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, 1995
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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.)
2355 Waukegan Rd.
Bannockburn, IL 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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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, 1995, the Registrant owned the three properties
described under "Properties" (Item 2). The Partnership Agreement provides that
the proceeds of any sale or refinancing of the Registrant's properties will not
be reinvested in new acquisitions.
Overall, the investment real estate market saw gradual improvement over the
last year. This improvement has taken place in an environment of generally low
interest rates and little or no new supply, parameters which may not exist in
the next few years. Demand for real estate space, while projected to improve in
line with the overall economy, is also vulnerable to external forces. The major
challenges facing the real estate industry today include increased
international competition, corporate restructurings, new computer and
communications technologies, an aging population and potential revisions of the
tax code. In addition, the increased flow of capital to real estate through new
vehicles such as commercial mortgage-backed securities and REITs could spur new
construction at unsupportable levels, as well as impact existing property
values.
Operationally, existing apartment properties continued to register occupancy
percentages in the 90s, with average rents rising at an annual rate of between
3 and 4 percent. Apartments are still considered one of the top real estate
asset classes in terms of performance. However, some markets are experiencing
new construction of rental units which, if unrestrained, could impact the
performance of existing properties. Most of the new construction is aimed at
the two segments of the rental market which are growing the fastest: low-income
households and upper-income households who prefer to rent rather than own. Of
all the major asset classes, apartments typically display the least volatility
in terms of property values.
The General Partner had previously advised the Limited Partners that its
strategy was to sell the Registrants remaining assets over the next two years.
The General Partner also stated that the timing of the liquidation could be
lengthened or shortened due to changes in market conditions, economic factors,
interest rates and unforeseen events. Since November 1995, the General Partner
believes that the market for multifamily housing properties has become
increasingly favorable to sellers of these properties. This belief is based on
the results of the sales and marketing activities of various other Registrants
affiliated with the Registrant. These favorable market conditions are in part
attributable to the increasing strength of the capital markets and the re-entry
of REITs into the acquisition market. The General Partner intends to begin
marketing the Registrants remaining properties for sale. If the current market
conditions for sales remain favorable and the General Partner can obtain
<PAGE>
appropriate sales prices, the Registrant's liquidation strategy may be
accelerated.
The Registrant received notice of an unsolicited offer for the purchase of
limited partnership interests ("tender offer") in November 1995. The tender
offer was made by Walton Street Capital Acquisition Co. L.L.C. ("Walton
Street"). Walton Street stated that their primary motive in making the offer
was to make a profit from the purchase of the interests. Walton Street acquired
8.71 % of the total interests outstanding in the Registrant and assigned the
interests to its affiliate, WIG 82 Partners. The Registrant incurred
administrative costs in responding to the tender offer.
The Registrant received notice of an unsolicited offer for the purchase of
limited partnership interests ("tender offer") on March 11, 1996. The tender
offer was made by Metropolitan Acquistition VII, L.L.C. ("Metropolitan").
Metropolitan is an affiliate of Insignia Financial Group, Inc., which provides
property management services to all of of the Registrant's properties.
Metropolitan stated that their primary motive in making the offer is to make a
profit from the purchase of the interests. Metropolitan is seeking to acquire
up to 30% of the total interests outstanding in the Registrant. The Registrant
will incur administrative costs in responding to the tender offer and may incur
additional costs if additional tender offers are made in the future.
During 1995, the wrap-around note received in connection with the sale of the
Meridian Hills Court Apartments was repaid in full. See Note 4 of Notes to
Financial Statements for additional information.
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.
Item 2. Properties
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As of December 31, 1995, the Registrant owns the three properties described
below:
Location Description of Property
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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 approxi-
mately 13 acres.
<PAGE>
* Owned by the Registrant through a joint venture with the seller.
Each of the above properties is held subject to various mortgage loans.
In the opinion of the General Partner, the Registrant has provided for adequate
insurance coverage for its real estate investment properties.
See Note 7 of Notes to Financial Statements for other information regarding
real property investments.
