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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
For the year ended December 31, 1997
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
---------- --------
Commission File Number 0-7798
FIRST WILKOW VENTURE, A LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Illinois 36-6169280
- ----------------------- ------------------------------------
(State of Organization) (I.R.S. Employer Identification No.)
180 North Michigan Avenue, Chicago, Illinois 60601
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including area code: (312) 726-9622
Securities Registered Pursuant to Section 12(h) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Units of Partnership Interest, Exchange Value $91
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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
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The Registrant's units of limited partnership interest are not traded in a
regulated market. The restrictions on the sale, transfer, assignment or pledge
of partnership units are described in the Agreement of Limited Partnership of
the Registrant.
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PART I
ITEM 1 - BUSINESS
ORGANIZATION
First Wilkow Venture (the "Registrant") is a limited partnership composed
of 416 limited partners and two general partners who are Marc R. Wilkow and
Clifton J. Wilkow.
Marc R. Wilkow and Clifton J. Wilkow have been engaged in real estate
activities for over 20 years as officers of M&J Wilkow, Ltd., a closely held
corporation, and certain affiliated companies which have been involved (through
their predecessors in interest) in the acquisition, sale, development, leasing,
operation, brokerage and management of real estate since 1939.
Marc R. Wilkow is also president and sole director and stockholder of the
law firm of Wilkow & Wilkow, P.C., which is the general counsel for the
Registrant.
All of the above entities, including the Registrant, have their principal
offices at 180 North Michigan Avenue in Chicago, Illinois 60601.
M & J Wilkow, Ltd. and its affiliated companies have a combined
administrative staff of 43 and ancillary clerical, office and maintenance staff
of approximately 117.
The Registrant employs approximately five people who are management and
maintenance personnel in connection with the operation of certain wholly owned
properties.
DESCRIPTION OF BUSINESS
The Registrant owns outright or otherwise has participatory ownership
interests in real property for investment purposes. At December 31, 1997, there
are 31 properties in which the Registrant has interests, divided among
residential, commercial and industrial buildings, shopping centers, and
undeveloped land. Twenty-six of the properties are neither owned nor leased by
the Registrant directly, but are owned by the Registrant in participation with
other partnerships, some of which the Registrant has contracted for a priority
position with respect to the receipt of cash distributions. These properties
break down into the following categories: three are residential projects;
fourteen are shopping centers; six are office buildings; one is a real estate
investment trust; one is undeveloped land; and one is a hotel.
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The remaining five properties are owned and operated by the Registrant.
Two are office buildings, and three are shopping centers.
CHANGES IN PROPERTIES
During the calendar year ended December 31, 1997, certain of the property
investments held by the Registrant underwent the changes described below:
(a) Purchases:
On August 26, 1997, the Registrant invested $70,000 in M&J/Mid Oak
Limited Partnership, which has a 9% interest in Mid Oak Plaza LLC, which
acquired a 77,942 square foot shopping center in Midlothian, Illinois.
On October 8, 1997, the Registrant invested $200,000 in M&J/Hotel
Investors Limited Partnership, which acquired a 164-room hotel in the greater
Orlando area, three miles from the main entrance at Walt Disney World.
(b) Sales:
On January 16, 1997, the property known as 2221 Camden Court Office
Building was sold for $11,750,000, resulting in repayment of Registrant loans
and an equity distribution of $690,360 to the Partnership. A provision for loss
in book value of $154,000, equal to the ultimate loss to the Registrant on the
disposition of the investment, was recognized in 1996.
On February 12, 1997, Sun Pointe Place Limited Partnership sold a
140-unit apartment complex it developed and owned in Largo, Florida, for
$2,600,000. M&J/Largo Limited Partnership, which owns a 91.12% interest,
exercised its option to withdraw as a limited partner of Sun Pointe Place
Limited Partnership simultaneously with the sale of the property, entitling it
to all the available sale proceeds. The Registrant received an equity
distribution from M&J/Largo Limited Partnership of $615,384, resulting in a loss
on disposition of $78,843. A provision for loss in book value equal to the
estimated loss on the transaction of $119,000 was recognized in 1996, and a gain
of $40,157 was recognized in 1997.
The Registrant on April 15, 1997, converted 25,000 units in Duke
Realty Limited Partnership to 25,000 shares of common stock of Duke Realty
Investments, Inc. The stock was sold in two blocks of 12,500 shares on June 12,
1997, and July 21, 1997, for total proceeds of $1,028,212, resulting in a gain
of $794,962.
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(c) Proposed Purchases and Sales:
None
(d) Declined Purchases:
None
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COMPETITIVE POSITION
In general, none of the Registrant's properties are immune from the
pressures of competition. There are competing properties serving the
geographical areas in which each of the Registrant's properties are located. The
amount of revenue generated annually from these properties is very much
dependent upon national economic conditions generally and upon local economic
conditions specifically, among the latter of which are the availability and
demand for office space, commercial space and apartment units, as the case may
be. In general, the Registrant may incur substantial costs, from time to time,
at its commercial properties, in connection with either the renewal of existing
leases or the marketing of vacant space to new tenants. These costs may include
the costs of improving and upgrading space to be competitive, as well as the
payment of brokerage commissions.
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ITEM 2 - PROPERTIES
The Registrant has an ownership interest in the following properties as
of December 31, 1997:
PROPERTIES INVOLVING NET LEASES
23 EAST FLAGLER, MIAMI, FLORIDA
The property is a three-story commercial building located in downtown
Miami, Florida, which was net leased to McCrory Corporation for a term of 25
years, with four five-year options. The property is unencumbered by any mortgage
debt. The scheduled net rent through January 31, 2000, is $61,425 per year.
Prior to May 2, 1996, McCrory Corporation filed a petition for relief under
Chapter 11 of the United States Bankruptcy Code. In response to a motion filed
on behalf of the Registrant to either (i) compel McCrory Corporation to comply
with its obligations under the lease or (ii) reject the lease, a settlement was
reached which, as subsequently amended, would allow McCrory Corporation to
reject the lease and yet retain possession through April 30, 1997, to complete
an inventory liquidation process. The Registrant has retained CB Commercial to
assist the Registrant in connection with its efforts to either lease or sell the
property.
Per the terms of the settlement, the Registrant received $45,645,
representing rent for the months of February, March and April 1997 at $8,000 per
month and real estate taxes on the premises for January, February, March and
April 1997 based on an annual real estate tax bill of $64,935 ($5,411 per
month). In August 1997, McCrory Corporation reimbursed the Registrant $72,306
towards repairs and improvements to the building while it was an occupant.
47TH & HALSTED, CHICAGO, ILLINOIS
This property is a 148,469 square foot commercial complex acquired in
1968 at a cost of $1,994,842. The property was leased on a 25-year net lease,
expiring on April 30, 1993, to Community Discount Centers, Inc. In addition, the
tenant has three five-year options at a rental during each option of $205,264
per annum. The first and second five-year options have been exercised. On
January 16, 1981, the lease was assigned to the Zayre Corp., to be operated as a
Zayre Department Store. As a result of the acquisition of Zayre Corp. by Ames
Department Stores, Inc., the latter succeeded to the tenant's position under the
lease. On April 25, 1990, Ames filed a petition for relief under the United
States Bankruptcy Code and on December 21, 1990, elected to accept the lease.
Subsequently, on January 15, 1991, the Zayre Corp. assigned its interest in the
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lease to Fairplay, Inc. The tenant is directly responsible for all taxes and
common area maintenance expenses.
The property is encumbered by a mortgage securing two promissory notes in
the original principal amounts of $1,800,000 and $600,000, maturing December 31,
2003, and December 31, 2002, respectively, and bearing interest at 7% and 4.96%,
respectively, per annum.
PROPERTIES INVOLVING PARTICIPATIONS
FIRST RON VENTURE (APOLLO APARTMENTS)
The Apollo Apartments consist of 256 units (128 one-bedroom and 128
two-bedroom) built on 10 acres of land on Britton Road in Oklahoma City,
Oklahoma. The project is owned by Apollo Associates, a limited partnership of
which First Ron Venture, a joint venture, owns 38%. The Registrant has a
one-third interest in First Ron Venture. The Registrant paid $260,000 for its
interest in May 1978. The limited partners are entitled to a cash flow priority
of 9% per annum. The Registrant also acquired 10 limited partnership units
(3.831% interest) in First Apollo Associates, which has a one-third interest in
First Ron Venture.
The property was acquired with a $2,150,000 first mortgage bearing
interest at 8-3/4% per annum. In December 1987, the mortgage was purchased by
McKinley Associates, an affiliate of the general partner of Apollo Associates.
The old mortgage was replaced with a $2,135,000 first mortgage bearing interest
at 9.9% per annum but payable on a current basis only to the extent of cash
flow. Any unpaid interest accrues and compounds at 13% per annum. In addition to
minimum interest, the lender is entitled to additional interest based upon
generation of cash flow and net sale and/or refinancing proceeds in excess of
certain specified levels.
HAWDEL LIMITED PARTNERSHIP I AND III (2221 CAMDEN COURT OFFICE BUILDING)
The Registrant had invested a total of $1,320,000 representing an 18.03%
interest in Hawdel Limited Partnership I and III, which owned the 2221 Camden
Court Office Building located in Oak Brook, Illinois. The property contains
100,796 net rentable square feet of prime office space.
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On January 16, 1997, the property was sold for $11,750,000, resulting in
full payment of the first mortgage and the partner loans. In addition, the
Registrant received an equity distribution of $690,360, resulting in a loss on
disposition of $154,000. A provision for loss in book value equal to the
estimate of $154,000 was recognized in 1996.
M&J/LARGO LIMITED PARTNERSHIP (SUN POINTE PLACE APARTMENTS)
The Registrant invested a total of $694,227 to acquire 756 limited
partnership units (a 25.1% interest) in M&J/Largo Limited Partnership. M&J/Largo
Limited Partnership owned 91.12% of Sun Pointe Place Limited Partnership, which
developed and owned a 140 furnished one-bedroom unit apartment complex.
The project, located on Bay Drive in Largo, Florida, was sold on February
12, 1997, for $2,600,000. A portion of the sale proceeds were used to pay the
balance of a $200,000 mortgage obtained on October 13, 1994. The remainder of
the net sale proceeds were paid to M&J/Largo Limited Partnership when it
exercised its option to withdraw as a limited partner of Sun Pointe Place
Limited Partnership, simultaneous with the sale of the property. The Registrant
received a final equity distribution from M&J/Largo Limited Partnership of
$615,384, resulting in a loss on disposition of $78,843. A provision for loss in
book value equal to the estimated loss on the transaction of $119,000 was
recognized in 1996, and a gain of $40,157 was recognized in 1997.
DUKE REALTY LIMITED PARTNERSHIP
On December 2, 1994, the Registrant's interests in three partnerships
were redeemed for 50,251 partnership units in Duke Realty Limited Partnership,
the operating partnership ("UPREIT") of more than 100 properties. The UPREIT's
sole general partner is Duke Realty Investments, Inc., a real estate investment
trust ("REIT") listed on the New York Stock Exchange. The partnership units in
the UPREIT will eventually be convertible, on a one-for-one basis, to shares of
common stock to the REIT. As part of the issuance of partnership units in the
UPREIT, the REIT also completed an offering to the public of 13,167,500
additional shares of common stock, which generated proceeds of approximately
$312.7 million.
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The Registrant on April 15, 1997, converted 25,000 units in Duke Realty
Limited Partnership to 25,000 shares of common stock of Duke Realty Investments,
Inc. The stock was sold in two blocks of 12,500 shares on June 12, 1997, and
July 21, 1997, for total proceeds of $1,028,212, resulting in a gain of
$794,962.
On August 18, 1997, a 2-for-1 stock and unit split occurred, resulting in
an additional 25,251 units of Duke Realty Limited Partnership being issued to
the Registrant. The Registrant thus held 50,502 units in Duke Realty Limited
Partnership at December 31, 1997.
ROSEMONT 28 LIMITED PARTNERSHIP (UNIMPROVED LAND IN ORLANDO, FLORIDA)
In June 1985, the Registrant invested $275,000 to obtain a 22.92%
interest in Rosemont 28 Limited Partnership, which owns 11.25 acres of
unimproved land held for development in Orlando, Florida. Additional investments
of $467,786 have been funded to cover the Registrant's pro rata share of the
costs of carrying the property and paying off the mortgage loan in full. Net
cash flow and residual proceeds are required to be distributed in accordance
with the partners' respective interests.
XXI OFFICE PLAZA ASSOCIATES (CENTURY XXI OFFICE BUILDING)
Century XXI Office Plaza is an office complex built in 1971-1973, which
is located in Germantown, Maryland, a suburb of Washington, D.C. The property
consists of three separate office buildings and a connecting five-level parking
deck, on a site in excess of six acres. The office buildings have a total
leasable area of 179,385 square feet. The property has two 30-year mortgages
from Teachers Insurance and Annuity Association of America in the combined
original principal amount of $5,500,000. During December 1996, one of the
mortgages was repaid. The mortgagee, in addition to the regular monthly payments
due under the mortgage, participates in 25% of the gross income over $1,160,000.
The Registrant owns a 13.907% limited partnership interest in XXI Office Plaza
Associates, the partnership that was formed to acquire the subject property. In
addition, the Registrant owns 50 units (an 8.28% interest) in 21st M&J Venture,
which has a 16% interest in XXI Office Plaza Associates and 35 units (a 7.59%
interest) in Orhow Associates, which has a 12.2% interest in XXI Office Plaza
Associates.
During September 1994, the Registrant made an unsecured loan for $27,814
representing the Registrant's share of the $200,000 in partner loans needed for
capital improvements. The notes bear interest at prime and will be due December
31, 1999.
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M&J/GROVE LIMITED PARTNERSHIP (THE GROVE OFFICE PARK)
The Grove Office Park consists of three two-story office buildings lying
on six acres of land located in Wheaton, Illinois. The complex contains 105,454
square feet of prime office space with parking available for 343 cars.
Through December 31, 1995, the Registrant had invested a total of
$931,000 to acquire 981 limited partnership units (a 23.08% interest) in
M&J/Grove Limited Partnership ("M&J/Grove"), the partnership that was formed to
acquire the subject property. In addition, the Registrant owns seven units (a
3.02% interest) in Wilkow/Grove Partners L.P., which has a 5.87% interest in
M&J/Grove. As a Class A Limited Partner, the Registrant is entitled to an 8%
cumulative priority claim.
