UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period _____ to _____
Commission file number: 0-10223
HUTTON/CONAM REALTY INVESTORS 81
Exact name of Registrant as specified in its charter
California 13-3069026
__________ __________
State or other jurisdiction of incorporation I.R.S. Employer Identification No.
3 World Financial Center, 29th Floor, New York, New York 10285
________________________________________________________ _____
Address of principal executive offices zip code
Registrant's telephone number, including area code: (212) 526-3237
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
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 the 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)
Documents Incorporated by Reference:
Portions of Prospectus of the Registrant dated June 24, 1981 (included in
Amendment No. 2 to Registrant's Registration Statement No. 2-70331, filed June
24, 1981 and in Amendment No. 1 to Registrant's Registration Statement No.
2-73558, filed August 20, 1981) are incorporated by reference into Part III of
this report.
Portions of Parts I, II, III and IV are incorporated by reference to the
Partnership's Annual Report to Unitholders for the year ended December 31,
1994.
PART I
Item 1. Business
General Development of Business
Hutton/ConAm Realty Investors 81 (the "Registrant" or the "Partnership") is a
California limited partnership formed on April 30, 1981, of which RI 81 Real
Estate Services Inc. ("RI 81 Services", formerly Hutton Real Estate Services
III, Inc.) a Delaware corporation, and ConAm Property Services, Ltd., a
California limited partnership ("ConAm Services"), are the general partners
(together, the "General Partners").
Commencing June 24, 1981, the Registrant began offering through E.F. Hutton &
Company Inc., an affiliate of the Registrant ("Hutton"), up to a maximum of
55,000 units of limited partnership interest (the "Units") at $500 per Unit.
Investors who purchased the Units (the "Limited Partners") are not required to
make any additional capital contributions. The Units were registered under the
Securities Act of 1933, as amended (the "Act"), under Registration Statement
No. 2-70331, which Registration Statement was declared effective on June 24,
1981. On August 6, 1981, the Registrant filed under the Act its Registration
Statement No. 2-73558 covering an additional 25,000 Units. The offering of
Units was terminated on October 1, 1981. Upon termination of the offering, the
Registrant had accepted subscriptions for 78,290 Units, including 200 Units
purchased by the General Partners for an aggregate of $39,145,000. All unsold
Units, aggregating $855,000, were de-registered pursuant to Post-Effective
Amendment No. 1 to Registrant's Registration Statement No. 2-73558, filed
November 5, 1981.
Narrative Description of Business
The Registrant is engaged in the business of acquiring, operating and holding
for investment multi-family residential properties, which by virtue of their
location and design and the nature of the local real estate market have
potential for capital appreciation and generation of current income. As of
December 31, 1994, all of the proceeds available for investment in real estate
were invested in two joint ventures and three limited partnerships, each owning
a single property. Funds held as a working capital reserve are invested in
unaffiliated money market funds or other highly liquid short-term investments
where there is appropriate safety of principal in accordance with the
Registrant's investment objectives and policies.
The Registrant's principal investment objectives with respect to its interests
in real property are:
(1) capital appreciation;
(2) distributions of net cash from operations attributable to rental
income; and
(3) preservation and protection of capital.
Distributions of net cash from operations will be the Registrant's objective
during its operational phase, while preservation and appreciation of capital
will be the Registrant's long-term objectives. The attainment of the
Registrant's objectives will depend on many factors, including future economic
conditions in the United States as a whole and, in particular, in the
localities in which the Registrant's properties are located, especially with
regard to achievement of capital appreciation.
From time to time the Registrant expects to sell its real property investments
taking into consideration such factors as the amount of appreciation in value,
if any, to be realized and the possible risks of continued ownership. In
consideration of these factors and improving market conditions, the General
Partners have begun marketing certain of the properties for sale and recently
entered into preliminary negotiations with an institutional buyer to sell
Kingston Village and Cedar Bay Village. There is no assurance that the sale
will be completed or that any particular price for the properties can be
obtained. No property will be sold, financed or refinanced by the Registrant
without the agreement of both General Partners. Proceeds from the sale,
financing or refinancing of properties will not be reinvested and may be
distributed to the Limited Partners and General Partners (sometimes referred to
together herein as the "Partners"), so that the Registrant will, in effect, be
self-li quidating. If deemed necessary, the Registrant may retain a portion of
the proceeds from any sale, financing or refinancing as capital reserves. As
partial payment for properties sold, the Registrant may receive purchase money
obligations secured by mortgages or deeds of trust. In such cases, the amount
of such obligations will not be included in Net Proceeds From Sale or
Refinancing (distributable to the Partners) until and only to the extent the
obligations are realized in cash, sold or otherwise liquidated.
Since inception, the Registrant has acquired five residential apartment
complexes (collectively, the "Properties"), through investments in joint
ventures or limited partnerships. As of December 31, 1994, the Registrant had
interests in the Properties as follows: (1) Las Colinas Apartments I and II, a
300-unit apartment complex located in Scottsdale, Arizona; (2) Cedar Bay
Village, a 42-unit apartment complex located in Altamonte Springs, Florida; (3)
Ridge Park Apartments, a 100-unit apartment complex located in Tulsa, Oklahoma;
(4) Kingston Village, a 120-unit apartment complex located in Altamonte
Springs, Florida; and (5) Tierra Catalina, a 120-unit apartment complex located
in Tucson, Arizona. For further information on the Properties, see Item 2 of
this report and Note 4 to the Consolidated Financial Statements, incorporated
herein by reference to the Partnership's Annual Report to Unitholders for the
year ended December 31, 1994, which is filed as an exhibit under item 14.
The acquisitions of the Properties were originally made on an all-cash basis
without the use of mortgage financing. During the second quarter of 1985, the
Registrant obtained mortgage financing on Las Colinas I and II, Kingston
Village and Tierra Catalina. The resulting net proceeds from such financing
were distributed to the Partners during the second quarter of 1985. The
Registrant's three mortgage loans were scheduled to mature in May 1992. The
Registrant was unable to repay or refinance the mortgages prior to that date;
however, the former mortgage lender agreed to an extension of the maturity date
to concur with the anticipated funding of new loans. Due to stricter
underwriting criteria, the Registrant was required to encumber the other two
properties which were previously debt-free with mortgage loans in order to
secure sufficient financing to repay the former lender in full and to meet the
new lender's initial funding requirements. On August 27, 1992, the Registrant
obtain ed new mortgage loans on all five of its properties. The proceeds of
this financing were used primarily to repay the outstanding amounts due to the
previous lender on the Registrants's three prior mortgages. See Item 7 of this
report and Note 5 to the Consolidated Financial Statements incorporated herein
by reference to the Partnership's Annual Report to Unitholders for the year
ended December 31, 1994, which is filed as an exhibit under item 14, for a
discussion of the loan maturities and the Registrant's current indebtedness.
Competition
The Registrant's real property investments are subject to competition from
similar types of properties in the vicinities in which they are located and
such competition has increased since the Registrant's investment in the
Properties due principally to the addition of newly constructed apartment
complexes offering increased residential and recreational amenities. The
Properties have also been subject to competition from condominiums and
single-family properties, especially during periods of low mortgage interest
rates. The Registrant competes with other real estate owners and developers in
the rental and leasing of its Properties by offering competitive rental rates
and, if necessary, leasing incentives. Such competition may affect the
occupancy levels and revenues of the Properties. The occupancy levels at the
Properties in Arizona and Florida reflect some seasonality, which is also
reflected in the markets. In some cases, the Registrant may compete with other
partnerships affiliated with either General Partner of the Registrant.
For a discussion of current market conditions in each of the areas where the
Partnership's Properties are located, see Item 2 below.
Employees
The Registrant has no employees. General services are performed by RI 81
Services, ConAm Services, ConAm Management Corporation ("ConAm Management"), an
affiliate of ConAm Services, as well as Service Data Corporation and The
Shareholder Services Group, both unaffiliated companies. The Registrant has
entered into management agreements pursuant to which ConAm Management provides
management services with respect to the Properties. The Shareholder Services
Group has been retained by the Registrant to provide all accounting and
investor communication functions, while Service Data Corporation provides
transfer agent services. See Item 13 for a further description of the service
and management agreements between the Registrant and affiliated entities.
Item 2. Properties
Below is a description of the Properties and a discussion of current market
conditions in each of the areas where the Properties are located. For
information on the purchase of the Properties, reference is made to Note 4 to
the Consolidated Financial Statements on page F-8 of the Partnership's Annual
Report to Unitholders for the year ended December 31, 1994, which is filed as
an exhibit under Item 14. Appraised values of the Partnership's real estate
investments are incorporated by reference to page 13 of the Partnership's
Annual Report to Unitholders. Average occupancy rates at each property are
incorporated by reference to page 2 of the Partnership's Annual Report to
Unitholders.
Cedar Bay Village - Altamonte Springs, Florida
Cedar Bay Village contains 42 apartment units in a nine-building complex
situated approximately ten miles northwest of downtown Orlando in the
Longwood/Altamonte submarket. Orlando's population growth and healthy economy
continues to fuel strong job creation and strong market conditions for
multifamily housing. The Longwood/Altamonte submarket represents one of the
strongest areas in the Orlando metropolitan area. Average occupancy of area
complexes was 94% as of September 1994, and a survey of local complexes
indicated average rent increases of 3.4% from September 1993 to September 1994.