Item 3. Legal Proceedings
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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, 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 seeking to recover amounts 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 $205,860 and the Affiliate $195,654, which was less
than 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 January 1995, a motion was filed in the
Appellate Court to stay the appeal so that settlement discussions could
proceed. In February 1996, a settlement was completed pursuant to which the
Seller has paid the Joint Venture and the Affiliate $216,750 and $208,250,
respectively.
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
No matters were submitted to a vote of the Limited Partners of the Registrant
during 1995.
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
- -------------------------------------------------------------------------
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 distributions, see Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources.
As of December 31, 1995, the number of record holders of Limited Partnership
Interests of the Registrant was 7,875.
Item 6. Selected Financial Data
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Year ended December 31,
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1995 1994 1993 1992 1991
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Total income $7,524,577 $8,392,007 $ 9,010,969 $12,403,715 $15,242,595
Income (loss) before
net gains on sales
of assets, write-
off of real estate
commissions and
extraordinary items 759,384 (100,170) (950,479) (1,003,918) (2,428,716)
Net income (loss) 4,003,564 5,423,112 3,749,327 7,502,993 (2,058,204)
Net income (loss)
per Limited Part-
nership Interest 53.06 72.48 50.58 100.74 (26.18)
Total assets 20,030,290 26,891,815 34,122,065 44,314,508 57,514,920
Mortgage notes
payable 23,603,034 28,823,037 40,714,714 51,853,415 70,438,350
Distributions per
Limited Partner-
ship Interest (A) 72.95 3.45 None None None
(A) This amount includes distributions of original capital of $63.50 per
Limited Partnership Interest during the year 1995.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
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Results of Operations
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Operations
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Summary of Operations
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Balcor Realty Investors Ltd.-82 (the "Partnership") recognized net gains on
sales of properties during 1993, 1994, 1995 and recognized an extraordinary
gain during 1993 in connection with the forgiveness of debt related to a
property sale. The timing of these transactions, resulted in a decrease in net
income in 1995 as compared to 1994 and an increase in net income in 1994 as
compared to 1993. Further discussion of the Partnership's operations is
summarized below.
1995 Compared to 1994
- ---------------------
The sales of the Bemis Square Shopping Center and the Via El Camino Apartments
in February 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
1995 as compared to 1994. The Partnership also recognized gains in connection
with the sales of these properties during 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 during 1995 as compared to 1994.
Interest on short-term investments increased during 1995 as compared to 1994
due to an increase in interest rates earned on short-term investments.
During 1994, a liability related to tenant improvements at one of the disposed
properties was written-off and recognized as other income in the financial
statements.
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 during 1995, the Partnership recognized
the final portion of the deferred gain related to this installment sale. This
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 of the mortgage note payable related to the
Songbird Phases I and II Apartments in June 1994 and the assumption by the
borrower of the mortgage note payable related to the Meridian Hills Court
Apartments wrap-around note in February 1995, further contributed to the
decrease in interest expense on mortgage notes payable.
Decreased expenditures at the Eagles Pointe and Balcones Woods Apartments
relating to roof repairs and interior improvements further contributed to the
decrease in property operating expenses in 1995.
<PAGE>
1994 Compared to 1993
- ---------------------
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, 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.
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.
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
property operating expense. An increase in landscaping, painting, insurance 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 disposition.
Higher accounting costs resulted in an increase in administrative expenses
during 1994 when compared to 1993.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased as of December 31, 1995 as
compared to December 31, 1994. The operating activities of the Partnership
include the cash flow from operations of the properties as discussed below, and
interest income received on the wrap-around note receivable and short-term
investments, partially offset by administrative costs. The net cash flow
provided by investing activities represents the net proceeds from the repayment
of the Meridian Hills Court Apartments wrap-around note receivable. Financing
activities included quarterly distributions to Limited Partners including
<PAGE>
special distributions in April and October 1995, principal payments on mortgage
notes payable, and capital improvement escrow activity.
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. As of December 31, 1995, the occupancy rates of the
Partnership's properties ranged from 91% to 99%.
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.
