
payable 15,320,720 15,419,064 13,226,872 14,570,999 12,866,457
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
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Results of Operations
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Summary of Operations
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During 1994, Balcor Equity Properties Ltd. - VIII (the "Partnership") received
a repayment of its interest in the Sherwood Lake Apartments wrap-around note
receivable and the Partnership's properties experienced overall improvements in
net operations. These were the primary reasons the Partnership recognized net
income during 1994 as compared to a net loss during 1993.
During December 1992, title to the Barcelona Apartments was conveyed to an
unaffiliated party, subject to the existing mortgage loan. In addition, during
1993 certain of the Partnership's remaining properties had an overall
improvement in net operations as compared to 1992. As a result, the Partnership
recognized net income during 1992 as compared to a net loss during 1993.
Further discussion of the Partnership's operations is summarized below.
Operations
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1994 Compared to 1993
- ---------------------
Rental rates and/or average occupancy levels increased at all of the
Partnership's five properties resulting in increases in rental and service
income and property management fees during 1994 as compared to 1993.
Due to higher average cash balances, primarily from the Sherwood Lakes
repayment and higher interest rates earned on short-term investments, interest
income on short-term investments increased during 1994 as compared to 1993.
During November 1994, the Sherwood Lake Apartments wrap-around note receivable
was repaid. As a result of this repayment, the Partnership recognized interest
income on wrap-around note receivable and the previously deferred gain on sale
of property. No interest income was recognized in 1993 since the wrap-around
note receivable had been placed on non-accrual status and, consistent with the
Partnership's accounting policies, income is recorded only as cash payments are
received from the purchaser.
The outstanding short-term loans from the General Partner were repaid during
1994, resulting in a decrease in interest expense on short-term loans during
1994 as compared to 1993.
The Partnership incurred refinancing fees in connection with the May 1993
mortgage loan refinancings on the Cedar Creek - Phases I and II and Walnut
Hills - Phases I and II apartment complexes which are amortized over the term
of the respective loan agreements. As a result, amortization of deferred
expenses increased during 1994 as compared to 1993.
Primarily due to repairs in 1993 required by the new mortgage holders as a
condition of the refinancings of Cedar Creek - Phases I and II and Walnut Hills
- - Phases I and II, maintenance and repairs expense decreased during 1994 as
compared to 1993.
Increased accounting and portfolio management fees and data processing costs
resulted in an increase in administrative expenses during 1994 as compared to
1993.
1993 Compared to 1992
- ---------------------
The disposition of the Barcelona Apartments in December 1992 caused decreases
<PAGE>
in rental and service income, interest on mortgage notes payable, depreciation,
property operating expenses, maintenance and repairs expenses, real estate
taxes and property management fees during 1993 as compared to 1992. The
decreases resulting from this property disposition were offset by or in
addition to other activity described below.
Higher rental rates at all of the Partnership's remaining five properties
resulted in increases in rental and service income and property management fees
at these properties during 1993. This partially offset the decreases relating
to the disposition of the Barcelona Apartments.
During 1993, the Partnership completed the refinancings of the mortgage loans
on the Cedar Creek - Phases I and II and Walnut Hills - Phases I and II
apartment complexes. As a result of the refinancings the Partnership was able
to borrow funds in excess of the previous loans. The excess funds were used to
repay a portion of the General Partner debt which resulted in lower short-term
interest expense during 1993. However, the increased loan balances resulted in
increased interest expense on mortgage notes payable during 1993.
Lower interest rates on short-term loans, as well as a reduction in the amount
of outstanding debt, resulted in a decrease in interest expense on short-term
loans during 1993 as compared to 1992.
The Partnership incurred refinancing fees in connection with the May 1993
mortgage loan refinancings on the Cedar Creek - Phases I and II and Walnut
Hills - Phases I and II apartment complexes which are amortized over the life
of the respective loans. As a result, amortization of deferred expenses
increased during 1993 as compared to 1992.
Increased payroll and utilities expenses at the Greentree Village apartment
complex during 1993 as compared to 1992 partially offset the decrease in
property operating expenses caused by the disposition of the Barcelona
Apartments.
The decrease in maintenance and repair expenses during 1993 as compared to 1992
was primarily caused by the disposition of the Barcelona Apartments and
exterior painting expenditures incurred on the Cedar Creek - Phases I and II
apartment complexes during 1992. However, apartment interior upgrade
expenditures at the Greentree Village and Walnut Hills - Phases I and II
apartment complexes during 1993 partially offset this decrease.
Increases in 1993 assessed property valuations received from taxing authorities
on the Cedar Creek - Phases I and II and Walnut Hills - Phases I and II
apartment complexes resulted in an overall increase in real estate tax expense
during 1993 as compared to 1992. These increases were partially offset by the
property disposition discussed earlier.
During 1993 the Partnership incurred higher accounting and investor
communications fees which resulted in an increase in administrative expenses
during 1993 as compared to 1992. However, these increases were partially offset
by a decrease in portfolio management fees.
