UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 0-11127
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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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Securities registered pursuant to Section 12(b) of the Act: None
----
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
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(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
<PAGE>
PART I
Item 1. Business
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Balcor Realty Investors Ltd.-82 (the "Registrant") is a limited partnership
formed in 1981 under the laws of the State of Illinois. The Registrant raised
$74,133,000 from sales of Limited Partnership Interests. The Registrant's
operations currently consist exclusively of investment in and operation of real
property, and all financial information included in this report relates to this
industry segment.
The Registrant utilized the net offering proceeds to acquire fourteen real
property investments. The Registrant has since disposed of eleven of these
properties. As of December 31, 1994, the Registrant owned the three properties
described under "Properties" (Item 2). The Partnership Agreement generally
provides that the proceeds of any sale or refinancing of the Registrant's
properties will not be reinvested in new acquisitions.
During 1994, the Registrant sold two properties, and during February 1995, the
wrap-around note received in connection with the sale of the Meridian Hills
Court Apartments was repaid in full. See Notes 3 and 9 of Notes to Financial
Statements for additional information.
During 1994, the Registrant used cash reserves to repay the second mortgage
note related to the Songbird Phases I and II Apartments. See Note 8 of Notes to
Financial Statements for additional information.
During 1994, institutionally owned and managed multi-family residential
properties in many markets continued to experience favorable operating
conditions combined with relatively low levels of new construction. These
favorable operating conditions were supported by the strong pattern of national
economic growth which contributed to job growth and rising income levels in
most local economies. However, some rental markets continue to remain extremely
competitive; therefore, the General Partner's goals are to maintain high
occupancy levels, while increasing rents where possible, and to monitor and
control operating expenses and capital improvement requirements at the
properties. Of the Registrant's three remaining properties, during 1994 two
generated positive cash flow while Eagles Pointe Apartments generated a
marginal cash flow deficit. See Item 7. Liquidity and Capital Resources for
additional information.
Historically, real estate investments have experienced the same cyclical
characteristics affecting most other types of long-term investments. While
real estate values have generally risen over time, the cyclical character of
real estate investments, together with local, regional and national market
conditions, has resulted in periodic devaluations of real estate in particular
markets, as has been experienced in the last few years. As a result of these
factors, it has become necessary for the Registrant to retain ownership of many
of its properties for longer than the holding period for the assets originally
described in the prospectus. The General Partner examines the operations of
each property and each local market in conjunction with the Registrant's long-
term dissolution strategy when determining the optimal time to sell each of the
Registrant's properties.
The Registrant, by virtue of its ownership of real estate, is subject to
federal and state laws and regulations covering various environmental issues.
Management of the Registrant utilizes the services of environmental consultants
to assess a wide range of environmental issues and to conduct tests for
environmental contamination as appropriate. The General Partner is not aware of
any potential liability due to environmental issues or conditions that would be
material to the Registrant.
The officers and employees of Balcor Partners-XI, the General Partner of the
Registrant, and its affiliates perform services for the Registrant. The
Registrant currently has no employees engaged in its operations.
<PAGE>
Item 2. Properties
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As of December 31, 1994, the Registrant owns the three real properties
described below:
Location Description of Property
- -------- -----------------------
Austin, Texas * Balcones Woods Apartments: a 384-unit apartment
complex located on approximately 23 acres.
Atlanta, Georgia Eagles Pointe Apartments: a 252-unit apartment
complex located on approximately 25 acres.
San Antonio, Texas Songbird Apartments, Phase I and Phase II: a
262-unit apartment complex located on
approximately 13 acres.
* Owned by the Registrant through a joint venture with the seller.
Each of the above properties is held subject to various mortgages and other
forms of financing.
In the opinion of the General Partner, the Registrant has provided for adequate
insurance coverage for its real estate investment properties.
See Notes to Financial Statements for other information regarding real property
investments.
Item 3. Legal Proceedings
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Balcones Woods Apartments
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In 1981, a joint venture consisting of the Registrant as general partner and
the seller as limited partner (the "Joint Venture") acquired the Balcones Woods
Apartments. In 1983, an affiliate of the seller (together with the seller, the
"Seller") sold another property to a joint venture affiliated with the
Registrant (the "Affiliate"). In 1987, the Joint Venture and the Affiliate
filed suit against the Seller, two principals of the Seller and other parties
in the 285th District Court, Bexar County, Texas, Case No.: 87-CI-11919, DO
Associates, et al. vs. ADC Development Co., et al. The Joint Venture and the
Affiliate sought to recover amounts due from the Seller under the management
and guarantee agreements and for construction defects at the properties.
The case went to trial in April 1992 and the jury found for the Joint Venture
and the Affiliate on certain counts and against them on other counts. The jury
awarded the Joint Venture $55,860 in damages and $150,000 in attorneys' fees
and the Affiliate $45,654 in damages and $150,000 in attorneys' fees, which
were less than the amounts requested. The Joint Venture and the Affiliate
filed a notice of appeal in October 1993, in the Fourth Court of Appeals, State
of Texas, San Antonio (Appeal No.: 04-93-00718-CV). In November 1993, a
principal of the Seller filed for protection under Chapter 7 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court, District of Nevada, Case No. BK-
S93-25-233-LBR, In Re Dustin Gorden, which stayed the proceedings in the
Appellate Court. However, the Bankruptcy Court lifted the stay to permit the
appeal to proceed. In January 1995, the Joint Venture, the Affiliate and
certain defendants executed a motion in the Appellate Court to stay the appeal
so that settlement discussions, which are currently ongoing, could proceed.
Item 4. Submission of Matters to a Vote of Security Holders
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No matters were submitted to a vote of the Limited Partners of the Registrant
during 1994.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
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Matters
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There has not been an established public market for Limited Partnership
Interests and it is not anticipated that one will develop; therefore, the
market value of the Limited Partnership Interests cannot reasonably be
determined. For information regarding previous distributions, see Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources, below.
As of December 31, 1994, the number of record holders of Limited Partnership
Interests of the Registrant was 7,896.