The General Partner had previously advised the Limited Partners that its
strategy was to sell the Partnership's remaining assets over the next two
years. The General Partner also stated that the timing of the liquidation
could be lengthened or shortened due to changes in market conditions, economic
factors, interest rates and unforeseen events. Since November, 1995, the
General Partner believes that the market for multifamily housing properties has
become increasingly favorable to sellers of these properties. This belief is
based on the results of the sales and marketing activities of various other
partnerships affiliated with the Partnership. These favorable market
conditions are in part attributable to the increasing strength of the capital
markets and the re-entry of REITs into the acquisition market. The General
Partner intends to begin marketing the remaining properties in the Partnership
for sale. If the current market conditions for sales remain favorable and the
General Partner can obtain appropriate sales prices, the Partnership's
liquidation strategy may 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.
Distributions to Limited Partners were reinstated beginning with the second
quarter 1994 distribution. The Partnership made two distributions in 1994
totaling $3.45 and four distributions in 1995 totaling $72.95. Distributions
were comprised of $9.45 of Net Cash Receipts and $63.50 of Net Cash Proceeds in
1995, and $3.45 of Net Cash Receipts in 1994. The quarterly distributions from
Net Cash Receipts increased in 1995 as compared to 1994 due to improved
operations of the Partnership's properties. In addition, the Partnership made
special distributions of $63.50 per Interest in 1995 from the Meridian Hills
wrap-around note repayment and from Net Cash Proceed reserves.
<PAGE>
In January 1996, the Partnership made a distribution of $296,532 ($4.00 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 fourth quarter of 1995, and Net Cash Proceeds of $1.00 per Interest from
Net Cash Proceed reserves. Including the January 1996 distribution, investors
have received distributions of Net Cash Receipts of $30.90 and Net Cash
Proceeds of $374.50, totaling $405.40 per $1,000 Interest, as well as certain
tax benefits. The General Partner expects to continue making 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 properties, the maintenance of 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.
In 1995, the Financial Accounting Standards Board issued Statement No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of" which establishes accounting standards for impairment of
long-lived assets and long-lived assets to be disposed of. This statement has
been adopted by the Partnership as of January 1, 1995, and did not have a
material impact on the financial position or results of operations of the
Partnership.
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.
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, 1995 December 31, 1994
------------------------ ------------------------
Financial Tax Financial Tax
Statements Returns Statements Returns
----------- ----------- ----------- -----------
Total assets $20,030,290 $17,642,989 $26,891,815 $28,024,973
Partners' capital
(deficit):
General Partner (3,773,519) (4,899,423) (3,843,930) (5,177,262)
Limited Partners (485,660) (1,747,056) 989,189 3,067,569
Net income (loss):
General Partner 70,411 581,966 50,224 1,330,149
<PAGE>
(A)
Limited Partners 3,933,153 593,373 5,372,888 6,521,930
(A)
Per Limited
Partnership
Interest 53.06 8.00 72.48 87.98
(A) Includes a net long term capital gain of $8,404,796 for 1994.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- -----------------------------------------------------------------------
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
Senior Vice President Alexander J. Darragh
Senior Vice President Josette V. Goldberg
Senior Vice President Alan G. Lieberman
Senior Vice President, Chief Brian D. Parker
Financial Officer, Treasurer
and Assistant Secretary
Senior Vice President John K. Powell, Jr.
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. He is
also Senior Vice President of American Express Company and is responsible for
its real estate operations worldwide. 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.
Alexander J. Darragh (February 1955) joined Balcor in September 1988 and is
responsible for due diligence analysis and real estate advisory services for
Balcor and American Express Company. He also has supervisory responsibility for
Balcor's environmental matters. Mr. Darragh received masters' degrees in Urban
Geography from Queen's University and in Urban Planning from Northwestern
University.
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 MIS functions. Ms. Goldberg has been
designated as a Senior Human Resources Professional (SHRP).
Alan G. Lieberman (June 1959) joined Balcor in May 1983 and is responsible for
Balcor's property sales and capital markets functions. Mr. Lieberman is a
Certified Public Accountant.