While 486 units were under construction in this submarket as of September 1994,
the area's continued growth is expected to keep pace with the new supply.
Kingston Village - Altamonte Springs, Florida
Kingston Village is located in the same community as Cedar Bay Village and
consists of 120 apartments. The property offers a park-like setting,
attractive to retired tenants and unique to area apartment complexes, which
allow it to command premium rents. Market conditions in the Longwood/
Altamonte submarket remain healthy, and population and job growth in the area
is expected to keep pace with new supply (see Cedar Bay Village discussion
above).
Las Colinas I & II - Scottsdale, Arizona
This 300-unit apartment community is located in a suburban setting
approximately eight miles northwest of downtown Phoenix. Strong population and
job growth have characterized Phoenix in recent years, bringing about favorable
market conditions for apartment complexes in the area. A survey of the
Scottsdale/Paradise Valley submarket reported average occupancy of 96% as of
the third quarter of 1994, and most area complexes have instituted rent
increases in 1994. Construction, while limited in recent years, picked up in
1994 and eight projects in the Scottsdale/Paradise Valley submarket were in
process of planning or construction as of the third quarter of 1994. The new
supply is likely to limit rental rate increases in the coming year, however,
the area's strong population and job growth are expected to keep pace with new
supply.
Ridge Park - Tulsa, Oklahoma
This 100-unit complex is situated in South Tulsa, approximately eight miles
from downtown Tulsa, in the South Zone submarket. The Tulsa economy continues
to recover from the recent recession, and while there is a growing
diversification into service industries, Tulsa is still highly reliant upon
petroleum and defense. These recovering economic conditions are reflected in
the area's rental market, where the large inventory of units from prior period
overbuilding continues to depress the market. Occupancy in the South Zone
submarket averaged 93% as of the third quarter of 1994, and rental rate
increases have been limited. Improvement in this market is expected to be
gradual and will be contingent upon a further strengthening of the local
economy.
Tierra Catalina - Tucson, Arizona
This 120-unit apartment community is situated in the "foothills" section of
northeast Tucson. Tucson continues to experience brisk population and job
growth, which have fueled strong demand for apartment housing in recent years.
A local survey of metropolitan Tucson conducted in the fourth quarter of 1994
showed an average occupancy rate of 96% among multifamily properties with five
or more units. While construction of new units has been minimal during the
past four years, eight new complexes commenced construction in 1994. When
completed, these projects can be expected to compete with Tierra Catalina.
All of the Partnership's properties, except Las Colinas II, are encumbered by
mortgage loans. See Note 5 to the Consolidated Financial Statements for a
description of such mortgage financing.
Item 3. Legal Proceedings
The Registrant is not a party to any material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of the year ended December 31, 1994, no matter was
submitted to a vote of security holders through the solicitation of proxies or
otherwise.
PART II
Item 5. Market for the Registrant's Limited Partnership Units and Related
Security Holder Matters
As of December 31, 1994, the number of Unitholders of record was 3,831.
No established public trading market exists for the Units and it is not
anticipated that a market will develop in the future.
Distributions of Net Cash Flow From Operations, when made, are paid on a
quarterly basis, with distributions generally occurring approximately 45 days
after the end of each quarter. Such distributions have been made primarily
from net operating income with respect to the Registrant's investment in the
Properties and from interest on short-term investments, and partially from
excess cash reserves. For a full accounting of the cash distributions paid to
the Partners during the past two years, reference is made to page 3 of the
Partnership's Annual Report to Unitholders for the year ended December 31,
1994, which is filed as an exhibit under Item 14.
Cash distributions to the Limited Partners were suspended from the fourth
quarter of 1990 through the second quarter of 1993 in consideration of the
funds required for roof repairs and litigation associated with Kingston
Village, and in view of the estimated costs of securing replacement financing.
Following the closing of the refinancing, the completion of the required roof
repairs, and the settlement of the litigation, the General Partners reviewed
the Partnership's cash reserve levels and anticipated cash flow from operations
and funding needs, and determined that the Partnership had sufficient cash
reserves to reinstate quarterly cash distributions commencing with the third
quarter of 1993. A third quarter distribution in the amount of $1.50 per unit
was paid on November 15, 1993. After reviewing the Partnership's fourth
quarter operating results, the General Partners increased the cash distribution
level to $2.00 per Unit for the fourth quarter, which rate was maintained
throug hout 1994. The level and timing of future distributions will be
reviewed on a quarterly basis.
Item 6. Selected Financial Data
Incorporated by reference to page 3 of the Partnership's Annual Report to
Unitholders for the year ended December 31, 1994, which is filed as an exhibit
under Item 14.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
At December 31, 1994, the Partnership had cash and cash equivalents of
$1,535,391, which were invested in unaffiliated money market funds. The
Partnership also maintains a restricted cash balance, which totaled $659,076 at
December 31, 1994, composed of escrows required by the lender for property
improvements, real estate taxes, and insurance. Pursuant to the terms of the
loans, as costs are incurred for property improvements or when real estate
taxes and insurance are due, reimbursements are made from the escrow accounts
maintained by the lender to the Partnership. The General Partners expect
sufficient cash to be generated from operations to meet its current operating
expenses.
In light of improving market conditions in certain of the areas where the
Partnership's properties are located, the General Partners have begun marketing
some of the properties for sale and recently entered into preliminary
negotiations with an institutional buyer to sell Kingston Village and Cedar Bay
Village. There is no assurance that the sale will be completed or that any
particular price for the properties can be obtained. In the event that a sale
is completed, the General Partners intend to distribute the net proceeds
following a review of the Partnership's cash reserve requirements.
Cash distributions to the Limited Partners were suspended from the fourth
quarter of 1990 through the second quarter of 1993 in consideration of the
funds required for roof repairs and the litigation associated with Kingston
Village, and in view of the estimated costs of securing replacement financing.
Following the closing of the refinancing, the completion of the required roof
repairs, and the settlement of the litigation, the General Partners reviewed
the Partnership's cash reserve levels and anticipated cash flow from operations
and funding needs, and determined that the Partnership had sufficient cash
reserves to reinstate quarterly cash distributions commencing with the third
quarter of 1993. A third quarter distribution in the amount of $1.50 per unit
was paid on November 15, 1993. After reviewing the Partnership's fourth
quarter operating results, the General Partners increased the cash distribution
level to $2.00 per Unit for the fourth quarter, which rate was maintained th
roughout 1994. The level of future distributions will be reviewed on a
quarterly basis.
Results of Operations
1994 versus 1993
Partnership operations for the year ended December 31, 1994 resulted in a net
loss of $252,627, compared with a net loss of $617,882 in 1993. After adding
back depreciation and amortization, both noncash expenses, and subtracting
mortgage amortization, operations generated cash flow of $839,191 for the year
ended December 31, 1994, compared with cash flow of $486,347 for the
corresponding period in 1993. The lower net loss and higher cash flow in 1994
are primarily attributable to an increase in rental income and a reduction in
operating expenses.
Rental income for the year ended December 31, 1994, was $4,702,059 compared
with $4,444,950 for 1993. The increase in 1994 reflects higher rental income
at all the Partnership's properties, particularly at the Las Colinas property,
due primarily to rental rate increases implemented over the past year.
Interest income totaled $58,009 in 1994 compared with $39,735 in 1993. The
increase was due to the Partnership's increased cash balance and higher
interest rates in 1994.
Total expenses for the year ended December 31, 1994 were $5,012,695, compared
with $5,102,567 for 1993. Property operating expenses decreased from
$2,376,972 in 1993 to $2,301,465 in 1994, reflecting lower repairs and
maintenance expense at the Cedar Bay and Kingston Village properties. All
other expense components remained in line with 1993 levels.
1993 versus 1992
Partnership operations for the year ended December 31, 1993 resulted in a net
loss of $617,882, compared with a net loss of $464,968 in 1992. After adding
back depreciation and amortization, both noncash expenses, and subtracting
mortgage amortization, operations generated cash flow of $486,347 for the year
ended December 31, 1993, compared with cash flow of $606,454 for the
corresponding period in 1992. The higher net loss and reduced cash flow in
1993 are primarily attributable to an increase in property operating expenses,
offset partially by an increase in rental income.
Rental income for the year ended December 31, 1993, was $4,444,950 compared
with $4,255,637 for 1992. The increase in 1993 is primarily attributable to
increased revenues from the Las Colinas property, reflecting higher occupancy
and rental rates. Tierra Catalina, Kingston Village and Cedar Bay Village also
reported higher income primarily due to rental rate increases instituted during
1993.
Property operating expenses totalled $2,376,972 for the year ended December 31,
1993, compared with $1,917,190 for 1992. The increase is primarily attributed
to higher repairs and maintenance expenditures which included exterior painting
at Kingston Village and the refurbishment of certain unit interiors at Las
Colinas I and II, Tierra Catalina and Cedar Bay Village.
Interest expense decreased 9% in 1993 as a result of the August 1992 loan
refinancing at lower interest rates.
General and administrative expenses totalled $158,440 for the year ended
December 31, 1993, compared with $195,294 for 1992. The decrease is primarily
attributed to a reduction in legal fees and lower printing and postage costs.