On July 1, 1996, the Registrant invested an additional $98,100 in
M&J/Grove in connection with the purchase of 981 Call Units, increasing its
interest in the investment to 28.03%. The Call Unit holders are entitled to a
cumulative cash flow priority of 12% per annum. Upon sale or refinancing, the
Call Unit holders will receive the first $367,500 of available proceeds pro
rata. Any proceeds remaining thereafter will be split 25% to the holders of the
Call Units and 75% to the General and Class A Limited Partners. The proceeds of
the M&J/Grove capital call were primarily used for a mortgage debt restructuring
of the Grove Office Park. The original $8,000,000 mortgage was paid off at a
discounted amount of $5,600,000 and replaced with a new first mortgage loan in
the amount of $5,500,000, bearing interest at the fixed rate of 8.55% per annum
for five years. A limited guaranty covering 28.41%, or $1,562,500, of the
mortgage loan was made by third parties on behalf of M&J/Grove. The Registrant
guaranteed $520,833, an amount which approximates 28.41% of its ownership
interest in M&J/Grove, exclusive of subordinated equity interests which have no
value. The property is also encumbered by unsecured debentures of $1,000,000,
which mature on May 1, 2001, and bear interest at 9% per annum, payable
quarterly.
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L-C OFFICE PARTNERSHIP IV (LAKE COOK OFFICE CENTRE - BUILDING IV)
The Registrant holds a 74.69% interest in L-C Office Partnership IV,
which has a 94% interest in Lake Cook Office Development - Building Four Limited
Partnership ("Lake Cook Development"), which has a 57.915% interest in DFA
Limited Partnership, which has a 99% interest in M&J/Dover Limited Partnership,
which owns Dover Farms Apartments, a 300 unfurnished one- and two-bedroom
apartment complex located on a hilly, landscaped setting in North Royalton,
Ohio. During 1997, the Registrant contributed an additional $175,097 to maintain
its 74.69% interest in L-C Office Partnership IV. Each apartment has a washer
and dryer, as well as either a patio or terrace. Many apartments also include
fireplaces, dens and lofts. In terms of common areas, the complex includes a
clubhouse, pool and deck area, Jacuzzi and racquetball court.
In addition, the Registrant owns limited partnership interests in the
partnerships scheduled below whose sole asset is represented by an interest in
Lake Cook Development. The following is a recap of these interests:
<TABLE>
<CAPTION>
Owned by Ownership in
Registrant Lake Cook Development
-------------------------- ---------------------
Partnership # of Units % Interest % Interest
----------- ---------- ---------- ----------
<S> <C> <C> <C>
544 Arizona Associates 61 13.034% .384%
Fifth Arizona Associates 3 .667 .154
Fifth Orlando Associates 83 11.690 .243
First Orlando Associates 50 10.000 .157
Monterey Village Associates 45 5.625 .598
Seventh M&J Associates 35 8.274 .226
TOP Investors Limited Partnership 95 95.000 .688
</TABLE>
222 FEE ASSOCIATES
The Registrant owns a 3.18% interest (58 units) in 222 Fee Associates,
which holds multiple partnership and debenture investments.
5601 N. SHERIDAN ASSOCIATES
The Registrant owns a 13.04% interest (36 units) in 5601 N. Sheridan
Associates, which holds partnership interests in XXI Office Plaza Associates and
M&J/Crossroads Limited Partnership (see Page 13, "M&J/Retail Limited
Partnership") and an investment in Tango Bay Suites (see Page 13) debentures.
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FIRST CANDLEWICK ASSOCIATES
The Registrant owns an 11.96% interest (55 units) in First Candlewick
Associates, which holds multiple partnership and debenture investments.
SECOND WILKOW VENTURE
The Registrant owns a 4.89% interest (197 units) in Second Wilkow
Venture, which holds multiple partnership and debenture investments.
209 WEST JACKSON
On August 24, 1995, the Registrant acquired a 59.44% undivided interest
in 209 West Jackson, a 142,996 square foot office building located in downtown
Chicago, in exchange for its 57.67% undivided interest in Tango Bay Suites. As
part of this transaction, Tango Bay Suites remains liable to the Registrant for
loans advanced to fund operating deficits. The 209 West Jackson building is
subject to a first mortgage of $10,000,000 and an additional $5,661,000 note
secured by the first mortgage, both interest only at General Electric Capital
Corporation's commercial paper rate plus 3.25% per annum. The Registrant posted
a letter of credit for $150,000 as a part of this transaction. Due to the
character of the investment, the Registrant is using the equity method to
account for its interest in the 209 West Jackson building.
M&J/HOTEL INVESTORS LIMITED PARTNERSHIP
On October 8, 1997, the Registrant invested $200,000 to obtain a 14.81%
interest in M&J/Hotel Investors Limited Partnership, which owns a 164-room hotel
in Kissimmee, Florida. The property is located three miles from the main
entrance to Walt Disney World. At the time of purchase, the property was
operating as the EconoLodge Maingate Central Hotel, but immediately following
the closing, the property was converted to a Howard Johnson franchise.
The property was acquired with a three-year first mortgage of $4,550,000
bearing interest at 8.5% per annum. The property is currently undergoing a
renovation of all rooms.
M&J/MID OAK LIMITED PARTNERSHIP
On August 26, 1997, the Registrant invested $70,000 to obtain a 35%
interest in M&J/Mid Oak Limited Partnership, which has a 9% interest in Mid Oak
Plaza LLC, which owns Mid Oak Plaza Shopping Center located in Midlothian,
Illinois. The property contains 77,942 net rentable square feet of retail space.
There
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is an outparcel at the property consisting of 30,000 square feet, which is
occupied by White Castle pursuant to a ground lease. The tenant owns its own
building.
The property was acquired with a $4,558,000 mortgage bearing interest at
8.04% per annum. The term of the loan is seven years. Net cash flow and residual
proceeds are required to be distributed in accordance with the limited liability
company agreement.
PROPERTIES INVOLVING PROMISSORY NOTES
TANGO BAY SUITES, ORLANDO, FLORIDA
At December 31, 1997, the Registrant has a loan receivable in the
principal amount of $731,124 from Tango Bay Suites, a 158-unit all-suites hotel
located on Westwood Drive in Orlando, Florida.
PROPERTIES OWNED AND OPERATED BY REGISTRANT OR CONSOLIDATED SUBSIDIARIES
180 NORTH MICHIGAN, CHICAGO, ILLINOIS
The leasehold estate to this commercial office building on Chicago's
prestigious Michigan Avenue was acquired in 1968 at a price of $6,550,000, of
which $5,250,000 comprised mortgage financing. The property was constructed in
1926 and completely renovated in 1967 at a cost in excess of $3,000,000, which
included changeover to fully automatic passenger elevators, redesigned interiors
and a marble exterior facade. In 1973, the Registrant acquired the fee simple
estate of 18,649 square feet of land for $1,600,000. In November 1986, the
leasehold and fee simple estates were merged and the property was refinanced
with an $8,700,000 first mortgage loan. This loan, which was scheduled to mature
on November 1, 1996, was restructured during September 1994. In conjunction with
the restructuring, the mortgage holder agreed to a $500,000 forgiveness of debt
in return for a principal payment of $500,000 for a total principal reduction of
$1,000,000. The new mortgage loan with a principal balance of $6,733,888 bears
interest at 8.50% per annum and is due on September 1, 2001.
M&J/RETAIL LIMITED PARTNERSHIP (TEN STRIP SHOPPING CENTERS)
The Registrant originally invested a total of $3,995,000 to obtain a
56.97% interest in M&J/Retail Limited Partnership ("M&J/Retail"). The Registrant
also owns three limited partnership units (.75% interest) in Wilkow/Retail
Partners L.P., which has a 5.63% interest in M&J/Retail. On July 1, 1995, the
Registrant sold 300 Class A units of M&J/Retail for a total of $314,800,
resulting in a gain of $137,245 and reducing its
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ownership in this partnership from 56.97% to 52.75%.
On July 28, 1995, M&J/Retail acquired a majority interest in Northlake
Tower Limited Partnership ("Tower") by contributing $1,112,677 of initial
capital. Additional contributions through December 31, 1997, of $116,837
increased the total capital investment to $1,229,514. Tower owns a 17.08% share
of BSRT/M&J Northlake Limited Partnership ("BSRT/M&J"), which purchased a
leasehold interest in the Northlake Tower Festival Shopping Center for
$16,989,000 on July 28, 1995. The purchase of this property was made subject to
a $10,350,000 first mortgage loan bearing interest only at the fixed rate of
8.5% per annum for ten years. On November 18, 1997, this loan was refinanced
with a first mortgage of $17,600,000 with principal and interest payments based
on a 30-year amortization and an interest rate of 7.64%. A portion of the
refinancing proceeds were used to make distributions to the partners of
BSRT/M&J, with M&J/Retail ultimately receiving a distribution of $1,166,745. The
shopping center, consisting of 303,956 square feet of improvements and five
outlots, is located in Atlanta, Georgia. In a related transaction, M&J/Retail
loaned $83,212 to Northlake Tower Corporation ("Tower Corporation"), a General
Partner of both Tower and BSRT/M&J. At December 31, 1997, the amount outstanding
was $4,420. The loan is secured by Tower Corporation's partnership interests in
Tower and BSRT/M&J, and interest thereon will be paid from Tower Corporation's
share of net cash flow. Tower Corporation was organized to act as general
partner, as aforesaid, in order to insulate M&J/Retail from personal liability.
On October 27, 1995, M&J/Retail invested a total of $297,000 to acquire a
46.41% interest in M&J/Crossroads Limited Partnership ("M&J/Crossroads").
M&J/Crossroads purchased a 330,505 square foot shopping center known as
Crossroads of Roseville for $19,250,000, subject to a $19,550,000 first mortgage
loan (which included a reserve for anticipated capital improvements). The center
is located on 19.9 acres of land in Roseville, Minnesota. As a result of a
refinancing of the first mortgage loan on December 31, 1997, M&J/Retail received
a distribution on January 10, 1998, of $501,065.
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A summary of the properties in which M&J/Retail owns a majority interest
is as follows:
<TABLE>
<CAPTION>
Net Area
Rentable Land First Interest Mortgage
Property (Square Feet) (Acres) Mortgage Rate Maturity
- -------- ------------- ------- -------- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Harlem & North 22,775 1.00 $ 2,362,500 7.85% 01/01/99
Diversey & Sheffield 16,500 .75 2,000,000 7.875% 04/01/99
Oak Lawn Promenade 32,576 1.95 3,175,000 8.25% 06/01/98
Oak Lawn Square 9,746 .67 890,000 8.25% 06/01/98
Broadway-Berwyn 33,385 1.44 2,750,000 8.20% 07/31/00
Irving-Kimball 14,062 .55 1,450,000 8.875% 05/01/98
Melrose-Kimball 9,653 .36 1,250,000 8.875% 05/01/98
Archer-Central 29,426 1.49 2,200,000 8.875% 05/01/98
Evergreen Commons 8,981 .41 530,000 8.25% 05/01/99
111th & Western 9,620 .36 618,000 8.25% 05/01/99
--------- ------ -------------
186,724 8.98 $ 17,225,500
========= ====== =============
</TABLE>
The Registrant is entitled to a cumulative cash flow priority in the
amount of 9% per annum on its investment.
M&J/SHERIDAN LIMITED PARTNERSHIP (HIGHLAND PARK PROFESSIONAL BUILDING)
In April 1988, the Registrant invested $2,500,000 to obtain an 89.286%
interest in M&J/Sheridan Limited Partnership, which owns a 22,523 square foot
office building located at 1893 Sheridan Road in Highland Park, Illinois. The
property is a three-story building situated on a quarter acre of land. On
October 10, 1990, the property was encumbered with a $1,600,000 first mortgage
loan bearing interest at the rate of 10.25% per annum which matured on October
1, 1996. On September 30, 1996, M&J/Sheridan Limited Partnership paid off the
existing mortgage loan and refinanced the property. The term of the new loan,
with a principal amount of $1,425,000, is five years. Debt service reflects an
interest rate of 8.88% per annum and amortization based on 20 years.
NAPERVILLE OFFICE COURT, NAPERVILLE, ILLINOIS
In August 1986, pursuant to the terms of an exchange agreement, the
Registrant acquired the Naperville Office Court for $4,830,000.
On April 6, 1988, the Registrant procured a $3,000,000 first mortgage
loan on the property which bears interest at the rate of 9.75% per annum and is
due in May 1998. During 1993, the Registrant exercised an option to adjust the
interest rate to 8.875%.
15
<PAGE> 16
Naperville Office Court is located at 1801 - 1813 Mill Street in
Naperville, Illinois. Consisting of four single-story office buildings, the
property rests on 5.5 acres, contains 66,405 net rentable square feet and
provides parking space for 300 automobiles.
WATERFALL PLAZA, ORLAND PARK, ILLINOIS
In March 1993, the Registrant acquired 100% ownership in the Waterfall
Plaza in exchange for its interest in the 2101 Commercial Office Building.
The project is subject to a $2,268,444 first mortgage loan with interest
at 9.65% per annum and is due in September 1999.
Waterfall Plaza is a retail center located in Orland Park, Illinois.
Consisting of one single-story building, the property rests on 1.5 acres and
contains 21,893 net rentable square feet.
16
<PAGE> 17
ITEM 3 - LEGAL PROCEEDINGS
Legal proceedings pending involve either suits which have been instituted
by the Registrant or its agents against tenants who are in default of their
lease obligations or the defense of alleged personal injury claims incidental to
the operation of properties accessible to the general public. All of the
personal injury claims are covered by insurance. It is not anticipated that the
outcome of any of these proceedings, if unfavorable to the Registrant, will have
a materially adverse impact on the Registrant.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
17
<PAGE> 18
PART II
ITEM 5 - MARKET FOR REGISTRANT'S CAPITAL UNITS AND RELATED SECURITY
HOLDER MATTERS
The number of holders of record of equity securities of the Registrant as
of December 31, 1997, was approximately:
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
-------------- ------------------------
<S> <C>
Unit of Limited Partnership Interest 416
</TABLE>
The Registrant's units of limited partnership interest are not actively
traded in a regulated market. The restrictions on the sale, transfer, assignment
or pledge of partnership units are described in the Agreement of Limited
Partnership of the Registrant as amended.
18
<PAGE> 19
ITEM 6 - SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
December 31,
---------------------------------------------------------
1997 1996 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATING RESULTS
(IN THOUSANDS)
Total Revenue $ 9,516 $ 9,874 $ 12,135 $ 14,445
Net Income (Loss)* $ 1,136 $ (99) $ (2,327) $ (3,119)
PARTNERSHIP UNIT DATA
(PER PARTNERSHIP UNIT)
Net Income (Loss):
General Partner* $ 6.42 $ (.55) $ (13.00) $ (17.43)
Limited Partner* 6.42 (.55) (13.00) (17.43)
Cash Distributions Paid:
General Partner $ 2.75 $ -- $ -- $ --
Limited Partner 2.75 -- -- --
* Includes gain (loss) on sale of real estate properties
December 31,
---------------------------------------------------------
1997 1996 1995 1994
---------- ---------- ---------- ----------
FINANCIAL POSITION DATA
Total Assets (In thousands) $ 45,385 $ 45,595 $ 55,075 $ 64,373
Net Book Value Per Unit $ 53.31 $ 49.12 $ 49.67 $ 62.67
</TABLE>
19
<PAGE> 20
ITEM 7 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - 1997 COMPARED TO 1996
For the year ended December 31, 1997, income from partnerships was $1,823,771
compared to $136,843 for the comparative period of 1996. The increase in 1997 is
primarily due to gains on the disposition of M&J/Largo Limited Partnership and
Duke Realty Investments, Inc. and income recognized on the distribution from
Northlake Tower Limited Partnership.