<PAGE>
Brian D. Parker (June 1951) joined Balcor in March 1986 and, as Chief Financial
Officer and Chief Accounting Officer, is responsible for Balcor's financial,
legal and treasury functions. He is a Director of The Balcor Company. 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 portfolio and asset management matters relating to Balcor's
partnerships. Mr. Powell also has supervisory responsibility for Balcor's risk
management and investor services functions. He received a Master of Planning
degree from the University of Virginia. Mr. Powell 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.
(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 1995.
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 9 of Notes to
Financial Statements for the information relating to transactions with
affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
(a) The following entity is the sole Limited Partner which owns beneficially
more than 5% of the outstanding Limited Partnership Interests of the
Registrant:
Name and Amount and
Address of Nature of Percent
Beneficial Beneficial of
Title of Class Owner Ownership Class
- -----------------------------------------------------------------------------
Limited WIG 82 6,457 8.71%
Partnership Partners Limited
Interests Chicago, Partnership
Illinois Interests
(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.
<PAGE>
(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 3 of Notes to Financial Statements for information relating to
the Partnership Agreement and the allocation of distributions and profits and
losses.
See Note 9 of Notes to Financial Statements for additional information relating
to transactions with affiliates.
(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.
(27) Financial Data Schedule of the Registrant for 1995 is attached hereto.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter
ended December 31, 1995.
(c) Exhibits: See Item 14(a)(3) above.
(d) Financial Statement Schedule: See Index to Financial Statements and
Financial Statement Schedule 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/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: March 29, 1996
------------------
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 29, 1996
- -------------------- --------------
Thomas E. Meador
Senior Vice President, and
Chief Financial Officer
(Principal Accounting and
Financial Officer) of
Balcor Partners-XI, the
/s/Brian D. Parker General Partner March 29, 1996
- -------------------- --------------
Brian D. Parker
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Report of Independent Accountants
Financial Statements:
Balance Sheets, December 31, 1995 and 1994
Statements of Partners' Deficit, for the years ended December 31, 1995, 1994
and 1993
Statements of Income and Expenses, for the years ended December 31, 1995, 1994
and 1993
Statements of Cash Flows, for the years ended December 31, 1995, 1994 and 1993
Notes to Financial Statements
Financial Statement Schedule:
III - Real Estate and Accumulated Depreciation, as of December 31, 1995
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, 1995 and 1994, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1995, 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 23, 1996
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
BALANCE SHEETS
December 31, 1995 and 1994
ASSETS
1995 1994
------------- -------------
Cash and cash equivalents $ 1,585,311 $ 4,292,726
Restricted investments 1,230,000 1,230,000
Escrow deposits 790,489 1,149,063
Accounts and accrued interest receivable 17,823 112,860
Prepaid expenses 66,598
Wrap-around note receivable 6,150,000
Deferred gain on sale of property (3,244,180)
Deferred expenses, net of accumulated
amortization of $164,686, in 1995
and $175,843 in 1994 490,194 569,532
------------- -------------
4,180,415 10,260,001
------------- -------------
Investment in real estate:
Land 3,452,798 3,452,798
Buildings and improvements 25,174,333 25,174,333
------------- -------------
28,627,131 28,627,131
Less accumulated depreciation 12,777,256 11,995,317
------------- -------------
Investment in real estate, net of
accumulated depreciation 15,849,875 16,631,814
------------- -------------
$ 20,030,290 $ 26,891,815
============= =============
LIABILITIES AND PARTNERS' (DEFICIT) CAPITAL
Accounts payable $ 40,387 $ 140,229
Due to affiliates 20,633 97,841
Accrued liabilities, principally
real estate taxes 490,554 520,304
Escrow liabilities 39,877
Security deposits 134,861 125,268
Mortgage notes payable 23,603,034 28,823,037
------------- -------------
Total liabilities 24,289,469 29,746,556
------------- -------------
Limited Partners' (deficit) capital
(74,133 Interests issued