The Partnership recognized an extraordinary gain on foreclosure of investment
property of $599,201 in connection with the December 1992 foreclosure of the
Barcelona Apartments located in Colorado Springs, Colorado.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership increased as of December 31, 1994 when
compared to December 31, 1993. Operating activities consisted primarily of cash
flow generated from property operations, which was partially offset by the
payment of administrative expenses. Investing activities consisted of its share
of the proceeds from the Sherwood Lake wrap-around note receivable and property
improvements on the Cedar Creek - Phases I and II apartment complexes.
Financing activities consisted of repayment of the short-term loans from the
<PAGE>
General Partner, principal payments on mortgage notes payable, and the receipt
of funds released from restricted escrow accounts.
As of December 31, 1994, the Partnership had repaid all loans from the General
Partner. The loans were repaid with available cash flow from property
operations.
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 to be 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, which include debt service
payments. During 1994, four of the Partnership's five properties generated
positive cash flow after debt service as compared to all five properties
generating positive cash flow during 1993. The Walnut Hills - Phase I
Apartments generated a marginal cash flow deficit in 1994 primarily due to
increased debt service payments caused by an increase in the outstanding loan
balance resulting from the 1993 refinancing. On a combined basis, Walnut Hills
Phase I and Phase II apartment complexes generated positive cash flow after
debt service payments.
While the cash flow of the Partnership's properties has improved, the General
Partner continues to pursue actions aimed at further improving property
operating performance and seeking rent increases where market conditions allow.
As of December 31, 1994, the occupancy rates of the Partnership's properties
ranged from 90% to 96%.
The Partnership retained a 21.6% interest in the wrap-around note receivable
previously received by the Partnership as a portion of the selling price of the
Sherwood Lake Apartments. The purchaser of the property was unable to make the
balloon payment due under the note at maturity in June 1991 and in November
1991 filed for protection under the U.S. Bankruptcy Code. In December 1993, a
liquidation plan was confirmed by the bankruptcy court. In November 1994, the
Partnership received $2,200,000 representing its participation in the wrap-
around note. The repayment consisted of the Partnership's share of the
principal balance of the note of $1,792,575 and interest income of $407,425.
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. See Note 4 of Notes to Financial
Statements for information concerning outstanding balances, maturity dates,
interest rates and other terms related to each of these mortgage 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. In light of results to date and current market conditions, the
General Partner does not anticipate that investors will recover all of their
original investment.
The General Partner has recently completed the outsourcing of the financial
reporting and accounting services, transfer agent and investor records
services, and computer operations and systems development functions that
provided services to the Partnership. All of these functions are now being
provided by independent third parties. Additionally, Allegiance Realty Group,
Inc., which has provided property management services to all of the
Partnership's properties, was sold to a third party. Each of these transactions
occurred after extensive due diligence and competitive bidding processes. The
<PAGE>
General Partner does not believe that the cost of providing these services to
the Partnership, in the aggregate, will be materially different to the
Partnership during 1995 when compared to 1994.
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>
Item 8. Financial Statements and Supplementary Data
- ---------------------------------------------------
See Index to Financial Statements and Financial Statements Schedule.
The supplemental financial information specified by Item 302 of Regulation S-K
is not applicable.
The net effect of the differences between the financial statements and the tax
return is summarized as follows:
December 31, 1994 December 31, 1993
----------------------- -------------------------
Financial Tax Financial Tax
Statements Returns Statements Returns
---------- ---------- ----------- --------
Total assets $15,387,316 $17,613,469 $15,170,384 $18,111,315
Partners' (deficit)
capital accounts:
General Partner (225,399) (220,802) (232,405) (569,907)
Limited Partners (483,243) 1,738,312 (1,176,857) 2,101,018
Net income (loss):
General Partner 7,006 349,105 (3,275) 18,609
Limited Partners 693,614 (362,706) (324,224) (720,502)
Per Limited Part-
nership Interest 23.12 (12.09) (10.81) (24.01)
Item 9. Changes in and Disagreements with Accountants on Accounting and
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Financial Disclosure
- --------------------
There have been no changes in or disagreements with accountants on any matter
of accounting principles, practices or financial statement disclosure.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
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(a) Neither the Registrant nor BRI Partners-79, its General Partner, has a
Board of Directors.
(b, c & e) The names, ages and business experience of the executive officers
and significant employees of the General Partner of the Registrant are as
follows:
TITLE OFFICERS
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Chairman, President and Chief Thomas E. Meador
Executive Officer
Executive Vice President, Allan Wood
Chief Financial Officer and
Chief Accounting Officer
Senior Vice President Alexander J. Darragh
First Vice President Daniel A. Duhig
First Vice President Josette V. Goldberg
First Vice President Alan G. Lieberman
First Vice President Brian D. Parker
and Assistant Secretary
First Vice President John K. Powell, Jr.