For the year ended December 31, 1997, the Registrant loaned to investment
partnerships in which it has substantial equity interests the following amounts:
<TABLE>
<CAPTION>
Advances Collections Write-offs Total Loan
Year Ended Year Ended Year Ended Balance at
December 31, December 31, December 31, December 31,
1997 1997 1997 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Hawdel Limited Partnership I
and III $ - $ 295,161 $ - $ -
Northlake Tower Corporation 2,976 82,155 - 4,033
</TABLE>
The Northlake Tower Corporation unsecured promissory note bears interest at
prime and is due on demand.
On January 10, 1997, the Registrant made a distribution in the amount of
$357,944, or $2 per unit.
On January 16, 1997, the property known as 2221 Camden Court Office Building was
sold for $11,750,000, resulting in repayment of Registrant loans and an equity
distribution of $690,360 to the Registrant. A provision for loss in book value
of $154,000, equal to the estimated loss to the Registrant on the disposition of
the investment, was recognized in 1996.
On February 12, 1997, Sun Pointe Place Limited Partnership sold a 140-unit
apartment complex it developed and owned in Largo, Florida, for $2,600,000.
M&J/Largo Limited Partnership, which owns a 91.12% interest, exercised its
option to withdraw as a limited partner of Sun Pointe Place Limited Partnership
simultaneously with the sale of the property, entitling it to all the available
sale proceeds. The Registrant received an equity distribution from M&J/Largo
Limited Partnership of $615,384. A gain of $40,157 was recognized as a result of
the equity distribution for the disposition of the investment and included in
net income from partnership investments.
On April 10, 1997, the Registrant made a distribution in the amount of $44,743,
or $.25 per unit.
The Registrant on April 15, 1997, converted 25,000 units in Duke Realty Limited
Partnership to 25,000 shares of common stock of Duke Realty Investments, Inc.
On June 12, 1997, the Registrant sold 12,500 shares of Duke Realty Investments,
Inc. for $500,044. This transaction resulted in a gain of $383,419, which was
included in net income from partnership investments.
20
<PAGE> 21
On July 10, 1997, the Registrant made a distribution in the amount of $44,743,
or $.25 per unit.
On July 21, 1997, the Registrant sold an additional 12,500 shares of Duke Realty
Investments, Inc. for $528,168. This transaction resulted in a gain of $411,543,
which was included in net income from partnership investments.
On August 26, 1997, the Registrant invested $70,000 to obtain a 35% interest in
M&J/Mid Oak Limited Partnership, which has a 9% interest in Mid Oak Plaza LLC,
which acquired a 77,942 square foot shopping center in Midlothian, Illinois.
On September 26, 1997, the Registrant invested $175,097 to maintain its 74.69%
interest in L-C office Partnership IV.
On October 8, 1997, the Registrant invested $200,000 in M&J/Hotel Investors
Limited Partnership, which acquired a 164-room hotel in the greater Orlando
area, three miles from the main entrance at Walt Disney World.
On October 10, 1997, 8,056 limited partnership units owned by 52 partners (out
of a total of 470 partners) were redeemed as of October 1, 1997, at the
redemption rate of $40 per unit. The redemption price paid by the Registrant was
$322,240. As a result of the redemption, there are now 170,916 units outstanding
owned by 428 partners. Also on this date, the Registrant made a distribution in
the amount of $44,743, or $.25 per unit, based on 178,972 units outstanding at
September 30, 1997.
On November 11, 1997, M&J/Retail received $1,166,745 from Northlake Tower
Limited Partnership relating to Northlake's refinancing.
21
<PAGE> 22
RESULTS OF OPERATIONS - 1996 COMPARED TO 1995
For the year ended December 31, 1996, income from partnerships was $136,843
compared to $382,248 for the comparative period of 1995. The decrease in 1996 is
primarily due to estimated losses on the disposition of Hawdel Limited
Partnership and M&J/Largo Limited Partnership.
For the year ended December 31, 1996, the Registrant loaned to investment
partnerships in which it has substantial equity interests the following amounts:
<TABLE>
<CAPTION>
Advances Collections Write-offs Total Loan
Year Ended Year Ended Year Ended Balance at
December 31, December 31, December 31, December 31,
1996 1996 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Second Wilkow Venture $ - $ 200,000 $ - $ -
First Candlewick Associates - 45,000 - -
222 Fee Associates - 30,000 - -
5601 N. Sheridan Associates - 22,000 - -
L-C Office Partnership IV 502 - - 15,091
Lake Cook Office Development 71,872 - - 71,872
Crossroads of Roseville
Corporation - 6,000 - -
Northlake Tower Corporation 2,261 - - 83,212
</TABLE>
The Northlake Tower Corporation unsecured promissory note bears interest at
prime and is due on demand. The Lake Cook notes bear interest at prime plus 2%
and are due on demand.
On January 18, 1996, Freeport Office Partners Limited sold the 8505 Freeport
Office Building for $8,503,150, resulting in full repayment of the $5,185,580
first mortgage and the $2,000,000 subordinated debenture. The Registrant
received approximately $600,000 as repayment of previous operating deficit
loans. A provision for loss in book value of $1,400,000, equal to the estimated
loss to the Registrant on the disposition of the property, was recognized in
1995. An additional loss of $12,800 is included in 1996.
On July 1, 1996, the Registrant invested an additional $98,100 in M&J/Grove
Limited Partnership in connection with the purchase of 981 Call Units,
increasing its interest in the investment to 28.03%. The Call Unit holders are
entitled to a cumulative cash flow priority of 12% per annum. Upon sale or
refinancing, the Call Unit holders will receive the first $367,500 of available
proceeds. Any proceeds remaining thereafter will be split 25% to the holders of
the Call Units and 75% to the General and Class A Limited Partners. The proceeds
of the M&J/Grove Limited Partnership capital call were primarily used for a
mortgage debt restructuring of the Grove Office Park. The original $8,000,000
mortgage was paid off at a discounted amount of $5,600,000 and replaced with a
new first mortgage loan in the amount of $5,500,000, bearing interest at the
fixed rate of 8.55% per annum for five years. A Limited Guaranty covering
28.41%, or $1,562,500, of the mortgage loan was made by third parties on behalf
of M&J/Grove Limited Partnership. The Registrant guaranteed $520,833, an amount
which approximates 28.41% of its ownership interest in M&J/Grove Limited
Partnership, exclusive of subordinated equity interests which have no value.
22
<PAGE> 23
On September 30, 1996, M&J/Sheridan Limited Partnership refinanced the Highland
Park Professional Center located at 1893 Sheridan Road in Highland Park,
Illinois. The term of the new loan, with a principal amount of $1,425,000, is
five years. Debt service reflects an interest rate of 8.88% per annum and
amortization based on 20 years.
On December 24, 1996, the Registrant sold 6.1 acres of land at Metro
Parkway/Colonial Boulevard in Fort Myers, Florida, for gross proceeds of
$1,329,830 and a gain of $150,200.
23
<PAGE> 24
RESULTS OF OPERATIONS - 1995 COMPARED TO 1994
For the year ended December 31, 1995, income from partnerships was $382,248
compared to loss of $1,099,073 for the comparative period of 1994. The increase
is primarily due to gains on the partial disposition of M&J/Retail Limited
Partnership interest and the entire disposition of the First MW Associates, S &
S Venture and Second Chase Venture interests. The prior year loss was due
primarily to the loss on disposition of the North LaSalle Street Limited
Partnership interest.
For the year ended December 31, 1995, the Registrant loaned to investment
partnerships in which it has substantial equity interests and to a property in
which it held a co-tenancy ownership interest through June 30, 1995, the
following amounts:
<TABLE>
<CAPTION>
Advances Collections Write-offs Total Loan
Year Ended Year Ended Year Ended Balance at
December 31, December 31, December 31, December 31,
1995 1995 1995 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Hawdel Limited Partnership I
and III $ - $ 19,355 $ - $ 295,161
Tango Bay Suites 300,000 - 257,453 731,124
Second Wilkow Venture 200,000 - - 200,000
First Candlewick Associates 45,000 - - 45,000
222 Fee Associates 30,000 - - 30,000
5601 N. Sheridan Associates 22,000 - - 22,000
Crossroads of Roseville
Corporation 6,000 - - 6,000
Northlake Tower Corporation 80,951 - - 80,951
</TABLE>
The Second Wilkow Venture, First Candlewick Associates, 222 Fee Associates, 5601
N. Sheridan Associates and Crossroads of Roseville Corporation unsecured
promissory notes bear interest at prime and are due on demand. These loans were
repaid during March 1996.
On January 20, 1995, the Registrant entered into a revolving credit facility
with the LaSalle National Bank. The facility, due September 1, 1996, pays
interest at the prime rate per annum. Maximum borrowing under the facility
agreement is the lesser of $800,000 or 80% of the fair market value of the
Registrant's investment in Duke Realty Limited Partnership. As of December 31,
1995, the amount outstanding under this facility was $580,000, consisting of
cash draws of $350,000 and letters of credit of $230,000. Borrowings under the
facility are secured by the partnership units of Duke Realty Limited Partnership
owned by the Registrant.
S & S Venture acquired a property in Des Plaines, Illinois, on July 26, 1975,
which was sold on March 15, 1995. The Registrant received proceeds of $100,008
related to the sale of the property and has included a $34,290 gain on the
disposition of its 6.667% partnership in S & S Venture.
On July 1, 1995, the Registrant sold 300 Class A units of M&J/Retail Limited
Partnership ("M&J/Retail") for a total of $314,800, resulting in a gain of
$137,245 and reducing its ownership in this partnership from 56.97% to 52.75%.
24
<PAGE> 25
On July 28, 1995, Freeport Office Partners Limited extended the $5,200,000 loan
held by Confederation Life for five years effective August 1, 1995. The
Registrant sold the Freeport Office building in January of 1996. A provision for
loss in book value of $1,400,000 equal to the estimated loss to the Registrant
on the disposition of the property is recognized in 1995.
On July 28, 1995, M&J/Retail, owned 52.75% by the Registrant, acquired a
majority interest in Northlake Tower Limited Partnership ("Tower"), contributing
$1,124,109 of a total initial capital requirement of $1,251,000, with,
potentially, an additional capital requirement of $124,000 to cover
unanticipated contingencies. Additional contributions of $25,532 made through
December 31, 1995, increased the total capital investment to $1,149,641. Tower
owns a 17.08% share of BSRT/M&J Northlake Limited Partnership ("BSRT/M&J"),
which purchased a leasehold interest in the Northlake Tower Festival Shopping
Center for $16,989,000 on July 28, 1995. The purchase of this property was made
subject to a $10,350,000 first mortgage loan bearing interest only at the fixed
rate of 8.5% per annum for ten years. The shopping center, consisting of 303,956
square feet of improvements and five outlots, is located in Atlanta, Georgia. In
a related transaction, M&J/Retail loaned $80,951 to Northlake Tower Corporation
("Tower Corporation"), a General Partner of both Tower and BSRT/M&J. The loan is
secured by Tower Corporation's partnership interests in Tower and BSRT/M&J, and
interest thereon will be paid from Tower Corporation's share of net cash flow.
On July 28, 1995, M&J/Retail refinanced a retail center located at Broadway and
Berwyn in Chicago, Illinois. The term of the new loan, with a principal amount
of $2,750,000, is five years. Debt service reflects an interest rate of 8.20%
per annum and amortization based on 25 years.
On August 24, 1995, the Registrant acquired a 59.44% undivided interest in the
209 W. Jackson building, a 144,608 square foot office building located in
downtown Chicago, in exchange for its 57.66% undivided interest in Tango Bay
Suites, a 260-unit all-suites hotel in Orlando, Florida. As part of this
transaction, Tango Bay Suites remains liable to the Registrant for loans
advanced to fund operating deficits. The 209 W. Jackson building is subject to a
first mortgage of $10,000,000 and an additional $4,213,875 note secured by the
first mortgage, both bearing interest only at General Electric Capital
Corporation's commercial paper rate plus 3.25% per annum. The Registrant posted
a letter of credit of $150,000 as a part of this transaction. Due to the
character of the investment, the Registrant is using the equity method to
account for its investment in 209 W. Jackson.
On October 27, 1995, M&J/Retail invested a total of $297,000 to acquire a 46.41%
Class A interest in M&J/Crossroads Limited Partnership. The balance of $303,000
of the total $600,000 required capital for Class A investors was also financed
by M&J/Retail, resulting in a receivable from the other investors for their
respective share of capital contributions. These loans were repaid to M&J/Retail
during March 1996.
25
<PAGE> 26
LIQUIDITY AND CAPITAL RESOURCES
On January 20, 1995, the Registrant entered into a revolving credit
facility with the LaSalle National Bank. The facility, due September 1, 1998,
pays interest at the prime rate. Maximum borrowings under the facility agreement
are the lesser of $675,000 or 80% of the fair market value of the Registrant's
investment in Duke Realty Limited Partnership (see Item 2). Borrowings under the
facility agreement are secured by the partnership units of Duke Realty Limited
Partnership owned by the Registrant.
As of December 31, 1997, the amounts outstanding under this facility are
as follows:
<TABLE>
<S> <C>
Cash borrowings $ --
Letters of credit:
Waterfall Plaza/GE Capital
(expires 9/01/98) 80,000
209 W. Jackson/GE Capital
(expires 9/01/98) 150,000
Annex of Arlington/City of
Arlington (expires 11/15/98) 115,000
Annex of Arlington/GE Capital
(expires 11/15/98) 280,000
-----------
Total Outstanding Amounts $ 625,000
===========
</TABLE>
The liquid assets of the Registrant increased as of December 31, 1997,
when compared to December 31, 1996, due to proceeds from sale of partnership
investments.
The General Partners currently believe that the amount of working capital
reserves, when considered with the Registrant's projected cash flows from
operations in 1998 and borrowings under the revolving credit facility, will be
sufficient to cover any normal cash or liquidity requirements which may be
reasonably foreseen.