and outstanding) (485,660) 989,189
General Partners' deficit (3,773,519) (3,843,930)
------------- -------------
Total partners' deficit (4,259,179) (2,854,741)
------------- -------------
$ 20,030,290 $ 26,891,815
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
STATEMENTS OF PARTNERS' DEFICIT
for the years ended December 31, 1995, 1994 and 1993
Partners' (Deficit) Capital Accounts
-----------------------------------------
General Limited
Total Partner Partners
------------- ------------- -------------
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
Cash distributions to
Limited Partners(A) (5,408,002) (5,408,002)
Net income for the year
ended December 31, 1995 4,003,564 70,411 3,933,153
------------- ------------- -------------
Balance at December 31, 1995 $ (4,259,179) $ (3,773,519) $ (485,660)
============= ============= =============
(A) Summary of cash distributions paid per Limited Partnership Interest:
1995 1994 1993
------------- ------------- -------------
First Quarter $ 1.725 None None
Second Quarter $ 41.725 None None
Third Quarter $ 3.000 $ 1.725 None
Fourth Quarter $ 26.500 $ 1.725 None
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the years ended December 31, 1995, 1994 and 1993
1995 1994 1993
------------- ------------- -------------
Income:
Rental and service $ 7,127,459 $ 7,188,617 $ 8,304,686
Interest on short-term
investments 304,405 247,640 145,095
Interest on wrap-around notes
receivable 92,713 655,750 561,188
Other income 300,000
------------- ------------- -------------
Total income 7,524,577 8,392,007 9,010,969
------------- ------------- -------------
Expenses:
Interest on mortgage
notes payable 2,067,794 2,834,551 3,766,507
Depreciation 781,939 849,210 1,066,030
Amortization of deferred
expenses 79,338 93,449 84,659
Property operating 2,387,812 3,167,857 3,428,446
Real estate taxes 615,826 649,662 711,189
Property management fees 341,872 358,941 424,476
Administrative 490,612 538,507 480,141
------------- ------------- -------------
Total expenses 6,765,193 8,492,177 9,961,448
------------- ------------- -------------
Income (loss) before net
gains on sales of
properties and extra-
ordinary item 759,384 (100,170) (950,479)
Net gains on sales of
properties 3,244,180 5,523,282 367,183
------------- ------------- -------------
Income (loss) before
extraordinary item: 4,003,564 5,423,112 (583,296)
Extraordinary item:
Gain on forgiveness of debt 4,332,623
------------- ------------- -------------
Net income $ 4,003,564 $ 5,423,112 $ 3,749,327
============= ============= =============
Income (loss) before
extraordinary item allocated
to General Partner $ 70,411 $ 50,224 $ (43,852)
============= ============= =============
Income (loss) before
extraordinary item allocated
to Limited Partner $ 3,933,153 $ 5,372,888 $ (539,444)
============= ============= =============
Income (loss) before
extraordinary item Per Limited
Partnership Interest (74,133
issued and outstanding) $ 53.06 $ 72.48 $ (7.28)
============= ============= =============
Extraordinary item allocated
to General Partner None None $ 43,326
============= ============= =============
Extraordinary item allocated
to Limited Partners None None $ 4,289,297
============= ============= =============
Extraordinary item per Limited
Partnership Interest (74,133
issued and outstanding) None None $ 57.86
============= ============= =============
Net income (loss) allocated to
General Partner $ 70,411 $ 50,224 $ (526)
============= ============= =============
Net income allocated to
Limited Partners $ 3,933,153 $ 5,372,888 $ 3,749,853
============= ============= =============
Net income per Limited
Partnership Interest (74,133
issued and outstanding) $ 53.06 $ 72.48 $ 50.58
============= ============= =============
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, 1995, 1994 and 1993
1995 1994 1993
------------- ------------- -------------
Operating activities:
Net income $ 4,003,564 $ 5,423,112 $ 3,749,327
Adjustments to reconcile net
income to net cash provided
by or used in operating
activities:
Gains on sales of
properties (3,244,180) (5,523,282) (367,183)
Gain on forgiveness
of debt (4,332,623)
Other income (300,000)
Depreciation of properties 781,939 849,210 1,066,030
Amortization of deferred
expenses 79,338 93,449 84,659
Net change in:
Escrow deposits 42,541 84,996 (582,707)
Accounts and accrued
interest receivable 95,037 (26,409) 3,678
Prepaid expenses (66,598)
Accounts payable (99,842) 12,849 (168,041)
Due to affiliates (77,208) 30,910 (21,742)
Accrued liabilities (29,750) (258,448) 23,538
Escrow liabilities (39,877) 26,251 2,838
Security deposits 9,593 (17,489) 3,487
------------- ------------- -------------
Net cash provided by or used