First Vice President Reid A. Reynolds
First Vice President Thomas G. Selby
Thomas E. Meador (July 1947) joined Balcor in July 1979. He is Chairman,
President and Chief Executive Officer and has responsibility for all ongoing
day-to-day activities at Balcor. He is a Director of The Balcor Company.
Prior to joining Balcor, Mr. Meador was employed at the Harris Trust and
Savings Bank in the commercial real estate division where he was involved in
various lending activities. Mr. Meador received his M.B.A. degree from the
Indiana University Graduate School of Business.
Allan Wood (January 1949) joined Balcor in August 1983 and, as Balcor's Chief
Financial Officer and Chief Accounting Officer, is responsible for the
financial and administrative functions. He is also a Director of The Balcor
Company. Mr. Wood is a Certified Public Accountant. Prior to joining Balcor,
he was employed by Price Waterhouse where he was involved in auditing public
and private companies.
Alexander J. Darragh (February 1955) joined Balcor in September 1988 and has
primary responsibility for the Portfolio Advisory Group. He is responsible for
due diligence analysis and real estate advisory services in support of asset
management, institutional advisory and capital markets functions. Mr. Darragh
has supervisory responsibility of Balcor's Investor Services, Investment
Administration, Fund Management and Land Management departments. Mr. Darragh
received masters' degrees in Urban Geography from Queens's University and in
Urban Planning from Northwestern University.
Daniel A. Duhig (October 1956) joined Balcor in November 1986 and is
responsible for the Asset Management Department relating to real estate
investments made by Balcor and its affiliated partnerships, including
negotiations for modifications or refinancings of real estate mortgage
investments and the disposition of real estate investments.
Josette V. Goldberg (April 1957) joined Balcor in January 1985 and has primary
responsibility for all human resources matters. In addition, she has
supervisory responsibility for Balcor's administrative and MIS departments.
Ms. Goldberg has been designated as a Senior Human Resources Professional
<PAGE>
(SHRP).
Alan G. Lieberman (June 1959) joined Balcor in May 1983 and is responsible for
the Property Sales and Capital Markets Groups. Mr. Lieberman is a Certified
Public Accountant.
Brian D. Parker (June 1951) joined Balcor in March 1986 and is responsible for
Balcor's corporate and property accounting, treasury and budget activities.
Mr. Parker is a Certified Public Accountant and holds an M.S. degree in
Accountancy from DePaul University.
John K. Powell, Jr. (June 1950) joined Balcor in September 1985 and is
responsible for the administration of the investment portfolios of Balcor's
partnerships and for Balcor's risk management functions. Mr. Powell received a
Master of Planning degree from the University of Virginia. He has been
designated a Certified Real Estate Financier by the National Society for Real
Estate Finance and is a full member of the Urban Land Institute.
Reid A. Reynolds (April 1950) joined Balcor in March 1981 and is involved with
the asset management of residential properties for Balcor. Mr. Reynolds is a
licensed Real Estate Broker in the State of Illinois.
Thomas G. Selby (July 1955) joined Balcor in February 1984 and has
responsibility for various Asset Management functions, including oversight of
the residential portfolio. From January 1986 through September 1994, Mr. Selby
was Regional Vice President and then Senior Vice President of Allegiance Realty
Group, Inc., an affiliate of Balcor providing property management services.
Mr. Selby was responsible for supervising the management of residential
properties in the western United States.
(d) There is no family relationship between any of the foregoing officers.
(f) None of the foregoing officers or employees are currently involved in any
material legal proceedings nor were any such proceedings terminated during the
fourth quarter of 1994.
<PAGE>
Item 11. Executive Compensation
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The Registrant has not paid and does not propose to pay any remuneration to the
executive officers and directors of the General Partner. Certain of these
officers receive compensation from The Balcor Company (but not from the
Registrant) for services performed for various affiliated entities, which may
include services performed for the Registrant. However, the General Partner
believes that any such compensation attributable to services performed for the
Registrant is immaterial to the Registrant. See Note 7 of Notes to Financial
Statements for the information relating to transactions with affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
(a) No person owns of record or is known by the Registrant to own beneficially
more than 5% of the outstanding Limited Partnership Interests of the
Registrant.
(b) Neither BRI Partners-79 nor its officers or partners own any Limited
Partnership Interests of the Registrant.
Relatives and affiliates of the officers and partners of the General Partner do
not own any Interests.
(c) The Registrant is not aware of any arrangements, the operation of which may
result in a change of control of the Registrant.
Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------
(a & b) See Note 7 of Notes to Financial Statements for information relating to
transactions with affiliates.
See Note 2 of Notes to Financial Statements for information relating to the
Partnership Agreement and the allocation of distributions and profits and
losses.
(c) No management person is indebted to the Registrant.
(d) The Registrant has no outstanding agreements with any promoters.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K
- -------------------------------------------------------------------------
(a)
(1 & 2) See Index to Financial Statements and Financial Statement Schedule in
this Form 10-K.