Item 6. Selected Financial Data
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Year ended December 31,
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1994 1993 1992 1991 1990
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Total income $8,392,007 $9,010,969 $12,403,715 $15,242,595 $13,607,368
Loss before net
gains on sales
of assets, write-
off of real estate
commissions and
extraordinary items (100,170) (950,479) (1,003,918) (2,428,716) (2,137,102)
Net income (loss) 5,423,112 3,749,327 7,502,993 (2,058,204) (2,137,102)
Net income (loss)
per Limited Part-
nership Interest 72.48 50.58 100.74 (26.18) (27.39)
Total assets 26,891,815 34,122,065 44,314,508 57,514,920 58,758,757
Mortgage notes
payable 28,823,037 40,714,714 51,853,415 70,438,350 70,823,111
Distributions per
Limited Partner-
ship Interest 3.45 None None None None
Item 7. Management's Discussion and Analysis of Financial Condition and
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Results of Operations
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Summary of Operations
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Balcor Realty Investors Ltd.-82 (the "Partnership") recognized net gains and
extraordinary gains during 1992, 1993 and 1994 in connection with the
dispositions of seven properties and the forgiveness of debt related to a
property sale. The Partnership also wrote-off real estate commissions payable
to the General Partner resulting in the recognition of additional income during
1992. The timing of these transactions, along with improved property operations
in 1994, resulted in an increase in net income in 1994 as compared to 1993 and
a decrease in net income in 1993 as compared to 1992. Further discussion of the
Partnership's operations is summarized below.
Operations
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1994 Compared to 1993
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<PAGE>
The sales of the Southgate and Bemis Square shopping centers and the Via El
Camino Apartments in June 1993, February 1994 and May 1994, respectively,
resulted in decreases in rental and service income, interest expense on
mortgage notes payable, depreciation, property operating expenses, maintenance
and repairs, real estate taxes and property management fees during 1994 as
compared to 1993. The Partnership recognized gains in connection with these
property dispositions and recognized a loss from the May 1993 sale of the 1400
North Lake Shore Drive Apartment Building, which had been in receivership since
June 1992. The Partnership also recognized an extraordinary gain in 1993 due to
the forgiveness of debt on the 1400 North Lake Shore Drive Apartment Building.
An increase in rental revenue during 1994 at the Eagles Pointe Apartments due
to higher rental rates partially offset the above decrease in rental and
service income.
The proceeds received from the October 1993 refinancings of the Balcones Woods
and Songbird Phases I and II apartment complexes and the above-mentioned
property sales, resulted in an increase in funds available during 1994 for
short-term investments. This increase in available funds, combined with higher
interest rates, resulted in an increase in interest income on short-term
investments during 1994 when compared to 1993.
An increase in the interest rate in accordance with the terms of the Meridian
Hills Court Apartments wrap-around note resulted in an increase in interest
income on wrap-around note receivable during 1994 when compared to 1993.
During 1994, a liability related to tenant improvements at one of the disposed
of properties was written-off and recognized as other income in the financial
statements.
A reduction in the interest rate in October 1993 on the note payable related to
the Songbird Phases I and II Apartments, and the subsequent repayment of this
note in June 1994, further contributed to the decrease in interest expense on
mortgage notes payable.
Higher insurance expense and leasing costs at the Balcones Woods Apartments and
higher insurance expense and real estate tax consulting fees at the Songbird
Phases I and II Apartments during 1994 substantially offset the decrease in
property operating expenses due to the above mentioned property dispositions.
A decrease in expenditures for painting and floor and wall covering upgrades at
the Eagles Pointe Apartments during 1994 further contributed to the decrease in
maintenance and repairs. An increase in landscaping and painting costs at the
Balcones Woods Apartments partially offset these decreases.
Higher accounting costs resulted in an increase in administrative expenses
during 1994 when compared to 1993.
1993 Compared to 1992
- ---------------------
The appointment of a receiver for the 1400 North Lake Shore Drive Apartment
Building in June 1992, and the dispositions of the Shallowford Ridge Apartments
and the Millington Square and Southgate shopping centers in September 1992,
December 1992 and June 1993, respectively, resulted in significant decreases in
rental and service income, interest expense on mortgage notes payable,
depreciation, property operating expenses, maintenance and repairs, real estate
taxes and property management fees during 1993 as compared to 1992. An increase
in rental rates at all of the remaining properties partially offset the
decrease in rental and service income.
The Partnership recognized extraordinary gains in connection with the
dispositions through foreclosure of the Foxwood and Shallowford Ridge apartment
complexes in February and September 1992, respectively. In addition, the
Partnership recognized a loss in connection with the May 1993 sale of the 1400
North Lake Shore Drive Apartment Building and gains in connection with the
<PAGE>
sales of the Southgate and Millington Square shopping centers in June 1993 and
December 1992, respectively. Also, an extraordinary gain was recognized due to
the forgiveness of debt on the 1400 North Lake Shore Drive Apartment Building
in May 1993.
The financing fee related to the Foxwood Apartment's mortgage loan was fully
amortized during 1992 due to the foreclosure by the lender. This resulted in a
decrease in the amortization of deferred expenses during 1993 as compared to
1992.
Higher expenditures at the Eagles Pointe and Songbird Phases I and II apartment
complexes relating to items such as painting, landscaping, parking lot repairs,
and floor and wall covering upgrades offset the decrease in maintenance and
repairs due to property dispositions, and resulted in an overall increase in
maintenance and repairs during 1993 as compared to 1992.
Higher legal fees incurred in 1992 in connection with the Balcones Woods
Apartments litigation resulted in a decrease in administrative expenses during
1993 as compared to 1992.
The General Partner voluntarily waived its right to receive real estate
commissions accrued by the Partnership in previous years. The payment of these
commissions had been subordinated to a cumulative return to the Limited
Partners as set forth in the Partnership Agreement. As a result, real estate
commissions payable to the General Partner were written-off, and the resulting
income of $1,772,250 was recognized in the financial statements during 1992.
These commissions had been recognized in prior years as selling expenses which
resulted in a reduction of the gains on the sales of the properties to which
they related.
Liquidity and Capital Resources
- -------------------------------
The operating activities of the Partnership include the cash flow from
operations of the properties as discussed below, and interest income received
on the wrap-around note receivable and short-term investments, partially offset
by administrative costs. The net cash flow provided by investing activities
represents proceeds received from the sales of the Bemis Square Shopping Center
and Via El Camino Apartments less selling costs. These proceeds were partially
used in financing activities to repay the existing mortgage loan on the Via El
Camino Apartments, while the mortgage loan on the Bemis Square Shopping Center
was assumed by the purchaser. Other financing activities include principal
payments on mortgage notes payable, capital improvement escrow activity and
quarterly distributions to Limited Partners. In addition, the Partnership used
cash reserves to repay the second mortgage note related to the Songbird Phases
I and II Apartments. As a net result of this activity, the cash position of the
Partnership decreased slightly as of December 31, 1994 when compared to
December 31, 1993. Additionally, in February 1995, the Meridian Hills Court
Apartments wrap-around note was repaid and the Partnership received net
proceeds of approximately $1,340,000. A portion of the cash reserves will be
retained for future working capital requirements, and a portion is expected to
be distributed to Limited Partners.