The average occupancy levels at each of the Properties for the years ended
December 31, 1994, 1993 and 1992 were as follows:
Twelve Months Ended December 31,
Property 1994 1993 1992
____________________________________________
Las Colinas I & II 96% 96% 95%
Tierra Catalina 96% 96% 96%
Ridge Park 96% 96% 96%
Kingston Village 96% 96% 96%
Cedar Bay Village 96% 94% 96%
Item 8. Financial Statements and Supplementary Data
The Financial Statements are Incorporated by reference to pages 4 - 6 of the
Partnership's Annual Report to Unitholders for the year ended December 31,
1994, which is filed as an exhibit under Item 14. Supplementary Data is
incorporated by reference to pages 7 - 11 of the Partnership's Annual Report to
Unitholders for the year ended December 31, 1994, which is filed as an exhibit
under Item 14.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Registrant has no officers or directors. RI 81 Services and ConAm
Services, the co-General Partners of the Registrant, jointly manage and control
the affairs of the Registrant and have general responsibility and authority in
all matters affecting its business.
RI 81 Services
RI 81 Services (formerly Hutton Real Estate Services III, Inc.) is a Delaware
corporation formed on October 30, 1980, an affiliate of Lehman Brothers Inc.
See the section captioned "Certain Matters Involving Affiliates of RI 81
Services" below for a description of the Hutton Group's acquisition by Shearson
Lehman Brothers, Inc. ("Shearson") and the subsequent sale of certain of
Shearson's domestic retail brokerage and asset management businesses to Smith
Barney, Harris Upham & Co. Incorporated ("Smith Barney"), which was followed by
a change in the general partner's name.
Certain officers and directors of RI 81 Services are now serving (or in the
past have served) as officers or directors of entities which act as general
partners of a number of real estate limited partnerships which have sought
protection under the provisions of the Federal Bankruptcy Code. The
partnerships which have filed bankruptcy petitions own real estate which has
been adversely affected by the economic conditions in the markets in which the
real estate is located and, consequently, the partnerships sought the
protection of the bankruptcy laws to protect the partnerships' assets from loss
through foreclosure.
The names and ages of, as well as the positions held by, the directors and
executive officers of RI 81 Services are set forth below. There are no family
relationships between any executive officers or directors.
Name Age Office
____ ___ ______
Paul L. Abbott 49 Director, President, Chief Financial
Officer and Chief Executive Officer
Janet M. Hoynes 30 Vice President
Kate D. Hobson 28 Vice President
Paul L. Abbott is a Managing Director of Lehman Brothers. Mr. Abbott joined
Lehman Brothers in August 1988, and is responsible for investment management of
residential, commercial and retail real estate. Prior to joining Lehman
Brothers, Mr. Abbott was a real estate consultant and a senior officer of a
privately held company specializing in the syndication of private real estate
limited partnerships. From 1974 through 1983, Mr. Abbott was an officer of two
life insurance companies and a director of an insurance agency subsidiary. Mr.
Abbott received his formal education in the undergraduate and graduate schools
of Washington University in St. Louis.
Janet M. Hoynes is a Vice President at Lehman Brothers in the Diversified Asset
Group and is responsible for asset management of residential real estate.
Prior to joining Shearson in July 1989, she was employed as an analyst in a
public real estate investment trust based in California. Ms. Hoynes received a
B.A. in Economics from the State University of New York at Stony Brook in 1986.
Kate D. Hobson is an Assistant Vice President of Lehman Brothers and has been a
member of the Diversified Asset Group since 1992. Prior to joining Lehman
Brothers, Ms. Hobson was associated with Cushman & Wakefield serving as a real
estate accountant from 1990 to 1992. Prior to that, Ms. Hobson was employed by
Cambridge Systematics, Inc. as a junior land planner. Ms. Hobson received a
B.A. degree in sociology from Boston University in 1988.
ConAm Services
ConAm Services is a California limited partnership organized on December 11,
1980. The sole general partner of ConAm Services is Continental American
Development, Inc. ("ConAm Development"). The names and ages of, as well as the
positions held by, the directors and executive officers of ConAm Development
are set forth below. There are no family relationships between any executive
officers or directors.
Name Age Office
____ ___ ______
Daniel J. Epstein 55 President and Director
Nancie Larimore 55 Secretary/Treasurer and Director
E. Scott Dupree 44 Vice President
Robert J. Svatos 36 Vice President
Ralph W. Tilley 40 Vice President
Daniel J. Epstein has been the President and a Director of ConAm Development
and ConAm Management (or its predecessor firm) and a general partner of
Continental American Properties, Ltd. ("ConAm"), an affiliate of ConAm
Services, since their inception. Prior to that time Mr. Epstein was Vice
President and a Director of American Housing Guild, which he joined in 1969.
At American Housing Guild, he was responsible for the formation of the
Multi-Family Division and directed its development and property management
activities. Mr. Epstein holds a Bachelor of Science degree in Engineering from
the University of Southern California.
Nancie Larimore has been employed by ConAm Management or its affiliates since
1976 and has been a Vice President of ConAm Management (or its predecessor
firm) and the Secretary/Treasurer and a Director of ConAm Development since
their inception. Ms. Larimore's responsibilities include leasing, consumer
relations, advertising and promotion. From 1972 to 1975, she held a similar
position with American Housing Guild. From 1969 to 1972, she was Director of
Property Management for Larwin Group, Inc. Ms. Larimore is a graduate of the
University of California at Los Angeles, and holds a Master's of Business
Administration degree from the University of California at Los Angeles.
E. Scott Dupree is a Vice President and general counsel of ConAm Management
responsible for negotiation, documentation, review and closing of acquisition,
sale and financing proposals. Mr. Dupree also acts as principal legal advisor
on general legal matters ranging from issues and contracts involving the
management company to supervision of litigation and employment issues. Prior
to joining ConAm Management in 1985, he was corporate counsel to Trusthouse
Forte, Inc., a major international hotel and restaurant corporation. Mr.
Dupree holds a B.A. from United States International University and a Juris
Doctorate degree from the University of San Diego.
Robert J. Svatos is a Vice President and Chief Financial Officer of ConAm
Management, and has been with the company since 1988. His responsibilities
include the accounting, treasury and data processing functions of the
organization. Mr. Svatos is part of the firm's due diligence team, analyzing a
broad range of projects for ConAm Management's fee client base. Prior to
joining ConAm Management, he was the Chief Financial Officer for AmeriStar
Financial Corporation, a nationwide mortgage banking firm. Mr. Svatos holds an
M.B.A. in Finance from the University of San Diego and a Bachelor's of Science
degree in Accounting from the University of Illinois. Mr. Svatos is a
Certified Public Accountant.
Ralph W. Tilley is a Vice President and Treasurer of ConAm Management. He is
responsible for the financial aspects of syndications and acquisitions, the
company's asset management portfolio and risk management activities. Prior to
joining ConAm Management in 1980, he was a senior accountant with KPMG Peat
Marwick, specializing in real estate. He holds a Bachelor's of Science degree
in Accounting from San Diego State University and is a Certified Public
Accountant.
Certain Matters Involving Affiliates of RI 81 Services
On January 13, 1988, SLBP Acquisition Corp. (the "Purchaser"), a wholly-owned
subsidiary of Shearson Lehman Brothers Holding Inc., acquired the right to
purchase 29,610,000 shares of stock of the Hutton Group pursuant to a cash
tender offer commenced on December 7, 1987. On January 21, 1988, the Purchaser
assigned its right to purchase the shares so accepted to Shearson. Shearson
purchased the 29,610,000 shares which constituted approximately 90% of the
outstanding shares of the Hutton Group. Shearson subsequently acquired the
remaining shares of the Hutton Group. Thus, the Hutton Group is now a
wholly-owned subsidiary of Shearson.
On July 31, 1993, Shearson sold certain of its domestic retail brokerage and
asset management businesses to Smith Barney, Harris Upham and Co. Incorporated.
Subsequent to the sale, Shearson changed its name to "Lehman Brothers Inc."
The transaction did not affect the ownership of the Partnership's General
Partners. However, the assets acquired by Smith Barney included the name
"Hutton." Consequently, the Hutton Real Estate Services III, Inc. general
partner changed its name to "RI 81 Real Estate Services Inc.," and the Hutton
Group changed its name to "LB I Group Inc." to delete any reference to
"Hutton."
Item 11. Executive Compensation
Neither of the General Partners nor any of their directors or executive
officers received any compensation from the Registrant. See Item 13 below with
respect to a description of certain transactions between the General Partners
or their affiliates and the Registrant.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of December 31, 1994, no person was known by the Registrant to be the
beneficial owner of more than five percent of the Units of the Registrant. The
General Partners own 200 Units (134 owned by RI 81 Services and 66 owned by
ConAm Services), as required by the terms of the offering described in the
Prospectus of Registrant dated June 24, 1981 (the "Prospectus"), contained in
Amendment No. 2 to Registrant's Registration Statement No. 2-70331, filed June
24, 1981 and in Amendment No. 1 to Registrant's Registration Statement, No.
2-73558, filed August 20, 1981.
Daniel J. Epstein, President and Director of ConAm Services, owned twenty Units
as of December 31, 1994. Nancie Larimore, Secretary/Treasurer and a Director
of ConAm Services owned six Units as of December 31, 1994. No other directors
or executive officers of the General Partners own any Units.
Item 13. Certain Relationships and Related Transactions
Pursuant to the Amended and Restated Certificate and Agreement of Limited
Partnership of the Registrant, for the year ended December 31, 1994, $2,526 of
Registrant's net loss was allocated to the General Partners ($1,684 to RI 81
Services and $842 to ConAm Services). For a description of the share of net
cash from operations and the allocation of income and loss to which the General
Partners are entitled, reference is made to the material contained on pages
72-74 of the Prospectus, under the section captioned "Profit and Losses and
Cash Distributions," which section is incorporated herein by reference thereto.
