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
- - -----
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-11127
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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.)
Balcor Plaza
4849 Golf Road, Skokie, Illinois 60077-9894
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(UNAUDITED)
ASSETS
1995 1994
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Cash and cash equivalents $ 6,236,192 $ 4,292,726
Restricted investments 1,230,000 1,230,000
Escrow deposits 527,255 1,149,063
Accounts and accrued interest receivable 46,245 112,860
Wrap-around note receivable 6,150,000
Deferred gain on sale of property (3,244,180)
Deferred expenses, net of accumulated
amortization of $115,927 in 1995 and
$175,843 in 1994 538,954 569,532
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8,578,646 10,260,001
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Investment in real estate, at cost:
Land 3,452,798 3,452,798
Buildings and improvements 25,174,333 25,174,333
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28,627,131 28,627,131
Less accumulated depreciation 12,190,802 11,995,317
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Investment in real estate, net of
accumulated depreciation 16,436,329 16,631,814
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$ 25,014,975 $ 26,891,815
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LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Accounts payable $ 109,851 $ 140,229
Due to affiliates 130,416 97,841
Accrued liabilities, principally interest
and real estate taxes 155,836 520,304
Escrow liabilities 39,877
Security deposits 124,271 125,268
Mortgage notes payable 23,910,446 28,823,037
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Total liabilities 24,430,820 29,746,556
Partners' capital (deficit) (74,133 Limited
Partnership Interests issued and
outstanding) 584,155 (2,854,741)
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$ 25,014,975 $ 26,891,815
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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 INCOME AND EXPENSES
for the quarters ended March 31, 1995 and 1994
(UNAUDITED)
1995 1994
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Income:
Rental and service $ 1,733,155 $ 1,955,074
Interest on short-term investments 112,956 41,909
Interest on wrap-around note receivable 89,037 161,437
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Total income 1,935,148 2,158,420
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Expenses:
Interest on mortgage notes payable 550,421 835,073
Depreciation 195,485 242,949
Amortization of deferred expenses 30,578 31,906
Property operating 489,364 642,340
Real estate taxes 157,882 166,941
Property management fees 85,198 92,897
Administrative 103,625 129,962
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Total expenses 1,612,553 2,142,068
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Income before gains on sales of properties 322,595 16,352
Gains on sales of properties 3,244,180 2,375,416
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Net income $ 3,566,775 $ 2,391,768
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Net income allocated to General Partner $ 48,572 $ 24,572
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Net income allocated to Limited Partners $ 3,518,203 $ 2,367,196
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Net income per Limited Partnership
Interest (74,133 issued and outstanding) $ 47.46 $ 31.93
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Distribution to Limited Partners $ 127,879 None
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Distribution per Limited Partnership
Interest outstanding $ 1.725 None
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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 quarters ended March 31, 1995 and 1994
(UNAUDITED)
1995 1994
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Operating activities:
Net income $ 3,566,775 $ 2,391,768
Adjustments to reconcile net income to
net cash provided by operating
activities:
Gains on sales of properties (3,244,180) (2,375,416)
Depreciation of properties 195,485 242,949
Amortization of deferred expenses 30,578 31,906
Net change in:
Escrow deposits 339,625 363,644
Accounts and accrued interest
receivable 66,615 (57,629)
Accounts payable (30,378) (31,793)
Due to affiliates 32,575 47,237
Accrued liabilities (364,468) (412,946)
Escrow liabilities (39,877) 40,866
Security deposits (997) (4,749)
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Net cash provided by operating
activities 551,753 235,837
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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 sale of real estate 747,882
Payment of selling costs (159,275)
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Net cash provided by investing
activities 1,342,445 588,607
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Financing activities:
Distributions to Limited Partners (127,879)
Principal payments on mortgage
notes payable (105,036) (103,482)
Funding of capital improvement escrows (32,300) (32,300)
Disbursements from capital improvement
escrows 314,483 66,777
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Net cash provided by or used in
financing activities 49,268 (69,005)
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Net change in cash and cash equivalents 1,943,466 755,439
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 $ 6,236,192 5,204,056
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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)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1995, and all such adjustments are of a normal and recurring nature.
