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 June 30, 1996
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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 (847) 267-1600
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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<PAGE>
BALCOR REALTY INVESTORS LTD. - 82
(An Illinois Limited Partnership)
BALANCE SHEETS
June 30, 1996 and December 31, 1995
(UNAUDITED)
ASSETS
1996 1995
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Cash and cash equivalents $ 1,747,895 $ 1,585,311
Restricted investments 1,230,000 1,230,000
Escrow deposits 501,324 790,489
Accounts and accrued interest receivable 16,075 17,823
Prepaid expenses 161,713 66,598
Deferred expenses, net of accumulated
amortization of $197,192 in 1996
and $164,686 in 1995 457,688 490,194
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4,114,695 4,180,415
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Investment in real estate:
Land 3,452,798 3,452,798
Buildings and improvements 25,174,333 25,174,333
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28,627,131 28,627,131
Less accumulated depreciation 13,168,226 12,777,256
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Investment in real estate, net of
accumulated depreciation 15,458,905 15,849,875
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$ 19,573,600 $ 20,030,290
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LIABILITIES AND PARTNERS' (DEFICIT)
Accounts payable $ 30,316 $ 40,387
Due to affiliates 32,600 20,633
Accrued liabilities, principally
real estate taxes 313,787 490,554
Security deposits 132,069 134,861
Mortgage notes payable 23,386,972 23,603,034
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Total liabilities 23,895,744 24,289,469
Limited Partners' (deficit)
(74,133 Interests issued
and outstanding) (575,130) (485,660)
General Partner's (deficit) (3,747,014) (3,773,519)
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Total Partners' (deficit) (4,322,144) (4,259,179)
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$ 19,573,600 $ 20,030,290
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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 six months ended June 30, 1996 and 1995
(UNAUDITED)
1996 1995
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Income:
Rental and service $ 3,566,742 $ 3,487,121
Interest on short-term investments 78,409 172,280
Interest on wrap-around note receivable 92,574
Settlement income 216,750
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Total income 3,861,901 3,751,975
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Expenses:
Interest on mortgage notes payable 1,000,461 1,058,373
Depreciation 390,970 390,970
Amortization of deferred expenses 32,506 46,831
Property operating 1,192,029 1,046,981
Real estate taxes 327,581 313,718
Property management fees 173,373 169,094
Administrative 214,882 240,493
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Total expenses 3,331,802 3,266,460
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Income before gain on sale of property 530,099 485,515
Gain on sale of property 3,244,180
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Net income $ 530,099 $ 3,729,695
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Net income allocated to General Partner $ 26,505 $ 56,718
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Net income allocated to Limited Partners $ 503,594 $ 3,672,977
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Net income per Limited Partnership Interest
(74,133 issued and outstanding) $ 6.80 $ 49.55
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Distributions to Limited Partners $ 593,064 $ 3,221,078
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Distributions per Limited Partnership
Interest $ 8.00 $ 43.45
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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 June 30, 1996 and 1995
(UNAUDITED)
1996 1995
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Income:
Rental and service $ 1,785,394 $ 1,753,966
Interest on short-term investments 34,481 59,324
Interest on wrap-around note receivable 3,537
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Total income 1,819,875 1,816,827
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Expenses:
Interest on mortgage notes payable 499,087 507,952
Depreciation 195,485 195,485
Amortization of deferred expenses 16,253 16,253
Property operating 597,265 557,617
Real estate taxes 156,894 155,836
Property management fees 86,128 83,896
Administrative 130,894 136,868
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Total expenses 1,682,006 1,653,907
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Net income $ 137,869 $ 162,920
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Net income allocated to General Partner $ 6,893 $ 8,146
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Net income allocated to Limited Partners $ 130,976 $ 154,774
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Net income per Limited Partnership Interest
(74,133 issued and outstanding) $ 1.77 $ 2.09
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Distribution to Limited Partners $ 296,532 $ 3,093,199
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Distribution per Limited Partnership
Interest $ 4.000 $ 41.725
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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 six months ended June 30, 1996 and 1995
(UNAUDITED)
1996 1995
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Operating activities:
Net income $ 530,099 $ 3,729,695