Pursuant to property management agreements with the Registrant, ConAm
Management has assumed direct responsibility for day-to-day management of the
Properties. It is the responsibility of ConAm Management to select resident
managers and to monitor their performance. ConAm Management is responsible
for on-site operations and maintenance, collection of rental income and
payment of operating expenses. These services include the supervision of
leasing, rent collection, maintenance, budgeting, employment of personnel,
payment of operating expenses and related services. For such services, ConAm
Management is entitled to receive a management fee as described under the
sections captioned "Investment Objectives and Policies--Management of
Properties" on pages 32 through 33 of the Prospectus, which section is
incorporated herein by reference thereto. A summary of the property
management fees earned by ConAm Management during the past three years is
incorporated by reference to Note 6 to the Consolidated Financial Statements,
incorporated herein by reference to the Partnership's Annual Report to
Unitholders for the year ended December 31, 1994, which is filed as an exhibit
under item 14.
Pursuant to Section 12(g) of the Registrant's Amended and Restated Certificate
and Agreement of Limited Partnership, the General Partners and their affiliates
may be reimbursed by the Registrant for certain of their costs as described on
page 16 of the Prospectus, which description is incorporated herein by
reference. The Shareholder Services Group provides partnership accounting and
investor relations services for the Registrant. Prior to May 1993, these
services were provided by an affiliate of a general partner. The Registrant's
transfer agent and certain tax reporting services are provided by Service Data
Corporation, an unaffiliated company. A summary of amounts paid to the General
Partners or their affiliates during the past three years is incorporated by
reference to Note 6 to the Consolidated Financial Statements, included in the
Partnership's Annual Report to Unitholders for the fiscal year ended December
31, 1994, which is filed as an exhibit under Item 14.
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
Page
(a) (1) Financial Statements: Number
Consolidated Balance Sheets - December 31, 1994 and 1993....... (1)
Consolidated Statements of Partners' Capital (Deficit) - For
the years ended December 31, 1994, 1993 and 1992................(1)
Consolidated Statements of Operations - For the years ended
December 31, 1994, 1993 and 1992................................(1)
Consolidated Statements of Cash Flows - For the years ended
December 31, 1994, 1993 and 1992................................(1)
Notes to the Consolidated Financial Statements..................(1)
Report of Independent Accountants...............................(1)
(a)(3) Financial Statement Schedule:
Schedule III - Real Estate and Accumulated Depreciation.........F-1
Report of Independent Accountants................................F-5
(1) Incorporated by reference to the Partnership's Annual Report to Unitholders
for the year ended December 31, 1994, filed as exhibit 13 under Item 14.
(a)(3) Exhibits:
(3)(A) Amended and Restated Certificate and Agreement of Limited
Partnership (included as, and incorporated herein by reference
to, Exhibit A to the Prospectus of Registrant dated June 24,
1981 (the "Prospectus"), contained in Amendment No. 2 to
Registration Statement, No. 2-70331, of Registrant filed June
24, 1981, (the "Registration Statement"), and in Amendment No.
1 to Registration Statement, No. 2-73558, of Registrant filed
August 20, 1981).
(B) Subscription Agreement and Signature Page (included as, and
incorporated herein by reference to, Exhibit B to the
Prospectus).
(10)(A) Financing Documents relating to Cedar Bay Village (Promissory
Note, Deed of Trust, Assignment of Rents and Leases) (included
as, and incorporated herein by reference to, Exhibit 10-G to
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992 (Commission file No. 0-10223)).
(B) Financing Documents relating to Kingston Village (Promissory
Note, Deed of Trust, Assignment of Rents and Leases) (included
as, and incorporated herein by reference to, Exhibit 10-H to
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992 (Commission file No. 0-10223)).
(C) Financing Documents relating to Las Colinas I and II
(Promissory Note, Deed of Trust, Assignment of Rents and
Leases) (included as, and incorporated herein by reference to,
Exhibit 10-I to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992 (Commission file No.
0-10223)).
(D) Financing Documents relating to Ridge Park (Promissory Note,
Deed of Trust, Assignment of Rents and Leases) (included as,
and incorporated herein by reference to, Exhibit 10-J to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992 (Commission file No. 0-10223)).
(E) Financing Documents relating to Tierra Catalina (Promissory
Note, Deed of Trust, Assignment of Rents and Leases)
(included as, and incorporated herein by reference to,
Exhibit 10-K to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1992 (Commission
file No. 0-10223)).
(F) Settlement Agreement by and among the Managing Joint
Venturers and the Epoch Joint Venturers dated July 1, 1992
(included as, and incorporated herein by reference to,
Exhibit 10.I to the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1992 (Commission
file No. 0-10223)).
(G) Agreement of Limited Partnership of RI-81 Las Colinas Limited
Partnership dated as of July 1, 1992 (included as, and
incorporated herein by reference to, Exhibit 10.2 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1992 (Commission file No. 0-10223)).
(H) Agreement of Limited Partnership of RI-81 Tierra Catalina
Limited Partnership dated as of July 1, 1992 (included as, and
incorporated herein by reference to, Exhibit 10.3 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1992 (Commission file No. 0-10223)).
(I) Amended and Restated Agreement of Limited Partnership of Ridge
Park Associates Limited Partnership dated as of April 23, 1992
(included as, and incorporated herein by reference to, Exhibit
10.4 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1992 (Commission file No.
0-10223)).
(J) Amended and Restated Agreement of General Partnership of
Kingston Village Joint Venture dated as of July 1, 1992
(included as, and incorporated herein by reference to, Exhibit
10.5 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1992 (Commission file No.
0-10223)).
(K) Amended and Restated Agreement of General Partnership of Cedar
Bay Village Joint Venture dated as of July 1, 1992 (included
as, and incorporated herein by reference to Exhibit 10.6 to
the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1992 (Commission file No. 0-10223)).
(L) Property Management Agreement between Hutton/ConAm Realty
Investors 81 and ConAm Management Corp. for the Las Colinas I
& II properties (included as, and incorporated herein by
reference to Exhibit 10-L to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993 (Commission
file No. 0-10223)).
(M) Property Management Agreement between Hutton/ConAm Realty
Investors 81 and ConAm Management Corp. for the Tierra
Catalina property (included as, and incorporated herein by
reference to Exhibit 10-M to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993 (Commission
file No. 0-10223)).
(N) Property Management Agreement between Hutton/ConAm Realty
Investors 81 and ConAm Management Corp. for the Ridge Park
property (included as, and incorporated herein by reference to
Exhibit 10-N to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1993 (Commission file No.
0-10223)).
(O) Property Management Agreement between Hutton/ConAm Realty
Investors 81 and ConAm Management Corp. for the Kingston
Village property (included as, and incorporated herein by
reference to Exhibit 10-O to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993 (Commission
file No. 0-10223)).
(P) Property Management Agreement between Hutton/ConAm Realty
Investors 81 and ConAm Management Corp. for the Cedar Bay
Village property (included as, and incorporated herein by
reference to Exhibit 10-P to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1993 (Commission
file No. 0-10223)).
(13) Annual Report to Unitholders for the year ended December 31,
1994.
(21) List of Subsidiaries - Joint Ventures (included as, and
incorporated herein by reference to Exhibit 22 to the
Registrant's 1991 Annual Report on Form 10-K for the year
ended December 31, 1991 (Commission file No. 0-10223)).
(99) Portions of the Prospectus of Registrant dated June 24, 1981
(included as, and incorporated herein by reference to Exhibit
28 to the Registrant's 1988 Annual Report on Form 10-K for the
year ended December 31, 1988 (Commission file No. 0-10223)).
(b)(3) Reports on Form 8-K:
No reports on Form 8-K were filed in the fourth quarter of
1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: March 28, 1995
HUTTON/CONAM REALTY INVESTORS 81
BY: RI 81 Real Estate Services Inc.
General Partner
BY: /S/ Paul L. Abbott
Name: Paul L. Abbott
Title: Director, President,
Chief Executive Officer
and Chief Financial Officer
BY: ConAm Property Services, Ltd.
General Partner
BY: Continental American Development, Inc.
General Partner
BY: /S/ Daniel J. Epstein
Name: Daniel J. Epstein
Title: President, Director
and Principal Executive Officer
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 in the capabilities and on the dates indicated.
RI 81 REAL ESTATE SERVICES INC.
A General Partner
Date: March 28, 1995
BY: /S/ Paul L. Abbott
Paul L. Abbott
Director, President, Chief Executive
Officer and Chief Financial Officer
Date: March 28, 1995
BY: /S/ Janet Hoynes
Janet Hoynes
Vice President
Date: March 28, 1995
BY: /S/ Kate Hobson
Kate Hobson
Vice President
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 in the capacities and on the dates indicated.
CONAM PROPERTY SERVICES, LTD. A
General Partner
By: Continental American Development, Inc.