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 1994 and 1993, the Balcones Woods and Songbird Phases I and II
apartment complexes generated positive cash flow. The Eagles Pointe Apartments
generated a marginal cash flow deficit during 1994 and a significant cash flow
deficit during 1993. The Eagles Pointe deficits are primarily a result of
maintenance and repairs expenditures which were deferred in prior years. The
majority of these deferred items have been completed as of December 31, 1994.
<PAGE>
The Bemis Square Shopping Center and the Via El Camino Apartments, which were
sold in 1994, generated positive cash flow during 1993.
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 December 31, 1994, the occupancy rates of the Partnership's
properties ranged from 92% to 94%. 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.
In February 1994, the Partnership sold the Bemis Square Shopping Center for a
sale price of $4,350,000. The purchaser acquired the property subject to a
mortgage loan which had an outstanding principal balance of $3,602,118. The
Partnership received net sales proceeds of $588,607 after payment of closing
costs. See Note 9 of Notes to Financial Statements for additional information.
In May 1994, the Partnership sold the Via El Camino Apartments for a sale price
of $7,150,000. A portion of the sale proceeds was used to repay the mortgage
loan of $5,530,000. The Partnership received the remaining net sales proceeds
of $1,459,116 after payment of closing costs. See Note 9 of Notes to Financial
Statements for additional information.
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 January 1995, the Partnership made a distribution of $127,879 ($1.725 per
Interest) to the holders of Limited Partnership Interests for the fourth
quarter of 1994, representing available Net Cash Receipts. Distributions to
Limited Partners were reinstated at this level beginning with the second
quarter 1994 distribution. To date, investors have received distributions of
Net Cash Receipts of $20.175 and Net Cash Proceeds of $310, totaling $330.175
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. In light of results to date and
current market conditions, the General Partner does not anticipate that
investors will recover all of their original capital.
The General Partner has recently completed the outsourcing of the financial
reporting and accounting services, transfer agent and investor records
services, and computer operations and systems development functions that
provided services to the Partnership. All of these functions are now being
provided by independent third parties. Additionally, Allegiance Realty Group,
Inc., which has provided property management services to all of the
Partnership's properties, was sold to a third party. Each of these transactions
occurred after extensive due diligence and competitive bidding processes. The
General Partner does not believe that the cost of providing these services to
the Partnership, in the aggregate, will be materially different to the
Partnership during 1995 when compared to 1994.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
<PAGE>
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
Item 8. Financial Statements and Supplementary Data
- ---------------------------------------------------
See Index to Financial Statements and Financial Statement Schedule in this
Form 10-K.
The supplemental financial information specified by Item 302 of Regulation S-K
is not applicable.
The net effect of the differences between the financial statements and the tax
returns is summarized as follows:
December 31, 1994 December 31, 1993
----------------------- -----------------------
Financial Tax Financial Tax
Statements Returns Statements Returns
---------- --------- ---------- ---------
Total assets $26,891,815 $28,024,973 $ 34,122,065 $ 32,586,581
Partners' capital
(deficit):
General Partner (3,843,930) (5,177,262) (3,894,154) (6,507,411)
Limited Partners 989,189 3,067,569 (4,127,941) (3,198,603)
Net income (loss):
General Partner 50,224 1,330,149 (526) (2,077,724)
(A) (A)
Limited Partners 5,372,888 6,521,930 3,749,853 1,103,744
(A) (A)
Per Limited
Partnership
Interest 72.48 87.98 50.58 14.89
(A) Includes a net long term capital gain of $8,404,796 and a net long-term
capital loss of $(3,572,281) for 1994 and 1993, respectively.
Item 9. Changes in and Disagreements with Accountants on Accounting and
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Financial Disclosure
- --------------------
There have been no changes in or disagreements with accountants on any matter
of accounting principles, practices or financial statement disclosure.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
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(a) Neither the Registrant nor Balcor Partners-XI, its General Partner, has a
Board of Directors.
(b, c & e) The names, ages and business experience of the executive officers
and significant employees of the General Partner of the Registrant are as
follows:
TITLE OFFICERS
----- --------
Chairman, President and Chief Thomas E. Meador
Executive Officer
Executive Vice President, Allan Wood
Chief Financial Officer and
Chief Accounting Officer
Senior Vice President Alexander J. Darragh
First Vice President Daniel A. Duhig
First Vice President Josette V. Goldberg
First Vice President Alan G. Lieberman
First Vice President Brian D. Parker
and Assistant Secretary
First Vice President John K. Powell, Jr.
First Vice President Reid A. Reynolds
First Vice President Thomas G. Selby
Thomas E. Meador (July 1947) joined Balcor in July 1979. He is Chairman,
President and Chief Executive Officer and has responsibility for all ongoing
day-to-day activities at Balcor. He is a Director of The Balcor Company.
Prior to joining Balcor, Mr. Meador was employed at the Harris Trust and
Savings Bank in the commercial real estate division where he was involved in
various lending activities. Mr. Meador received his M.B.A. degree from the
Indiana University Graduate School of Business.
Allan Wood (January 1949) joined Balcor in August 1983 and, as Balcor's Chief
Financial Officer and Chief Accounting Officer, is responsible for the
financial and administrative functions. He is also a Director of The Balcor
Company. Mr. Wood is a Certified Public Accountant. Prior to joining Balcor,
he was employed by Price Waterhouse where he was involved in auditing public
and private companies.
Alexander J. Darragh (February 1955) joined Balcor in September 1988 and has
primary responsibility for the Portfolio Advisory Group. He is responsible for
due diligence analysis and real estate advisory services in support of asset
management, institutional advisory and capital markets functions. Mr. Darragh
has supervisory responsibility of Balcor's Investor Services, Investment
Administration, Fund Management and Land Management departments. Mr. Darragh
received masters' degrees in Urban Geography from Queens's University and in
Urban Planning from Northwestern University.
Daniel A. Duhig (October 1956) joined Balcor in November 1986 and is
responsible for the Asset Management Department relating to real estate
investments made by Balcor and its affiliated partnerships, including
negotiations for modifications or refinancings of real estate mortgage
investments and the disposition of real estate investments.
Josette V. Goldberg (April 1957) joined Balcor in January 1985 and has primary
responsibility for all human resources matters. In addition, she has
supervisory responsibility for Balcor's administrative and MIS departments.
