<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________ to
____________________________
Commission File No. 0-7798
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FIRST WILKOW VENTURE
_____________________________________________________________________________
(Exact name of registrant as specified in its charter)
ILLINOIS 36-6169280
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
180 NORTH MICHIGAN AVENUE, CHICAGO, ILLINOIS 60601
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 726-9622
-----------------------
NOT APPLICABLE
- -----------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all
reports to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months and (2) has been
subject to such filing requirements for the past 90 days.
YES _X_ NO ___
<PAGE> 2
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30,
1998 December 31,
(Unaudited) 1997
----------- ------------
ASSETS
REAL ESTATE AND INVESTMENTS IN REAL ESTATE PARTNERSHIPS
<S> <C> <C>
Real Estate:
Land $ 6,230,711 $ 6,230,711
Buildings and Improvements 47,348,777 46,862,244
Fixtures and Equipment 113,105 116,955
----------- -----------
Total 53,692,593 53,209,910
Less-Accumulated Depreciation 18,661,378 17,955,658
----------- -----------
Net Real Estate 35,031,215 35,254,252
Investment in Real Estate Partnerships 3,559,954 3,642,820
----------- -----------
Total 38,591,169 38,897,072
----------- -----------
LOANS RECEIVABLE 847,934 849,934
----------- -----------
OTHER ASSETS
Cash 889,254 966,660
Certificates of Deposit 2,740,000 2,220,000
Receivable 748,526 702,567
Prepaid Expenses 2,120 818
Deposits 1,060,071 836,567
Deferred Charges 1,349,166 911,756
----------- -----------
Total 6,789,137 5,638,368
----------- -----------
TOTAL ASSETS $46,228,240 $45,385,374
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
MORTGAGES AND LOANS PAYABLE
Mortgages Payable $32,388,692 $30,653,730
Notes Payable 454,488 672,975
----------- -----------
Total 32,843,180 31,326,705
----------- -----------
OTHER LIABILITIES
Accounts Payable and Accrued Expenses 63,970 69,092
Accrued Property Taxes 2,504,134 2,378,995
Deferred State Income Taxes 200,000 200,000
Security Deposits and Prepaid Rent 474,017 539,698
Accrued Interest 63,741 72,847
----------- -----------
Total 3,305,862 3,260,632
----------- -----------
MINORITY INTEREST 1,621,657 1,685,777
----------- -----------
PARTNERS' CAPITAL (170,916 units authorized and issued) 8,457,541 9,112,260
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $46,228,240 $45,385,374
=========== ===========
</TABLE>
Note: Balance Sheet at 12/31/97 has been taken from the audited financial
statements at that date.
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<PAGE> 3
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- -------------------------
1998 1997 1998 1997
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES
Rental Income $ 2,456,113 $2,158,689 $4,885,554 $4,563,206
Interest Income 65,697 54,966 141,945 99,716
Other Income 0 17,998 0 36,043
------------ ---------- ---------- ----------
2,521,810 2,231,653 5,027,499 4,698,965
------------ ---------- ---------- ----------
PARTNERSHIP INVESTMENTS' INCOME (LOSS)
Share of Net Income (Loss) 5,652 489,627 11,948 581,536
------------ ---------- ---------- ----------
5,652 489,627 11,948 581,536
------------ ---------- ---------- ----------
EXPENSES
Operating Expenses 617,852 623,640 1,213,753 1,382,032
Real Estate Taxes 614,163 553,649 1,249,402 1,207,621
Depreciation and Amortization 457,318 434,591 898,510 871,164
Interest Expense 689,594 673,119 1,328,476 1,370,775
General and Administrative 177,206 188,904 282,828 305,850
------------ ---------- ---------- ----------
2,556,133 2,473,903 4,972,969 5,137,442
------------ ---------- ---------- ----------
INCOME (LOSS) BEFORE
MINORITY INTEREST
AND TAXES (28,671) 247,377 66,478 143,059
MINORITY INTEREST IN
SUBSIDIARIES NET INCOME/LOSS 6,402 20,335 (46,080) 3,003
PROVISION FOR STATE
INCOME TAXES 0 0 0 0
------------ ---------- ---------- ----------
NET INCOME (LOSS) ($22,269) $ 267,712 $ 20,398 $ 146,062
============ ========== ========== ==========
UNITS USED TO COMPUTE PER UNIT AMOUNTS 170,916 178,972 170,916 178,972
NET INCOME (LOSS)/PER UNIT ($0.13) $ 1.50 $ 0.12 $ 0.82
============= ========== ========== ==========
DISTRIBUTION PER UNIT $ 3.70 $ 0.25 $ 3.95 $ 2.25
============ ========== ========== ==========
</TABLE>
NOTE 1: No provision for Federal Income Taxes has been made since First Wilkow
Venture is a partnership and the partners report their pro-rata share
of income or loss individually.