(3) Exhibits:
(3) The Amended and Restated Agreement of Limited Partnership previously filed
as Exhibit 2(a) to Amendment No. 5 to the Registrant's Registration Statement
on Form S-11 dated July 16, 1980 (Registration No. 2-63821) is incorporated
herein by reference.
(4) Certificate of Limited Partnership set forth as Exhibit 2(b) to Amendment
No. 4 to the Registrant's Registration Statement on Form S-11 dated July 8,
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 1994 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended December 31, 1994.
(c) Exhibits: See Item 14(a)(3) above.
(d) Financial Statement Schedule: See Index to Financial Statements and
Financial Statement Schedule in this Form 10-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of l934, 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/Allan Wood
-----------------------------------
Allan Wood
Executive Vice President, and Chief Accounting
and Financial Officer (Principal Accounting and
Financial Officer) of BRI Partners-79, the
General Partner
Date: March 28, 1995
--------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
- --------------------- ------------------------------- ------------
President and Chief Executive
Officer (Principal Executive
Officer) of BRI Partners-79,
/s/Thomas E. Meador the General Partner March 28, 1995
- -------------------- --------------
Thomas E. Meador
Executive Vice President, and Chief
Accounting and Financial Officer
(Principal Accounting and Financial
Officer) of BRI Partners-79, the
/s/Allan Wood General Partner March 28, 1995
- -------------------- --------------
Allan Wood
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Report of Independent Accountants
Financial Statements:
Balance Sheets, December 31, 1994 and 1993
Statements of Partners' Deficit, for the years ended December 31, 1994, 1993
and 1992
Statements of Income and Expenses, for the years ended December 31, 1994, 1993
and 1992
Statements of Cash Flows, for the years ended December 31, 1994, 1993 and 1992
Notes to Financial Statements
Financial Statement Schedule:
III - Real Estate and Accumulated Depreciation, as of December 31, 1994
Financial Statement Schedules, other than that listed, are omitted for the
reason that they are inapplicable or equivalent information has been included
elsewhere herein.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Balcor Equity Properties Ltd.-VIII:
We have audited the financial statements and the financial statement schedule
of Balcor Equity Properties Ltd.-VIII (An Illinois Limited Partnership) as
listed in the index on this Form 10-K. These financial statements and the
financial statement schedule are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements and the financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Balcor Equity Properties
Ltd.-VIII at December 31, 1994 and 1993, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles. In addition,
in our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
March 13, 1995
<PAGE>
BALCOR EQUITY PROPERTIES LTD.- VIII
(An Illinois Limited Partnership)
BALANCE SHEETS
December 31, 1994 and 1993
ASSETS
1994 1993
-------------- --------------
Cash and cash equivalents $ 2,988,843 $ 591,618
Accounts and accrued
interest receivable 33,711
Escrow deposits 724,015 685,647
Escrow deposits - restricted 94,352 191,502
Wrap-around note receivable 1,792,575
Deferred gain on sale (286,462)
Deferred expenses, net of accumulated
amortization of $93,393 in 1994 and
$39,557 in 1993 503,189 557,025
-------------- --------------
4,344,110 3,531,905
-------------- --------------
Investment in real estate:
Land 1,325,898 1,325,898
Buildings and improvements 20,518,019 20,457,885
-------------- --------------
21,843,917 21,783,783
Less accumulated depreciation 10,800,711 10,145,304
-------------- --------------
Investment in real estate, net of
accumulated depreciation 11,043,206 11,638,479
-------------- --------------
$ 15,387,316 $ 15,170,384
============== ==============
LIABILITIES AND PARTNERS' DEFICIT
Loans payable - affiliate $ 417,775
Accounts payable $ 77,177 54,703
Due to affiliates 49,347 37,411
Accrued liabilities, principally
real estate taxes 548,122 534,542
Security deposits 100,592 116,151
Mortgage notes payable 15,320,720 15,419,064
-------------- --------------
Total liabilities 16,095,958 16,579,646
Partners' deficit (30,005 Limited
Partnership Interests issued and
outstanding) (708,642) (1,409,262)
-------------- --------------
$ 15,387,316 $ 15,170,384
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.- VIII
(An Illinois Limited Partnership)
STATEMENTS OF PARTNERS' DEFICIT
for the years ended December 31, 1994, 1993 and 1992
Partners' Deficit Accounts
--------------------------------------------
General Limited
Total Partner Partners
-------------- -------------- --------------
Balance at December 31, 1991 $ (1,113,516) $ (229,448) $ (884,068)
Net income for the year ended
December 31, 1992 31,753 318 31,435
-------------- -------------- --------------
Balance at December 31, 1992 (1,081,763) (229,130) (852,633)
Net loss for the year ended
December 31, 1993 (327,499) (3,275) (324,224)
-------------- -------------- --------------
Balance at December 31, 1993 (1,409,262) (232,405) (1,176,857)
Net income for the year ended
December 31, 1994 700,620 7,006 693,614
-------------- -------------- --------------
Balance at December 31, 1994 $ (708,642) $ (225,399) $ (483,243)
============== ============== ==============
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 years ended December 31, 1994, 1993 and 1992
1994 1993 1992