Adjustments to reconcile net income
to net cash provided by operating
activities:
Gain on sale of property (3,244,180)
Depreciation of properties 390,970 390,970
Amortization of deferred expenses 32,506 46,831
Net change in:
Accounts and accrued
interest receivable 1,748 98,402
Escrow deposits 240,746 167,131
Prepaid expenses (95,115) (56,231)
Accounts payable (10,071) (16,470)
Due to affiliates 11,967 (91,617)
Accrued liabilities (176,767) (208,632)
Escrow liabilities (39,877)
Security deposits (2,792) 1,948
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Net cash provided by operating activities 923,291 777,970
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Investing activity:
Proceeds from repayment of wrap-around
note received in connection with sale
of real estate 1,342,445
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Net cash provided by investing activity 1,342,445
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Financing activities:
Distributions to Limited Partners (593,064) (3,221,078)
Principal payments on mortgage notes
payable (216,062) (205,346)
Funding of capital improvement escrows (87,162) (64,600)
Disbursements from capital
improvement escrows 135,581
Proceeds from issuance of mortgage
notes payable 335,598
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Net cash used in financing activities (760,707) (3,155,426)
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Net change in cash and cash equivalents 162,584 (1,035,011)
Cash and cash equivalents at beginning
of period 1,585,311 4,292,726
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<PAGE>
Cash and cash equivalents at end of period $ 1,747,895 $ 3,257,715
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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 six months and quarter
ended June 30, 1996, and all such adjustments are of a normal and recurring
nature.
2. Interest Expense:
During the six months ended June 30, 1996 and 1995, the Partnership incurred
and paid interest expense on non-affiliated mortgage notes payable of
$1,000,461 and $1,058,373, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
six months and quarter ended June 30, 1996 are:
Paid
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Six Months Quarter Payable
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Reimbursement of expenses to
the General Partner, at cost $49,087 $32,810 $32,600
4. Subsequent Event:
In July 1996, the Partnership made a distribution of $1,779,192 ($24.00 per
Interest) to the holders of Limited Partnership Interests representing a
regular quarterly distribution of Net Cash Receipts of $4.00 per Interest for
the second quarter of 1996, and a special Net Cash Proceeds distribution of $20
per Interest resulting primarily from the release of $1,230,000 in short-term
investments pledged as collateral for the Eagles Pointe Apartments mortgage
note payable.
<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 through 1995, 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 1995 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 the remaining deferred gain from the sale of the
Meridian Hills Court Apartments in February 1995 which resulted in greater net
income being recognized for the six months ended June 30, 1995 as compared to
1996. Increased property operating expenses at the Balcones Woods and Songbird
Apartments relating to payroll, insurance and utility expenses resulted in a
decrease in net income for the quarter ended June 30, 1996 as compared to the
same period in 1995. Further discussion of the Partnership's operations is
summarized below.
1996 Compared to 1995
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Discussions of fluctuations between 1996 and 1995 refer to both the six months
and quarter ended June 30, 1996 and 1995.
Interest on short-term investments decreased during 1996 as compared to 1995
primarily due to lower average cash balances available for investment resulting
from the payment of special distributions to Limited Partners in 1995.
As a result of the February 1995 repayment of the Meridian Hills Court
Apartments wrap-around note, interest income on wrap-around note receivable
ceased and interest expense on mortgage notes payable decreased during 1996
when compared to 1995. In addition, the Partnership recognized the final
portion of the deferred gain of $3,244,180 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. In addition, the
remaining deferred expenses related to this loan were fully amortized. This
resulted in a decrease in amortization of deferred expenses for the six months
ended June 30, 1996, as compared to 1995.
<PAGE>
The Partnership reached a settlement with the seller of the Balcones Woods
Apartments in February 1996 and recognized $216,750 of settlement income
relating primarily to amounts due from the seller under the management and
guarantee agreement.
Increased expenditures at the Balcones Woods and Songbird Apartments relating
to payroll, insurance and utility expenses resulted in an increase in property
operating expenses for 1996 as compared to 1995.
Lower accounting fees resulted in a decrease in administrative expenses during
1996 as compared to 1995.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership increased by approximately $163,000 as of
June 30, 1996 as compared to December 31, 1995. Cash flow of approximately
$923,000 was provided by operating activities during 1996 consisting primarily
of cash provided by the operation of the Partnership's properties, and
settlement income received from the seller of the Balcones Woods Apartments.
