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 June 30, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-11127
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BALCOR REALTY INVESTORS LTD.-82
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(Exact name of registrant as specified in its charter)
Illinois 36-3139801
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 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 REALTY INVESTORS LTD.- 82
(An Illinois Limited Partnership)
BALANCE SHEETS
June 30, 1995 and December 31, 1994
(UNAUDITED)
ASSETS
1995 1994
-------------- --------------
Cash and cash equivalents $ 3,257,715 $ 4,292,726
Restricted investments 1,230,000 1,230,000
Escrow deposits 710,934 1,149,063
Accounts and accrued interest receivable 14,458 112,860
Prepaid expenses 56,231 0
Wrap-around note receivable 6,150,000
Deferred gain on sale of property (3,244,180)
Deferred expenses, net of accumulated
amortization of $132,179 in 1995 and
$175,843 in 1994 522,701 569,532
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5,792,039 10,260,001
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Investment in real estate, at cost:
Land 3,452,798 3,452,798
Buildings and improvements 25,174,333 25,174,333
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28,627,131 28,627,131
Less accumulated depreciation 12,386,287 11,995,317
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Investment in real estate, net of
accumulated depreciation 16,240,844 16,631,814
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$ 22,032,883 $ 26,891,815
============== ==============
LIABILITIES AND PARTNERS' DEFICIT
Accounts payable $ 123,759 $ 140,229
Due to affiliates 6,224 97,841
Accrued liabilities, principally real
estate taxes 311,672 520,304
Escrow liabilities 39,877
Security deposits 127,216 125,268
Mortgage notes payable 23,810,136 28,823,037
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Total liabilities 24,379,007 29,746,556
Partners' deficit (74,133 Limited
Partnership Interests issued and
outstanding) (2,346,124) (2,854,741)
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$ 22,032,883 $ 26,891,815
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1995 and 1994
(UNAUDITED)
1995 1994
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Income:
Rental and service $ 3,487,121 $ 3,748,185
Interest on short-term investments 172,280 113,306
Interest on wrap-around note receivable 92,574 322,875
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Total income 3,751,975 4,184,366
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Expenses:
Interest on mortgage notes payable 1,058,373 1,559,769
Depreciation 390,970 458,239
Amortization of deferred expenses 46,831 56,419
Property operating 1,046,981 1,538,392
Real estate taxes 313,718 322,895
Property management fees 169,094 186,141
Administrative 240,493 249,578
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Total expenses 3,266,460 4,371,433
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Income (loss) before gains on sales of
properties 485,515 (187,067)
Gains on sales of properties 3,244,180 5,523,282
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Net income $ 3,729,695 $ 5,336,215
============== ==============
Net income allocated to General
Partner $ 56,718 $ 45,879
============== ==============
Net income allocated to Limited
Partners $ 3,672,977 $ 5,290,336
============== ==============
Net income per Limited Partnership
Interest (74,133 issued and outstanding) $ 49.55 $ 71.36
============== ==============
Distributions to Limited Partners $ 3,221,078 None
============== ==============
Distributions per Limited Partnership $ 43.45 None
Interest outstanding ============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1995 and 1994
(UNAUDITED)
1995 1994
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Income:
Rental and service $ 1,753,966 $ 1,793,111
Interest on short-term investments 59,324 71,397
Interest on wrap-around note receivable 3,537 161,438
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Total income 1,816,827 2,025,946
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Expenses:
Interest on mortgage notes payable 507,952 724,696
Depreciation 195,485 215,290
Amortization of deferred expenses 16,253 24,513
Property operating 557,617 896,052
Real estate taxes 155,836 155,954
Property management fees 83,896 93,244
Administrative 136,868 119,616
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Total expenses 1,653,907 2,229,365
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Income (loss) before gain on sale of
property 162,920 (203,419)
Gain on sale of property 3,147,866
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Net income $ 162,920 $ 2,944,447
============== ==============
Net income allocated to General
Partner $ 8,146 $ 21,307
============== ==============
Net income allocated to Limited
Partners $ 154,774 $ 2,923,140
============== ==============
Net income per Limited Partnership
Interest (74,133 issued and outstanding) $ 2.09 $ 39.43
============== ==============
Distribution to Limited Partners $ 3,093,199 None
============== ==============
Distribution per Limited Partnership
Interest outstanding $ 41.725 None
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1995 and 1994
(UNAUDITED)
1995 1994
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Operating activities:
Net income $ 3,729,695 $ 5,336,215
Adjustments to reconcile net income
to net cash provided by or used in
operating activities:
Gains on sales of properties (3,244,180) (5,523,282)
Depreciation of properties 390,970 458,239
Amortization of deferred expenses 46,831 56,419
Net change in:
Escrow deposits 167,131 187,601
Accounts and accrued interest
receivable 98,402 (64,505)
Prepaid expenses (56,231)
Accounts payable (16,470) (52,491)
Due to affiliates (91,617) 72,725
Accrued liabilities (208,632) (462,359)
Escrow liabilities (39,877) 13,619
Security deposits 1,948 (25,106)
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Net cash provided by or used in
operating activities 777,970 (2,925)
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Investing activities:
Proceeds from repayment of wrap-around
note received in connection with sale
of real estate 1,342,445
Proceeds from sales of real estate 7,897,882
Payment of selling costs (320,159)
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Net cash provided by investing activities 1,342,445 7,577,723
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1995 and 1994
(UNAUDITED)
(Continued)
1995 1994
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Financing activities:
Distributions to Limited Partners (3,221,078)
Repayment of mortgage note payable (5,530,000)
Repayment of mortgage note payable -
affiliate (2,323,345)
Principal payments on mortgage
notes payable (205,346) (215,259)
Funding of capital improvement escrows (64,600) (64,600)
Disbursements from capital improvement
escrows 335,598 205,730
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Net cash used in financing activities (3,155,426) (7,927,474)
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Net change in cash and cash equivalents (1,035,011) (352,676)
Cash and cash equivalents at beginning
of period 4,292,726 4,448,617
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Cash and cash equivalents at end of period $ 3,257,715 $ 4,095,941
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair
presentation have been made to the accompanying statements for the six
months and quarter ended June 30, 1995, and all such adjustments are of a
normal and recurring nature.
