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 end September 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
September 30, 1995 and December 31, 1994
(UNAUDITED)
ASSETS
1995 1994
------------- -------------
Cash and cash equivalents $ 3,332,863 $ 4,292,726
Restricted investments 1,230,000 1,230,000
Escrow deposits 683,631 1,149,063
Accounts and accrued interest receivable 8,688 112,860
Prepaid expenses 109,239
Wrap-around note receivable 6,150,000
Deferred gain on sale of property (3,244,180)
Deferred expenses, net of accumulated
amortization of $148,432, in 1995
and $175,843 in 1994 506,448 569,532
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5,870,869 10,260,001
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Investment in real estate, at cost:
Land 3,452,798 3,452,798
Buildings and improvements 25,174,333 25,174,333
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28,627,131 28,627,131
Less accumulated depreciation 12,581,772 11,995,317
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Investment in real estate, net of
accumulated depreciation 16,045,359 16,631,814
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$ 21,916,228 $ 26,891,815
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 112,287 $ 140,229
Due to affiliates 19,745 97,841
Accrued liabilities, principally
real estate taxes 406,831 520,304
Escrow liabilities 39,877
Security deposits 134,436 125,268
Mortgage notes payable 23,707,681 28,823,037
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Total liabilities 24,380,980 29,746,556
Partners' deficit (74,133 Limited
Partnership Interests issued
and outstanding) (2,464,752) (2,854,741)
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$ 21,916,228 $ 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 nine months ended September 30, 1995 and 1994
(UNAUDITED)
1995 1994
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Income:
Rental and service $ 5,311,367 $ 5,472,818
Interest on short-term investments 250,791 168,799
Interest on wrap-around note receivable 92,574 484,312
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Total income 5,654,732 6,125,929
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Expenses:
Interest on mortgage notes payable 1,564,179 2,201,129
Depreciation 586,455 653,725
Amortization of deferred expenses 63,084 74,933
Property operating 1,800,761 2,357,004
Real estate taxes 470,490 473,303
Property management fees 253,233 272,294
Administrative 327,244 371,056
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Total expenses 5,065,446 6,403,444
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Income (loss) before gains
on sales of properties 589,286 (277,515)
Gains on sales of properties 3,244,180 5,523,282
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Net income $ 3,833,466 $ 5,245,767
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Net income allocated to General Partner $ 61,906 $ 41,357
============= =============
Net income allocated to Limited Partners $ 3,771,560 $ 5,204,410
============= =============
Net income per Limited Partnership Interest
(74,133 issued and outstanding) $ 50.88 $ 70.20
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Distributions to Limited Partners $ 3,443,477 $ 127,879
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Distributions per Limited Partnership Interest $ 46.45 $ 1.725
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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 September 30, 1995 and 1994
(UNAUDITED)
1995 1994
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Income:
Rental and service $ 1,824,246 $ 1,724,633
Interest on short-term investments 78,511 55,493
Interest on wrap-around note receivable 161,437
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Total income 1,902,757 1,941,563
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Expenses:
Interest on mortgage notes payable 505,806 641,369
Depreciation 195,485 195,486
Amortization of deferred expenses 16,253 18,514
Property operating 753,780 818,604
Real estate taxes 156,772 150,408
Property management fees 84,139 86,153
Administrative 86,751 121,478
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Total expenses 1,798,986 2,032,012
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Net income (loss) $ 103,771 $ (90,449)
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Net income (loss) allocated to General Partner $ 5,188 $ (4,522)
============= =============
Net income (loss) allocated
to Limited Partners $ 98,583 $ (85,927)
============= =============
Net income (loss) per Limited Partnership
Interest (74,133 issued and outstanding) $ 1.33 $ (1.16)
============= =============
Distribution to Limited Partners $ 222,399 $ 127,879
============= =============
Distribution per Limited Partnership Interest $ 3.00 $ 1.725
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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 nine months ended September 30, 1995 and 1994
(UNAUDITED)
1995 1994
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Operating activities:
Net income $ 3,833,466 $ 5,245,767
Adjustments to reconcile net income to net
cash provided by operating activities:
Gains on sales of properties (3,244,180) (5,523,282)
Depreciation of properties 586,455 653,725
Amortization of deferred expenses 63,084 74,933
Net change in:
Accounts receivable 104,172 (32,214)
Escrow deposits 188,882 208,353
Prepaid expenses (109,239)
Accounts payable (27,942) (32,492)
Due to affiliates (78,096) 63,619
Accrued liabilities (113,473) (382,204)
Escrow liabilities (39,877) 54,485
Security deposits 9,168 (23,679)
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Net cash provided by operating activities 1,172,421 307,011
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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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Financing activities:
Distributions to Limited Partners (3,443,477) (127,879)
Repayment of mortgage note payable (5,530,000)
Repayment of mortgage note
payable-affiliate (2,323,345)
Principal payments on mortgage notes payable (307,801) (319,452)
Funding of capital improvement escrows (96,900) (96,900)
Disbursements from capital
improvement escrows 373,449 256,944
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Net cash used in financing activities (3,474,729) (8,140,632)
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Net change in cash and cash equivalents (959,863) (255,898)
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 $ 3,332,863 $ 4,192,719
============= =============
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 nine months and quarter
ended September 30, 1995, and all such adjustments are of a normal and
recurring nature.