2. Interest Expense:
During the quarters ended March 31, 1995 and 1994, the Partnership incurred
interest expense on non-affiliated mortgage notes payable of $550,421 and
$812,497 and paid interest expense of $550,421 and $771,724, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1995 were:
Paid Payable
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Reimbursement of expenses to
the General Partner, at cost None $130,416
During the quarter ended March 31, 1994, the Partnership incurred interest
expense of $22,576 and paid interest expense of $44,086 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 an extension. 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 the 1995
financial statements.
5. Subsequent Event:
In April 1995, the Partnership made a distribution of $3,093,199 ($41.725 per
Interest) to the holders of Limited Partnership Interests for the first quarter
of 1995. This distribution includes a regular distribution of $1.725 per
Interest from Net Cash Receipts and a special distribution of $40.00 per
Interest from Net Cash Proceeds.
<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 quarters ended March 31, 1995 and
1994 related to property sales. Further discussion of the Partnership's
operations is summarized below.
1995 Compared to 1994
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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,
property operating expenses, real estate taxes and property management fees
during the quarter ended March 31, 1995 as compared to the same period in 1994.
The Partnership also recognized a gain in connection with the sale of the Bemis
Square Shopping Center during the quarter ended March 31, 1994.
An increase in rental revenue at the Balcones Woods Apartments due to higher
occupancy and rental rates partially offset the above decrease in rental and
service income.
The proceeds received from the above-mentioned property sales and the February
1995 repayment of the Meridian Hills Court Apartments wrap-around note,
resulted in an increase in funds available for short-term investments. This
increase in funds available, combined with higher interest rates, resulted in
an increase in interest income on short-term investments during the quarter
ended March 31, 1995 when compared to the same period in 1994.
<PAGE>
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 quarter ended March 31, 1995 when compared to the same period in 1994. In
addition, the Partnership recognized the final portion of the deferred gain
related to this installment sale during 1995. This gain had been deferred from
1986, when the property had been sold for a cash down payment plus the wrap-
around note.
The repayments of the note 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 further contributed to the decrease in interest expense
on mortgage notes payable.
Decreased expenditures at the Eagles Pointe Apartments relating to utilities
and floor and wall covering upgrades further contributed to the decrease in
property operating expenses.
Lower portfolio management fees resulted in a decrease in administrative
expenses during the quarter ended March 31, 1995 as compared to the same period
in 1994.
Liquidity and Capital Resources
- - -------------------------------
The cash position of the Partnership increased as of March 31, 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,
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. Financing activities include principal payments on mortgage notes
payable, capital improvement escrow activity and quarterly distributions to
Limited Partners. A portion of the Partnership's cash reserves was distributed
to Limited Partners in April 1995, as described below, and the remainder will
be retained for future working capital requirements.
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 quarters ended March 31, 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 were deferred in
prior years.
<PAGE>
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 March 31, 1995, the occupancy rates of the Partnership's
properties ranged from 93% to 95%. 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.
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 April 1995, the Partnership made a distribution of $3,093,199 ($41.725 per
Interest) to the holders of Limited Partnership Interests for the first quarter
of 1995. This distribution includes a regular distribution of $1.725 per
Interest from Net Cash Receipts and a special distribution of $40.00 per
Interest from Net Cash Proceeds. The level of the regular distribution is
consistent with that of the prior quarter. To date, investors have received
distributions of Net Cash Receipts of $21.90 and Net Cash Proceeds of $350,
totaling $371.90 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
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(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 three month period
ending March 31, 1995 is attached hereto.
(b) Reports on Form 8-K:
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No reports were filed on Form 8-K during the quarter ended March 31, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR 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 Parker
-----------------------------
Brian Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Partners-XI, the General
Partner
Date: May 12, 1995
--------------------------
<PAGE>
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<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 6236
<SECURITIES> 1230
<RECEIVABLES> 46
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8040
<PP&E> 28627
<DEPRECIATION> 12191
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<CURRENT-LIABILITIES> 520
<BONDS> 23910
<COMMON> 0
0
0
<OTHER-SE> 584
<TOTAL-LIABILITY-AND-EQUITY> 25015
<SALES> 0
<TOTAL-REVENUES> 5179
<CGS> 0
<TOTAL-COSTS> 732
<OTHER-EXPENSES> 330
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 550
<INCOME-PRETAX> 323
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<EPS-DILUTED> 47.46
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