26
<PAGE> 27
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditor's Report 28
First Wilkow Venture:
Consolidated Balance Sheet, December 31, 1997 and 1996 29
Consolidated Statement of Operations,
Years Ended December 31, 1997, 1996 and 1995 30
Consolidated Statement of Partners' Capital,
Years Ended December 31, 1997, 1996 and 1995 31
Consolidated Statement of Cash Flows,
Years Ended December 31, 1997, 1996 and 1995 32
Notes to Consolidated Financial Statements,
December 31, 1997, 1996 and 1995 34
</TABLE>
27
<PAGE> 28
INDEPENDENT AUDITOR'S REPORT
To the Partners
First Wilkow Venture
We have audited the consolidated financial statements of First Wilkow Venture
listed in the index to the consolidated financial statements set forth on Page
27. Our audits also included the financial statement schedules listed in the
index at Item 14 on Page 68. These financial statements and financial statement
schedules are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of First Wilkow Venture
and its subsidiaries as of December 31, 1997 and 1996, and the consolidated
results of their operations and their consolidated cash flows for the years
ended December 31, 1997, 1996 and 1995, in conformity with generally accepted
accounting principles.
Also, in our opinion, such financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly, in
all material respects, the information set forth therein.
PHILIP ROOTBERG & COMPANY, LLP
Chicago, Illinois
February 19, 1998
28
<PAGE> 29
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
DECEMBER 31, 1997 1996
- ------------------------------------------------------------------------------------------
ASSETS
REAL ESTATE AND INVESTMENTS IN
REAL ESTATE PARTNERSHIPS
<S> <C> <C>
Real estate:
Land $ 6,230,711 $ 6,230,711
Buildings and improvements 46,862,244 45,672,807
Fixtures and equipment 116,955 116,955
----------- -----------
Total 53,209,910 52,020,473
Less accumulated depreciation 17,955,658 16,543,394
----------- -----------
Net Real Estate 35,254,252 35,477,079
Investments in real estate partnerships 3,642,820 5,180,049
----------- -----------
Total 38,897,072 40,657,128
----------- -----------
LOANS RECEIVABLE 849,934 1,224,274
----------- -----------
OTHER ASSETS
Cash 966,660 466,870
Certificates of deposit 2,220,000 840,000
Receivables 702,567 702,376
Prepaid expenses 818 --
Deposits 836,567 715,053
Deferred charges 911,756 988,991
----------- -----------
Total 5,638,368 3,713,290
----------- -----------
TOTAL ASSETS $45,385,374 $45,594,692
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
MORTGAGES AND LOANS PAYABLE
Mortgages payable $30,653,730 $31,339,400
Loans payable 672,975 829,488
----------- -----------
Total 31,326,705 32,168,888
----------- -----------
OTHER LIABILITIES
Accounts payable and accrued expenses 69,092 182,975
Accrued property taxes 2,378,995 2,328,926
Deferred state income taxes 200,000 200,000
Security deposits and prepaid rent 539,698 404,507
Accrued interest 72,847 69,110
----------- -----------
Total 3,260,632 3,185,518
----------- -----------
MINORITY INTEREST 1,685,777 1,449,774
----------- -----------
PARTNERS' CAPITAL (170,916 units and 178,972 units
in 1997 and 1996, respectively, authorized and issued) 9,112,260 8,790,512
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $45,385,374 $45,594,692
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
29
<PAGE> 30
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997 1996 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE
Rental $ 9,200,711 $ 9,388,112 $ 10,612,769
Hotel -- -- 1,327,682
Interest 223,582 169,168 152,793
Other 91,896 316,876 42,137
------------ ------------ ------------
Total 9,516,189 9,874,156 12,135,381
------------ ------------ ------------
PARTNERSHIP INVESTMENTS' INCOME
Share of net income 1,823,771 409,843 382,248
Provision for loss in book value -- (273,000) --
------------ ------------ ------------
Total 1,823,771 136,843 382,248
------------ ------------ ------------
EXPENSES
Operating 2,920,960 3,121,511 4,637,916
Real estate taxes 2,441,588 2,460,946 2,608,758
Depreciation and amortization 1,753,085 1,719,377 2,334,430
Provision for loss in book value of real estate -- -- 1,400,000
Interest 2,626,037 2,740,843 3,852,992
General and administrative 115,926 86,750 95,178
------------ ------------ ------------
Total 9,857,596 10,129,427 14,929,274
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS 1,482,364 (118,428) (2,411,645)
MINORITY INTEREST IN SUBSIDIARIES'
NET INCOME (LOSS) (346,203) 19,384 84,485
------------ ------------ ------------
NET INCOME (LOSS) $ 1,136,161 $ (99,044) $ (2,327,160)
============ ============ ============
UNITS - AUTHORIZED AND ISSUED
General Partner 7,550 7,174 6,803
Limited Partner 163,366 171,798 172,169
NET INCOME (LOSS) PER UNIT
General Partner $ 6.42 $ (.55) $ (13.00)
Limited Partner 6.42 (.55) (13.00)
BOOK VALUE OF A UNIT
General Partner $ 53.31 $ 49.12 $ 49.67
Limited Partner 53.31 49.12 49.67
CASH DISTRIBUTIONS
General Partner $ 2.75 $ -- $-
Limited Partner 2.75 -- --
</TABLE>
See accompanying notes to consolidated financial statements
30
<PAGE> 31
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- ----------------------------------------------------------------------------------------------
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
-------- -------- -----
<S> <C> <C> <C>
BALANCE - DECEMBER 31, 1994 $ 414,101 $ 10,802,615 $ 11,216,716
Add (deduct):
Loss for the year ended
December 31, 1995 (88,459) (2,238,701) (2,327,160)
To reflect changes in partnership
capital between general and limited
partners - net 2,050 (2,050) --
------------ ------------ ------------
BALANCE - DECEMBER 31, 1995 327,692 8,561,864 8,889,556
Add (deduct):
Loss for the year ended
December 31, 1996 (3,970) (95,074) (99,044)
To reflect changes in partnership
capital between general and limited
partners - net 31,906 (31,906) --
------------ ------------ ------------
BALANCE - DECEMBER 31, 1996 355,628 8,434,884 8,790,512
Add (deduct):
Income for the year ended
December 31, 1997 46,501 1,089,660 1,136,161
To reflect changes in partnership
capital between general and limited
partners - net 34,216 (34,216) --
Cash distributions for the year ended
December 31, 1997 (19,728) (472,445) (492,173)
Redemption of limited partner units -- (322,240) (322,240)
------------ ------------ ------------
BALANCE - DECEMBER 31, 1997 $ 416,617 $ 8,695,643 $ 9,112,260
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements
31
<PAGE> 32
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $ 1,136,161 $ (99,044) $(2,327,160)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 1,753,085 1,719,377 2,334,430
Amortization of debt forgiveness income (71,903) (72,642) (73,389)
Net (gain) loss on disposal of land,
building and improvements -- (108,194) 160,840
Provision for loss in book value -- 273,000 1,400,000
Income from partnerships (1,823,771) (409,843) (382,248)
Changes in assets and liabilities:
Ending cash balance of entity
eliminated from consolidation -- -- (42,455)
(Increase) decrease in accounts receivable
and prepaid expenses - net (1,009) (21,370) 61,493
(Increase) decrease in deposits (121,514) (116,181) 320,928
Decrease in accounts payable
and accrued expenses (113,883) (57,115) (133,898)
Increase in accrued property taxes 50,069 26,838 90,096
Increase (decrease) in accrued interest 3,737 (20,611) 234,984
Increase (decrease) in security deposits
and prepaid rent 135,191 (77,232) 3,231
----------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 946,163 1,036,983 1,646,852
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in land, building and
furniture and equipment (1,189,437) (629,987) (879,261)
Investment in partnerships (449,769) (139,983) (1,455,871)
Investments in loans receivable (2,976) (74,635) (683,950)
Investment in deferred charges (primarily
unamortized broker commissions) (263,585) (308,956) (364,067)
Proceeds from sale of real estate,
net of selling expenses -- 3,836,988 --
Proceeds from sale of investment
in partnership/corporation 1,028,212 -- 314,800
Partnership investment draws 2,782,557 227,299 311,187
Increase (decrease) in minority interest 236,003 (88,085) (185,685)
Collection of notes receivable 377,316 303,000 19,355
----------- ----------- -----------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 2,518,321 3,125,641 (2,923,492)
----------- ----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements
32
<PAGE> 33
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENT OF CASH FLOWS - Continued
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997 1996 1995
- ---------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
<S> <C> <C> <C>
Payment of mortgages and notes payable $(1,313,021) $(3,857,920) $ (778,357)
Proceeds from mortgage financing 22,490 10,316 898,223
Proceeds from loans payable 520,250 500,000 1,119,488
Distributions to partners (492,173) -- --
Redemption of limited partnership units (322,240) -- --
----------- ----------- -----------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (1,584,694) (3,347,604) 1,239,354
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 1,879,790 815,020 (37,286)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 1,306,870 491,850 529,136
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 3,186,660 $ 1,306,870 $ 491,850
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid during the year $ 2,694,203 $ 3,109,453 $ 3,967,495
=========== =========== ===========
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES
During 1995, the Partnership exchanged its undivided interest in a property
with total assets of $8,480,741 and total liabilities of $8,257,513 for an
undivided interest in a replacement property.
See accompanying notes to consolidated financial statements
33
<PAGE> 34
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the principal accounting policies followed by First Wilkow
Venture (the "Partnership") is set forth as follows:
The financial statements include the accounts of all entities in which
the Partnership owns fifty percent or more and maintains effective
control. The Partnership had a 57.67% undivided interest in a hotel
which was accounted for using the proportionate consolidation method.
The interest in the hotel was exchanged in 1995 for an interest in a
commercial property which is being reported under the equity method of
accounting. Investments in entities in which ownership interests are
less than fifty percent and the Partnership exercises significant
influence over operating and financial policies are accounted for on
the equity method. Other investments are accounted for on the cost
method. Intercompany accounts and transactions between consolidated
entities have been eliminated in consolidation.
For purposes of the consolidated statement of cash flows, the
Partnership considers certificates of deposit with a maturity of three
months or less to be cash equivalents. Certain Partnership deposits at
LaSalle National Bank are in excess of the amount insured by the
Federal Deposit Insurance Corporation and are, therefore, considered a
concentration of credit risk.
Rental income is derived from leasing to lessees (under operating
leases) various types of real estate owned by the Partnership.
Investments in real estate partnerships are reported using either the
cost or equity methods of accounting. Under the equity method, the cost
of these investments is reduced by a pro rata share of net losses and
drawings and increased by a pro rata share of net income of the
investee. Under the cost method, income is reported as draws are
received.
Land, buildings and improvements are carried at cost. Major additions
and betterments are charged to the property accounts; maintenance and
repairs which do not improve or extend the life of the respective
assets are charged to expense as incurred. When assets are sold or
retired, the cost and accumulated depreciation are removed from the
accounts, and any gain or loss is recognized.
Depreciation on buildings, improvements, furniture and equipment is
computed using the straight-line and accelerated methods based on the
estimated useful lives of the assets.
Deferred charges represent real estate acquisition costs, deferred
broker commissions and mortgage financing costs. These costs are being
amortized using the straight-line method over lives ranging from 1 to
40 years.
There is no provision for federal income taxes as the partners report
their share of the Partnership's net income or loss in their individual
income tax returns.
34
<PAGE> 35
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
Deferred state income taxes are provided on certain real estate sales
that are taxable to the Partnership which are being reported on an
installment or tax free exchange basis for income tax purposes.
Debt forgiveness income is being amortized as a reduction of interest
expense over the remaining term of the related loan using the effective
interest method.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management 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 differ from those estimates.
2 - DEPRECIATION
Depreciation is based on the method and estimated useful life of the
respective assets as follows:
<TABLE>
<CAPTION>
Property Method Life
-------- ------ ----
<S> <C> <C>
180 North Michigan Avenue
a. Building Straight Line 35 years
b. Improvements Straight Line Various
c. Furniture and equipment 150% Declining Balance 12 years
Naperville Office
a. Building Straight Line 25 years
b. Improvements Straight Line Various
c. Furniture and equipment 150% Declining Balance Various
Waterfall Plaza
a. Building Straight Line 40 years
b. Improvements Straight Line 40 years
Freeport Office*
a. Building Straight Line 40 years
b. Improvements Straight Line Various
c. Furniture and equipment Straight Line Various
</TABLE>
* The Freeport Office Building was sold in 1996.
35
<PAGE> 36
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Property Method Life
-------- ------ ----
<S> <C> <C>
Highland Park
a. Building Straight Line 30 years
b. Improvements Straight Line 40 years
150% Declining Balance 40 years
150% Declining Balance 12 years
M&J/Retail (10 retail centers)
a. Buildings Straight Line 40 years
b. Improvements Straight Line 40 years
c. Furniture and equipment Straight Line 12 years
</TABLE>
36
<PAGE> 37
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
3 - INVESTMENTS IN PARTNERSHIPS
A summary of the income or loss from partnership investments included in
the accompanying consolidated statement of operations on the equity method
of accounting, unless otherwise indicated, is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
222 Fee Associates $ 290 $ 319(a) $ 406(a)
5601 N. Sheridan Associates 864 576(a) 544(a)
Duke Realty Limited Partnership 876,332(c) 100,502(a) 134,754(a)
First Candlewick Associates 6,050 22,055(a) 3,000(a)
First MW Associates -- -- 1,750
Hawdel Limited Partnership -- (163,664)(b) (34,351)
M&J/Crossroads Limited Partnership (12,527) (23,349) --
M&J/Grove Limited Partnership (31,205) 208,519 (31,206)
M&J/Largo Limited Partnership 40,157(c) (119,000)(b) --
M&J/Retail Limited Partnership -- -- 137,245(c)
Northlake Tower Limited Partnership 902,921 84,669 --
Rosemont 28 Limited Partnership (2,865) (3,559) 49
S & S Venture -- -- 35,206
Second Chase Venture -- -- 4,325(a)
Second Wilkow Venture 6,107 2,364(a) 2,364(a)
Wilkow/Retail Partners L.P. 111 120(a) 120(a)
XXI Office Plaza Associates 37,536 27,291 128,042
----------- ----------- -----------
$ 1,823,771 $ 136,843 $ 382,248
=========== =========== ===========
</TABLE>
(a) Income recognized under the cost method.
(b) Includes loss on disposition of investment.
(c) Includes gain on disposition of investment.
37
<PAGE> 38
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
The following is a summary of financial position and results of operations
of the properties in which the Partnership has a partnership interest. The
following schedule has been prepared from financial information provided by
these partnerships as of their calendar year ends.
YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
Rosemont
28 XXI Office
Apollo Limited Plaza
Associates Partnership Associates
---------- ----------- ----------
(a) (a) (b)
BALANCE SHEET
<S> <C> <C> <C>
Real estate - net of
accumulated depreciation $ 770,367 $ 1,909,955 $ 5,075,548
Current assets 213,899 4,272 1,912,065
Other assets 21,607 174 8,336
--------------- -------------- -------------
TOTAL ASSETS $ 1,005,873 $ 1,914,401 $ 6,995,949
=============== ============== =============
Mortgages payable $ 1,547,690 $ - $ 2,213,992
Other liabilities 2,869,057 21,256 652,436
Partners' capital (deficit) (3,410,874) 1,893,145 4,129,521
--------------- -------------- -------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) $ 1,005,873 $ 1,914,401 $ 6,995,949
=============== ============== =============
STATEMENT OF OPERATIONS
Revenue $ 858,649 $ 103 $ 1,884,588
Less: Operating expenses 627,093 12,606 902,931
Other expenses 195,440 - 299,772
Depreciation 150,724 - 429,057
--------------- -------------- -------------
NET INCOME (LOSS) $ (114,608) $ (12,503) $ 252,828
=============== ============== =============
</TABLE>
(a) Based upon unaudited financial statements.