-------------- -------------- --------------
Income:
Rental and service $ 5,724,364 $ 5,271,564 $ 5,311,812
Interest on short-term
investments 43,253 18,981 21,957
Interest on wrap-around
note receivable 407,425 3,137
-------------- -------------- --------------
Total income 6,175,042 5,290,545 5,336,906
-------------- -------------- --------------
Expenses:
Interest on mortgage notes
payable 1,463,776 1,419,454 1,374,149
Interest on short-term loans
from affiliate 5,773 38,845 84,578
Depreciation 655,407 648,503 738,300
Amortization of deferred
expenses 53,836 32,860 3,494
Property operating 1,745,940 1,602,872 1,827,283
Maintenance and repairs 678,157 795,174 857,458
Real estate taxes 545,503 534,618 499,827
Property management fees 286,031 262,846 265,745
Administrative 326,461 282,872 253,520
-------------- -------------- --------------
Total expenses 5,760,884 5,618,044 5,904,354
-------------- -------------- --------------
Income (loss) before gain on
sale of property and extra-
ordinary item 414,158 (327,499) (567,448)
Gain on sale of property 286,462
-------------- -------------- --------------
Income (loss) before
extraordinary item 700,620 (327,499) (567,448)
Extraordinary item:
Gain on foreclosure of
investment property 599,201
-------------- -------------- --------------
Net income (loss) $ 700,620 $ (327,499) $ 31,753
============== ============== ==============
Income (loss) before extra-
ordinary item allocated
to General Partner $ 7,006 $ (3,275) $ (5,674)
============== ============== ==============
Income (loss) before extra-
ordinary item allocated
to Limited Partners $ 693,614 $ (324,224) $ (561,774)
============== ============== ==============
Income (loss) before extra-
ordinary item per Limited
Partnership Interest (30,005
issued and outstanding) $ 23.12 $ (10.81) $ (18.72)
============== ============== ==============
Extraordinary item allocated
<PAGE>
to General Partner None None $ 5,992
============== ============== ==============
Extraordinary item allocated
to Limited Partners None None $ 593,209
============== ============== ==============
Extraordinary item per Limited
Partnership Interest (30,005
issued and outstanding) None None $ 19.77
============== ============== ==============
Net income (loss) allocated
to General Partner $ 7,006 $ (3,275) $ 318
============== ============== ==============
Net income (loss) allocated
to Limited Partners $ 693,614 $ (324,224) $ 31,435
============== ============== ==============
Net income (loss) per Limited
Partnership Interest (30,005
issued and outstanding) $ 23.12 $ (10.81) $ 1.05
============== ============== ==============
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 years ended December 31, 1994, 1993, and 1992
1994 1993 1992
-------------- -------------- --------------
Operating activities:
Net income (loss) $ 700,620 $ (327,499) $ 31,753
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Gain on sale of
property (286,462)
Gain on foreclosure of
investment property (599,201)
Depreciation of
properties 655,407 648,503 738,300
Amortization of deferred
expenses 53,836 32,860 3,494
Net change in:
Escrow deposits
unrestricted (138,271) (373,551) 341,219
Escrow deposits
restricted (12,672) (30,839) (50,841)
Accounts and accrued
interest receivable (33,711) 7,762
Accounts payable 22,474 (11,679) (171,008)
Due to affiliates 11,936 (8,996) (16,102)
Accrued liabilities 13,580 393,159 (89,121)
Security deposits (15,559) 16,680 13,931
-------------- -------------- --------------
Net cash provided by
operating activities 971,178 338,638 210,186
-------------- -------------- --------------
Investing activities:
Additions to properties (60,134) (133,077) (20,568)
Proceeds from wrap-around
note receivable 1,792,575
-------------- -------------- --------------
Net cash provided by or used
in investing activities 1,732,441 (133,077) (20,568)
-------------- -------------- --------------
Financing activities:
Proceeds from issuance of
mortgage note payable $ 12,350,000
Payments of mortgage notes
payable (10,025,572)
Repayment of loans
payable - affiliate $ (417,775) (1,361,965) $ (320,618)
Principal payments on
mortgage notes payable (98,344) (132,236) (219,247)
Funding of repair escrows (235,277)
Releases from repair escrows 99,903 135,374
Releases from escrow
<PAGE>
deposits - restricted 109,822 102,860 292,636
Payment of deferred expenses (474,277)
-------------- -------------- --------------
Net cash used in or provided
by financing activities (306,394) 358,907 (247,229)
-------------- -------------- --------------
Net change in cash and
cash equivalents 2,397,225 564,468 (57,611)
Cash and cash equivalents at
beginning of period 591,618 27,150 84,761
-------------- -------------- --------------
Cash and cash equivalents at
end of period $ 2,988,843 $ 591,618 $ 27,150
============== ============== ==============
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 Policies:
(a) Depreciation expense is computed using straight-line and accelerated
methods. Rates used in the determination of depreciation are based upon the
following estimated useful lives:
Years
-----
Buildings and improvements 15 to 33
Furniture and fixtures 3 to 5
Maintenance and repairs are charged to expense when incurred. Expenditures for
improvements are charged to the related asset account. The Partnership records
its investments in real estate at cost, and periodically assesses possible
impairment to the value of its properties. In the event that the General
Partner determines that a permanent impairment in value has occurred, the
carrying basis of the property is reduced to its estimated fair value.