Ms. Goldberg has been designated as a Senior Human Resources Professional
<PAGE>
(SHRP).
Alan G. Lieberman (June 1959) joined Balcor in May 1983 and is responsible for
the Property Sales and Capital Markets Groups. Mr. Lieberman is a Certified
Public Accountant.
Brian D. Parker (June 1951) joined Balcor in March 1986 and is responsible for
Balcor's corporate and property accounting, treasury and budget activities.
Mr. Parker is a Certified Public Accountant and holds an M.S. degree in
Accountancy from DePaul University.
John K. Powell, Jr. (June 1950) joined Balcor in September 1985 and is
responsible for the administration of the investment portfolios of Balcor's
partnerships and for Balcor's risk management functions. Mr. Powell received a
Master of Planning degree from the University of Virginia. He has been
designated a Certified Real Estate Financier by the National Society for Real
Estate Finance and is a full member of the Urban Land Institute.
Reid A. Reynolds (April 1950) joined Balcor in March 1981 and is involved with
the asset management of residential properties for Balcor. Mr. Reynolds is a
licensed Real Estate Broker in the State of Illinois.
Thomas G. Selby (July 1955) joined Balcor in February 1984 and has
responsibility for various Asset Management functions, including oversight of
the residential portfolio. From January 1986 through September 1994, Mr. Selby
was Regional Vice President and then Senior Vice President of Allegiance Realty
Group, Inc., an affiliate of Balcor providing property management services.
Mr. Selby was responsible for supervising the management of residential
properties in the western United States.
(d) There is no family relationship between any of the foregoing officers.
(f) None of the foregoing officers or employees are currently involved in any
material legal proceedings nor were any such proceedings terminated during the
fourth quarter of 1994.
<PAGE>
Item 11. Executive Compensation
- -------------------------------
The Registrant has not paid and does not propose to pay any remuneration to the
executive officers and directors of Balcor Partners - XI, the General Partner.
Certain of these officers receive compensation from The Balcor Company (but not
from the Registrant) for services performed for various affiliated entities,
which may include services performed for the Registrant. However, the General
Partner believes that any such compensation attributable to services performed
for the Registrant is immaterial to the Registrant. See Note 8 of Notes to
Financial Statements for the information relating to transactions with
affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
(a) No person owns of record or is known by the Registrant to own beneficially
more than 5% of the outstanding Limited Partnership Interests of the
Registrant.
(b) Neither Balcor Partners-XI nor its officers or partners own any Limited
Partnership Interests of the Registrant.
Relatives and affiliates of the officers and partners of the General Partner
own 25 Limited Partnership Interests.
(c) The Registrant is not aware of any arrangements, the operation of which may
result in a change of control of the Registrant.
Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------
(a & b) See Note 8 of Notes to Financial Statements for additional information
relating to transactions with affiliates.
See Note 2 of Notes to Financial Statements for information relating to the
Partnership Agreement and the allocation of distributions and profits and
losses.
(c) No management person is indebted to the Registrant.
(d) The Registrant has no outstanding agreements with any promoters.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K
- ------------------------------------------------------------------------
(a)
(1 & 2) See Index to Financial Statements and Financial Statement Schedule in
this Form 10-K.
(3) Exhibits:
(3) The Amended and Restated Agreement of Limited Partnership set forth as
Exhibit 3 to Post-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form S-11 dated January 15, 1982 (Registration No. 2-74358), is
incorporated herein by reference.
(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.
(10) Material Contracts:
(i) The Agreement of Sale of Via El Camino Apartments, Phoenix, Arizona,
included as Exhibit 2 to the Registrant's Report on Form 8-K dated April 13,
1994 is incorporated herein by reference.
(ii) The Agreement of Sale and attachments thereto and the Escrow Agreement
relating to the sale of the Southgate Shopping Center included as Exhibit 2 to
the Registrant's Report on Form 10-Q for the quarter ended March 31, 1993 are
incorporated herein by reference.
(iii) The Agreement of Sale and attachments thereto and the Escrow Agreement
relating to the sale of Bemis Square Shopping Center included as Exhibit 2 to
the Registrant's Report on Form 10-K for the year ended December 31, 1993 are
incorporated herein by reference.
(iv) The Agreement of Sale and attachments thereto and the Escrow Agreement
relating to the sale of 1400 North Lake Shore Drive Apartment Building included
as Exhibit 2 to the Registrant's Report on
Form 10-K for the year ended December 31, 1992 are incorporated herein by
reference.
(27) Financial Data Schedule of the Registrant for 1994 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended December 31, 1994.
(c) Exhibits: See Item 14(a)(3) above.
(d) Financial Statement Schedule: See Index to Financial Statements and
Financial Statement Schedule attached hereto in this Form 10-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of l934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BALCOR REALTY INVESTORS LTD.-82
By: /s/Allan Wood
---------------------------
Allan Wood
Executive Vice President, and Chief
Accounting and Financial Officer
(Principal Accounting and Financial
Officer) of Balcor Partners-XI, the
General Partner
Date: March 27, 1995
------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
- ---------------------- ------------------------------- ------------
President and Chief Executive
Officer (Principal Executive
Officer) of Balcor Partners-XI,
/s/Thomas E. Meador the General Partner March 27, 1995
- -------------------- --------------
Thomas E. Meador
Executive Vice President, and
Chief Accounting and Financial
Officer (Principal Accounting
and Financial Officer) of
Balcor Partners-XI, the
/s/Allan Wood General Partner March 27, 1995
- -------------------- --------------
Allan Wood
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Report of Independent Accountants
Financial Statements:
Balance Sheets, December 31, 1994 and 1993
Statements of Partners' Deficit, for the years ended December 31, 1994, 1993
and 1992
Statements of Income and Expenses, for the years ended December 31, 1994, 1993
and 1992
Statements of Cash Flows, for the years ended December 31, 1994, 1993 and 1992
Notes to Financial Statements
Financial Statement Schedule:
III - Real Estate and Accumulated Depreciation, as of December 31, 1994
Financial Statement Schedules, other than that listed, are omitted for the