(b) Based upon audited financial statements.
(c) Investment is stated at zero.
(d) Information not available at time of report.
38
<PAGE> 39
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Sun Pointe 2221 Camden
Place Court M&J/Grove
Limited Office Limited
Partnership Building Partnership
----------- ----------- -----------
(a) (a) (a)
BALANCE SHEET
<S> <C> <C> <C>
Real estate - net of
accumulated depreciation $ 2,310,382 $ 6,866,362 $ 9,412,696
Current assets 226,179 573,034 121,462
Other assets 6,504 272,705 179,861
----------- ----------- -----------
TOTAL ASSETS $ 2,543,065 $ 7,712,101 $ 9,714,019
=========== =========== ===========
Mortgages payable $ 125,231 $ 8,082,869 $ 6,323,316
Other liabilities 18,364 195,562 343,203
Partners' capital (deficit) 2,399,470 (566,330) 3,047,500
----------- ----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) $ 2,543,065 $ 7,712,101 $ 9,714,019
=========== =========== ===========
STATEMENT OF OPERATIONS
Revenue $ 251,921 $ 49,203 $ 1,654,463
Less:Operating expenses 92,184 82,739 775,117
Other expenses 761 33,722 550,508
Depreciation 21,447 22,745 310,610
----------- ----------- -----------
NET INCOME (LOSS) $ 137,529 $ (90,003) $ 18,228
=========== =========== ===========
</TABLE>
(a) Based upon unaudited financial statements.
(b) Based upon audited financial statements.
(c) Investment is stated at zero.
(d) Information not available at time of report.
39
<PAGE> 40
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Lake Cook
Office
Development
-----------
(d)
BALANCE SHEET
<S> <C>
Real estate - net of
accumulated depreciation $
Current assets ----------
Other assets
TOTAL ASSETS $
----------
Mortgages payable $
Other liabilities ----------
Partners' deficit (
----------
TOTAL LIABILITIES AND
PARTNERS' DEFICIT $
----------
STATEMENT OF OPERATIONS
Revenue $
Less: Operating expenses ----------
Other expenses
Depreciation
NET LOSS $(
---------
</TABLE>
(a) Based upon unaudited financial statements.
(b) Based upon audited financial statements.
(c) Investment is stated at zero.
(d) Information not available at time of report.
40
<PAGE> 41
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996:
<TABLE>
<CAPTION>
Rosemont
28 XXI Office
Apollo Limited Plaza
Associates Partnership Associates
---------- ----------- ------------
(a) (a) (b)
BALANCE SHEET
<S> <C> <C> <C>
Real estate - net of
accumulated depreciation $ 881,266 $ 1,909,955 $ 5,421,987
Current assets 212,886 1,846 1,543,617
Other assets 13,889 103 8,495
----------- ----------- -----------
TOTAL ASSETS $ 1,108,041 $ 1,911,904 $ 6,974,099
=========== =========== ===========
Mortgages payable $ 1,844,394 $ -- $ 2,498,233
Other liabilities 2,566,987 21,256 599,173
Partners' capital (deficit) (3,303,340) 1,890,648 3,876,693
----------- ----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) $ 1,108,041 $ 1,911,904 $ 6,974,099
=========== =========== ===========
STATEMENT OF OPERATIONS
Revenue $ 782,516 $ 307 $ 1,713,487
Less: Operating expenses 670,841 15,830 931,886
Other expenses 613,370 -- 164,015
Depreciation 150,359 -- 432,710
----------- ----------- -----------
NET INCOME (LOSS) $ (652,054) $ (15,523) $ 184,876
=========== =========== ===========
</TABLE>
(a) Based upon unaudited financial statements.
(b) Based upon audited financial statements.
(c) Investment is stated at zero.
(d) Information not available at time of report.
41
<PAGE> 42
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Sun Pointe 2221 Camden
Place Court M&J/Grove
Limited Office Limited
Partnership Building Partnership
----------- ----------- -----------
(a) (a) (a)
BALANCE SHEET
<S> <C> <C> <C>
Real estate - net of
accumulated depreciation $ 2,310,382 $ 6,866,362 $10,852,818
Current assets 226,179 573,034 292,241
Other assets 6,504 272,705 15,000
----------- ----------- -----------
TOTAL ASSETS $ 2,543,065 $ 7,712,101 $11,160,059
=========== =========== ===========
Mortgages payable $ 125,231 $ 8,082,869 $ 6,437,661
Other liabilities 18,364 195,562 316,956
Partners' capital (deficit) 2,399,470 (566,330) 4,405,442
----------- ----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) $ 2,543,065 $ 7,712,101 $11,160,059
=========== =========== ===========
STATEMENT OF OPERATIONS
Revenue $ 755,131 $ 1,784,216 $ 1,715,587
Less:Operating expenses 521,987 770,142 701,826
Other expenses 13,242 698,901 690,101
Depreciation 176,469 385,505 303,516
----------- ----------- -----------
NET INCOME (LOSS) $ 43,433 $ (70,332) $ 20,144
=========== =========== ===========
</TABLE>
(a) Based upon unaudited financial statements.
(b) Based upon audited financial statements.
(c) Investment is stated at zero.
(d) Information not available at time of report.
42
<PAGE> 43
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Lake Cook
Office
Development
-----------
(a)
BALANCE SHEET
<S> <C>
Real estate - net of
accumulated depreciation $ 3,045,515
Current assets 25,244
Other assets 79,289
-----------
TOTAL ASSETS $ 3,150,048
===========
Mortgages payable $ 8,678,941
Other liabilities 296,349
Partners' deficit (5,825,242)
-----------
TOTAL LIABILITIES AND
PARTNERS' DEFICIT $ 3,150,048
===========
STATEMENT OF OPERATIONS
Revenue $ 1,488,804
Less: Operating expenses 766,642
Other expenses 770,648
Depreciation 187,045
-----------
NET LOSS $ (235,531)
===========
</TABLE>
(a) Based upon unaudited financial statements.
(b) Based upon audited financial statements.
(c) Investment is stated at zero.
(d) Information not available at time of report.
43
<PAGE> 44
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1995:
<TABLE>
<CAPTION>
Crow- Rosemont
Commerce 28
Apollo Park North Limited
Associates Retail, Ltd. Partnership
---------- ------------ -----------
(a) (a)(c) (a)
BALANCE SHEET
<S> <C> <C> <C>
Real estate - net of
accumulated depreciation $ 1,000,834 $ 1,909,955
Current assets 3,467 472
Other assets 204,822 -
--------------- ---------------
TOTAL ASSETS $ 1,209,123 $ 1,910,427
=============== ===============
Mortgages payable $ 1,016,862 $ -
Other liabilities 2,843,506 21,256
Partners' capital (deficit) (2,651,245) 1,889,171
--------------- ---------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) $ 1,209,123 $ 1,910,427
=============== ===============
STATEMENT OF OPERATIONS
Revenue $ 775,314 $ 480,977 $ 133
Less: Operating expenses 594,413 487,077 14,315
Other expenses 189,736 888,852 -
Depreciation 153,479 67,904 -
--------------- --------------- ---------------
NET LOSS $ (162,314) $ (962,856) $ (14,182)
=============== =============== ===============
(a) Based upon unaudited financial statements.
(b) Based upon audited financial statements.
(c) Investment is stated at zero.
(d) Information not available at time of report.
</TABLE>
44
<PAGE> 45
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Sun Pointe 2221 Camden
XXI Office Place Court
Plaza Limited Office
Associates Partnership Building
--------------- --------------- ---------------
(b) (a) (a)
BALANCE SHEET
<S> <C> <C> <C>
Real estate - net of
accumulated depreciation $ 5,819,187 $ 2,462,283 $ 8,008,848
Current assets 1,712,961 80,547 352,327
Other assets 8,654 8,905 336,841
--------------- --------------- ---------------
TOTAL ASSETS $ 7,540,802 $ 2,551,735 $ 8,698,016
=============== =============== ===============
Mortgages payable $ 3,011,175 $ - $ 8,147,287
Other liabilities 837,810 199,053 203,650
Partners' capital 3,691,817 2,352,682 347,079
--------------- --------------- ---------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 7,540,802 $ 2,551,735 $ 8,698,016
=============== =============== ===============
STATEMENT OF OPERATIONS
Revenue $ 3,387,093 $ 690,303 $ 1,704,227
Less: Operating expenses 1,148,533 580,804 736,955
Other expenses 854,159 16,341 710,164
Depreciation 442,647 172,395 467,894
--------------- --------------- ---------------
NET INCOME (LOSS) $ 941,754 $ (79,237) $ (210,786)
=============== =============== ===============
</TABLE>
(a) Based upon unaudited financial statements.
(b) Based upon audited financial statements.
(c) Investment is stated at zero.
(d) Information not available at time of report.
45
<PAGE> 46
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
M&J/Fort
Myers M&J/Grove Lake Cook
Limited Limited Office
Partnership Partnership Development
--------------- --------------- ---------------
(a)(c) (a) (a)
BALANCE SHEET
<S> <C> <C>
Real estate - net of
accumulated depreciation $ 10,799,651 $ 3,003,057
Current assets 398,570 137,124
Other assets 150,018 92,120
--------------- ---------------
TOTAL ASSETS $ 11,348,239 $ 3,232,301
=============== ===============
Mortgages payable $ 8,667,856 $ 8,555,515
Other liabilities 1,659,904 261,909
Partners' capital (deficit) 1,020,479 (5,585,123)
--------------- ---------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) $ 11,348,239 $ 3,232,301
=============== ===============
STATEMENT OF OPERATIONS
Revenue $ 36,900 $ 1,779,295 $ 1,403,197
Less: Operating expenses 41,696 771,139 722,660
Other expenses 178,068 831,512 753,229
Depreciation 42,898 292,792 181,712
--------------- --------------- ---------------
NET LOSS $ (225,762) $ (116,148) $ (254,404)
=============== =============== ===============
</TABLE>
(a) Based upon unaudited financial statements.
(b) Based upon audited financial statements.
(c) Investment is stated at zero.
(d) Information not available at time of report.
46
<PAGE> 47
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
First Ron Venture
In April 1978, the Partnership invested $260,000 to obtain a one-third
interest in First Ron Venture, which has a 38% interest in Apollo
Associates, which owns an apartment complex in Oklahoma City, Oklahoma.
Although First Ron Venture is entitled to a cumulative annual priority
distribution of cash flow of which the Partnership's share is $23,490, the
property has not generated sufficient cash flow for the past several years
to make distributions. The investment is being carried at zero. On December
31, 1993, the Partnership acquired a 3.831% interest in First Apollo
Associates, which holds a one-third interest in First Ron Venture.
Hawdel Limited Partnership I and III
To date, the Partnership has invested $1,320,000 to obtain 18.03% interests
in Hawdel Limited Partnership I and III, which own the 2221 Camden Court
Office Building located in Oak Brook, Illinois. In addition to the
investment, the Partnership had a note receivable of $295,161 from Hawdel
Limited Partnership I and III as of December 31, 1996 (see Note 4).
On January 16, 1997, the property was sold, resulting in full payment of
the first mortgage and Partnership loans, and an equity distribution of
$690,360 was received by the Partnership (see Note 4). A provision for loss
in book value of $154,000, equal to the estimated loss to the Partnership
on the disposition of the investment, was recognized in 1996.
M&J/Largo Limited Partnership
The Partnership invested a total of $694,227 to acquire a 25.1% interest in
M&J/Largo Limited Partnership, which owns 91.12% of Sun Pointe Place
Limited Partnership, which developed and owned a 140 one-bedroom unit
apartment complex located in Largo, Florida. The property was sold on
February 12, 1997, for $2,600,000. Simultaneous with the sale, M&J/Largo
Limited Partnership exercised its put to Sun Pointe Place Limited
Partnership, resulting in all net sale proceeds being allocated to
M&J/Largo Limited Partnership. The Partnership received a final equity
distribution from M&J/Largo Limited Partnership of $615,384, resulting in a
gain on disposition of $40,157. A provision for loss in book value of
$119,000, equal to the estimated loss to the Partnership on the disposition
of the investment, was recognized in 1996.
47
<PAGE> 48
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
M&J/Quorum Associates
The Partnership has invested a total of $2,295,000 to obtain a 64.35%
interest in M&J/Quorum Associates, which is a 66.29% limited partner in the
Quorum Limited Partnership, which is a 50% general partner in Crow-Commerce
Park North Retail, Ltd., which developed a shopping center in Houston,
Texas. The Partnership is entitled to a 9% cumulative cash flow priority on
invested capital. In addition to the partnership investment, the
Partnership has a loan receivable of $113,663 which was written off at
December 31, 1995, as a result of the mortgage lien being foreclosed during
April 1995 (see Notes 4 and 11). During 1996, the Partnership received
$46,490 based on a settlement with the unrelated General Partner. During
1997, the Partnership received $19,142 as an additional cash payment on the
loan which was previously written off. The investment was disposed of in
1997 with no additional gain or loss to the partnership.
M&J/Westwood Limited Partnership
In December 1986, the Partnership invested $517,000 to obtain an 18.52%
interest in M&J/Westwood Limited Partnership, which owns 48% of The Villas
at Monterey Limited Partnership, which owns a 260- unit all suites hotel
and corporate rental project in Orlando, Florida, known as Tango Bay Suites
Resort. On December 31, 1993, the Partnership acquired an additional 2.19%
interest in M&J/Westwood.
In March 1993, the Partnership acquired a 63.64% undivided interest in
Tango Bay Suites pursuant to an exchange for an ownership interest in a
similar property. The Villas at Monterey Limited Partnership retained the
remaining 36.36% interest. In November 1993, the Partnership sold a 5.98%
undivided interest in Tango Bay Suites to an unrelated party for a relative
proportion of the debt, recognizing a gain of $53,231 on the disposition.
The Partnership exchanged its interest in Tango Bay Suites for an undivided
interest in the 209 W. Jackson building effective June 30, 1995. The
Partnership also has a loan receivable of $731,124 at December 31, 1997,
from Tango Bay Suites (see Note 4).