When properties are sold, the related costs and accumulated depreciation are
removed from the respective accounts. Any gain or loss on disposition is
recognized in accordance with generally accepted accounting principles.
Deferred gains on the sales of properties result from sales recorded under the
installment method. Gains are recognized based on the gross profit percentage
as future sales proceeds are collected.
(b) Once a wrap-around note receivable has been placed on non-accrual status,
income is recorded only as cash payments are received from the purchaser until
such time as the purchaser has demonstrated an ability to make payments under
the terms of the original or renegotiated loan agreement.
(c) Deferred expenses consist of loan refinancing fees which are amortized over
the term of the respective agreements.
(d) Cash equivalents include all highly liquid investments with a maturity of
three months or less when purchased.
(e) The Partnership is not liable for Federal income taxes and each partner
recognizes his proportionate share of the Partnership loss or income in his tax
return; therefore, no provision for income taxes is made in the financial
statements of the Partnership.
(f) Several reclassifications have been made to the previously reported 1993
and 1992 statements in order to provide comparability with the 1994 statements.
These reclassifications have not changed the 1993 and 1992 results.
2. Partnership Agreement:
The Partnership was organized in February 1979. The Partnership Agreement
provides for BRI Partners-79 to be the General Partner and for the admission of
Limited Partners through the sale of up to 30,005 Limited Partnership Interests
at $1,000 per Interest, all of which were sold on or prior to October 31, 1980,
the termination date of the offering.
The Partnership Agreement provides that the General Partner will be allocated
1% of the profits and losses. To the extent Net Cash Receipts are distributed,
the General Partner will be entitled to 10% of the Net Cash Receipts (9% being
its management fee and 1% being its distributive share), which payment is
subordinated to certain levels of return to holders of Interests as specified
by the Partnership Agreement. There have been no cash payments made to the
General Partner under these provisions.
<PAGE>
When and as the Partnership sells or refinances properties, the Net Cash
Proceeds resulting therefrom which are available for distribution will be
distributed only to holders of Interests until such time as holders of
Interests have received an amount equal to their Original Capital plus certain
levels of return, as specified by the Partnership Agreement. Only after such
returns are made to the Limited Partners would the General Partner receive 15%
of further distributed Net Cash Proceeds. There have been no cash payments made
to the General Partner under these provisions.
3. Wrap-around Note Receivable:
In January 1988, the Partnership sold (subject to the underlying debt
obligations) the wrap-around note receivable previously received by the
Partnership as a portion of the selling price of the Sherwood Lake Apartments.
At closing, the Partnership retained a 21.6% interest in the note pursuant to
the terms of a participation agreement entered into by the Partnership and the
purchaser of the note.
The purchaser of the property failed to make the balloon payment due in June
1991. As a result, foreclosure proceedings were commenced and shortly
thereafter the purchaser of the property filed for protection under the U.S.
Bankruptcy Code. In December 1993, a liquidation plan was confirmed by the
bankruptcy court. In November 1994, the Partnership received $2,200,000
representing its participation in the wrap-around note. The repayment consisted
of the Partnership's share of the principal balance of the note of $1,792,575
and interest income of $407,425. The Partnership also recognized a $286,462
deferred gain on sale.
4. Mortgage Notes Payable:
Mortgage notes payable at December 31, 1994 and 1993 consisted of the
following:
Carrying Carrying Current Final
Property Amount of Amount of Inter- Matur- Current Estimated
Pledged as Notes at Notes at est ity Monthly Balloon
Collateral 12/31/94 12/31/93 Rate Date Payment Payment
- -------------- -------------------------------- ----------------------------
Apartment Complexes:
Cedar Creek
Phase I (a) $2,350,562 $2,366,414 9.38% 2003 $19,763 $2,138,000
Cedar Creek
Phase II (b) 2,795,931 2,814,787 9.38% 2003 23,507 2,543,000
Greentree Village 3,099,604 3,114,355 9.75% 2026 26,479 None
Walnut Hills
Phase I (c) 5,164,476 5,200,159 9.26% 2002 42,977 4,767,000
Walnut Hills
Phase II (d) 1,910,147 1,923,349 9.26% 2002 15,896 1,763,000
----------- -----------
Total $15,320,720 $15,419,064
=========== ===========
(a) In May 1993, this loan was refinanced. The interest rate increased from
9.25% to 9.38%, the maturity date was extended from August 1993 to June 2003
and the monthly payments increased from $18,510 to $19,763. A portion of the
proceeds from the new $2,375,000 first mortgage loan were used to repay the
existing first mortgage loan of $1,864,165.