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<PAGE> 4
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
1998 1997
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 20,398 $ 146,062
Non Cash Items Included in Net Income
Minority Interest in Subsidiaries Net Income/Loss 46,080 (3,003)
Depreciation and Amortization 898,510 871,164
Amortization of Debt Forgiveness Income (35,676) (36,043)
(Decrease) Increase in Net Payable and Accrued Expe (225,532) 85,811
Share of Partnership's Net (Income) Loss (11,948) (581,535)
----------- -----------
Total Cash Provided (Used) from Operating Activities 691,832 482,456
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Partnership Investment Draws 602,894 1,994,476
(Increase) in Land and Buildings (491,634) (193,666)
Investment in Partnerships (508,081) (3,438)
(Decrease) Increase in Minority Interest (110,200) (55,100)
(Decrease) Increase in Mortgage and Notes Payable 8,947,513 (205,768)
(Increase) Decrease in Mortgage and Notes Receivable 2,000 298,161
Investment in Deferred Charges (621,248) (125,032)
----------- -----------
Total Cash Provided (Used) from Investing Activities 7,821,244 1,709,633
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash Distribution to Partners (675,118) (402,687)
Mortgage Principal Payments (7,395,362) (236,167)
----------- -----------
Total Cash Provided (Used) from Financing Activities (8,070,480) (638,854)
----------- -----------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS 442,596 1,553,235
CASH AND EQUIVALENTS - BEGINNING OF PERIOD 3,186,660 1,306,870
---------- ----------
CASH AND EQUIVALENTS - END OF PERIOD $3,629,256 $2,860,105
========== ==========
</TABLE>
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<PAGE> 5
FIRST WILKOW VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
------------------------------------------
1. Financial Statements
The financial statements have been prepared in accordance with generally
accepted accounting principles. Under this method of accounting, revenues are
recorded when earned and expenses are recorded when incurred.
Reference is made to the Partnership's annual report for the year ended
December 31, 1997, for a description of other accounting policies and additional
details for the Partnership's financial condition, results of operations,
changes in partners' capital and statement of cash flows for the year then
ended. The details provided in the notes thereto have not changed as a result
of normal transactions in the interim.
2. Subsequent Events
On July 6, 1998, the property owned by the Partnership at 23 East Flager
Street in Miami, Florida was sold to G.S Holding Company of South Florida for
net proceeds of $1,724,862.68.
On July 8, 1998, a property owned by M&J/Retail L.P., the Harlem & North
shopping center in Oak Park, Illinois, was refinanced with Criimi Mae, Inc. The
principal amount of the new loan is $2,550,000 bearing interest at an annual
rate of 7.27%. The loan is to be amortized over a 30-year schedule, with a
balloon payment of the unpaid principal balance on July 1, 2008. The existing
mortgage loan of $2,104,641 was paid off resulting in net refinancing proceeds
of $440,500.
On July 30, 1998, a property owned by the Partnership at 180 North Michigan
Avenue, Chicago, Illinois was refinanced with Column Financial. The principal
amount of the new loan is $7,300,000 bearing interest at an annual rate of
7.13%. The loan is to be amortized over a 30-year schedule, with a balloon
payment of the unpaid principal balance due on September 1, 2008. The existing
mortgage loan of $6,733,888 was paid off resulting in net refinancing proceeds
of approximately $400,000.
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<PAGE> 6
FIRST WILKOW VENTURE
FORM 10-Q
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
JUNE 30, 1998
Overview
Reference is made to partnership's annual report for the year ended
December 31, 1997 for a discussion of the partnership's business.
On January 10, 1998, the Partnership made a distribution in the amount of
$42,729, or $.25 per unit.
On April 8, 1998, M&J/Retail L.P. acquired a 64.95% investment in M &
J/Clarkfair L.P., which has a 9% interest in Clarkfair LLC. Clarkfair LLC is the
sole owner of two limited liability companies, namely Marketfair North LLC and
Shops at Clark's Pond LLC, which were formed to acquire the following described
properties:
Marketfair North - a 136,989 square foot shopping center in Clay, New
York
Shops at Clark's Pond - a 208,325 square foot shopping center in South
Portland, Maine
M&J/Retail L.P.'s interest is based on a capital contribution of $315,000
funded as follows:
As of March 31, 1998 $ 75,000.00
At the April 8, 1998 closing 84,927.59
May 13, 1998 funding 155,072.41
-------------
Total initial Capital $ 315,000.00
=============
In addition to the above cash contributions, M&J/Retail L.P. has posted two
letters of credit totaling $500,000. These letters of credit, which expire on
March 16, 1999, renew automatically until the underlying obligations are
satisfied. The general partner of M&J/Clarkfair, L.P. has indemnified M&J/Retail
L.P. for 10% or $50,000 of these letters of credit. In the event that the
letters of credit are drawn, M&J/Retail L.P. will be required to fund $450,000
in lieu of the letters of credit. At that time M&J/Retail L.P.'s interest in
M&J/Clarkfair L.P. will increase from 64.95% to 82.74%.