General Partner
Date: March 28, 1995
BY: /S/ Daniel J. Epstein
Daniel J. Epstein
Director and President
Date: March 28, 1995
BY: /S/ Nancie Larimore
Nancie Larimore
Secretary/Treasurer
and Director
Date: March 28, 1995
BY: /S/ E. Scott Dupree
E. Scott Dupree
Vice President
Date: March 28, 1995
BY: /S/ Robert J. Svatos
Robert J. Svatos
Vice President
Date: March 28, 1995
BY: /S/ Ralph W. Tilley
Ralph W. Tilley
Vice President
Hutton/ConAm Realty Investors 81
Exhibit 13
Hutton/ConAm Realty Investors 81
1994 Annual Report
Hutton/ConAm Realty Investors 81 is a California limited partnership formed in
1981 to acquire, operate and hold for investment multifamily housing
properties. At December 31, 1994, the Partnership's portfolio consisted of
five apartment properties located in Arizona, Florida and Oklahoma.
Average Occupancy
Property Location 1994 1993
______________________________________________________________________
Cedar Bay Village Altamonte Springs, Florida 96% 94%
Kingston Village Altamonte Springs, Florida 96% 96%
Las Colinas I & II Scottsdale, Arizona 96% 96%
Ridge Park Tulsa, Oklahoma 96% 96%
Tierra Catalina Tucson, Arizona 96% 96%
______________________________________________________________________
Administrative Inquiries Performance Inquiries/Form 10-Ks
Address Changes/Transfers The Shareholder Services Group
Service Data Corporation P.O.Box 1527
2424 South 130th Circle Boston, Massachusetts 02104-1527
Omaha, Nebraska 68144 Attn: Financial Communications
(800) 223-3464 (800) 223-3464
Contents
1 Message to Investors
2 Performance Summary
3 Financial Highlights
4 Consolidated Financial Statements
7 Notes to Consolidated Financial
Statements
13 Report of Independent Accountants
14 Net Asset Valuation
------------------------------Message to Investors----------------------------
Presented for your review is the 1994 Annual Report for Hutton/ConAm Realty
Investors 81. In this report, we review Partnership operations and discuss
general market conditions affecting the Partnership's properties. We have also
included a performance summary which addresses operating results at each of the
properties and financial highlights for the year.
Cash Distributions
During 1994, the Partnership paid cash distributions totaling $8 per Unit,
including the 1994 fourth quarter distribution of $2.00 per Unit, which was
credited to your brokerage account or sent directly to you on February 6, 1995.
Since inception, the Partnership has paid distributions totalling $369.15 per
original $500 Unit, including $200 per Unit in return of capital payments. The
level of future distributions will be evaluated on a quarterly basis and will
be based on cash flow generated by the Partnership. Please see page 3 of this
report for a summary of cash distributions paid for the past eight quarters.
Operations Overview
The past year has witnessed a solid recovery of multifamily housing in most
regions of the country. The improving economy and limited new construction in
most areas have boosted occupancy levels and rental rates, while rising
mortgage rates have curtailed renters from purchasing condominiums and single
family homes. These favorable conditions are especially prevalent in the
sunbelt states, which continue to benefit from long-term population growth.
Operating results at the Partnership's properties reflect these strengthening
market conditions. Occupancy rates remained above 95% during 1994, and all of
the properties instituted rental rate increases on lease renewals resulting in
a 6% increase in rental income. While construction of new units has picked up
in several areas, positive demographic trends, especially in the Florida
markets, are expected to keep pace with new supply. The General Partners
intend to closely monitor these conditions and will continue to make select
capital improvements and age-related repairs to keep the Partnership's
properties competitive with newer units.
Summary
The healthy market conditions and strong performance of the Partnership's
properties during 1994 bode well for their eventual sale. In light of these
improving conditions the General Partners have begun marketing some of the
properties for sale and recently entered into preliminary negotiations with an
institutional buyer to sell Kingston Village and Cedar Bay Village. However,
there can be no assurance that the sale will be completed or that any
particular price for the properties can be obtained. In the interim, the
General Partners will continue to effectively manage the Partnership's
properties by seeking to maintain high occupancy levels and implementing rental
rate increases as conditions permit. We will keep you updated on developments
affecting your investment in future reports.
Very truly yours,
Paul L. Abbott Daniel J. Epstein
President President
RI 81 Real Estate Services Inc. ConAm Development Corp.
General Partner of ConAm
Property Services, Ltd.
March 28, 1995
Performance Summary
Cedar Bay Village, Altamonte Springs, Florida
Located approximately 10 miles north of Orlando, this 42-unit apartment complex
reported stable operating results during the past year. Occupancy averaged 96%
in 1994, slightly above the Altamonte Springs fourth quarter 1994 average of
94%, and rental income increased by 2% from 1993. Market conditions in the
Orlando metropolitan area reflect these stable results, with limited new
construction and steady population and job growth fueling a sustained recovery.
These conditions have permitted moderate rate increases for many area complexes
during 1994, including Cedar Bay Village. Capital improvements at the property
during 1994 were minimal and were primarily related to the replacement of
carpet and appliances in units changing tenancy during the year.
Kingston Village, Altamonte Springs, Florida
This 120-unit complex located near Cedar Bay Village features a cluster-housing
layout of 25 detached one and two story buildings. As with Cedar Bay Village,
operating performance at Kingston Village during 1994 reflected the stability
of market conditions in the area. Occupancy averaged 96% for the third
consecutive year, and rental income increased 7% from 1993. Property
improvements consisted primarily of carpet replacements in 1994.
Las Colinas I & II, Scottsdale, Arizona
Situated approximately eight miles northwest of downtown Phoenix, Las Colinas
is comprised of two complexes with a total of 300 units. Operations at Las
Colinas remained strong during 1994, with average occupancy remaining at 96%
and rental income up 7% from 1993. The Phoenix area has sustained healthy
growth in population and employment and conditions for rental apartments remain
strong. While construction of new units is on the rise, many will not compete
directly with Las Colinas, and the area's growth is expected to keep pace with
new supply. Property improvements in 1994 consisted primarily of carpet and
tile replacements, and other age-related improvements, in a number of units.
Ridge Park, Tulsa, Oklahoma
This 100-unit complex is situated in South Tulsa, approximately eight miles
from downtown Tulsa. Although occupancy at Ridge Park averaged 96% during 1994
and 1993, the area's continued weak rental market permitted only minor rent
increases during the year, and rental income remained largely unchanged from
1993. New construction has been limited in recent years, however, one newly
constructed complex nearby is posing strong competition to Ridge Park and will
affect efforts to increase rents at the property. Property improvements during
the year included exterior painting, and carpet and vinyl floor replacement in
selected units.
Tierra Catalina, Tucson, Arizona
Situated in the desirable Foothills region of Tucson, this 120-unit complex
achieved average occupancy of 96% during fiscal 1994, consistent with 1993 and
local area averages. Rental income increased 7%, reflecting rental rate
increases and the lack of rental concessions. While construction of new units
in the Foothills region has been minimal during the past four years, eight new
apartment complexes recently commenced construction which are likely to provide
strong competition when completed. Improvements at the property in 1994
consisted primarily of carpet replacements in selected units and landscaping
upgrades.
Selected Financial Data
For the Periods Ended December 31,
(dollars in thousands, except per Unit data)
1994 1993 1992 1991 1990
_____________________________________________________________________
Total Income $ 4,760 $ 4,485 $ 4,284 $ 4,026 $ 4,099
Net Loss (253) (618) (465) (719) (510)
Net Cash Provided by (Used
for) Operating Activities 949 1,020 (362) 288 679
Mortgages Payable 15,601 15,736 15,861 15,403 15,527
Total Assets
at Year End 22,497 23,565 24,518 24,434 25,427
Net Loss per Limited
Partnership Unit
(78,290 Units) (3.19) (7.81) (5.88) (9.10) (6.45)
Distributions per Limited
Partnership Unit
(78,290 Units) 8.00 3.50 - - 6.60
______________________________________________________________________
The 6% increase in total income from 1993 to 1994 is primarily
attributable to rental rate increases implemented at each of the
properties during 1994.
The reduced net loss and net cash provided by operating activities is
primarily attributable to the increase in rental income. Total
expenses decreased 2% from 1993 to 1994, reflecting lower property
operating expenses at Kingston Village and Cedar Bay Village, due
primarily to reductions in repairs and maintenance expense.
Quarterly Cash Distributions
Per Limited Partnership Unit
1994 1993
____________________________________________________
First Quarter $ 2.00 $ -
Second Quarter 2.00 -
Third Quarter 2.00 1.50
Fourth Quarter 2.00 2.00
Total 8.00 3.50
____________________________________________________
Consolidated Balance Sheets
December 31, 1994 and 1993
Assets 1994 1993
_________________________________________________________________
Investments in real estate:
Land $ 5,255,820 $ 5,255,820
Buildings and improvements 28,473,477 28,473,477
_____________________________
33,729,297 33,729,297
Less-accumulated depreciation (13,875,550) (12,735,626)
_____________________________
19,853,747 20,993,671
Cash and cash equivalents 1,535,391 1,418,054
Restricted cash 659,076 620,595
Mortgage fees, net of accumulated
amortization of $202,797 in 1994
and $115,538 in 1993 408,014 495,273
Other assets 41,055 37,446
_________________________________________________________________
Total Assets $22,497,283 $23,565,039
_____________________________
Liabilities and Partners' Capital
Liabilities:
Mortgages payable $15,601,031 $15,736,396
Distribution payable 173,978 173,978
Accounts payable and accrued
expenses 183,869 188,385
Security deposits 141,408 129,708
Due to general partners and
affiliates 44,814 35,851
____________________________
Total Liabilities 16,145,100 16,264,318
____________________________
Partners' Capital (Deficit):
General Partners (1,316,915) (1,244,798)
Limited Partners 7,669,098 8,545,519
___________________________
Total Partners' Capital 6,352,183 7,300,721
_______________________________________________________________
Total Liabilities and
Partners' Capital $22,497,283 $23,565,039
___________________________
Consolidated Statements of Partners' Capital (Deficit)
For the years ended December 31, 1994, 1993 and 1992
General Limited Total
Partners' Partners' Partners'
___________________________________________________________________
Balance at January
1, 1992 $(1,203,523) $9,891,555 $8,688,032
Net loss (4,650) (460,318) (464,968)
___________________________________________________________________
Balance at December
31, 1992 (1,208,173) 9,431,237 8,223,064
Net loss (6,179) (611,703) (617,882)
Cash distributions (30,446) (274,015) (304,461)
___________________________________________________________________
Balance at December
31, 1993 (1,244,798) 8,545,519 7,300,721
Net loss (2,526) (250,101) (252,627)
Cash distributions (69,591) (626,320) (695,911)
___________________________________________________________________
Balance at December
31, 1994 $(1,316,915) $7,669,098 $6,352,183
___________________________________________
See accompanying notes to the consolidated financial statements.