(b) In May 1993, this loan was refinanced. The interest rate decreased from
9.75% to 9.38%, the maturity date was extended from September 1995 to June 2003
and the monthly payments decreased from $27,235 to $23,507. A portion of the
proceeds from the new $2,825,000 first mortgage loan were used to repay the
existing first mortgage loan of $2,729,330.
(c) In May 1993, this loan was refinanced. The interest rate increased from
<PAGE>
9.25% to 9.26%, the maturity date was extended from March 1994 to June 2002 and
the monthly payments increased from $21,845 to $42,977. A portion of the
proceeds from the new $5,219,500 first mortgage loan were used to repay the
existing first mortgage loan of $2,231,902.
(d) In May 1993, this loan was refinanced. The interest rate decreased from
10.25% to 9.26%, the maturity date was extended from October 1996 to June 2002
and the monthly payments decreased from $32,260 to $15,896. The proceeds from
the new $1,930,500 first mortgage loan, along with Partnership cash reserves,
were used to repay the existing first mortgage loan of $3,200,175.
All of the Partnership's loans described above require current monthly payments
of principal and interest.
Five-year maturities of the above notes are summarized as follows:
1995 $ 108,000
1996 119,000
1997 130,000
1998 143,000
1999 157,000
During the years ended December 31, 1994, 1993 and 1992 the Partnership
incurred interest expense on mortgage notes payable of $1,463,776, $1,419,454
and $1,374,149, respectively. The Partnership paid interest expense of
$1,463,776, $1,419,454 and $1,355,940 in 1994, 1993 and 1992, respectively.
5. Management Agreements:
As of December 31, 1994, all of the properties owned by the Partnership are
under management agreements with a third-party management company. These
management agreements provide for annual fees of 5% of gross operating
receipts.
6. Tax Accounting:
The Partnership keeps its books in accordance with the Internal Revenue Code,
rules and regulations promulgated thereunder and existing interpretations
thereof. The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles, will differ from the
tax return due to the different treatment of various items as specified in the
Internal Revenue Code. The net effect of these accounting differences is that
the net income for 1994 in the financial statements is $714,221 higher than the
tax loss of the Partnership for the same period.
7. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/94 12/31/93 12/31/92
-------------- -------------- --------------
Paid Payable Paid Payable Paid Payable
------ ------- ------ ------- ------ -------
Property management fees $283,313 None $263,313 $22,346 $266,223 $22,813
Reimbursement of expenses
to the General Partner,
at cost:
Accounting 50,895 $18,653 47,708 3,941 47,083 3,606
Data processing 23,660 4,773 13,598 2,824 15,483 1,269
Investor communica-
tions 17,584 4,864 17,915 1,480 7,916 606
Legal 6,703 3,202 6,139 507 8,944 685
Portfolio management 27,997 15,353 28,449 3,637 39,922 6,890
Other 18,156 2,502 7,851 648 6,018 457
<PAGE>
Allegiance Realty Group, Inc., an affiliate of the General Partner, managed all
of the Partnership's properties until the affiliate was sold to a third-party
in November 1994.
As of December 31, 1993, the Partnership had loans outstanding from the General
Partner of $417,775, which were repaid during 1994 with cash flow available
from property operations. The Partnership incurred interest expense of $5,773,
$38,845 and $84,578, and paid interest expense of $7,801, $46,898 and $84,382
in 1994, 1993 and 1992, respectively, on these loans. Interest expense was
computed at the American Express Company cost of funds rate plus a spread to
cover administrative costs.
The Partnership participates in an insurance deductible program with other
affiliated partnerships in which the program pays claims up to the amount of
the deductible under the master insurance policies for its properties. The
program is administered by an affiliate of the General Partner who receives no
fee for administering the program. The Partnership's premiums to the deductible
insurance program were $49,714, $25,901 and $35,808 for 1994, 1993 and 1992,
respectively.