On April 10, 1998, the Partnership made a distribution in the amount of
$230,736.60 or $1.35 per unit.
On April 10, 1998, the Partnership invested $64,000 to obtain a 26.44%
ownership in M&J/Eden Prairie L.P. which has a 10% interest in Eden Prairie LLC
which acquired a 70,689 square foot shopping center in Eden Prairie, Minnesota.
On April 30, 1998, three properties owned by M&J/Retail L.P., Archer &
Central, Irving & Kimball, and Melrose & Kimball, had their mortgages refinanced
with Criimi Mae, Inc. The principal terms of the three loans are as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Date of Principal Annual Amortization
Property Refinance Amount Interest Rate Schedule Maturity
------------ ----------- ---------- ------------- ----------------- --------
Archer & Central 4/30/98 $2,350,000 7.40% 30 years 4/30/08
Irving & Kimball 4/30/98 $1,325,000 7.58% 30 years 4/30/08
Melrose & Kimball 4/30/98 $ 991,000 7.58% 30 years 4/30/08
</TABLE>
The existing mortgages for $1,997,870, $1,316,725, $1,135,099, respectively,
were paid off resulting in net refinancing proceeds of $54,621.38. By virtue of
these refinancings, the aggregate annual debt service will be reduced from
$475,464 to $391,101.
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<PAGE> 7
On May 22, 1998, the Partnership contributed capital to Arlington LLC for
$125,175. On July 8, an additional $375,179 was contributed for a total of
$500,354.
On June 8, 1998, a property owned by the Partnership, Naperville Office
Court in Naperville, Illinois, was refinanced with Column Financial. The
principal amount of the new loan is $4,500,000 bearing interest at an annual
rate of 7.13%. The loan is to be amortized over a 30-year schedule, with a
balloon payment of the unpaid principal balance due on August 1, 2008. The
existing mortgage loan of $2,690,185 was paid off resulting in net refinancing
proceeds of $1,642,123.
On June 26, 1998, the Partnership made a distribution in the amount of
$401,652.60, or $2.35 per unit.
Year 2000 Issue
The Partnership is working to resolve the potential impact of the year 2000
on the ability of the Partnership=s computerized information systems to
accurately process information that may be date-sensitive. Any of the
Partnership's programs that recognize a date using "00" as the year 1900 rather
than the year 2000 could result in error or system failures. The Partnership
utilizes a number of computer programs across its entire operation. The
Partnership has not completed its assessment, but currently believes that costs
of addressing this will not have a material adverse impact on the Partnership=s
financial position. However, no estimates can be made as to the potential
adverse impact resulting from the failure of third party service providers and
vendors to prepare for the year 2000. The Partnership is attempting to identify
those risks as well as to receive compliance certificates from all third parties
that have a material impact on the Partnership's operations.
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<PAGE> 8
REMARKS
In the opinion of the General Partners, the financial information of this
report includes all adjustments, including estimated provisions for items
normally settled at year end, and is a fair statement of the results for the
interim ended June 30, 1998 and 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FIRST WILKOW VENTURE
By: Marc R. Wilkow
-----------------------------------
Marc R. Wilkow, General Partner and
President of M & J Wilkow, Ltd., its
Managing Agent
DATED: August 11, 1998
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, in the capacities indicated, on August 11, 1998
Clifton J. Wilkow
--------------------------------------
Clifton J. Wilkow, General Partner and
Executive Vice President of
M & J Wilkow, Ltd.
Thomas Harrigan
-------------------------------------
Thomas Harrigan, Vice President of
M & J Wilkow, Ltd.
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 3,629,254
<SECURITIES> 0
<RECEIVABLES> 1,596,460
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,439,971
<PP&E> 53,692,593
<DEPRECIATION> 18,661,378
<TOTAL-ASSETS> 46,228,240
<CURRENT-LIABILITIES> 2,568,104
<BONDS> 32,843,180
0
0
<COMMON> 0
<OTHER-SE> 8,457,541
<TOTAL-LIABILITY-AND-EQUITY> 46,228,240
<SALES> 4,885,554
<TOTAL-REVENUES> 5,027,499
<CGS> 0
<TOTAL-COSTS> 1,213,753
<OTHER-EXPENSES> 1,532,230
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,328,476
<INCOME-PRETAX> 20,398
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,398
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,398
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