in operating activities 1,454,557 395,149 (538,739)
------------- ------------- -------------
Investing activities:
Proceeds from repayment of
wrap-around note received
in connection with sale
of real estate 1,342,445
Proceeds from sales of
properties 7,897,882 11,664,858
Payment of selling costs (320,159) (120,599)
Improvements to properties (266,691)
Purchase of restricted
investments (1,230,000)
------------- ------------- -------------
Net cash provided by
investing activities 1,342,445 7,577,723 10,047,568
------------- ------------- -------------
Financing activities:
Distributions to
Limited Partners (5,408,002) (255,758)
Repayment of mortgage notes
payable (5,530,000) (23,686,375)<PAGE>
Repayment of mortgage note
payable - affiliate (2,323,345)
Proceeds from refinancings of
mortgage notes payable 16,925,000
Principal payments on
mortgage notes payable (412,448) (436,214) (352,338)
Funding of capital
improvement escrows (135,675) (129,200) (740,758)
Disbursements from capital
improvement escrows 451,708 545,754 33,285
Payment of deferred expenses (626,381)
------------- ------------- -------------
Net cash used in
financing activities (5,504,417) (8,128,763) (8,447,567)
------------- ------------- -------------
Net change in cash and cash
equivalents (2,707,415) (155,891) 1,061,262
Cash and cash equivalents at
beginning of year 4,292,726 4,448,617 3,387,355
------------- ------------- -------------
Cash and cash equivalents at
end of year $ 1,585,311 $ 4,292,726 $ 4,448,617
============= ============= =============
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. Nature of the Partnership's Business:
Balcor Realty Investors Ltd.-82 is engaged principally in the operation of
residential real estate located in Austin, Texas, San Antonio, Texas and
Atlanta, Georgia.
2. Accounting Policies:
(a) The preparation of the financial statements in conformity with generally
accepted accounting principles requires the General Partner to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could vary from those estimates.
(b) 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.
Interest incurred while properties were under construction was capitalized.
As 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.
(c) Effective january 1, 1995 the partnership adopted Statement of Financial
Accounting Standards, No. 121 (SFAS 121), "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to Be Disposed Of." Under SFAS 121, the
Partnership records its investments in real estate at the lower of cost or fair
value, and periodically assesses, but not less than on an annual basis,
possible impairment to the value of its properties. The General Partner
estimates the fair value of its properties by dividing the property's expected
net operating income by a risk adjusted rate of return which considers economic
and demographic conditions in the market. In the event the General Partner
determines an impairment in value has occurred, and the carrying amount of the
real estate asset will not be recovered, a provision is recorded to reduce the
carrying basis of the property to its estimated fair value. The General Partner
<PAGE>
considers the method referred to above to result in a reasonable measurement of
a property's fair value, unless other factors affecting the property's value
indicate otherwise.
(d) Deferred expenses consist of financing fees which are amortized over the
terms of the respective agreements.
(e) Cash and cash equivalents include all highly liquid investments with an
original maturity of three months or less when purchased.
(f) The Financial Accounting Standard Board's Statement No. 107, "Disclosures
About Fair Value of Financial Instruments", requires disclosure of fair value
information about financial instruments for which it is practicable to estimate
that value. Since quoted market prices are not available for the Partnership's
financial instruments, fair values have been based on estimates using present
value techniques. These techniques are significantly affected by the
assumptions used, including the discount rate and estimates of future cash
flows. In that regard, the derived fair value estimates cannot be substantiated
by comparison to independent markets and, in many cases, may not be realized in
immediate settlement of the instrument. Statement No. 107 does not apply to
all balance sheet items and excludes certain financial instruments and all
non-financial instruments such as real estate and investment in joint ventures
from its disclosure requirements.
(g) 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.
(h) Revenue is recognized on an accrual basis in accordance with generally
accepted accounting principles.