2. Interest Expense:
During the nine months ended September 30, 1995 and 1994, the Partnership
incurred interest expense on non-affiliated mortgage notes payable of
$1,564,179 and $2,158,692 and paid interest expense of $1,564,179 and
$2,118,168, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
nine months and quarter ended September 30, 1995 were:
Paid
----------------------
Nine Months Quarter Payable
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Reimbursement of expenses to
the General Partner, at cost $188,495 $16,914 $19,745
During the nine months ended September 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.
5. Subsequent Event:
In October 1995, the Partnership made a distribution of $1,964,525 ($26.50 per
Interest) to the holders of Limited Partnership Interests representing a
regular quarterly distribution of Net Cash Receipts of $3.00 per Interest for
the third quarter of 1995 and a special distribution of $23.50 per Interest
from Net Cash Proceeds reserves.
<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
- ----------
Summary of Operations
- ---------------------
The Partnership recognized gains related to property sales during the nine
months ended September 30, 1995 and 1994. The timing and extent of these gains
resulted in a decrease in income for 1995 as compared to 1994. Further
discussion of the Partnership's operations is summarized below.
1995 Compared to 1994
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1995 and 1994 refer
to the quarter and nine months ended September 30, 1995 and 1994.
The sales of the Bemis Square Shopping Center and the Via El Camino Apartments
in February and May 1994, respectively, resulted in decreases in rental and
service income, interest expense on mortgage notes payable, depreciation,
amortization, property operating expenses, and property management fees during
the nine months ended 1995 as compared to 1994. The Partnership also
recognized gains in connection with the sales of these properties during the
nine months ended September 30, 1994.
An increase in rental revenue at the three remaining properties due to higher
rental and occupancy rates partially offset the above decrease in rental and
service income for the nine months ended September 30, 1995, and resulted in an
increase in rental and service income for the quarter ended September 30, 1995
as compared to the same period in 1994.
Interest on short-term investments increased during 1995 as compared to 1994
due to higher average cash balances as well as an increase in interest rates
earned on short-term investments.
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
1995 when compared to 1994. In addition, the Partnership recognized the final
portion of the deferred gain related to this installment sale during 1995. This
<PAGE>
gain had been deferred from 1986, when the property had been sold for a cash
down payment plus the wrap-around note.
The repayment by the Partnership 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 roof repairs, painting and interior improvements, further
contributed to the decrease in property operating expenses in 1995 as compared
to 1994.
Lower portfolio management fees and bank charges resulted in a decrease in
administrative expenses during 1995 when compared to 1994.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased as of September 30, 1995 as
compared to December 31, 1994. The Partnership received net proceeds from the
February 1995 repayment of the Meridian Hills Court Apartments wrap-around note
receivable and used these amounts along with cash reserves to fund
distributions to Limited Partners. In addition to regular quarterly
distributions, special distributions to the Limited Partners were issued from
the Partnership's cash reserves in April and October 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. During 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 improvement in cash flow at Eagles Pointe was due
primarily to a decrease in repair and maintenance expenditures. The Bemis
Square Shopping Center generated positive cash flow and the Via El Camino
Apartment Complex generated a marginal cash flow deficit prior to their
respective sales in 1994.
While certain of the Partnership's properties have 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 September 30,
1995, the occupancy rates of the Partnership's properties ranged from 91% to
99%. Despite improvements during 1994 and 1995 in the local economies and
rental markets where 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 October 1995, the Partnership made a distribution of $1,964,525 ($26.50 per
Interest) to the holders of Limited Partnership Interests representing a
regular quarterly distribution of Net Cash Receipts of $3.00 per Interest for
the third quarter of 1995, and a special distribution of $23.50 per Interest
from Net Cash Proceeds reserves. Including the October 1995 distribution,
investors have received distributions of Net Cash Receipts of $27.90 and Net
Cash Proceeds of $373.50, totaling $401.40 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, the maintenance of 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 nine month period ending
September 30, 1995 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended September 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: November 10, 1995
--------------------------
<PAGE>
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<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 3333
<SECURITIES> 1230
<RECEIVABLES> 9
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5364
<PP&E> 28627
<DEPRECIATION> 12582
<TOTAL-ASSETS> 21916
<CURRENT-LIABILITIES> 673
<BONDS> 23708
<COMMON> 0
0
0
<OTHER-SE> (2465)
<TOTAL-LIABILITY-AND-EQUITY> 21916
<SALES> 0
<TOTAL-REVENUES> 8899
<CGS> 0
<TOTAL-COSTS> 2525
<OTHER-EXPENSES> 977
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1564
<INCOME-PRETAX> 3833
<INCOME-TAX> 0
<INCOME-CONTINUING> 3833
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3833
<EPS-PRIMARY> 50.88
<EPS-DILUTED> 50.88
</TABLE>