Duke Realty Limited Partnership
Prior to October 1993, the Partnership owned a 69.42% interest in Park 100
Equity Investors Limited Partnership and a 55.07% limited partnership
interest in Park 100 Mortgage Investors Limited Partnership. Both of these
limited partnerships held indirect ownership interests in Park 100, an
industrial park in Indianapolis, Indiana, which was developed by Duke
Associates. Duke Associates also maintained a significant ownership
interest in the property. On October 4, 1993, Park 100 was conveyed to an
operating partnership, Duke Realty Limited Partnership (the "UPREIT"), the
sole general partner of which is Duke Realty Investments, Inc., a real
estate investment trust ("REIT") listed on the New York Stock Exchange,
together with more than 100 other properties, in return for the issuance of
units of partnership interest in the operating partnership which,
eventually, will be convertible, on a one-for-one basis, to shares of
common stock to the REIT. As part of this transaction, the REIT also
completed an offering to the public of 13,167,500 additional shares of
common stock, which generated proceeds of approximately $312.7 million.
48
<PAGE> 49
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
On December 31, 1993, the Partnership acquired an additional 1.77% interest
in Park 100 Equity Investors Limited Partnership and an additional 6.78%
interest in Park 100 Mortgage Investors Limited Partnership. The
Partnership also acquired a 5.52% interest in M&J/Two Market Associates,
which also holds an indirect interest in the REIT.
On December 2, 1994, the Partnership redeemed its interest in the above
three partnerships for a direct ownership in the UPREIT. The redemption
resulted in the Partnership owning 50,251 partnership units in the UPREIT,
which are convertible on a one-for-one basis to shares of common stock of
the REIT. The Partnership's limited partner units are currently pledged as
collateral for a revolving credit facility with LaSalle National Bank (see
Note 10).
On April 15, 1997, the Partnership converted 25,000 units in Duke Realty
Limited Partnership to 25,000 shares of common stock of Duke Realty
Investments, Inc. On June 12, 1997, 12,500 shares were sold for $500,044,
resulting in a gain of $383,419. On July 21, 1997, the remaining 12,500
shares were sold for $528,168, resulting in a gain of $411,543.
On August 18, 1997, a 2-for-1 stock and unit split occurred, resulting in
an additional 25,251 units of Duke Realty Limited Partnership being issued
to the Partnership. The Partnership thus held 50,502 units in Duke Realty
Limited Partnership at December 31, 1997.
Rosemont 28 Limited Partnership
The Partnership has invested a total of $742,786 to obtain a 22.92%
interest in Rosemont 28 Limited Partnership, which owns 11.25 acres of land
held for development in Orlando, Florida. Net cash flow and residual
proceeds are distributed in accordance with the partners' respective
interests.
S & S Venture
On December 31, 1993, the Partnership acquired a 6.67% interest in S & S
Venture, which owned a 51,000 square foot industrial building in Lincoln,
Rhode Island. On March 15, 1995, S & S Venture closed a transaction which
coupled the sale of its property with a settlement of the obligations of
the tenant under its lease and resulted in a gain to the Partnership of
$34,290.
XXI Office Plaza Associates
In February 1981, the Partnership invested $525,000 to obtain a 13.91%
interest in XXI Office Plaza Associates, which owns an office plaza in
Germantown, Maryland. As a "Class A" limited partner, the Partnership is
entitled, on a noncumulative basis, to a priority distribution from
available cash flow of $41,580. On December 31, 1993, the Partnership
acquired an 8.28% interest in 21st M&J Venture, which has a 16% interest in
XXI Office Plaza Associates. The Partnership also acquired a 7.59% interest
in Orhow Associates, which has a 12.2% interest in XXI Office Plaza
Associates. In addition to the investment, the Partnership has a note
receivable of $27,814 from XXI Office Plaza Associates (see Note 4).
49
<PAGE> 50
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
M&J/Grove Limited Partnership
The Partnership had invested a total of $931,000 to obtain a 21.91%
interest in M&J/Grove Limited Partnership ("M&J/Grove"), which owns an
office complex in Wheaton, Illinois. As a "Class A" limited partner, the
Partnership is entitled to cumulative cash priority of 8%. On December 31,
1993, the Partnership acquired an additional 1.17% interest in M&J/Grove.
On July 1, 1996, the Partnership invested an additional $98,100 in
M&J/Grove in connection with the purchase of 981 Call Units, increasing its
interest in this investment to 28.03%. The Call Unit holders are entitled
to a cumulative cash flow priority of 12% per annum. Upon sale or
refinancing, the Call Unit holders will receive the first $367,500 of
available proceeds. Any proceeds remaining thereafter will be split 25% to
the holders of the Call Units and 75% to the General and Class A Limited
Partners. The proceeds of the M&J/Grove capital call were primarily used
for a mortgage debt restructuring of the Grove Office Park. The original
$8,000,000 mortgage was paid off at a discounted amount of $5,600,000 and
replaced with a new first mortgage loan in the amount of $5,500,000,
bearing interest at the fixed rate of 8.55% per annum for five years. A
Limited Guaranty covering 28.41%, or $1,562,500, of the mortgage loan was
made by third parties on behalf of M&J/Grove. The Partnership guaranteed
$520,833, an amount which approximates 28.41% of its ownership interest in
M&J/Grove, exclusive of subordinated equity interests which have no value.
The property is also encumbered by unsecured debentures of $1,000,000,
which mature on May 1, 2001, and bear interest at 9% per annum, payable
quarterly.
L-C Office Partnership IV
Prior to December 31, 1993, the Partnership had a 73.34% ownership interest
in L-C Office Partnership IV Limited Partnership ("L-C Office Partnership
IV"), which holds a 94% interest in Lake Cook Office Development - Building
Four Limited Partnership ("Lake-Cook IV"), which has a 57.915% interest in
DFA Limited Partnership, which has a 99% interest in M&J/Dover Limited
Partnership, which owns Dover Farms Apartments, a 300-unit apartment
complex located in a suburb of Cleveland, Ohio. In 1996, under the terms of
the co-tenancy agreement, Lake-Cook IV made advances to the property
totaling $102,375. As of December 31, 1995, the Partnership had a loan
payable of $50,000 to Dover Farms Apartments bearing interest at prime and
payable on demand. The loan and related interest were paid in full during
1996.
On December 31, 1993, the Partnership acquired an additional 1.35% interest
in L-C Office Partnership IV. On January 1, 1994, the Partnership acquired
a 0.4906% interest in Lake Cook Office Development Building Four Limited
Partnership. In addition to the investment, the Partnership has notes
receivable of $15,091 and $71,872 from Lake Cook Office Development -
Building Four Limited Partnership and L-C Office Partnership IV,
respectively. During 1997, the Partnership contributed an additional
$175,097 to maintain its 74.69% interest in L-C Office Partnership IV.
M&J/Hotel Investors Limited Partnership
On October 8, 1997, the Partnership invested $200,000 to obtain a 14.81%
interest in M&J/Hotel Investors Limited Partnership, which owns a 164-room
hotel in Kissimmee, Florida. At the time of purchase, the property was
operating as the EconoLodge Maingate Central Hotel, but immediately
following the closing, the property was converted to a Howard Johnson
franchise.
50
<PAGE> 51
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
The property was acquired with a three-year first mortgage of $4,550,000
bearing interest at 8.5% per annum. The property is currently undergoing a
renovation of all rooms.
M&J/Mid Oak Limited Partnership
On August 26, 1997, the Partnership invested $70,000 to obtain a 35%
interest in M&J/Mid Oak Limited Partnership, which has a 9% interest in Mid
Oak Plaza LLC, which owns Mid Oak Plaza Shopping Center located in
Midlothian, Illinois. The property contains 77,942 net rentable square feet
of retail space. There is an outparcel at the property consisting of 30,000
square feet, which is occupied by White Castle pursuant to a ground lease.
The tenant owns its own building.
The property was acquired with a $4,558,000 mortgage bearing interest at
8.04% per annum. The term of the loan is seven years. Net cash flow and
residual proceeds are required to be distributed in accordance with the
limited liability company agreement.
CONSOLIDATED PARTNERSHIPS
M&J/Sheridan Limited Partnership
During 1988, the Partnership invested $2,500,000 to obtain an 89.29%
interest in the M&J/Sheridan Limited Partnership, which owns a 22,523
square foot office building in Highland Park, Illinois. The financial
position and results of operations at December 31, 1997, are included in
the accompanying consolidated financial statements. In addition to the
investment, the Partnership has a note receivable of $492,000 at December
31, 1997, from M&J/Sheridan Limited Partnership. On September 30, 1996,
M&J/Sheridan Limited Partnership refinanced the Highland Park Professional
Center. The term of the new loan, with a principal amount of $1,425,000, is
five years. Debt service reflects an interest rate of 8.88% per annum and
amortization based on 20 years.
M&J/Freeport Limited Partnership
The Partnership had invested a total of $5,139,000 to obtain a 68.85%
limited partnership interest in M&J/Freeport Limited Partnership, which is
a 94.05% limited partner in Freeport Office Partners Limited, which owns an
office building in Dallas, Texas. The property was sold on January 18,
1996. A provision for loss in book value of $1,400,000 equal to the
estimated loss to the Partnership on the disposition of the property was
recognized in 1995 (see Note 11). An additional loss of $12,800 was
recognized in 1996.
51
<PAGE> 52
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
M&J/Retail Limited Partnership
The Partnership has invested a total of $3,995,000 to obtain a 56.27%
limited partnership interest in M&J/Retail Limited Partnership
("M&J/Retail"), which owns a majority interest in ten strip shopping
centers in the metropolitan Chicago area and two partnership interests. The
Partnership is entitled to a 9% cumulative cash flow priority on invested
capital. On December 31, 1993, the Partnership acquired an additional 0.70%
interest in M&J/Retail. On July 1, 1995, the Partnership sold 4.22% of its
limited partnership interest in M&J/Retail to an unrelated party for
$314,800 and recognized a gain of $137,245.
During 1988, the Partnership invested $3,110,000 to obtain a 99% interest
in M&J/Harlem Mortgage Limited Partnership, which owns Harlem North
Shopping Plaza located in Oak Park, Illinois. On December 30, 1993,
M&J/Harlem Mortgage Limited Partnership financed the property with a first
mortgage of $2,362,500, bearing interest at 7.85% per annum. The mortgage
matures January 1, 1999. On December 31, 1993, the Partnership sold its 99%
interest in M&J/Harlem Mortgage Limited Partnership to M&J/Retail for
$3,150,000.
On July 28, 1995, M&J/Retail acquired a majority interest in Northlake
Tower Limited Partnership ("Tower"), contributing $1,112,667 of initial
capital. Additional contributions of $116,837 were made through December
31, 1997, increasing the total capital investment to $1,229,514. Tower owns
a 17.08% share of BSRT/M&J Northlake Limited Partnership ("BSRT/M&J"),
which purchased a leasehold interest in the Northlake Tower Festival
Shopping Center for $16,989,000 on July 28, 1995. The purchase of this
property was made subject to a $10,350,000 first mortgage loan bearing
interest only at the fixed rate of 8.5% per annum for ten years. On
November 18, 1997, this loan was refinanced with a first mortgage of
$17,600,000 with principal and interest payments based on a 30-year
amortization and an interest rate of 7.64%. A portion of the refinancing
proceeds were used to make distributions to the partners of BSRT/ M&J, with
M&J/Retail ultimately receiving a distribution of $1,166,745. The shopping
center, consisting of 303,956 square feet of improvements and five outlots,
is located in Atlanta, Georgia. In a related transaction, M&J/Retail loaned
$83,212 to Northlake Tower Corporation ("Tower Corporation"), a General
Partner of both Tower and BSRT/M&J (see Note 4). The loan is secured by
Tower Corporation's partnership interests in Tower and BSRT/M&J, and
interest thereon will be paid from Tower Corporation's share of net cash
flow.
On October 27, 1995, M&J/Retail invested a total of $297,000 to acquire a
46.41% Class A interest in M&J/Crossroads Limited Partnership. The balance
of $303,000 of the total $600,000 required capital for Class A investors
was also financed by M&J/Retail, resulting in a receivable from the other
investors for their respective share of capital contributions as of
December 31, 1995 (see Note 4). These receivables were repaid in full
during 1996. As a result of a refinancing of the first mortgage loan on
December 31, 1997, M&J/Retail received a distribution on January 10, 1998,
of $501,065.
The financial position and results of operations at December 31, 1997, are
included in the accompanying consolidated financial statements.