Consolidated Statements of Operations
For the years ended December 31, 1994, 1993 and 1992
Income 1994 1993 1992
_______________________________________________________________________
Rental $4,702,059 $4,444,950 $4,255,637
Interest 58,009 39,735 28,201
_______________________________________________________________________
Total Income 4,760,068 4,484,685 4,283,838
___________________________________________
Expenses
_______________________________________________________________________
Property operating 2,301,465 2,376,972 1,917,190
Interest 1,327,560 1,338,514 1,470,486
Depreciation and
amortization 1,227,183 1,228,641 1,165,836
General and
administrative 156,487 158,440 195,294
Total Expenses 5,012,695 5,102,567 4,748,806
__________________________________________
Net loss $(252,627) $(617,882) $(464,968)
__________________________________________
Net Loss Allocated:
_______________________________________________________________________
To the General Partners $ (2,526) $ (6,179) $ (4,650)
To the Limited Partners (250,101) (611,703) (460,318)
_______________________________________________________________________
Net loss $(252,627) $(617,882) $(464,968)
__________________________________________
Per limited
partnership unit
(78,290 outstanding) $(3.19) $ (7.81) $ (5.88)
__________________________________________
See accompanying notes to the consolidated financial statements.
Consolidated Statements of Cash Flows
For the years ended December 31, 1994, 1993 and 1992
Cash Flows from Operating Activities: 1994 1993 1992
__________________________________________________________________________
Net loss $ (252,627) $(617,882) $(464,968)
Adjustments to reconcile net loss
to net cash provided by (used for)
operating activities:
Depreciation and amortization 1,227,183 1,228,641 1,165,836
Increase (decrease) in cash
arising from changes in operating
assets and liabilities:
Fundings to restricted cash (581,675) (532,805) (1,111,835)
Release of restricted cash
to property operations 543,194 950,922 73,123
Other assets (3,609) 71,790 (116,737)
Accounts payable and
accrued expenses (4,516) (73,125) 74,271
Security deposits 11,700 6,904 (2,382)
Due to general partners
and affiliates 8,963 (14,271) 20,213
_________________________________
Net cash provided by (used for)
operating activities 948,613 1,020,174 (362,479)
_________________________________
Cash Flows from Investing Activities:
__________________________________________________________________________
Additions to real estate - - (32,896)
Acquisition of joint venture
partner interests - - (36,999)
__________________________________
Net cash used for investing activities - - (69,895)
__________________________________
Cash Flows from Financing Activities:
Distributions (695,911) (130,483) -
Mortgage principal payments (135,365) (124,412) (15,442,623)
Mortgage proceeds - - 15,900,000
Mortgage fees - - (603,310)
___________________________________
Net cash used for financing
activities (831,276) (254,895) (145,933)
___________________________________
Net increase (decrease) in cash and
cash equivalents 117,337 765,279 (578,307)
Cash and cash equivalents at
beginning of year 1,418,054 652,775 1,231,082
____________________________________
Cash and cash equivalents
at end of year $1,535,391 $1,418,054 $ 652,775
____________________________________
Supplemental Disclosure of Cash Flow
Information:
___________________________________________________________________________
Cash paid during the period for
interest $1,327,560 $1,338,514 $1,470,486
_____________________________________
Supplemental Disclosure of Cash and Non-Cash Investing and Financing
Activities:
During the year ended December 31, 1993, the Partnership reclassified $7,500 of
commitment fees related to the September 1, 1992 mortgage loans for all five
properties from other assets to mortgage fees.
During the year ended December 31, 1992, the Partnership purchased the Joint
Venture Partner interest of the co-venturers, including a $10,000 minority
interest, in the Ridge Park Joint Venture. Total consideration of $36,890 was
paid for the purchase of such interest. In addition $1,827 of legal costs were
incurred as a result of this transaction, resulting in a net building basis
adjustment of $28,717.
During the year ended December 31, 1992, the Partnership also purchased the
Joint Venture Partner interest of the co-venturers in the Kingston Village and
Cedar Bay Village Joint Ventures. No cash consideration was paid for the
purchase of such interest. In addition $8,282 of legal costs were incurred as
a result of this transaction, resulting in a building basis adjustment of
$8,282.
See accompanying notes to the consolidated financial statements.
Notes to the Consolidated Financial Statements
For the years ended December 31, 1994, 1993 and 1992
1. Organization Hutton/ConAm Realty Investors 81 (the "Partnership") was
organized as a limited partnership under the laws of the State of California
pursuant to a Certificate and Agreement of Limited Partnership (the
"Partnership Agreement") dated April 30, 1981, as amended and restated August
31, 1981. The Partnership was formed for the purpose of acquiring and
operating certain types of residential real estate. The general partners of
the Partnership are RI 81 Real Estate Services Inc., an affiliate of Lehman
Brothers (see below), and ConAm Property Services, Ltd., an affiliate of
Continental American Properties, Ltd (the "General Partners"). The Partnership
will continue until December 31, 2010 unless sooner terminated pursuant to the
terms of the Partnership Agreement.
On July 31, 1993, Shearson Lehman Brothers Inc. sold certain of its domestic
retail brokerage and asset management businesses to Smith Barney, Harris Upham
& Co. Incorporated ("Smith Barney"). Subsequent to the sale, Shearson Lehman
Brothers Inc. changed its name to Lehman Brothers Inc. ("Lehman Brothers").
The transaction did not affect the ownership of the General Partners. However,
the assets acquired by Smith Barney included the name "Hutton." Consequently,
effective October 29, 1993, the Hutton Real Estate Services III, Inc. General
Partner changed its name to RI 81 Real Estate Services Inc.
2. Significant Accounting Policies
Financial Statements The consolidated financial statements include the accounts
of the Partnership and its affiliated ventures. The effect of transactions
between the Partnership and its ventures has been eliminated in consolidation.
Real Estate Investments Real estate investments are recorded at the lower of
cost or net realizable value which includes the initial purchase price of the
property, legal fees, capitalized interest, acquisition and closing costs.
Leases are accounted for under the operating method. Under this method,
revenue is recognized as rentals are earned and expenses (including
depreciation) are charged to operations when incurred. Leases are generally
for terms of one year or less.
Depreciation is computed using the straight-line method based upon the
estimated useful lives of the properties. Maintenance and repairs are charged
to operations as incurred. Significant betterments and improvements are
capitalized and depreciated over their estimated useful lives.
For assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
reflected in income for the period.
Mortgage Fees Included in mortgage fees are deferred mortgage costs incurred in
connection with obtaining financing on the Partnership's properties. Such
costs are amortized over the 7-year term of the applicable loans.
Offering Costs Costs relating to the sale of limited partnership units were
deferred during the offering period and charged to the limited partners'
capital accounts upon the consummation of the public offering.
Income Taxes No provision for income taxes has been made in the financial
statements since income, losses and tax credits are passed through to the
individual partners.
Cash and Cash Equivalents Cash equivalents consist of short-term highly liquid
investments which have maturities of three months or less from the date of
issuance. Cash and cash equivalents include security deposits of $69,364 and
$66,520 for December 31, 1994 and 1993, respectively, restricted under certain
state statutes.
Concentration of Credit Risk Financial instruments which potentially subject
the Partnership to a concentration of credit risk principally consist of cash
and cash equivalents in excess of the financial institutions' insurance limits.
The Partnership invests available cash with high credit quality financial
institutions.
Restricted Cash Consists of escrows for betterments and improvements, real
estate taxes, and casualty insurance as required by the first mortgage lender.
3. The Partnership Agreement
The Partnership Agreement provides that net cash from operations, as defined,
will be distributed quarterly, 90% to the limited partners and 10% to the
General Partners.
Net loss for any year will be allocated 99% to the limited partners and 1% to
the General Partners. Net income will generally be allocated in accordance
with the distribution of net cash from operations.
Net proceeds from sales or refinancing will be distributed 99% to the limited
partners and 1% to the General Partners until each limited partner has received
an amount equal to his adjusted capital value (as defined) and an annual,
cumulative 7% return thereon, and until the General Partners have received 15%
of the aggregate distributions of net proceeds. The balance, if any, will be
distributed 85% to the limited partners and 15% to the General Partners. Gain
from sales will be allocated to each partner having a negative capital account
balance, prorata, to the extent of such negative balance. Thereafter, such
gain will be allocated in accordance with the distribution of net proceeds from
sale or refinancing, with the balance allocated to the limited partners.