reason that they are inapplicable or equivalent information has been included
elsewhere herein.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Balcor Realty Investors Ltd.-82:
We have audited the financial statements and the financial statement schedule
of Balcor Realty Investors Ltd.-82 (An Illinois Limited Partnership) as listed
in the index of this Form 10-K. These financial statements and the financial
statement schedule are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Balcor Realty Investors
Ltd.-82 at December 31, 1994 and 1993, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles. In addition,
in our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
March 13, 1995
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
BALANCE SHEETS
December 31, 1994 and 1993
ASSETS
1994 1993
------------- -------------
Cash and cash equivalents $ 4,292,726 $ 4,448,617
Restricted investments 1,230,000 1,230,000
Escrow deposits 1,149,063 1,650,613
Accounts and accrued interest receivable 112,860 86,451
Wrap-around note receivable 6,150,000 6,150,000
Deferred gain on sale of property (3,244,180) (3,244,180)
Deferred expenses, net of accumulated
amortization of $175,843 in 1994 and
$287,744 in 1993 569,532 662,981
------------- -------------
10,260,001 10,984,482
------------- -------------
Investment in real estate, at cost:
Land 3,452,798 5,035,382
Buildings and improvements 25,174,333 33,363,751
------------- -------------
28,627,131 38,399,133
Less accumulated depreciation 11,995,317 15,261,550
------------- -------------
Investment in real estate,
net of accumulated depreciation 16,631,814 23,137,583
------------- -------------
$ 26,891,815 $ 34,122,065
============= =============
LIABILITIES AND PARTNERS' DEFICIT
Accounts payable $ 140,229 $ 427,380
Due to affiliates 97,841 66,931
Accrued liabilities, principally interest
and real estate taxes 520,304 778,752
Escrow liabilities 39,877 13,626
Security deposits 125,268 142,757
Mortgage notes payable 28,823,037 38,391,369
Mortgage note payable - affiliate 2,323,345
------------- -------------
Total liabilities 29,746,556 42,144,160
Partners' deficit (74,133 Limited Partnership
Interests issued and outstanding) (2,854,741) (8,022,095)
------------- -------------
$ 26,891,815 $ 34,122,065
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
STATEMENTS OF PARTNERS' DEFICIT
for the years ended December 31, 1994, 1993 and 1992
Partners' (Deficit) Capital Accounts
-------------------------------------------
General Limited
Total Partner Partners
------------- ------------- -------------
Balance at December 31, 1991 $(19,274,415) $ (3,928,501) $(15,345,914)
Net income for the year
ended December 31, 1992 7,502,993 34,873 7,468,120
------------- ------------- -------------
Balance at December 31, 1992 (11,771,422) (3,893,628) (7,877,794)
Net income (loss) for the year
ended December 31, 1993 3,749,327 (526) 3,749,853
------------- ------------- -------------
Balance at December 31, 1993 (8,022,095) (3,894,154) (4,127,941)
Cash distributions to
Limited Partners(A) (255,758) (255,758)
Net income for the year
ended December 31, 1994 5,423,112 50,224 5,372,888
------------- ------------- -------------
Balance at December 31, 1994 $ (2,854,741) $ (3,843,930) $ 989,189
============= ============= =============
(A) Summary of cash distributions paid per Limited Partnership Interest:
1994 1993 1992
------------ ------------ ------------
First Quarter None None None
Second Quarter None None None
Third Quarter $1.725 None None
Fourth Quarter $1.725 None None
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 years ended December 31, 1994, 1993 and 1992
1994 1993 1992
------------- ------------- -------------
Income:
Rental and service $ 7,188,617 $ 8,304,686 $ 11,714,242
Interest on short-term
investments 247,640 145,095 135,973
Interest on wrap-around note
receivable 655,750 561,188 553,500
Other income 300,000
------------- ------------- -------------
Total income 8,392,007 9,010,969 12,403,715
------------- ------------- -------------
Expenses:
Interest on mortgage
notes payable 2,834,551 3,766,507 5,313,590
Depreciation 849,210 1,066,030 1,732,437
Amortization of deferred
expenses 93,449 84,659 177,618
Property operating 2,090,958 2,139,579 2,905,536
Maintenance and repairs 1,076,899 1,288,867 974,154
Real estate taxes 649,662 711,189 1,062,791
Property management fees 358,941 424,476 604,832
Administrative 538,507 480,141 636,675
------------- ------------- -------------
Total expenses 8,492,177 9,961,448 13,407,633
------------- ------------- -------------
Loss before net gains on sales
of properties, write-off
of real estate commissions
and extraordinary items (100,170) (950,479) (1,003,918)
Net gains on sales of
properties 5,523,282 367,183 1,006,738
Write-off of real estate
commissions payable to
General Partner 1,772,250
------------- ------------- -------------
Income (loss) before
extraordinary items 5,423,112 (583,296) 1,775,070
Extraordinary items:
Gain on forgiveness of debt 4,332,623
Gains on foreclosures
of properties 5,727,923
------------- ------------- -------------
Net income $ 5,423,112 $ 3,749,327 $ 7,502,993
============= ============= =============
Income (loss) before
extraordinary items
allocated to General Partner $ 50,224 $ (43,852) $ (22,406)
============= ============= =============
Income (loss) before
extraordinary items allocated
to Limited Partners $ 5,372,888 $ (539,444) $ 1,797,476
============= ============= =============
Income (loss) before
extraordinary items per
Limited Partnership Interest
(74,133 issued and
<PAGE>
outstanding) $ 72.48 $ (7.28) $ 24.25
============= ============= =============
Extraordinary items allocated
to General Partner None $ 43,326 $ 57,279
============= ============= =============
Extraordinary items allocated
to Limited Partners None $ 4,289,297 $ 5,670,644
============= ============= =============
Extraordinary items per Limited
Partnership Interest (74,133
issued and outstanding) None $ 57.86 $ 76.49
============= ============= =============
Net income (loss) allocated to
General Partner $ 50,224 $ (526) $ 34,873
============= ============= =============
Net income allocated to
Limited Partners $ 5,372,888 $ 3,749,853 $ 7,468,120
============= ============= =============
Net income per Limited
Partnership Interest (74,133
issued and outstanding) $ 72.48 $ 50.58 $ 100.74
============= ============= =============
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 years ended December 31, 1994, 1993 and 1992
1994 1993 1992
------------- ------------- -------------
Operating activities:
Net income $ 5,423,112 $ 3,749,327 $ 7,502,993
Adjustments to reconcile net
income to net cash
provided by or used in
operating activities:
Net gains on sales of
properties (5,523,282) (367,183) (1,006,738)
Gain on forgiveness
of debt (4,332,623)
Write-off of real estate
commissions payable to
General Partner (1,772,250)
Gains on foreclosures
of properties (5,727,923)
Other income (300,000)
Depreciation of
properties 849,210 1,066,030 1,732,437
Amortization of deferred
expenses 93,449 84,659 177,618
Net change in:
