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, 1998
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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.)
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
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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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<PAGE>
BALCOR EQUITY PROPERTIES, LTD. - VIII
(AN ILLINOIS LIMITED PARTNERSHIP)
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(UNAUDITED)
ASSETS
1998 1997
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Cash and cash equivalents $ 941,556 $ 1,002,912
Accounts and accrued interest receivable 4,296 25,094
Prepaid expense 1,702
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$ 947,554 $ 1,028,006
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 20,490 $ 20,257
Due to affiliates 56,877 51,426
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Total liabilities 77,367 71,683
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Commitments and contingencies
Limited Partners' capital (30,005
Interests issued and outstanding) 890,823 976,959
General Partner's deficit (20,636) (20,636)
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Total partners' capital 870,187 956,323
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$ 947,554 $ 1,028,006
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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, 1998 and 1997
(UNAUDITED)
1998 1997
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Income:
Rental and service $ 1,001,330
Interest on short-term investments $ 12,971 36,587
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Total income 12,971 1,037,917
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Expenses:
Interest on mortgage notes payable 279,780
Depreciation 117,284
Amortization of deferred expenses 12,585
Property operating 30,810 502,387
Real estate taxes 115,968
Property management fees 51,106
Administrative 68,297 60,590
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Total expenses 99,107 1,139,700
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Net loss $ (86,136) $ (101,783)
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Net loss allocated to General Partner None $ (1,018)
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Net loss allocated to Limited Partners $ (86,136) $ (100,765)
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Net loss per Limited Partners Interest
(30,005 issued and outstanding)-Basic
and Diluted $ (2.87) $ (3.36)
=============== ===============
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, 1998 and 1997
(UNAUDITED)
1998 1997
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Operating activities:
Net loss $ (86,136) $ (101,783)
Adjustments to reconcile net loss
to net cash (used in) or provided by
operating activities:
Depreciation of properties 117,284
Amortization of deferred
expenses 12,585
Net change in:
Escrow deposits - unrestricted 277,827
Accounts and accrued interest
receivable 20,798 175,174
Prepaid expenses (1,702) 37,220
Accounts payable 233 (18,318)
Due to affiliates 5,451 386
Accrued liabilities (347,902)
Security deposits (9,652)
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Net cash (used in) or provided by
operating activities (61,356) 142,821
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Financing activities:
Principal payments on mortgage
notes payable (26,648)
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Cash used in financing activities (26,648)
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Net change in cash and cash equivalents (61,356) 116,173
Cash and cash equivalents at
beginning of period 1,002,912 1,588,218
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Cash and cash equivalents at end
of period $ 941,556 $ 1,704,391
=============== ===============
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) The loss allocation between the Limited Partners and the General Partner
has been adjusted for financial statement purposes during 1998 in order that
the capital account balances more accurately reflect their remaining economic
interests as provided for in the Partnership Agreement.
(b) 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, 1998, and all such adjustments are of a normal and recurring
nature.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1997, the Partnership sold its four remaining properties.
The Partnership has retained a portion of the cash from the property sales to
satisfy obligations of the Partnership as well as establish a reserve for
contingencies. The timing of the termination of the Partnership and final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees and costs stemming from litigation involving the Partnership
including, but not limited to, the lawsuit discussed in Note 5 of Notes to the
Financial Statements. In the absence of any such contingencies, the reserves
will be paid within twelve months of the last property being sold. In the event
a contingency continues to exist or arises, reserves may be held by the
Partnership for a longer period of time.
3. Interest Expense:
During the quarter ended March 31, 1997, the Partnership incurred and paid
interest expense on mortgage notes payable of $279,780.
4. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1998 are:
Paid Payable
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Reimbursement of expenses to
the General Partner, at cost $ 5,902 $56,877
5. Contingency:
The Partnership is currently involved in a lawsuit whereby the Partnership and
certain affiliates were named as defendants alleging claims involving certain
<PAGE>
state securities and common law violations with regard to the adequacy and
accuracy of disclosures of information concerning, as well as marketing efforts
related to, the offering of the Limited Partnership Interests of the
Partnership. The defendants continue to vigorously contest this action. A
plaintiff class has not been certified in the action and, no determinations of
the merits have been made. It is not determinable at this time whether or not
an unfavorable decision in the action would have a material adverse impact on
the financial position, operations or liquidity of the Partnership. The
Partnership believes that it has meritorious defenses to contest the claims.
<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. As of March 31,
1998, the Partnership had no properties remaining in its portfolio.
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 1997 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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The operations of the Partnership in 1998 consisted primarily of administrative
expenses and operating expenses related to sold properties which were partially
offset by interest income earned on short-term investments. During 1997 the
Partnership sold its remaining four properties which had collectively been
generating losses from operations. Primarily as a result of the sales of the
four properties, the Partnership's net loss decreased during 1998 as compared
to 1997. Further discussion of the Partnership's operations is summarized
below.
1998 Compared to 1997
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Discussions of fluctuations between 1998 and 1997 refer to the quarters ended
March 31, 1998 and 1997.
As a result of the sales of the Cedar Creek Phase I and II apartment complexes
and the Walnut Hills Phase I and II apartment complexes, rental and service
income, interest expense on mortgage notes payable, depreciation expense,
amortization expense, real estate tax expense and property management fees
expense ceased during 1997.
Higher average cash balances were available for investment due to proceeds
retained from the sale of the Greentree Village Apartments for working capital
requirements during 1997. In addition, the Partnership received interest
income during 1997 related to a real estate tax refund at the Greentree
Village Apartments. As a result, interest income on short-term investments
decreased during 1998 when compared to 1997.
Property operating expenses decreased during 1998 as compared to 1997 due to
the sale of the Partnership's four remaining properties in 1997. During 1998,
the Partnership paid additional expenditures related to three of the properties
sold in 1997.
<PAGE>
The estimate for 1997 accounting fees was lower than the actual expense
incurred. This was the primary reason administrative expenses increased during
1998 when compared to 1997. Higher legal fees during 1998 also contributed to
the increase.
Liquidity and Capital Resources
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The cash position of the Partnership decreased by approximately $61,000 as of
March 31, 1998 as compared to December 31, 1997 due to cash used in operating
activities for the payment of administrative expenses and property operating
expenses related to sold properties which were partially offset by interest
income received on short-term investments.
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1997, the Partnership sold its four remaining properties.
The Partnership has retained a portion of the cash from the property sales to
satisfy obligations of the Partnership as well as establish a reserve for
contingencies. The timing of the termination of the Partnership and final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees and costs stemming from litigation involving the Partnership
including, but not limited to, the lawsuit discussed in Note 5 of Notes to the
Financial Statements. In the absence of any such contingencies, the reserves
will be paid within twelve months of the last property being sold. In the event
a contingency continues to exist or arises, reserves may be held by the
Partnership for a longer period of time.
To date, Limited Partners have received distributions of Net Cash Receipts of
$173.33 and Net Cash Proceeds of $449.24, totaling $622.57 per $1,000 Interest,
as well as certain tax benefits. No distributions are anticipated to be made
prior to the termination of the Partnership. However, after paying final
partnership expenses, any remaining cash reserves will be distributed. Limited
Partners will not recover all of their original investment.
<PAGE>
BALCOR EQUITY PROPERTIES LTD.-VIII
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(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 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 September 30, 1992 (Commission File No.
0-9541) are incorporated herein by reference.
(10) Material Contracts:
(a)(i) Agreement of Sale and attachment thereto related to the sale of the
Walnut Hills - Phase I Apartments, San Antonio, Texas, previously filed as
Exhibit (2)(a) to the Registrant's Current Report on Form 8-K dated March 31,
1997 is incorporated herein by reference.