4. Real Estate Investments
Real estate investments consist of five residential apartment complexes
acquired either directly or through investments in joint ventures as follows:
Apartment Date Purchase
Property Name Units Location Acquired Price
__________________________________________________________________
Las Colinas I 226 Scottsdale, AZ 5/20/81 $9,266,864
and II 74 Scottsdale, AZ 9/23/82 3,564,919
Cedar Bay
Village 42 Altamonte
Springs, FL 4/15/82 2,030,000
Ridge Park 100 Tulsa, OK 7/19/82 3,326,004
Kingston
Village 120 Altamonte
Springs, FL 1/21/83 5,675,433
Tierra Catalina 120 Tucson, AZ 3/9/84 7,012,650
__________________________________________________________________
Cedar Bay Village, Ridge Park, Kingston Village and Tierra Catalina were
originally acquired through joint ventures with unaffiliated developers. On
March 30, 1984, the co-venturer's interest with respect to Tierra Catalina was
acquired for $400,000. To each venture, the Partnership contributed the
apartment projects as its initial capital contribution.
On April 23, 1992, the Partnership purchased the interests of the co-venturers
in the Ridge Park Joint Venture. In consideration for the withdrawal by the
co-venturers from the Joint Venture, a payment of $36,890 was made by the
Partnership. The Partnership has entered into an Amended and Restated
Agreement of Limited Partnership, dated April 23, 1992 with its two corporate
general partners, RI 81 Real Estate Services Inc. and ConAm Property Services,
Ltd., with respect to the Ridge Park Apartments.
On July 1, 1992, a Settlement Agreement was executed by and among the
Partnership, Hutton/ConAm Realty Investors 2, Hutton/ConAm Realty Investors 3,
Hutton/ConAm Realty Investors 4, and Hutton/ConAm Realty Investors 5, as the
Managing Joint Venturers and Epoch Properties, Inc., James H. Pugh, Jr. and
John H. McClintock, Jr. as the Epoch Joint Venturers (the Epoch Joint Venturers
being collectively referred to herein as "Epoch"), the Partnership's partners
and co-venturers in the Kingston Village and Cedar Bay Village Apartments.
The Settlement Agreement provides that the Partnership and Epoch withdraw all
of their claims and counterclaims in connection with the litigation regarding
construction defects with respect to Kingston Village Apartments. Each party
is responsible for its costs with respect to court action. In consideration
for the withdrawal by the Partnership of its claims, Epoch withdrew as a
partner in the Joint Ventures which owned Kingston Village Apartments and Cedar
Bay Village Apartments. While the title to these apartments continues to be
held by their respective Joint Ventures, the Partnership and its two General
Partners are the sole co-venturers. General Releases were executed between the
Partnership, the Joint Venture, Epoch and Epoch Management Corporation. The
Partnership has entered into Amended and Restated Agreements of General
Partnership, dated as of July 1, 1992, with its two corporate General Partners,
RI 81 Real Estate Services Inc. and ConAm Property Services, Ltd., as the
General Partners and the Partnership as the sole limited partner.
The Partnership entered into Agreements of Limited Partnership, dated as of
July 1, 1992 with its two corporate General Partners, RI 81 Real Estate
Services Inc. and ConAm Property Services, Ltd. with respect to the Las Colinas
I & II Apartments and the Tierra Catalina Apartments. The new limited
partnerships hold title to their own individual properties. This change was
made in order to satisfy requirements of the new lender. There has been no
interruption in either management or operating activities as a result of this
Agreement.
The initial joint venture agreements of Cedar Bay Village, Kingston Village and
Ridge Park Associates substantially provide that:
a. Net cash from operations will be distributed 100% to the
Partnership until it has received an annual, non-cumulative 12%
return on its adjusted capital contribution. Any remaining
balance will be distributed 60% to the Partnership and 40% to
the co-venturer.
b. Net income of the joint ventures and gain from sale will be
allocated basically in accordance with the distribution of net
cash from operations and net proceeds from sales, respectively.
All losses will be allocated 99% to the Partnership and 1% to
the co-venturer.
c. Net proceeds from a sale or refinancing will be distributed
100% to the Partnership until it has received an amount equal
to 120% of its adjusted capital contribution and an annual,
cumulative 12% return on its adjusted capital contribution.
Thereafter, the Partnership will receive approximately 50% to
75% of the balance depending on the joint venture agreement.
The amended joint venture and limited partnership agreements for Cedar Bay
Village, Kingston Village, Ridge Park Associates, Tierra Catalina and Las
Colinas substantially provide that:
a. Available cash from operations will be distributed 100% to the
Partnership until it has received an annual, non-cumulative
preferred return, as defined. Any remaining balance will be
distributed 99% to the Partnership and 1% to the corporate
General Partners.
b. Net income will be allocated first, proportionately to partners
with negative capital accounts, as defined, until such capital
accounts, as defined, have been increased to zero. Then, to
the Partnership up to the amount of any payments made on
account of its preferred return; thereafter, 99% to the
Partnership and 1% to the corporate General Partners. All
losses will be allocated first, to the partners with positive
capital accounts, as defined, until such accounts have been
reduced to zero. Then 99% to the Partnership and 1% to the
corporate General Partners.
c. Income from a sale will be allocated first, to the Partnership
until the Partnership's capital accounts, as defined, are equal
to the fair market value of the ventures' assets at the date of
the amendments. Then, any remaining balance will be allocated
99% to the Partnership and 1% to the corporate General
Partners. Net proceeds from a sale or refinancing will be
distributed first to the partners with the positive capital
account balance, as defined; thereafter, 99% to the Partnership
and 1% to the corporate General Partners.
5. Mortgages Payable
Mortgages payable, at December 31, 1994, consist of the following first
mortgage loans:
Interest Date of
Property Name Principal Rate Loan Term
___________________________________________________________________
Las Colinas I and II $ 6,452,122 8.50% 9/1/92 7 years
Tierra Catalina 3,689,731 8.50% 9/1/92 7 years
Kingston Village 2,845,803 8.50% 9/1/92 7 years
Ridge Park 1,926,457 8.25% 9/1/92 7 years
Cedar Bay Village 686,918 8.50% 9/1/92 7 years
___________________________________________________________________
On August 27, 1992, the Partnership obtained new first mortgage loans
on all five of its properties from Washington Mortgage Financial Group,
an unaffiliated party. Total proceeds of $15,900,000 were received and
collateralized by deeds of trust and assignments of rents as security
encumbering the properties. Additionally, these mortgages contain
provisions for prepayment penalties if the mortgages are repaid prior
to their maturity date of September 1, 1999.
The proceeds of this financing were primarily used to repay the outstanding
amounts due to Aetna Investment Group, on the Partnership's Las Colinas I & II,
Tierra Catalina and Kingston Village mortgages, totalling $15,348,209. The
remaining proceeds along with a portion of the Partnership's cash reserves,
were used to pay mortgage fees of $603,310 and to establish escrows required at
closing by the new lender totalling $1,111,835.