(i) A reclassification has been made to the previously reported 1994 and 1993
financial statements to conform with the classification used in 1995. This
reclassification has not changed the 1994 and 1993 results.
3. 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.
Under certain circumstances, the General Partner may also participate in the
Net Cash Proceeds from (i) the refinancing of Partnership properties and
<PAGE>
(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.
4. Wrap-around Note Receivable:
In February 1995, the Partnership received $1,342,445 as payment in full on the
wrap-around note that had been received in connection with the sale of the
Meridian Hills Court Apartments. This note had matured in November 1994, but
the Partnership granted the borrower an extension. The amount received
represented the wrap-around note balance of $6,150,000, less the underlying
mortgage note balance which was $4,807,555 at the time of the repayment. The
liability for the underlying mortgage note was 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. The Partnership had recognized interest income related to
this wrap-around note during 1995, 1994 and 1993.
<PAGE>
5. Mortgage Notes Payable:
Mortgage notes payable at December 31, 1995 and 1994 consisted of the following:
<TABLE> Carrying Carrying Current Final
Amount of Amount of Inter- Matur- Current Estimated
Property Pledged Notes at Notes at est ity Monthly Balloon
as Collateral 12/31/95 12/31/94 Rate Date Payment Payment
- ----------------- ---------- ---------- ------ ------ ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Apartment Complexes:
Balcones Woods $9,319,103 $9,464,764 7.625% 2003 $71,726 $7,701,000
Eagles Pointe 4,408,130 4,539,803 9.750% 1998 47,254 4,102,000
2,781,372 2,798,517 11.875% 1998 29,046 2,742,000
Meridian Hills Court (A) 4,814,381
Songbird Phases I and II 7,094,429 7,205,572 7.625% 2003 54,728 5,876,000
---------- ----------
Total $23,603,034 $28,823,037
=========== ===========
</TABLE>
See note (A) following.
<PAGE>
(A) In February 1995, the note which wraps around the mortgage note payable was
repaid in full. The liability for the underlying mortgage note was assumed by
the purchaser of the property. See Note 4 of Notes to Financial Statements for
additional information.
Real estate with an aggregate carrying value of $15,849,875 at December 31,
1995 was pledged as collateral for repayment of mortgage loans.
The Partnership's loans described above require current monthly payments of
principal and interest.
The Partnership incurred and paid interest expense on non-affiliated mortgage
notes payable of $2,067,794, $2,792,114 and $3,551,828 during 1995, 1994 and
1993, respectively.
Future annual maturities of the above mortgage notes payable during each of the
next five years are approximately as follows:
1996 $ 442,000
1997 465,000
1998 7,167,000
1999 348,000
2000 376,000
6. Management Agreements:
As of December 31, 1995, 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.
7. 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.
8. 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. The net effect of these accounting differences is that
the net income for 1995 in the financial statements is $2,828,225 more than the
tax income of the Partnership for the same period.
<PAGE>
9. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/95 12/31/94 12/31/93
----------------- ----------------- -----------------
Paid Payable Paid Payable Paid Payable
------ --------- ------ --------- ------ ---------
Property manage-
ment fees None None $336,869 None $424,534 $35,260
Reimbursement of
expenses to
General Partner,
at cost:
Accounting $48,142 $4,054 66,482 $25,801 58,691 4,849
Data processing 23,877 1,627 44,605 10,907 32,306 6,148
Investor com-
munications 6,608 None 20,355 5,898 18,645 1,541
Legal 21,721 2,539 10,594 8,392 15,634 1,292
Portfolio
management 109,487 12,306 65,643 39,974 77,270 16,561
Other 8,284 107 12,668 6,869 15,490 1,280
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; however, the General Partner is reimbursed
for expenses. The Partnership paid premiums to the deductible insurance program
of $52,047, $66,189, and $46,181 in 1995, 1994 and 1993, respectively.
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.
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., an affiliate of the General
Partner. The Partnership incurred interest expense of $42,437 and $214,679 and
paid interest expense of $72,120 and $206,003 on this loan during 1994 and
1993, 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.