(a)(ii) First Amendment to Agreement of Sale relating to the sale of Walnut
Hills - Phase I Apartments, San Antonio, Texas, previously filed as Exhibit
(10)(a)(ii) to the Registrant's Quarterly Report on Form 10-Q dated June 30,
1997 is incorporated herein by reference.
(b)(i) Agreement of Sale and attachment thereto related to the sale of the
Walnut Hills - Phase II Apartments, San Antonio, Texas, previously filed as
Exhibit (2)(b) to the Registrant's Current Report on Form 8-K dated March 31,
1997 is incorporated herein by reference.
(b)(ii) First Amendment to Agreement of Sale relating to the sale of Walnut
Hills - Phase II Apartments, San Antonio, Texas, previously filed as Exhibit
(10)(b)(ii) to the Registrant's Quarterly Report on Form 10-Q dated June 30,
1997 is incorporated herein by reference.
(c) Agreement of Sale and attachment thereto relating to the sale of Greentree
Village Apartments, Colorado Springs, Colorado, previously filed as Exhibit
(10) to the Registrant's Quarterly Report on Form 10-Q dated June 30, 1996, is
incorporated herein by reference.
(d)(i) Agreement of Sale and attachment thereto related to the sale of Cedar
Creek - Phases I and II Apartments, San Antonio, Texas, previously filed as
Exhibit (10)(d)(i) to the Registrant's Quarterly Report on Form 10-Q dated
March 31, 1997, is incorporated herein by reference.
<PAGE>
(ii) Escrow Agreement related to the Sale of Cedar Creek - Phases I and II
Apartments, San Antonio, Texas, previously filed as Exhibit (10)(a)(ii) to the
Registrant's Quarterly Report on Form 10-Q dated March 31, 1997, is
incorporated herein by reference.
(iii) First Amendment to Agreement of Sale related to the sale of Cedar Creek -
Phases I and II Apartments, San Antonio, Texas, previously filed as Exhibit
(10)(d)(iii) to the Registrant's Quarterly Report on Form 10-Q dated March 31,
1997, is incorporated herein by reference.
(iv) Second Amendment to Agreement of Sale related to the sale of Cedar Creek -
Phases I and II Apartments, San Antonio, Texas, previously filed as Exhibit
(10)(d)(iv) to the Registrant's Quarterly Report on Form 10-Q dated March 31,
1997, is incorporated herein by reference.
(v) Third Amendment to Agreement of Sale relating to the sale of Cedar Creek -
Phases I and II Apartments, San Antonio, Texas, previously filed as Exhibit
(10)(d)(v) to the Registrant's Quarterly Report on Form 10-Q dated June 30,
1997 is incorporated herein by reference.
(vi) Fourth Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of Cedar Creek - Phases I and II Apartments, San Antonio, Texas,
previously filed as Exhibit (10)(d)(vi) to the Registrant's Quarterly Report on
Form 10-Q dated June 30, 1997 is incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the quarter ending March 31,
1998 is attached hereto.
(b) Reports on Form 8-K: A Current Report on Form 8-K dated January 15, 1998
was filed reporting the status of proposed class action litigation to which the
Registrant was a party.
<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/Jayne A. Kosik
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Jayne A. Kosik
Senior Managing Director and Chief
Financial Officer (Principal Accounting
Officer) of BRI Partners-79, the General
Partner
Date: May 8, 1998
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<PAGE>
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<ARTICLE> 5
<MULTIPLIER> 1000
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 942
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<ALLOWANCES> 0
<INVENTORY> 0
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0
0
<COMMON> 0
<OTHER-SE> 870
<TOTAL-LIABILITY-AND-EQUITY> 948
<SALES> 0
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<CGS> 0
<TOTAL-COSTS> 31
<OTHER-EXPENSES> 68
<LOSS-PROVISION> 0
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<INCOME-PRETAX> (86)
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<INCOME-CONTINUING> (86)
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<NET-INCOME> (86)
<EPS-PRIMARY> (2.87)
<EPS-DILUTED> (2.87)
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