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 March 31, 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
March 31, 1996 and December 31, 1995
(UNAUDITED)
ASSETS
1996 1995
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Cash and cash equivalents $ 1,798,926 $ 1,585,311
Restricted investments 1,230,000 1,230,000
Escrow deposits 539,410 790,489
Accounts and accrued interest receivable 14,029 17,823
Prepaid expenses 15,606 66,598
Deferred expenses, net of accumulated
amortization of $180,939 in 1996
and $164,686 in 1995 473,941 490,194
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4,071,912 4,180,415
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Investment in real estate:
Land 3,452,798 3,452,798
Buildings and improvements 25,174,333 25,174,333
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28,627,131 28,627,131
Less accumulated depreciation 12,972,741 12,777,256
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Investment in real estate, net of
accumulated depreciation 15,654,390 15,849,875
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$ 19,726,302 $ 20,030,290
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LIABILITIES AND PARTNERS' (DEFICIT)
Accounts payable $ 73,334 $ 40,387
Due to affiliates 30,593 20,633
Accrued liabilities, principally
real estate taxes 156,894 490,554
Security deposits 132,815 134,861
Mortgage notes payable 23,496,147 23,603,034
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Total liabilities 23,889,783 24,289,469
Limited Partners' (deficit)
(74,133 Interests issued
and outstanding) (409,573) (485,660)
General Partner's (deficit) (3,753,908) (3,773,519)
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Total Partners' (deficit) (4,163,481) (4,259,179)
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$ 19,726,302 $ 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 quarters ended March 31, 1996 and 1995
(UNAUDITED)
1996 1995
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Income:
Rental and service $ 1,781,348 $ 1,733,155
Interest on short-term investments 43,928 112,956
Interest on wrap-around note receivable 89,037
Settlement income 216,750
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Total income 2,042,026 1,935,148
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Expenses:
Interest on mortgage notes payable 501,374 550,421
Depreciation 195,485 195,485
Amortization of deferred expenses 16,253 30,578
Property operating 594,764 489,364
Real estate taxes 170,687 157,882
Property management fees 87,245 85,198
Administrative 83,988 103,625
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Total expenses 1,649,796 1,612,553
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Income before gain
on sale of property 392,230 322,595
Gain on sale of property 3,244,180
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Net income $ 392,230 $ 3,566,775
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Net income allocated to General Partner $ 19,611 $ 48,572
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Net income allocated to Limited Partners $ 372,619 $ 3,518,203
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Net income per Limited Partnership Interest
(74,133 issued and outstanding) $ 5.03 $ 47.46
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Distribution to Limited Partners $ 296,532 $ 127,879
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Distribution per Limited Partnership Interest$ 4.000 $ 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 quarters ended March 31, 1996 and 1995
(UNAUDITED)
1996 1995
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Operating activities:
Net income $ 392,230 $ 3,566,775
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on sale of property (3,244,180)
Depreciation of properties 195,485 195,485
Amortization of deferred expenses 16,253 30,578
Net change in:
Accounts and accrued interest
receivable 3,794 66,615
Escrow deposits 297,416 339,625
Prepaid expenses 50,993
Accounts payable 32,947 (30,378)
Due to affiliates 9,960 32,575
Accrued liabilities (333,660) (364,468)
Escrow liabilities (39,877)
Security deposits (2,046) (997)
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Net cash provided by operating activities 663,372 551,753
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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:
Distribution to Limited Partners (296,532) (127,879)
Principal payments on mortgage notes payable (106,887) (105,036)
Funding of capital improvement escrows (46,338) (32,300)
Disbursements from capital
improvement escrows 314,483
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Net cash (used in) provided by (449,757) 49,268
financing activities
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Net change in cash and cash equivalents 213,615 1,943,466
Cash and cash equivalents at beginning
of period 1,585,311 4,292,726
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Cash and cash equivalents at end of period $ 1,798,926 $ 6,236,192
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS LTD.-82
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1996, and all such adjustments are of a normal and recurring nature.
2. Interest Expense:
During the three months ended March 31, 1996 and 1995, the Partnership incurred
and paid interest expense on non-affiliated mortgage notes payable of $501,374
and $550,421, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1996 are:
Paid Payable
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Reimbursement of expenses to $16,277 $30,593
the General Partner, at cost
4. Subsequent Event:
In April 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 for the first quarter of
1996.
<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 quarter ended March 31, 1995 as compared to
March 31, 1996. 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 the quarters ended
March 31, 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 1996 as
compared to 1995.
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.
<PAGE>
Increased expenditures at the Balcones Woods Apartments relating to payroll,
insurance and sewer and water charges 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
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The cash position of the Partnership increased by approximately $214,000 as of
March 31, 1996 as compared to December 31, 1995. Cash flow of approximately
$663,000 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 $449,000 consisted of
distributions to the Limited Partners, principal payments on mortgage notes
payable and the funding of capital improvement escrows.
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. The
Partnership defines cash flow generated from its properties as an amount equal
to the property's revenue receipts less property related expenditures, which
include debt service payments. For the quarters ended March 31, 1996 and 1995,
all three of the Partnership's properties generated positive cash flow. As of
March 31, 1996, the occupancy rates of the Partnership's properties ranged from
89% to 96%.
While the cash flow of 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 believes that the market for multifamily housing properties
has become increasingly favorable to sellers of these properties. Currently,
the Partnership has entered into a contract to sell the Eagles Pointe
Apartments for a sales price of $11,600,000 and is preparing to market the
remaining two properties in its portfolio. If current market conditions 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.
In April 1996, the Partnership made a distribution of $296,532 ($4.00 per
Interest) to the holders of Limited Partnership Interests representing a
distribution of Net Cash Receipts of $4.00 per Interest for the first quarter
of 1996. Including the April 1996 distribution, investors have received
distributions of Net Cash Receipts of $34.90 and Net Cash Proceeds of $374.50,
totaling $409.40 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.
<PAGE>
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
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.
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 quarter ending March 31,
1996 is attached hereto.
(b) Reports on Form 8-K: 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.
<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
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Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners-XI, the General Partner
By: /s/Brian D. Parker
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Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Partners-XI, the General
Partner
Date: May 14, 1996
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<PAGE>
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<TOTAL-LIABILITY-AND-EQUITY> 19726
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