52
<PAGE> 53
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
The following is a summary of the financial position and results of
operations of the entities included in consolidation at December 31, 1997:
<TABLE>
<CAPTION>
M&J/ M&J/
Sheridan Retail
Limited Limited
Partnership Partnership
----------- -----------
BALANCE SHEET
<S> <C> <C>
Real estate - net of
accumulated depreciation $ 2,787,284 $18,631,721
Current assets 21,700 431,990
Other assets 75,445 380,269
----------- -----------
TOTAL ASSETS $ 2,884,429 $19,443,980
=========== ===========
Mortgages payable $ 1,395,553 $15,524,516
Other long-term payables 492,000 218,487
Current liabilities 143,192 1,385,554
Minority interest (104,948) 1,790,724
Partners' capital 958,632 524,699
----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 2,884,429 $19,443,980
=========== ===========
STATEMENT OF OPERATIONS
Revenue $ 397,534 $ 4,619,793
Less: Operating expenses 210,293 1,935,994
Other expenses 164,972 1,372,331
Depreciation 125,247 527,129
Minority interest (10,971) 357,174
----------- -----------
NET INCOME (LOSS) $ (92,007) $ 427,165
=========== ===========
</TABLE>
53
<PAGE> 54
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
The following is a summary of the financial position and results of
operations of the entities included in consolidation at December 31, 1996:
<TABLE>
<CAPTION>
Freeport M&J/ M&J/
Office Sheridan Retail
Partners Limited Limited
Limited Partnership Partnership
----------- ----------- -----------
BALANCE SHEET
<S> <C> <C> <C>
Real estate - net of
accumulated depreciation $ -- $ 2,834,233 $18,882,289
Current assets -- 20,436 123,452
Other assets -- 93,680 500,770
----------- ----------- -----------
TOTAL ASSETS $ -- $ 2,948,349 $19,506,511
=========== =========== ===========
Mortgages payable $ -- $ 1,422,834 $16,024,959
Other long-term payables -- 462,000 575,000
Current liabilities -- 106,853 1,265,268
Minority interest -- (93,977) 1,543,751
Partners' capital -- 1,050,639 97,533
----------- ----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ -- $ 2,948,349 $19,506,511
=========== =========== ===========
STATEMENT OF OPERATIONS
Revenue $ 1,773,673 $ 396,499 $ 3,945,064
Less: Operating expenses 201,162 227,551 1,944,470
Other expenses 32,335 177,486 1,400,382
Depreciation -- 122,035 522,310
Minority interest (41,499) (13,984) 36,100
----------- ----------- -----------
NET INCOME (LOSS) $ 1,581,675 $ (116,589) $ 41,802
=========== =========== ===========
</TABLE>
54
<PAGE> 55
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
The following is a summary of the financial position and results of
operations of the entities included in consolidation at December 31, 1995:
<TABLE>
<CAPTION>
Freeport M&J/ M&J/
Office Sheridan Retail
Partners Limited Limited
Limited Partnership Partnership
------------ ------------ ------------
BALANCE SHEET
<S> <C> <C> <C>
Real estate - net of
accumulated depreciation $ 8,328,075 $ 2,906,108 $ 19,221,742
Current assets 66,480 14,775 894,027
Other assets 182,295 37,130 442,304
------------ ------------ ------------
TOTAL ASSETS $ 8,576,850 $ 2,958,013 $ 20,558,073
============ ============ ============
Mortgages payable $ 5,185,580 $ 1,545,802 $ 16,337,894
Other long-term payables 3,730,000 265,000 608,333
Current liabilities 1,201,446 59,975 1,245,725
Minority interest 41,499 (79,993) 1,617,851
Partners' capital (deficit) (1,581,675) 1,167,229 748,270
------------ ------------ ------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) . $ 8,576,850 $ 2,958,013 $ 20,558,073
============ ============ ============
STATEMENT OF OPERATIONS
Revenue $ 1,417,320 $ 381,346 $ 4,042,911
Less: Operating expenses 929,202 202,057 2,216,168
Other expenses 2,345,203 182,398 1,400,034
Depreciation 437,245 121,217 518,583
Minority interest (219,384) (13,315) (148,215)
------------ ------------ ------------
NET INCOME (LOSS) $ (2,074,946) $ (111,011) $ 56,341
============ ============ ============
</TABLE>
55
<PAGE> 56
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
4 - LOANS RECEIVABLE - OTHER
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Tango Bay Suites
Unsecured promissory note bearing
interest at 3% over prime issued in
connection with Tango Bay Suites located
in Orlando, Florida. The note is due on
demand or, if demand is not sooner made,
on December 31, 2002 (see Note 3) $ 731,124 $ 731,124
L-C Office Partnership IV
Unsecured promissory note bearing
interest at 2% over prime issued in
connection with the Dover Farms
Apartments located in North Royalton,
Ohio. The note is due on demand or, if
demand is not sooner made, on March 31,
1998 71,872 71,872
Lake Cook Office Development - Building
Four Limited Partnership
Unsecured promissory note bearing
interest at 2% over prime issued in
connection with the Dover Farms
Apartments located in North Royalton,
Ohio. The note is due on demand or, if
demand is not sooner made, on March 31,
1998 15,091 15,091
Hawdel Limited Partnership and Hawdel
Limited Partnership III
Unsecured promissory note bearing
interest at 7.52% issued in connection
with the Camden Place Office Building
located in Oak Brook, Illinois. The note
is due on July 18, 2004. On February 21,
1997, the loan was repaid in full along
with accrued interest -- 295,161
XXI Office Plaza Associates
Unsecured promissory note bearing
interest at prime issued in connection
with Century XXI Office Plaza located in
Germantown, Maryland. The note is due on
December 31, 1999 27,814 27,814
Northlake Tower Corporation
Promissory note bearing interest at
prime plus participating interest,
secured by Northlake Tower Corporation's
partnership interests in Northlake Tower
Limited Partnership and BSRT/M&J
Northlake Limited Partnership. The note
is due on demand or, if demand is not
sooner made, on December 31, 1999 4,033 83,212
---------- ----------
$ 849,934 $1,224,274
========== ==========
</TABLE>
56
<PAGE> 57
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
5 - CERTIFICATES OF DEPOSIT
Certificates of deposit include maturities through January 8, 1998, with
interest rates up to 5.80%, and represent temporary investments.
57
<PAGE> 58
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
6 - MORTGAGES PAYABLE
The mortgages payable at December 31, 1997, consist of:
<TABLE>
<CAPTION>
OUTSTANDING
ORIGINAL BALANCE
PRINCIPAL MONTHLY DECEMBER 31,
AMOUNT PAYMENTS 1997
---------- ---------- ----------
<S> <C> <C> <C>
180 North Michigan, 8.50%
due monthly to September 1,
2001 (a) $6,733,888 $ 47,698 $6,733,888
Naperville Office Court,
8.875% due monthly to
May 1, 1998 (b) 3,000,000 24,025 2,710,379
Highland Park Medical Building,
8.88% due monthly to
October 1, 2001 (c) 1,425,000 12,711 1,395,552
Oak Lawn Promenade,
8.25% due monthly to
June 1, 1998 (d) 3,175,000 24,143 2,604,549
Oak Lawn Square,
8.25% due monthly to
June 1, 1998 (e) 890,000 6,995 801,206
Broadway - Berwyn, 8.20% due
monthly to July 31, 2000 (f) 2,750,000 23,346 2,610,001
Irving - Kimball, 8.875% due
monthly to May 1, 1998 (g) 1,450,000 11,725 1,322,598
Melrose - Kimball, 8.875% due
monthly to May 1, 1998 (h) 1,250,000 10,108 1,140,163
<CAPTION>
PRINCIPAL PAYMENTS
----------------------------------------------------------------------------------------
DURING YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 THEREAFTER
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
180 North Michigan, 8.50%
due monthly to September 1,
2001 (a) $ 26,377 $ 83,752 $ 91,154 $6,532,605 $ -- $ --
Naperville Office Court,
8.875% due monthly to
May 1, 1998 (b) 2,710,379 -- -- -- -- --
Highland Park Medical Building,
8.88% due monthly to
October 1, 2001 (c) 29,804 32,562 35,568 1,297,618 -- --
Oak Lawn Promenade,
8.25% due monthly to
June 1, 1998 (d) 2,604,549 -- -- -- -- --
Oak Lawn Square,
8.25% due monthly to
June 1, 1998 (e) 801,206 -- -- -- -- --
Broadway - Berwyn, 8.20% due
monthly to July 31, 2000 (f) 68,670 74,517 2,466,814 -- -- --
Irving - Kimball, 8.875% due
monthly to May 1, 1998 (g) 1,322,598 -- -- -- -- --
Melrose - Kimball, 8.875% due
monthly to May 1, 1998 (h) 1,140,163 -- -- -- -- --
</TABLE>
58
<PAGE> 59
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OUTSTANDING
ORIGINAL BALANCE
PRINCIPAL MONTHLY DECEMBER 31
AMOUNT PAYMENTS 1997
------------ ------------ ------------
<S> <C> <C> <C>
Archer - Central, 8.875% due
monthly to May 1, 1998 (i) $ 2,200,000 $ 17,789 $ 2,006,777
Diversey and Sheffield, 7.875%
due monthly to April 1, 1999 (j) 2,000,000 14,938 1,846,863
111th and Western,
8.25% due May 1, 1999 (k) 618,000 5,266 567,321
Evergreen Commons, 8.25% due
May 1, 1999 (l) 530,000 4,516 486,538
Harlem North Shopping Center,
7.85% due monthly to January 1,
1999 (m) 2,362,500 19,541 2,138,500
Waterfall Plaza, 9.65% due monthly
to September 30, 1999 (n) 2,100,000 12,232 2,268,444
47th and Halsted, 7% due monthly
to December 31, 2003 (o) 1,800,000 (o) 1,560,000
47th and Halsted, 4.96% due
at maturity on December 31,
2002 (p) 600,000 2,480 600,000
------------
TOTAL 30,792,779
Unamortized debt forgiveness
income and fair market value
acquisition adjustment (a)(n) (139,049)
------------
TOTAL OUTSTANDING MORTGAGE BALANCE $ 30,653,730
============
<CAPTION>
PRINCIPAL PAYMENTS
---------------------------------------------------------------------------------------------
DURING YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 THEREAFTER
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Archer - Central, 8.875% due
monthly to May 1, 1998 (i) $ 2,006,777 $ -- $ -- $ -- $ -- $ --
Diversey and Sheffield, 7.875%
due monthly to April 1, 1999 (j) 35,062 1,811,801 -- -- -- --
111th and Western,
8.25% due May 1, 1999 (k) 17,020 550,301 -- -- -- --
Evergreen Commons, 8.25% due
May 1, 1999 (l) 14,596 471,942 -- -- -- --
Harlem North Shopping Center,
7.85% due monthly to January 1,
1999 (m) 69,069 2,069,431 -- -- -- --
Waterfall Plaza, 9.65% due monthly
to September 30, 1999 (n) -- 2,268,444 -- -- -- --
47th and Halsted, 7% due monthly
to December 31, 2003 (o) 60,000 93,000 96,000 96,000 96,000 1,119,000
47th and Halsted, 4.96% due
at maturity on December 31,
2002 (p) -- -- -- -- -- 600,000
------------ ------------ ------------ ------------ ------------ ------------
TOTAL $ 10,906,270 $ 7,455,750 $ 2,689,536 $ 7,926,223 $ 96,000 $ 1,719,000
============ ============ ============ ============ ============ ============
</TABLE>
59
<PAGE> 60
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
(a) A balloon payment of $6,475,755 will be due September 1, 2001. Loan
is interest only through September 30, 1998, at which time a
principal amortization schedule based on 25 years will commence. Debt
forgiveness income of $500,000 is being amortized over the remaining
term of the loan using the effective interest method.
(b) A balloon payment of $2,698,352 will be due May 1, 1998.
(c) A balloon payment of $1,265,467 will be due October 1, 2001.
(d) A balloon payment of $2,579,344 will be due June 1, 1998.
(e) A balloon payment of $795,188 will be due June 1, 1998.
(f) A balloon payment of $2,420,449 will be due July 31, 2000.
(g) A balloon payment of $1,316,725 will be due May 1, 1998.
(h) A balloon payment of $1,135,099 will be due May 1, 1998.
(i) A balloon payment of $1,997,870 will be due May 1, 1998.
(j) A balloon payment of $1,805,684 will be due April 1, 1999.
(k) A balloon payment of $542,784 will be due May 1, 1999.
(l) A balloon payment of $465,494 will be due May 1, 1999.
(m) A balloon payment of $2,063,428 will be due January 1, 1999.
(n) A balloon payment of $2,268,443 will be due September 30, 1999. The
balance of the loan reflected in the Partnership's financial
statements was adjusted to the fair market value of the property at
time of acquisition.
(o) Monthly interest payments and fixed principal payments of $5,000 from
February 1, 1994, to January 1, 1999, and $8,000 from February 1,
1999, to December 1, 2003, are to be made with the balance of
$1,028,000 due on December 31, 2003.
(p) A balloon payment will be due on December 31, 2002.
60
<PAGE> 61
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
7 - RELATED PARTY TRANSACTIONS
Management and Other Fees
Management, leasing and consulting fees paid to M&J Wilkow, Ltd. and M&J
Wilkow Brokerage Corp. (companies whose principal shareholders are general
partners of the Partnership) for the years ended December 31, 1997, 1996
and 1995, were $853,890, $907,244 and $994,776, respectively.
At December 31, 1997 and 1996, $39,785 and $98,371, respectively, are owed
to M&J Wilkow, Ltd. for management, leasing and consulting fees.
Professional Fees
Professional fees paid during the years ended December 31, 1997, 1996 and
1995, to Wilkow & Wilkow, P.C. (a company owned by a general partner of the
Partnership) for services in the ordinary course of business were $32,787,
$37,901 and $37,170, respectively. For the years ended December 31, 1997,
1996 and 1995, $84,731, $62,792 and $59,388, respectively, were paid to M&J
Wilkow, Ltd. for services rendered in connection with legal, tax and
accounting matters.
Investments in Partnerships
The general partners and/or entities controlled or managed by one or more
of such partners have ownership interests in a majority of the real estate
projects in which the Partnership also has ownership interests.
Loans Payable
Loans payable to a general partner and certain limited partners in the
amount of $410,000 bear interest at the prime rate and are due December 31,
1999.
The Partnership has received loans from a company partially owned by the
general partners. The loan in the amount of $425,000 bore interest at the
prime rate. The loan was repaid on January 25, 1996, with interest accruing
through the date of repayment.
The Partnership also has a loan payable in the amount of $44,488 to a real
estate project held in a cotenancy arrangement by various entities in which
the general partners of the Partnership are also partners. The note bears
interest at the prime rate and is due on demand.
61
<PAGE> 62
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
Debentures
Freeport Office Partners had issued $1,674,000 of a total available issue
of $2,000,000 of subordinated debentures to the general partners, certain
limited partners and other related parties. The debentures earned interest
of 11% (per annum) and an additional 3% (per annum) to be accrued over five
years. The debentures were due September 1, 1995. Nine percent interest was
accrued and paid on the outstanding debentures until the date of repayment
along with the principal amount on January 18, 1996, from the proceeds of
the sale of the building.
At December 31, 1994, the Partnership had a nonrecourse liability of
$1,747,833 in connection with the issuance of $3,260,000 of unsecured,
subordinated debentures by The Villas at Monterey Limited Partnership, one
of the cotenants of the Tango Bay Suites property (see Note 3 -
M&J/Westwood Limited Partnership). The debentures are payable to the
general partners, certain limited partners, and other related parties. The
debentures bear interest at 10% and are due November 24, 1999. In addition,
the debenture holders are entitled to contingent interest equal to 50% of
"net cash flow" as defined in the agreement. The Partnership was relieved
of its liability in connection with the debentures upon disposal of its
interest in Tango Bay Suites effective June 30, 1995.
Rental Income
Rental income received from M&J Wilkow, Ltd. (a company whose principal
shareholders are partners of the Partnership) was $172,280, $172,279 and
$162,528 for the years ended December 31, 1997, 1996 and 1995,
respectively, under a lease for office space.
62
<PAGE> 63
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
8 - RENTALS RECEIVABLE UNDER OPERATING LEASES
Minimum future rentals receivable by the Partnership on noncancelable
operating leases as of December 31, 1997, are as follows:
<TABLE>
<CAPTION>
Year Ending
December 31, Total
------------ ----------------
<S> <C>
1998 $ 6,061,000
1999 4,990,000
2000 4,213,000
2001 3,350,000
Thereafter 6,515,000
---------------
Total $ 25,129,000
===============
</TABLE>
9 - PARTNERS' CAPITAL
On October 10, 1997, 8,056 limited partnership units owned by 52
partners (out of a total of 470 partners) were redeemed as of October 1,
1997, at the redemption rate of $40 per unit. The redemption price paid
by the Partnership was $322,240. As a result of the redemption, there
are now 170,916 units outstanding owned by 418 partners.
At December 31, 1997, general partner units totaled 7,550 units and the
general partners also beneficially owned 3,388 limited partner units.
At December 31, 1996, general partner units totaled 7,174 units and the
general partners also beneficially owned 2,923 limited partner units.