<PAGE>
10. Property Sales:
(a) In May 1994, the Partnership sold the Via El Camino Apartments for
$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.
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 $4,350,000. The
purchaser assumed the existing first mortgage loan of $3,602,118. The basis of
the property sold was $1,815,309, net of accumulated depreciation of
$1,579,016. 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
$2,600,000. The purchaser assumed the existing first mortgage loan of
$2,135,142. The basis of the property sold was $1,736,952, net of accumulated
depreciation of $1,335,655. 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 $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.
11. Extraordinary Item:
The Partnership recognized an extraordinary gain on forgiveness of debt in 1993
related to the 1400 North Lake Shore Drive Apartment Building. See Note 10 for
additional information.
12. Fair Value of Financial Instruments
The carrying amounts and fair values of the Partnership's financial instruments
at December 31, 1995 are as follows:
The carrying value of cash and cash equivalents, accounts and accrued interest
receivable, accounts payable and restricted investments approximate fair value.
Based on borrowing rates available to the Partnership at the end of 1995 for
mortgage loans with similar terms and maturities, the fair value of the
mortgage notes payable approximates the carrying value.
<PAGE>
13. Subsequent Event:
(a) In January 1996, the Partnership made a distribution of $296,532 ($4.00 per
Interest) to the holders of Limited Partnership Interests representing a
quarterly distribution of Net Cash Receipts of $3.00 per Interest for the
fourth quarter of 1995 and a special distribution of $1.00 per Interest from
Net Cash Proceeds reserves.
(b) The Partnership reached a settlement with the seller of the Balcones Woods
Apartments in February 1996. In connection with this settlement, the
partnership received $216,750 representing amounts due from the seller under
the management and guarantee agreement as well as construction defects at the
property.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1995
<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, 1995
(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- Aqu- 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 $4,760,675 1983 9/81 (e)
Eagles Pointe Apts.,
252-units, Atlanta,
GA 577,249 7,522,097 8,099,346 3,977,712 1977 6/82 (e)
Songbird Phases I and
II Apts., 262-units,
San Antonio, TX 961,326 7,905,127 8,866,453 4,038,869 1981/1982 6/82 (e)
---------- ----------- ----------- -----------
Total $3,452,798 $25,174,333 $28,627,131 $12,777,256
========== =========== =========== ===========
</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 these is $26,466,239.
(c) Reconciliation of Real Estate
-----------------------------
1995 1994 1993
---------- ---------- ----------
Balance at beginning of year $28,627,131 $38,399,133 $53,707,462
Additions during year:
Capital improvements 266,691
Deductions during year:
Cost of real estate sold (9,772,002) (15,575,020)
----------- ----------- -----------
Balance at end of year $28,627,131 $28,627,131 $38,399,133
=========== =========== ===========
Reconciliation of Accumulated Depreciation
------------------------------------------
1995 1994 1993
----------- ---------- -----------
Balance at beginning of year $11,995,317 $15,261,550 $16,458,322
Depreciation expense for
the year 781,939 849,210 1,066,030
Accumulated depreciation of
real estate sold (4,115,443) (2,262,802)
----------- ------------ ------------
Balance at end of year $12,777,256 $11,995,317 $15,261,550
=========== ============ ============
(d) See descriptions of mortgage notes payable in Note 5 of Notes to Financial
Statements.
(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-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 1585
<SECURITIES> 1230
<RECEIVABLES> 18
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3690
<PP&E> 28627
<DEPRECIATION> 12777
<TOTAL-ASSETS> 20030
<CURRENT-LIABILITIES> 686
<BONDS> 23603
0
0
<COMMON> 0
<OTHER-SE> 4259
<TOTAL-LIABILITY-AND-EQUITY> 20030
<SALES> 0
<TOTAL-REVENUES> 10769
<CGS> 0
<TOTAL-COSTS> 3346
<OTHER-EXPENSES> 1351
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2068
<INCOME-PRETAX> 4004
<INCOME-TAX> 0
<INCOME-CONTINUING> 4004
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4004
<EPS-PRIMARY> 53.06
<EPS-DILUTED> 53.06
</TABLE>