Escrow deposits 84,996 (582,707) 53,127
Accounts and accrued
interest receivable (26,409) 3,678 163,529
Accounts payable 12,849 (168,041) (74,303)
Due to affiliates 30,910 (21,742) (39,217)
Accrued liabilities (258,448) 23,538 530,111
Escrow liabilities 26,251 2,838 (10,590)
Security deposits (17,489) 3,487 (202,254)
------------- ------------- -------------
Net cash provided by or used
in operating activities 395,149 (538,739) 1,326,540
------------- ------------- -------------
Investing activities:
Proceeds from sales of
properties 7,897,882 11,664,858 750,000
Payment of selling costs (320,159) (120,599) (86,281)
Improvements to properties (266,691) (165,305)
Purchase of restricted
investments (1,230,000)
Proceeds relating to land
condemnation 654,922
------------- ------------- -------------
Net cash provided by
investing activities 7,577,723 10,047,568 1,153,336
------------- ------------- -------------
Financing activities:
Distributions to Limited
Partners (255,758)
Repayment of mortgage note
payable - affiliate (2,323,345)
Proceeds from refinancings of
<PAGE>
mortgage notes payable 16,925,000
Repayment of mortgage
notes payable (5,530,000) (23,686,375)
Principal payments on
mortgage notes payable (436,214) (352,338) (1,578,196)
Funding of capital
improvement escrows (129,200) (740,758) (352,613)
Disbursements from capital
improvement escrows 545,754 33,285 112,851
Payment of deferred expenses (626,381)
------------- ------------- -------------
Net cash used in financing
activities (8,128,763) (8,447,567) (1,817,958)
------------- ------------- -------------
Net change in cash and
cash equivalents (155,891) 1,061,262 661,918
Cash and cash equivalents at
beginning of year 4,448,617 3,387,355 2,725,437
------------- ------------- -------------
Cash and cash equivalents at
end of year $ 4,292,726 $ 4,448,617 $ 3,387,355
============= ============= =============
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 Policies:
(a) Depreciation expense is computed using straight-line and accelerated
methods. Rates used in the determination of depreciation are based upon the
following estimated useful lives:
Years
-----
Buildings and improvements 20 to 30
Furniture and fixtures 5
Depreciation expense for tenant improvements was computed using a straight-line
method over the term of the lease.
Maintenance and repairs are charged to expense when incurred. Expenditures for
improvements are charged to the related asset account.
When properties are sold, the related costs and accumulated depreciation are
removed from the respective accounts. Any gain or loss on disposition is
recognized in accordance with generally accepted accounting principles.
Deferred gains on sales of properties result from prior year sales being
recorded under the installment method. Gains are recognized (based on the gross
profit percentage) as future sales proceeds are collected.
The Partnership records its investments in real estate at cost, and
periodically assesses possible impairment to the value of its properties. In
the event that the General Partner determines that a permanent impairment in
value has occurred, the carrying basis of the property is reduced to its
estimated fair value.
(b) Deferred expenses consist of financing fees which are amortized over the
terms of the respective agreements.
(c) Cash equivalents include all highly liquid investments with a maturity of
three months or less when purchased.
(d) The Partnership is not liable for Federal income taxes and each partner
recognizes his proportionate share of the Partnership income or loss in his tax
return; therefore, no provision for income taxes is made in the financial
statements of the Partnership.
2. Partnership Agreement:
The Partnership was organized during June 1981. The Partnership Agreement
provides for Balcor Partners-XI to be the General Partner and for the admission
of Limited Partners through the sale of up to 75,000 Limited Partnership
Interests at $1,000 per Interest, 74,133 of which were sold on or prior to
May 29, 1982, the termination date of the offering.
The Partnership Agreement generally provides that the General Partner will be
allocated 5% of the profits and losses. Profits and losses from property
dispositions will be allocated 1% to the General Partner and 99% to Limited
Partners. One hundred percent of Net Cash Receipts available for distribution
shall be distributed to the holders of Interests. In addition, there shall be
accrued for the benefit of the General Partner as its distributive share from
operations, an amount equivalent to approximately 5% of the total Net Cash
Receipts being distributed, which will be paid only out of Net Cash Proceeds.
The payment of this amount to the General Partner is subordinated to the return
to holders of Interests of their Original Capital plus a 3% per annum
Cumulative Distribution on Adjusted Original Capital, as described below.
<PAGE>
Under certain circumstances, the General Partner may also participate in the
Net Cash Proceeds of (i) the refinancing of Partnership properties and (ii) the
sale of Partnership properties. When and as the Partnership sells or refinances
its properties, the Net Cash Proceeds resulting therefrom, which are available
for distribution, will be distributed only to holders of Interests until such
time as holders of Interests have received an amount equal to their Original
Capital plus a 3% per annum Cumulative Distribution on Adjusted Original
Capital. Thereafter, the General Partner will receive 15% of further
distributed Net Cash Proceeds. Such distribution will include the accrued
distributive share from operations.
3. 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. As a
result of this repayment, the Partnership will recognize the remaining deferred
gain of $3,244,180 from the property sale in its 1995 financial statements. The
Partnership had recognized interest income related to this wrap-around note
during each of 1994, 1993 and 1992.
<PAGE>
4. Mortgage Notes Payable:
Mortgage notes payable at December 31, 1994 and 1993 consisted of the following:
<TABLE>
<CAPTION>
Carrying Carrying Current Final
Amount of Amount of Inter- Matur- Current Estimated
Property Pledged Notes at Notes at est ity Monthly Balloon
as Collateral 12/31/94 12/31/93 Rate Date Payment Payment
- ----------------- ---------- ---------- ------ ------ ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Apartment Complexes:
Balcones Woods (A) $9,464,764 $9,599,766 7.625% 2003 $71,726 $7,701,000
Eagles Pointe 4,539,803 4,659,290 9.750% 1998 47,254 4,102,000
2,798,517 2,813,750 11.875% 1998 29,046 2,742,000
Meridian Hills Court (B) 4,814,381 4,874,192
Songbird Phases I and II (C) 7,205,572 7,308,580 7.625% 2003 54,728 5,876,000
Via El Camino (D) 5,530,000
Shopping Center:
Bemis Square (D) 3,605,791
----------- ----------
Mortgage Notes Payable -
Nonaffiliates 28,823,037 38,391,369
Mortgage Note Payable - Affiliate:
Songbird Phases I and II (E) 2,323,345
----------- -----------
Total $28,823,037 $40,714,714
=========== ===========
</TABLE>
See notes (A) through (E) following.