Annual maturities of mortgage notes principal over the next five years
are as follows:
Year Amount
__________________
1995 $147,283
1996 160,251
1997 174,361
1998 189,713
1999 14,929,423
__________________
$15,601,031
6. Transactions with Related Parties
The following is a summary of fees earned and reimbursable expenses for the
years ended December 31, 1994, 1993 and 1992, and the unpaid portion at
December 31, 1994:
Unpaid at
December 31, Earned
___________________________
1994 1994 1993 1992
________________________________________
Reimbursement of:
Administrative
salaries and expenses $24,984 $ 48,473 $ 50,927 $ 46,034
Out-of-pocket expenses - 1,132 1,310 2,784
Property operating
salaries - 418,143 430,901 345,067
Property management fees 19,830 234,723 221,613 219,046
$44,814 $702,471 $704,751 $612,931
The above amounts have been paid and/or accrued to the General Partners and
affiliates as follows:
Unpaid at Earned
December 31, ___________________________
1994 1994 1993 1992
________________________________________________________________
RI 81 Real Estate
Services,Inc. $ 24,984 $ 49,605 $52,237 $ 48,818
ConAm and affiliates 19,830 652,866 652,514 564,113
________________________________________________________________
$ 44,814 $ 702,471 $704,751 $612,931
7. Reconciliation of Financial Statement and Tax Information
The following is a reconciliation of the net loss for financial statement
purposes to net loss for federal income tax purposes for the years ended
December 31, 1994, 1993 and 1992:
1994 1993 1992
_______________________________________________________________________
Net loss per financial statements $(252,627) $(617,882) $(464,968)
Depreciation deducted for
tax purposes in excess of
depreciation expense per
financial statements - - (105,937)
Tax basis joint venture net
loss in excess of GAAP
basis joint venture net
loss (253,640) (252,182) (171,662)
Other 1,050 2,701 6,029
_______________________________________________________________________
Taxable net loss $(505,217) $(867,363) $(736,538)
____________________________________
The following is a reconciliation of partners' capital for financial statement
purposes to partners' capital (deficit) for federal income tax purposes as of
December 31, 1994, 1993 and 1992:
1994 1993 1992
______________________________________________________________________
Partners' capital per
financial statements $6,352,183 $7,300,72 $8,223,064
Adjustment for cumulative
difference between tax
basis net loss and net
loss per financial
statements (6,590,747) (6,338,157) (6,088,676)
_____________________________________________________________________
Partners' capital (deficit)
per tax return $(238,564) $962,564 $2,134,388
_____________________________________________________________________
8. Distributions Paid
Cash distributions, per the consolidated statements of partners' capital, are
recorded on the accrual basis, which recognizes specific record dates for
payments within each calendar year. The consolidated statements of cash flows
recognize actual cash distributions paid during the calendar year. The
following table discloses the annual differences as presented on the
consolidated financial statements:
Distributions Distributions
Payable Beginning Distributions Distributions Payable
of Year Declared Paid December 31
__________________________________________________________________________
1994 $173,978 $695,911 $695,911 $173,978
1993 - 304,461 130,483 173,978
1992 - - - -
__________________________________________________________________________
9. Supplementary Information
Maintenance and repairs, advertising costs and real estate taxes included in
property operating expenses for the years ended December 31, 1994, 1993 and
1992, are as follows:
1994 1993 1992
__________________________________________________________________
Maintenance and repairs $ 926,404 $ 1,015,351 $ 653,273
Advertising costs 56,608 63,021 50,237
Real estate taxes 345,680 329,009 321,638
__________________________________________________________________
Report of Independent Auditors
To the Partners of
Hutton/ConAm Realty Investors 81:
We have audited the accompanying balance sheets of Hutton/ConAm Realty
Investors 81, a California limited partnership, and Consolidated Ventures, as
of December 31, 1994 and 1993, and the related consolidated statements of
operations, partners' capital (deficit) and cash flows for each of the three
years in the period ended December 31, 1994. These consolidated financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hutton/ConAm Realty Investors 81, a California limited partnership, and
Consolidated Ventures as of December 31, 1994 and 1993, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1994, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
March 10, 1995
Comparison of Acquisition Costs to Appraised Value and Determination of
Net Asset Value Per $300 Unit at December 31, 1994 (Unaudited)
Acquisition Cost
(Purchase Price Partnership's
Plus General Share of
Partners' December 31,
Property Date of Acquisition 1994 Appriased
Acquisition Fees) Value (1)
________________________________________________________________________
Las Colinas I & II
05-20-81
and
09-23-82
$ 13,326,613 $ 12,700,000
Cedar Bay 04-15-82 2,125,709 1,600,000
Ridge Park 07-19-82 3,468,089 3,100,000
Kingston Village 01-21-83 5,863,710 5,300,000
Tierra Catalina 03-09-84 7,759,670 6,400,000
____________ _____________
$ 32,543,791 $ 29,100,000
____________ _____________
Cash and cash equivalents 2,194,467
Other assets 41,055
_____________
31,335,522
Less:
Total liabilities (16,145,100)
_____________
Partnership Net Asset Value (2) $ 15,190,422
_____________
Net Asset Value Allocated:
Limited Partners $ 15,038,518
General Partners 151,904
_____________
15,190,422
_____________
Net Asset Value Per Unit (78,290 units outstanding) $192.09
_______
(1) This represents the Partnership's share of the December 31, 1994
Appraised Values which were determined by an independent property
appraisal firm.
(2) The Net Asset Value assumes a hypothetical sale at December 31, 1994 of
all the Partnership's properties at a price based upon their value as a
rental property as determined by an independent property appraisal
firm, and the distribution of the proceeds of such sale, combined with
the Partnership's cash after liquidation of the Partnership's
liabilities, to the Partners.
Limited Partners should note that appraisals are only estimates of current
value and actual values realizable upon sale may be significantly different.
A significant factor in establishing an appraised value is the actual
selling price for properties which the appraiser believes are
comparable. In addition, the appraised value does not reflect the
actual costs which would be incurred in selling the properties. As a
result of these factors and the illiquid nature of an investment in
Units of the Partnership, the variation between the appraised value of
the Partnership's properties and the price at which Units of the
Partnership could be sold may be significant. Fiduciaries of Limited
Partners which are subject to ERISA or other provisions of law
requiring valuations of Units should consider all relevant factors,
including, but not limited to Net Asset Value per Unit, in determining
the fair market value of the investment in the Partnership for such
purposes.
HUTTON/CONAM REALTY INVESTORS 81 and Consolidated Ventures
Schedule III - Real Estate and Accumulated Depreciation
December 31, 1994
Cost Capitalized
Subsequent
Initial Cost to Partnership To Acquisition
___________________________ ________________
Buildings and Buildings and
Description Encumbrances Land Improvements Improvements
______________________________________________________________________________
Residential Property:
Consolidated Ventures:
Las Colinas Apts I
Scottsdale, AZ $ 6,452,122 1,582,000 $8,268,721 $29,123
Las Colinas Apts II
Scottsdale, AZ - 514,564 3,268,996 8,494
Tierra Catalina
Tucson, AZ 3,689,731 1,497,150 6,403,622 32,772
Cedar Bay Village Apts.
Altamonte Springs, FL 686,918 485,488 1,691,590 3,148
Ridge Park Apts.
Tulsa, OK 1,926,457 312,891 3,283,553 41,691
Kingston Village
Altamonte Springs, FL 2,845,803 828,002 5,086,300 391,192
__________________________________________________
$ 15,601,031 $5,220,095 $28,002,782 $506,420
__________________________________________________
F-1
HUTTON/CONAM REALTY INVESTORS 81
and Consolidated Ventures
Schedule III - Real Estate and Accumulated Depreciation
December 31, 1994
Gross Amount at Which Carried at Close of Period
________________________________________________
Buildings and Accumulated
Description Land Improvements Total Depreciation
_____________________________________________________________________________
Residential Property:
Consolidated Ventures:
Las Colinas Apts I
Scottsdale, AZ $1,611,123 $8,268,721 $9,879,844 $4,465,068
Las Colinas Apts II
Scottsdale, AZ 515,719 3,276,335 3,792,054 1,615,897
Tierra Catalina
Tucson, AZ 1,503,333 6,430,211 7,933,544 2,784,393
Cedar Bay Village Apts.
Altamonte Springs, FL
485,267 1,694,959 2,180,226 863,156
Ridge Park Apts.
Tulsa, OK 314,020 3,324,114 3,638,134 1,652,961
Kingston Village
Altamonte Springs, FL
826,358 5,479,137 6,305,495 2,494,075
___________________________________________________
$ 5,255,820 $28,473,477 $33,729,297 $13,875,550
___________________________________________________
(1) (2)
F-2
HUTTON/CONAM REALTY INVESTORS 81
and Consolidated Ventures
Schedule III - Real Estate and Accumulated Depreciation
December 31, 1994
Life on which
Depreciation
in Latest
Date of Date Income Statements
Description Construction Acquired is Computed
____________________________________________________________________________
Residential Property:
Consolidated Ventures:
Las Colinas Apts I
Scottsdale, AZ 1981 5/20/81 (3)
Las Colinas Apts II
Scottsdale, AZ 1982 9/23/82 (3)
Tierra Catalina
Tucson, AZ 1983,1984 3/9/84 (3)
Cedar Bay Village Apts.
Altamonte Springs, FL 1981 4/15/82 (3)
Ridge Park Apts.
Tulsa, OK 1982 7/19/82 (3)
Kingston Village
Altamonte Springs, FL 1982 1/21/83 (3)
(1) Represents aggregate cost for both financial reporting and Federal income
tax purposes.
(2) The amount of accumulated depreciation for Federal income
tax purposes is $14,129,190.
(3) Buildings and improvements - 25 years;
personal property - 10 years.
F-3
A reconciliation of the carrying amount of real estate and accumulated
depreciation for the years ended December 31, 1994, 1993 and 1992:
Real Estate investments: 1994 1993 1992
___________________________________________
Beginning of year $33,729,297 $33,729,297 $33,659,402
Additions - - 69,895
End of year $33,729,297 $33,729,297 $33,729,297
___________________________________________
Accumulated Depreciation:
Beginning of year $12,735,626 $11,594,244 $10,456,687
Depreciation expense 1,139,924 1,141,382 1,137,557
___________________________________________
End of year $13,875,550 12,735,626 $11,594,244
___________________________________________
F-4
Report of Independent Auditors
Our report on the consolidated financial statements of Hutton/ConAm Realty
Investors 81, a California limited partnership, and Consolidated Ventures has
been incorporated by reference in this Form 10-K from the Annual Report to
unitholders of Hutton/ConAm Realty Investors 81 for the year ended December 31,
1994. In connection with our audits of such financial statements, we have also
audited the related financial statement schedule listed in the index of this
Form 10-K.
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.
Hartford, Connecticut
March 10, 1995
F-5
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 2,194,467
<SECURITIES> 000
<RECEIVABLES> 000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 33,729,297
<DEPRECIATION> 13,875,550
<TOTAL-ASSETS> 22,497,283
<CURRENT-LIABILITIES> 000
<BONDS> 15,601,031
<COMMON> 000
000
000
<OTHER-SE> 6,352,183
<TOTAL-LIABILITY-AND-EQUITY> 22,497,283
<SALES> 4,702,059
<TOTAL-REVENUES> 4,760,068
<CGS> 000
<TOTAL-COSTS> 2,301,465
<OTHER-EXPENSES> 1,383,670
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 1,327,560
<INCOME-PRETAX> (252,627)
<INCOME-TAX> 000
<INCOME-CONTINUING> (252,627)
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> (252,627)
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