2. Interest Expense:
During the six months ended June 30, 1995 and 1994, the Partnership
incurred and paid interest expense on non-affiliated mortgage notes payable
of $1,058,373 and $1,517,332, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during
the six months and quarter ended June 30, 1995 were:
Paid
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Six Months Quarter Payable
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Reimbursement of expenses to
the General Partner, at cost $171,581 $171,581 $6,224
During the six months ended June 30, 1994, the Partnership incurred
interest expense of $42,437 and paid interest expense of $72,120 on the
$2,323,345 note payable related to the Songbird Phases I and II Apartments
which was outstanding from Balcor Real Estate Holdings, Inc. ("BREHI"), an
affiliate of the General Partner. This loan was repaid in June 1994.
4. Repayment of Wrap-around Note Receivable:
In February 1995, the Partnership received $1,342,445 as payment in full on
the wrap-around note that had been received in connection with the sale of
the Meridian Hills Court Apartments. This note had matured in November
1994, but the Partnership granted the borrower a six month extension on the
loan. The amount received represented the wrap-around note balance of
$6,150,000, less the underlying mortgage note balance, which was $4,807,555
at the time of the repayment. The liability for the underlying mortgage
note has been assumed by the purchaser of the property. As a result of this
repayment, the Partnership recognized the remaining deferred gain of
$3,244,180 from the property sale in its 1995 financial statements.
<PAGE>
5. Subsequent Event:
In July 1995, the Partnership made a distribution of $222,399 ($3.00 per
Interest) to the holders of Limited Partnership Interests for the second
quarter of 1995.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Realty Investors Ltd.-82 (the "Partnership") is a limited partnership
formed in 1981 to invest in and operate income-producing real property. The
Partnership raised $74,133,000 through the sale of Limited Partnership
Interests and utilized these proceeds to acquire fourteen real property
investments. From 1984 to 1994, eleven of these properties were sold or
relinquished through foreclosure. The Partnership continues to own the three
remaining properties.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1994 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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The Partnership recognized gains during the six months ended June 30, 1995 and
1994 related to property sales. Further discussion of the Partnership's
operations is summarized below.
1995 Compared to 1994
---------------------
The sales of the Bemis Square Shopping Center and the Via El Camino Apartments
in February 1994 and May 1994, respectively, resulted in decreases in rental
and service income, interest expense on mortgage notes payable, depreciation,
amortization, property operating expenses, real estate taxes and property
management fees during the six months and quarter ended June 30, 1995 as
compared to the same periods in 1994. The Partnership also recognized gains
in connection with the sales of these properties during the six months ended
June 30, 1994.
An increase in rental revenue at the three remaining properties due to higher
rental rates partially offset the above decrease in rental and service income.
A special distribution was made in April 1995 from the proceeds received from
the above-mentioned property sales and the February 1995 repayment of the
Meridian Hills Court Apartments wrap-around note. Prior to this distribution,
these proceeds were invested in short-term investments. As a result of these
events, interest income on short-term investments increased during the six
months ended June 30, 1995, but decreased during the quarter ended June 30,
1995 as compared to the same periods in 1994.
The February 1995 repayment of the Meridian Hills Court Apartments wrap-around
note caused a decrease in interest income on wrap-around note receivable during
the six months and quarter ended June 30, 1995 when compared to the same
periods in 1994. In addition, the Partnership recognized the final portion of
the deferred gain related to this installment sale during 1995. This gain had
<PAGE>
been deferred from 1986, when the property had been sold for a cash down
payment plus the wrap-around note.
The repayment and the assumption by the borrower of the mortgage notes payable
related to the Songbird Phases I and II Apartments in June 1994 and the
Meridian Hills Court Apartments wrap-around note in February 1995,
respectively, further contributed to the decrease in interest expense on
mortgage notes payable.