Cash used in financing activities of approximately $761,000 consisted of
distributions to the Limited Partners, principal payments on mortgage notes
payable and net disbursements received from capital improvement escrows.
Short-term investments totaling $1,230,000 had been pledged as additional
collateral for the mortgage note payable relating to the Eagles Pointe
Apartments. Since the property achieved break even-operations for 1995, the
funds were released to the Partnership in July 1996 in accordance with the loan
agreement and were distributed to the Limited Partners.
The Partnership defines cash flow generated from its properties as an amount
equal to the property's revenue receipts less property related expenditures,
which include debt service payments. For the six months ended June 30, 1996 and
1995, all three of the Partnership's properties generated positive cash flow.
As of June 30, 1996, the occupancy rates of the Partnership's properties ranged
from 92% to 97%.
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.
The General Partner believes that the market for multifamily housing properties
is favorable to sellers of these properties. Currently, the Partnership has
entered into contracts to sell the Eagles Pointe and Songbird apartment
complexes for sales prices of $11,075,000 and $11,000,000, respectively and is
actively marketing Balcones Woods for sale. If current market conditions
remain favorable and the General Partner can obtain appropriate sales prices,
the Partnership's liquidation strategy will be accelerated.
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. The Partnership has no third
party financing which matures prior to 1998.
<PAGE>
In July 1996, the Partnership made a distribution of $1,779,192 ($24.00 per
Interest) to the holders of Limited Partnership Interests representing a
distribution of Net Cash Receipts of $4.00 per Interest for the second quarter
of 1996, and a special Net Cash Proceeds distribution of $20 per Interest
resulting primarily from the release of $1,230,000 in short-term investments
pledged as collateral for the Eagles Pointe Apartments mortgage note payable.
Including the July 1996 distribution, investors have received distributions of
Net Cash Receipts of $38.90 and Net Cash Proceeds of $394.50, totaling $433.40
per $1,000 Interest, as well as certain tax benefits. Future quarterly
distributions from cash flow are expected to continue until the properties are
sold. As the properties are sold, the Partnership will distribute the proceeds
to the Limited Partners. In light of results to date and current market
conditions, the General Partner does not anticipate that investors will recover
all of their original investment.
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.
(10) Agreement of sale relating to Eagles Pointe Apartments, Norcross, GA
previously filed as Exhibit (2) to the Partnership's current Report on Form 8-K
dated April 23, 1996, is incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the six month period ending
June 30, 1996 is attached hereto.
(b) Reports on Form 8-K:
(i) A current Report on Form 8-K dated April 23, 1996, was filed reporting the
execution of a contract for the sale of Eagles Pointe Apartments, Norcross, GA.
(ii) A current Report on Form 8-K dated May 22, 1996, was filed reporting the
termination of the sale agreement on Eagles Pointe Apartments, Norcross, GA.
(iii) A current Report on Form 8-K dated August 5, 1996, was filed reporting
the execution of contracts to sell Eagles Pointe Apartments, Norcross, Georgia,
and Songbird Apartments, Phase I and II, San Antonio, Texas.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR REALTY INVESTORS LTD.-82
By: /s/ Thomas E. Meador
-----------------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners-XI, the General Partner
By: /s/ Brian D. Parker
-----------------------------
Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Partners-XI, the General
Partner
Date: August 13, 1996
--------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1748
<SECURITIES> 1230
<RECEIVABLES> 1137
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4115
<PP&E> 28627
<DEPRECIATION> 13168
<TOTAL-ASSETS> 19574
<CURRENT-LIABILITIES> 509
<BONDS> 23387
0
0
<COMMON> 0
<OTHER-SE> 4322
<TOTAL-LIABILITY-AND-EQUITY> 19574
<SALES> 0
<TOTAL-REVENUES> 3862
<CGS> 0
<TOTAL-COSTS> 1693
<OTHER-EXPENSES> 638
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1001
<INCOME-PRETAX> 530
<INCOME-TAX> 0
<INCOME-CONTINUING> 530
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 530
<EPS-PRIMARY> 6.80
<EPS-DILUTED> 6.80
</TABLE>