<PAGE>
(A) In October 1993, this loan was refinanced. The interest rate decreased from
9.75% to 7.625%, the maturity date was extended from October 1993 to November
2003 and the monthly payments increased from $63,835 to $71,726. A portion of
the proceeds from the new $9,600,000 first mortgage loan was used to repay the
existing mortgage loan of $6,817,737.
(B) In February 1995, the note which wraps around this mortgage note payable
was repaid in full. As of this repayment, the Partnership no longer has any
further obligation related to this mortgage note payable. See Note 3 of Notes
to Financial Statements for additional information.
(C) In October 1993, this loan was refinanced. The interest rate decreased from
9.875% to 7.625%, the maturity date was extended from October 1993 to November
2003 and the monthly payments increased from $51,406 to $54,728. A portion of
the proceeds from the new $7,325,000 first mortgage loan was used to repay the
existing mortgage loan of $5,758,484.
(D) This property was sold during 1994. See Note 9 of Notes to Financial
Statements for additional information.
(E) This loan was repaid in June 1994. See Note 8 of Notes to Financial
Statements for additional information.
The Partnership's mortgage loans described above all require current monthly
payments of principal and interest.
The Partnership incurred interest expense on non-affiliated mortgage notes
payable of $2,792,114, $3,551,828 and $5,062,522 and paid interest expense of
$2,792,114, $3,551,828 and $4,662,318 during 1994, 1993 and 1992, respectively.
Approximate principal maturities of the above mortgage notes payable during
each of the next five years are as follows:
1995 $ 406,000
1996 442,000
1997 465,000
1998 7,167,000
1999 348,000
The Meridian Hills Court Apartments wrap-around note was repaid in February
1995, and these maturities exclude the related mortgage note payable.
5. Management Agreements:
As of December 31, 1994, all of the properties owned by the Partnership are
under management agreements with a third-party management company. These
management agreements provide for annual fees of 5% of gross operating
receipts.
6. Seller's Participation in Joint Venture:
The Balcones Woods Apartments is owned by a joint venture between the
Partnership and the seller. Consequently, the property seller retains an
interest in the property through its interest in the joint venture. All assets,
liabilities, income and expenses of the joint venture are included in the
financial statements of the Partnership with the appropriate adjustment, if
any, for the seller's participation in the joint venture.
7. Tax Accounting:
The Partnership keeps its books in accordance with the Internal Revenue Code,
rules and regulations promulgated thereunder and existing interpretations
thereof. The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles will differ from the
tax returns due to the different treatment of various items as specified in the
Internal Revenue Code. For 1994, the net effect of these accounting differences
<PAGE>
is that the net income for 1994 in the financial statements is $2,428,967 less
than the tax income of the Partnership for the same period.
8. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/94 12/31/93 12/31/92
-------------- ---------------- ----------------
Paid Payable Paid Payable Paid Payable
------ ------- ------ ------- ------ -------
Property manage-
ment fees $336,869 None $424,534 $35,260 $631,372 $35,318
Reimbursement of
expenses to
General Partner,
at cost:
Accounting 66,482 $25,801 58,691 4,849 66,075 4,882
Data processing 44,605 10,907 32,306 6,148 37,168 3,050
Investor com-
munications 20,355 5,898 18,645 1,541 12,803 946
Legal 10,594 8,392 15,634 1,292 18,339 1,355
Portfolio
management 65,643 39,974 77,270 16,561 84,785 41,909
Other 12,668 6,869 15,490 1,280 16,427 1,213
Allegiance Realty Group, Inc., an affiliate of the General Partner, managed all
of the Partnership's properties until the affiliate was sold to a third party
in November 1994.
The General Partner had voluntarily waived its right to receive real estate
commissions accrued by the Partnership in previous years. The payment of these
commissions had been subordinated to a cumulative return to the Limited
Partners as set forth in the Partnership Agreement. As a result, real estate
commissions payable to the General Partner were written-off, and the resulting
income of $1,772,250 was recognized in the financial statements during 1992.
In June 1994, the Partnership used cash reserves to repay 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. The Partnership incurred interest expense of $42,437,
$214,679 and $251,068 and paid interest expense of $72,120, $206,003 and
$251,068 on this loan during 1994, 1993 and 1992, respectively.
The Partnership was required to post a $1,230,000 letter of credit as
additional collateral for the Eagles Pointe Apartments mortgage note payable.
An affiliate of the General Partner originally had been providing a guarantee
for this letter of credit. During 1993, the Partnership pledged $1,230,000 from
its cash reserves as cash collateral for the letter of credit in place of the
affiliate's guarantee. The amount pledged as collateral is invested in
short-term instruments pursuant to the terms of the pledge agreement with the
lending institution. Interest earned on this amount accumulates for the benefit
of the Partnership.
The Partnership participates in an insurance deductible program with other
affiliated partnerships in which the program pays claims up to the amount of
the deductible under the master insurance policies for its properties. The
program is administered by an affiliate of the General Partner who receives no
fee for administering the program. The Partnership's premiums to the deductible
insurance program were $66,189, $46,181 and $84,122 for 1994, 1993 and 1992,
respectively.
9. Property Sales:
<PAGE>
(a) In May 1994, the Partnership sold the Via El Camino Apartments for a sale
price of $7,150,000. From the proceeds of the sale, the Partnership paid
$5,530,000 in full satisfaction of the property's first mortgage loan. The
basis of the property sold was $3,841,250, net of accumulated depreciation of
$2,536,427, and for financial statement purposes, the Partnership recognized a
gain of $3,147,866 from the sale of the property.
(b) In February 1994, the Partnership sold the Bemis Square Shopping Center,
including a leasehold interest in a portion of the land, for a sale price of
$4,350,000. The purchaser assumed the existing first mortgage loan in the
amount of $3,602,118. The basis of the property sold was $1,815,309, net of
accumulated depreciation of $1,579,016, and for financial statement purposes,
the Partnership recognized a gain of $2,375,416 from the sale of the property.
(c) In June 1993, the Partnership sold the Southgate Shopping Center for a sale
price of $2,600,000. The purchaser assumed the existing first mortgage loan in
the amount of $2,135,142. The basis of the property sold was $1,736,952, net of
accumulated depreciation of $1,335,655, and for financial statement purposes,
the Partnership recognized a gain of $832,295 from the sale of the property.