Decreased expenditures at the Eagles Pointe and Balcones Woods Apartments
relating to utilities, roof repairs, painting and floor and wall covering
upgrades further contributed to the decrease in property operating expenses.
Liquidity and Capital Resources
-------------------------------
The cash position of the Partnership decreased as of June 30, 1995 when
compared to December 31, 1994. The operating activities of the Partnership
include the cash flow from operations of the properties as discussed below, and
interest income received on short-term investments and the wrap-around note
receivable, which was partially offset by administrative costs. The cash flow
provided by investing activities represents the net proceeds of approximately
$1,340,000 received from the February 1995 repayment of the Meridian Hills
Court Apartments wrap-around note receivable. Financing activities include
principal payments on mortgage notes payable, capital improvement escrow
activity and distributions to Limited Partners. In addition to the regular
quarterly distributions, a special distribution to the Limited Partners was
issued from the Partnership's cash reserves in April 1995.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered to be significant if it exceeds $250,000 annually or 20% of the
property's rental and service income. The Partnership defines cash flow
generated from its properties as an amount equal to the property's revenue
receipts less property related expenditures, which include debt service
payments. For the six months ended June 30, 1995 and 1994, the Balcones Woods
and Songbird Phases I and II apartment complexes generated positive cash flow.
The Eagles Pointe Apartments generated positive cash flow during 1995 and a
marginal cash flow deficit during 1994. The Eagles Pointe deficit had primarily
been a result of maintenance and repairs expenditures which had been deferred
from prior years.
While the cash flow of certain of the Partnership's properties has improved,
the General Partner continues to pursue a number of actions aimed at improving
the cash flow of the Partnership's properties including improving property
operating performance, and seeking rent increases where market conditions
allow. As of June 30, 1995, the occupancy rates of the Partnership's properties
ranged from 92% to 98%. Despite improvements in the local economies and rental
markets where certain of the Partnership's properties are located, the General
Partner believes that continued ownership of the remaining properties is in the
best interest of the Partnership in order to maximize potential returns to
Limited Partners. As a result, the Partnership will continue to own these
properties for longer than the holding period for the assets originally
described in the prospectus.
<PAGE>
Each of the Partnership's properties is owned through the use of third-party
mortgage loan financing and, therefore, the Partnership is subject to the
financial obligations required by such loans. As a result of the General
Partner's efforts to obtain loan refinancings, as well as the repayment of
certain loans with proceeds from property sales and cash reserves, the
Partnership has no third party financing which matures prior to 1998.
In July 1995, the Partnership made a distribution of $222,399 ($3.00 per
Interest) to the holders of Limited Partnership Interests for the second
quarter of 1995, representing available Net Cash Receipts. The level of this
regular quarterly distribution was slightly higher in comparison with that of
the prior quarter. Including the July 1995 distribution, investors have
received distributions of Net Cash Receipts of $24.90 and Net Cash Proceeds of
$350, totaling $374.90 per $1,000 Interest, as well as certain tax benefits.
The General Partner expects to continue quarterly distributions to Limited
Partners based on the current performance of the Partnership's properties.
However, continued distributions will depend on cash flow from the
Partnership's remaining properties, adequate reserves and proceeds from future
property sales, as to all of which there can be no assurances.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibits:
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(4) Certificate of Limited Partnership set forth as Exhibit 4.1 to Amendment
No. 1 to the Registrant's Registration Statement on Form S-11 dated December
11, 1981 (Registration No. 2-74358), and Form of Confirmation regarding
Interests in the Registrant set forth as Exhibit 4.2 to the Registrant's Report
on Form 10-Q for the quarter ended June 30, 1992 (Commission File No. 0-11127)
are incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the six month period ending
June 30, 1995 is attached hereto.
(b) Reports on Form 8-K:
-----------------------
No reports were filed on Form 8-K during the quarter ended June 30, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR REALTY INVESTORS LTD.-82
By: /s/Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners-XI, the General Partner
By: /s/Brian D. Parker
-----------------------------
Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Partners-XI, the General
Partner
Date: August 14, 1995
--------------------------
<PAGE>
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<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 3258
<SECURITIES> 1230
<RECEIVABLES> 14
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5269
<PP&E> 28627
<DEPRECIATION> 12386
<TOTAL-ASSETS> 22033
<CURRENT-LIABILITIES> 569
<BONDS> 23810
<COMMON> 0
0
0
<OTHER-SE> (2346)
<TOTAL-LIABILITY-AND-EQUITY> 22033
<SALES> 0
<TOTAL-REVENUES> 3752
<CGS> 0
<TOTAL-COSTS> 1530
<OTHER-EXPENSES> 678
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1058
<INCOME-PRETAX> 3730
<INCOME-TAX> 0
<INCOME-CONTINUING> 3730
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3730
<EPS-PRIMARY> 49.55
<EPS-DILUTED> 49.55
</TABLE>