8. Extraordinary Item:
During 1992, title to Barcelona Apartments was conveyed to an unaffiliated
party. The Partnership wrote-off the underlying mortgage balance of $1,124,880
plus accrued and unpaid interest expense of $88,312, accrued and unpaid real
estate taxes of $50,568, escrow deposits of $9,986, and the property basis of
$654,573, net of accumulated depreciation of $1,719,217. The Partnership
received no cash as a result of this transaction. An extraordinary gain on
foreclosure of $599,201 was recognized for financial statement purposes.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1994
<CAPTION>
Col. A Col. B Col. C Col. D
- --------------------- -------- -------------------- ---------------------------------
Initial Cost Cost Adjustments
to Partnership Subsequent to Acquisition
-------------------- ---------------------------------
Buildings Carrying
Encum- and Im- Improve- Costs Reduction
Description brances Land provements ments (a) of Basis
- --------------------- ------- -------- ------------ --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Cedar Creek Apts./I,
176-units in
San Antonio, TX (d) $ 196,020 $ 4,591,190 $ 94,448 $ 6,801 ($1,299,826)
Cedar Creek Apts./II,
216-units in San
Antonio, TX (d) 300,000 6,189,358 59,907 9,336 (1,680,893)
Greentree Village
Apts., 216-units in
Colorado Springs, CO (d) 395,800 5,564,212 250,877 10,680 None
Walnut Hills Apts./I,
192-units in San
Antonio, TX (d) 247,228 3,314,879 82,225 15,728 (347,203)
Walnut Hills Apts./II,
232-units in San
Antonio, TX (d) 372,576 3,764,901 92,722 15,748 (402,797)
---------- ----------- -------- ------- -----------
Total $1,511,624 $23,424,540 $580,179 $58,293 ($3,730,719)
========== =========== ======== ======= ===========
</TABLE>
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1994
(Continued)
<CAPTION>
Col. A Col. E Col. F Col. G Col. H Col. I
- ------------------- -------------------------------- -------- -------- ------ --------------
Gross Amounts at Which Life Upon
Carried at Close of Period Which Depre-
----------------------------------- ciation in
Buildings Accumulated Date Date Latest Income
and Im- Total Deprecia- of Con- Acq- Statement
Description Land provements (b)(c) tion(b) struction uired is Computed
- ------------------- --------------------- ------------ ----------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cedar Creek Apts./I,
176-units in
San Antonio, TX $143,150 $3,445,483 $3,588,633 $2,036,304 1978 4/07/81 (e)
Cedar Creek Apts./II,
216-units in San
Antonio, TX 222,714 4,654,994 4,877,708 2,696,447 1979 4/07/81 (e)
Greentree Village
Apts., 216-units in
Colorado Springs, CO 396,747 5,824,822 6,221,569 3,467,727 (f) 11/06/80 (e)
Walnut Hills Apts./I,
192-units in San
Antonio, TX 224,767 3,088,090 3,312,857 1,306,685 1979 11/04/86(g) (e)
Walnut Hills Apts./II,
232-units in San
Antonio, TX 338,520 3,504,630 3,843,150 1,293,548 1980 11/04/86(g) (e)
---------- ----------- ----------- -----------
Total $1,325,898 $20,518,019 $21,843,917 $10,800,711
========== =========== =========== ===========
</TABLE>
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
NOTES TO SCHEDULE III
(a) Consists of legal fees, appraisal fees, title costs and other related
professional fees.
(b) Reconciliation of Real Estate
-----------------------------
1994 1993 1992
---------- ---------- ----------
Balance at beginning of year $21,783,783 $21,650,706 $24,003,928
Additions during year:
Improvements 60,134 133,077 20,568
Deductions during year:
Foreclosure of investment
property None None (2,373,790)
----------- ----------- -----------
Balance at end of year $21,843,917 $21,783,783 $21,650,706
=========== =========== ===========
Reconciliation of Accumulated Depreciation
-------------------------------------------
1994 1993 1992
---------- ---------- ----------
Balance at beginning of year $10,145,304 $9,496,801 $10,477,718
Depreciation expense for the
year 655,407 648,503 738,300
Accumulated depreciation of
foreclosed investment
property None None (1,719,217)
----------- ----------- -----------
Balance at end of year $10,800,711 $10,145,304 $ 9,496,801
=========== =========== ===========
(c) The aggregate cost of land for Federal income tax purposes is $1,627,607
and the aggregate cost of buildings and improvements for Federal income tax
purposes is $10,133,137. The total of the above-mentioned is $11,760,744.
(d) See description of mortgage notes payable in Note 4 of Notes to Financial
Statements.
(e) Depreciation expense is computed based upon the following estimated useful
lives:
Years
-----
Buildings and improvements 15 to 33
Furniture and fixtures 3 to 5
(f) This apartment complex was completed in stages from 1971 to 1979.
(g) These properties were reacquired through foreclosure in November 1986.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 2989
<SECURITIES> 0
<RECEIVABLES> 34
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3841
<PP&E> 21844
<DEPRECIATION> 10801
<TOTAL-ASSETS> 15387
<CURRENT-LIABILITIES> 775
<BONDS> 15321
<COMMON> 0
0
0
<OTHER-SE> (709)
<TOTAL-LIABILITY-AND-EQUITY> 15387
<SALES> 0
<TOTAL-REVENUES> 6462
<CGS> 0
<TOTAL-COSTS> 3255
<OTHER-EXPENSES> 1036
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1470
<INCOME-PRETAX> 701
<INCOME-TAX> 0
<INCOME-CONTINUING> 701
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 701
<EPS-PRIMARY> 23.12
<EPS-DILUTED> 23.12
</TABLE>