(d) In May 1993, the Partnership sold the 1400 North Lake Shore Drive Apartment
Building for a sale price of $11,200,000. The Partnership paid net proceeds of
$11,110,154 after selling costs in full satisfaction of the outstanding first
mortgage loan, accrued interest and real estate tax advances due to an
affiliate of the General Partner. In March 1993, the first mortgage loan was
purchased by this affiliate, which had also advanced the funds in April 1993 to
pay the delinquent real estate taxes on the property. The balance of the first
mortgage loan was $13,000,000 and the accrued interest expense and real estate
taxes totaled $2,442,777, net of escrows of $200,372 withheld by the first
mortgage holder. For financial statement purposes, the Partnership recognized
an extraordinary gain of $4,332,623 relating to the forgiveness of debt. The
basis of the property was $11,575,266, net of accumulated depreciation of
$927,147. For financial statement purposes, a loss of $465,112 was recognized
from the sale of the property.
(e) In December 1992, the Partnership sold the Millington Square Shopping
Center for a sale price of $3,256,564. The purchaser assumed the existing first
mortgage loan in the amount of $2,506,564. The basis of the property sold was
$2,163,545, net of accumulated depreciation of $1,611,046, and for financial
statement purposes, the Partnership recognized a gain of $1,006,738 from the
sale of the property.
10. Extraordinary Items:
(a) The Partnership recognized an extraordinary gain on forgiveness of debt in
1993 related to the 1400 North Lake Shore Drive Apartment Building. See Note 9
for additional information.
(b) In February and September 1992, titles to the Foxwood and Shallowford Ridge
apartment complexes, respectively, were relinquished through foreclosure. The
Partnership wrote-off the property bases of $9,344,561, net of accumulated
depreciation of $5,352,932, the mortgage loan balances of $14,500,175 and other
liabilities of $572,309. The Partnership recognized extraordinary gains on
foreclosures related to these transactions totaling $5,727,923 during 1992.
11. Subsequent Event:
In January 1995, the Partnership made a distribution of $127,879 ($1.725 per
Interest) to the holders of Limited Partnership Interests for the fourth
quarter of 1994.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1994
<CAPTION>
Col. A Col. B Col. C Col. D
- --------------------- -------- -------------------- ---------------------------------
Initial Cost Cost Adjustments
to Partnership Subsequent to Acquisition
-------------------- ---------------------------------
Buildings Carrying
Encum- and Im- Improve- Costs
Description brances Land provements Land ments (a)
- --------------------- ------- -------- ------------ -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balcones Woods Apts.,
384-units, Austin, TX (d) $1,542,435 $ 7,546,641 $(28,797) $240,505 $2,360,548
Eagles Pointe Apts.,
252-units, Atlanta, GA (d) 565,000 7,315,000 47,870 171,476
Songbird Phases I and
II Apts., 262-units,
San Antonio, TX (d) 941,000 7,709,000 29,451 187,002
---------- ----------- -------- -------- ----------
Total $3,048,435 $22,570,641 $(28,797) $317,826 $2,719,026
========== =========== ======== ======== ==========
</TABLE>See notes (a) through (e) following.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1994
(Continued)
<CAPTION>
Col. A Col. E Col. F Col. G Col. H Col. I
- ------------------- -------------------------------- -------- -------- ------ --------------
Gross Amounts at Which Life Upon
Carried at Close of Period Which Depre-
------------------------------- ciation in
Buildings Accumulated Date Date Latest Income
and Im- Total Deprecia- of Con- Acq- Statement
Description Land provements (b)(c) tion(c) struction uired is Computed
- ------------------- -------- ---------- ---------- --------- --------- ----- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balcones Woods Apts.,
384-units, Austin, TX $1,914,223 $ 9,747,109 $11,661,332 $4,464,815 1983 9/81 (e)
Eagles Pointe Apts.,
252-units, Atlanta,
GA 577,249 7,522,097 8,099,346 3,733,074 1977 6/82 (e)
Songbird Phases I and
II Apts., 262-units,
San Antonio, TX 961,326 7,905,127 8,866,453 3,797,428 1981/1982 6/82 (e)
---------- ----------- ----------- -----------
Total $3,452,798 $25,174,333 $28,627,131 $11,995,317
========== =========== =========== ===========
</TABLE>
See notes (a) through (e) following.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
NOTES TO SCHEDULE III
(a) Consists of legal fees, appraisal fees, title costs, other related
professional fees and capitalized construction period interest.
(b) The aggregate cost of land for Federal income tax purposes is $3,052,213
and the aggregate cost of buildings and improvements for Federal income tax
purposes is $23,414,026. The total of the above-mentioned is $26,466,239.
(c) Reconciliation of Real Estate
-----------------------------
1994 1993 1992
---------- ---------- ----------
Balance at beginning of year $38,399,133 $53,707,462 $72,014,241
Additions during year:
Capital improvements 266,691 78,436
Tenant improvements 86,869
Deductions during year:
Cost of real estate sold (9,772,002) (15,575,020) (3,774,591)
Foreclosures of investment
properties (14,697,493)
----------- ----------- -----------
Balance at end of year $28,627,131 $38,399,133 $53,707,462
=========== =========== ===========
Reconciliation of Accumulated Depreciation
------------------------------------------
1994 1993 1992
---------- ---------- ----------
Balance at beginning of year $15,261,550 $16,458,322 $21,689,863
Depreciation expense for
the year 849,210 1,066,030 1,732,437
Accumulated depreciation of
foreclosed investment
properties (5,352,932)
Accumulated depreciation of
real estate sold (4,115,443) (2,262,802) (1,611,046)
----------- ---------- -----------
Balance at end of year $11,995,317 $15,261,550 $16,458,322
=========== =========== ===========
(d) See descriptions of mortgage notes payable in Note 4 of Notes to Financial
Statements.
<PAGE>
(e) Depreciation expense is computed based upon the following estimated useful
lives:
Years
-----
Buildings and improvements 20 to 30
Furniture and fixtures 5
Depreciation expense for tenant improvements is computed using a straight-line
method over the term of the lease.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 4293
<SECURITIES> 1230
<RECEIVABLES> 6263
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6785
<PP&E> 28627
<DEPRECIATION> 11995
<TOTAL-ASSETS> 26892
<CURRENT-LIABILITIES> 924
<BONDS> 28823
<COMMON> 0
0
0
<OTHER-SE> (2855)
<TOTAL-LIABILITY-AND-EQUITY> 26892
<SALES> 0
<TOTAL-REVENUES> 13915
<CGS> 0
<TOTAL-COSTS> 4176
<OTHER-EXPENSES> 1481
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2835
<INCOME-PRETAX> 5423
<INCOME-TAX> 0
<INCOME-CONTINUING> 5423
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5423
<EPS-PRIMARY> 72.48
<EPS-DILUTED> 72.48
</TABLE>