10 - COMMITMENTS AND CONTINGENCIES
As of December 31, 1997, the Partnership has a revolving credit facility
with LaSalle National Bank which is secured by the Partnership's limited
partnership units in Duke Realty Limited Partnership (see Note 3). The
facility, due September 1, 1998, pays interest at the prime rate. Maximum
borrowings under the agreement are the lesser of $675,000 or 80% of the
fair market value of the Partnership's 50,502 units in Duke Realty
Limited Partnership (see Note 3). As of December 31, 1997, the amount
outstanding under this facility is $625,000, consisting of three
unsecured letters of credit for $80,000, $150,000 and $280,000 with
General Electric Capital Corporation as beneficiary and one for $115,000
with the City of Arlington as beneficiary.
As of December 31, 1997, the Partnership, through its investment in
M&J/Retail Limited Partnership, has an installment note due to LaSalle
National Bank. The note, due October 1, 2000, pays interest at the prime
rate plus 1% per annum. As of December 31, 1997, the amount outstanding
under this note is $218,487 and is included in loans payable in the
accompanying consolidated balance sheet. The note was subsequently repaid
in full in February 1998.
63
<PAGE> 64
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
11 - PROVISION FOR LOSS IN BOOK VALUE OF REAL ESTATE
During the fourth quarter of 1996, the Partnership recognized write-downs
of $154,000 and $119,000 on its investments in Hawdel Limited Partnership
I and III and M&J/Largo Limited Partnership, respectively. The amounts of
the write-downs were based on estimated final cash distributions from the
proceeds of the sale of the underlying real properties in 1997.
During the fourth quarter of 1995, the Partnership recognized a
$1,400,000 write-down on the Freeport Office building.
These provisions were based upon market conditions and estimated future
cash flows.
12 - SUBSEQUENT EVENT
In January 1998, the Partnership made a distribution in the amount of
$42,729, or $.25 per unit.
64
<PAGE> 65
ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following sets forth certain information with respect to each general
partner of the Registrant:
Name Position
---- --------
Marc R. Wilkow General Partner and General Counsel
Clifton J. Wilkow General Partner
Marc R. Wilkow has been in the real estate management and investment
business since 1977. He is also a lawyer and the sole shareholder of the law
firm of Wilkow & Wilkow, P.C. Clifton J. Wilkow has been involved in the
business of the Registrant since 1976. Also see "ITEM 1: Business Organization"
for further information.
There have been no proceedings of any kind involving bankruptcy,
criminality or restraint in the area of financial dealings against or otherwise
affecting any general partner during the last ten years.
The executive officers of the Registrant are its general partners. Their
names, ages, positions and relationships are listed below:
<TABLE>
<CAPTION>
Name Position Age Other Positions Relation to Other Officer
---- -------- --- --------------- -------------------------
<S> <C> <C> <C> <C>
Marc R. Wilkow General 48 General Counsel Brother of Clifton Wilkow
Partner
Clifton J. Wilkow General 45 None Brother of Marc Wilkow
Partner
</TABLE>
65
<PAGE> 66
ITEM 11 - EXECUTIVE COMPENSATION
The general partners do not receive any remuneration or other special
benefit directly from the Registrant; however, Marc R. and Clifton J. Wilkow are
owners and shareholders of M&J Wilkow, Ltd., which receives management, leasing,
consulting and brokerage fees from each of the operating properties and/or
partnerships. In addition, the Registrant pays M&J Wilkow, Ltd. an asset
management fee. M&J Wilkow, Ltd. receives accounting and tax return preparation
fees based upon hourly service. Wilkow & Wilkow, P.C. also receives a retainer
for services rendered as general counsel to the Registrant and legal fees on an
hourly rate basis for professional services rendered beyond the scope of the
services contemplated by the retainer fee. Also see "ITEM 1: Business
Organization" for further information.
Options Granted to Management to Purchase Securities
There have been no options granted to management to purchase securities
from the Registrant.
Interest of Management and Others in Certain Transactions
For transactions to date, and those anticipated, reference is made to
"ITEM 1: Business."
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No general partner holds 5% or more of any of the securities.
The following limited partners hold 5% or more of the Registrant's
total units:
<TABLE>
<CAPTION>
Units Owned % of Total Units
----------- ----------------
<S> <C> <C>
William W. Wilkow Marital Trust 15,025 8.79%
Gisa W. Slonim Irrevocable Trust 12,877 7.53%
</TABLE>
(b) The following table sets forth the equity securities of the Registrant
beneficially owned directly or indirectly by the general partners and
their spouses as a group (three persons) at December 31, 1997:
<TABLE>
<CAPTION>
Amount
Beneficially Owned % of Owned
------------------ ----------
<S> <C> <C>
General Partnership Units 7,550 4.40%
Units of Limited
Partnership Interest 3,388 1.98%
</TABLE>
66
<PAGE> 67
(c) There are no contractual arrangements known to the Registrant
including any pledge of securities of the Registrant, the operation of
the terms of which may at a subsequent date result in a change of
control of the Registrant. Wilkow & Wilkow, P.C., a professional
corporation owned by one of the general partners, acting in its
capacity as attorney and general counsel for the Registrant, was
involved with the Registrant in certain transactions.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Management, leasing and consulting fees paid to M&J Wilkow, Ltd. and M&J
Wilkow Brokerage Corp. (companies whose principal shareholders are general
partners of the Registrant) for the years ended December 31, 1997, 1996 and
1995, were $853,890, $907,244 and $994,776, respectively (see Note 7 to
Consolidated Financial Statements).
Professional fees paid during the years ended December 31, 1997, 1996 and
1995, to Wilkow & Wilkow, P.C. for services in the ordinary course of business
were $32,787, $37,901 and $37,170, respectively.
Legal, tax and accounting services rendered in the years ended December
31, 1997, 1996 and 1995, by M&J Wilkow, Ltd. were $84,731, $62,792 and $59,388,
respectively.
The general partners and/or entities controlled or managed by one or more
of such partners have ownership interests in a majority of the real estate
projects in which the Registrant also has ownership interests.
67
<PAGE> 68
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
<TABLE>
<S> <C>
1. The Index to Consolidated Financial Statements is set forth
on Page 27
2. Financial Statement Schedules: Page No.
--------
Independent Auditor's Report 28
Schedule VIII - Valuation and Qualifying Accounts and
Reserves, Years Ended December 31, 1997, 1996 and 1995 69
Schedule X - Supplementary Profit and Loss Information,
Years Ended December 31, 1997, 1996 and 1995 70
Schedule XI - Real Estate and Accumulated Depreciation,
Year Ended December 31, 1997 71
Notes to Schedule XI 75
Schedule XIII - Investments in, Equity in Earnings of,
and Drawings Received From Affiliates and Other Persons,
Years Ended December 31, 1997, 1996 and 1995 88
</TABLE>
Schedules other than those listed above have been omitted
since they are either not applicable or not required or the
information is included elsewhere herein.
3. Exhibits: See Index to Exhibits on Page 98
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during the
year ended December 31, 1997.
68
<PAGE> 69
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING PROFIT OR CLOSE OF
OF YEAR INCOME OTHER DEDUCTIONS YEAR
------------ -------- ------- ------------ -----------
YEAR ENDED DECEMBER 31, 1995
<S> <C> <C>
Reserve for bad debts $ -- $ -- $ -- $ -- $ --
============= ========= ======= ============ ==========
Reserve for losses on loans $ 113,863 $ -- $ -- $ 113,863 $ --
============= ========= ======= ============ ==========
Reserve for valuation of investments $ 2,560,000 $ -- $ -- $ -- $2,560,000
============= ========= ======= ============ ==========
YEAR ENDED DECEMBER 31, 1996
Reserve for bad debts $ -- $ -- $ -- $ -- $ --
============= ========= ======= ============ ==========
Reserve for losses on loans $ -- $ -- $ -- $ -- $ --
============= ========= ======= ============ ==========
Reserve for valuation of investments $ 2,560,000 $ -- $ -- $ 2,560,000 $ --
============= ========= ======= ============ ==========
YEAR ENDED DECEMBER 31, 1997
Reserve for bad debts $ $ $ $ $
============= ========= ======= ============ ==========
Reserve for losses on loans $ $ $ $ $
============= ========= ======= ============ ==========
Reserve for valuation of investments $ $ $ $ $
============= ========= ======= ============ ==========
</TABLE>
69
<PAGE> 70
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE X - SUPPLEMENTARY PROFIT AND LOSS INFORMATION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 REPAIRS AND MAINTENANCE
Name of property:
180 North Michigan Avenue $ 386,750 $ 427,928 $ 391,454
Naperville 46,011 45,433 64,734
Freeport Office -- 22,555 111,033
Highland Park 55,057 64,468 59,343
Waterfall Plaza 6,687 7,313 12,120
Tango Bay Suites -- -- 62,127
Ten Retail Centers 89,549 114,989 135,570
---------- ---------- ----------
TOTAL $ 584,054 $ 682,686 $ 836,381
========== ========== ==========
2. DEPRECIATION, DEPLETION AND AMORTIZATION
OF FIXED AND INTANGIBLE ASSETS
Depreciation expense $1,412,264 $1,384,141 $1,905,764
Amortization expense 340,821 335,236 428,666
---------- ---------- ----------
TOTAL $1,753,085 $1,719,377 $2,334,430
========== ========== ==========
3. TAXES, OTHER THAN INCOME TAXES
Real estate taxes:
23 East Flagler - Department Store $ 62,753 $ 63,937 $ 54,988
Fairplay Foods 235,062 218,820 206,009
Freeport Office -- 9,451 185,084
180 North Michigan Avenue 730,583 682,999 614,938
Naperville Office Court 111,196 103,278 119,193
Highland Park 44,170 44,219 36,670
Ten Retail Centers 1,118,974 1,163,665 1,127,412
Tango Bay Suites -- -- 58,920
Waterfall Plaza 138,850 142,401 172,885
Land - Fort Myers -- 32,176 32,659
---------- ---------- ----------
Total 2,441,588 2,460,946 2,608,758
Payroll taxes -- 14,453 6,877
Florida sales taxes 4,478 4,371 12,657
---------- ---------- ----------
TOTAL $2,446,066 $2,479,770 $2,628,292
========== ========== ==========
4. MANAGEMENT FEES $ 655,936 $ 734,716 $ 877,342
========== ========== ==========
5. RENTS
Ground rent - 180 North Michigan Avenue $ 11,855 $ 13,549 $ 13,549
========== ========== ==========
</TABLE>
70
<PAGE> 71
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION ENCUMBRANCES
----------- ------------
<S> <C> <C>
23 East Flagler Street -
Department Store, Shopping
Miami, Florida Center $ --
Fairplay Foods, Shopping
Chicago, Illinois Center 2,160,000
Naperville Office Court, Office
Naperville, Illinois Building 2,710,379
180 North Michigan Avenue, Office
Chicago, Illinois Building 6,594,839
Highland Park, Office
Highland Park, Illinois Building (A) 1,395,552
Waterfall Plaza, Shopping
Orland Park, Illinois Center 2,268,444
<CAPTION>
INITIAL COST TO COST CAPITALIZED
COMPANY SUBSEQUENT TO ACQUISITION
------------------------- -------------------------
BUILDINGS
AND CARRYING
LAND IMPROVEMENTS IMPROVEMENTS COST
---------- ------------ ------------ --------
<S> <C> <C> <C> <C>
23 East Flagler Street -
Department Store,
Miami, Florida $ 231,920 $ 695,759 $ 87,710 $ --
Fairplay Foods,
Chicago, Illinois 429,877 1,562,842 -- --
Naperville Office Court,
Naperville, Illinois 1,796,459 3,321,535 2,011,242 --
180 North Michigan Avenue,
Chicago, Illinois 1,061,120 6,550,000 6,140,030 --
Highland Park,
Highland Park, Illinois 158,000 2,028,750 1,617,435 --
Waterfall Plaza,
Orland Park, Illinois 317,400 1,165,643 506,677 --
</TABLE>
71
<PAGE> 72
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION ENCUMBRANCES
----------- ------------
<S> <C> <C>
Ten Strip Shopping Centers:
Oak Lawn Promenade, Shopping
Oak Lawn, Illinois Center (B) $ 2,604,549
Oak Lawn Square, Shopping
Oak Lawn, Illinois Center (B) 801,206
Broadway Festival, Shopping
Chicago, Illinois Center (B) 2,610,001
Irving Kimball, Shopping
Chicago, Illinois Center (B) 1,322,598
Melrose Kimball, Shopping
Chicago, Illinois Center (B) 1,140,163
Archer Central, Shopping
Chicago, Illinois Center (B) 2,006,777
Evergreen Commons, Shopping
Evergreen Park, Illinois Center (B) 486,538
111 and Western, Shopping
Chicago, Illinois Center (B) 567,321
Diversey and Sheffield, Shopping
Chicago, Illinois Center (B) 1,846,863
Harlem North Shopping Center, Shopping
Oak Park, Illinois Center (B) 2,138,500
-----------
Total $30,653,730
===========
<CAPTION>
INITIAL COST TO COST CAPITALIZED
COMPANY SUBSEQUENT TO ACQUISITION
----------------------- -------------------------
BUILDINGS
AND CARRYING
LAND IMPROVEMENTS IMPROVEMENTS COST
----------------------- -------------------------
<S> <C> <C> <C> <C>
Ten Strip Shopping Centers:
Oak Lawn Promenade,
Oak Lawn, Illinois $ 429,456 $ 3,865,100 $ 101,192 $ --
Oak Lawn Square,
Oak Lawn, Illinois 136,325 1,226,921 167,922 --
Broadway Festival,
Chicago, Illinois 355,696 3,201,267 157,232 --
Irving Kimball,
Chicago, Illinois 180,521 1,624,686 193,278 --
Melrose Kimball,
Chicago, Illinois 155,195 1,396,752 -- --
Archer Central,
Chicago, Illinois 267,483 2,407,344 210,202 --
Evergreen Commons,
Evergreen Park, Illinois 70,307 632,760 20,000 --
111 and Western,
Chicago, Illinois 76,295 686,652 33,279 --
Diversey and Sheffield,
Chicago, Illinois 254,657 2,291,911 15,968 --
Harlem North Shopping Center,
Oak Park, Illinois 310,000 2,790,000 152,155 --
----------- ----------- ----------- ----------
Total $ 6,230,711 $35,447,922 $11,414,322 $ --
=========== =========== =========== ==========
</TABLE>
See Notes 1, 2 and 3 accompanying Schedule XI.
(A) Owned by M&J/Sheridan Limited Partnership; 89% owned subsidiary of
First Wilkow Venture.
(B) Owned by M&J/Retail Limited Partnership; 53% owned subsidiary of First
Wilkow Venture.
72
<PAGE> 73
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT
DECEMBER 31, 1997
---------------------------------------------
BUILDINGS
AND
LAND IMPROVEMENTS TOTAL
----------- ------------ -----------
<S> <C> <C> <C>
23 East Flagler Street -
Department Store
Miami, Florida $ 231,920 $ 783,469 $ 1,087,695
Fairplay Foods,
Chicago, Illinois 429,877 1,562,842 1,992,719
Naperville Office Court,
Naperville, Illinois 1,796,459 5,332,777 7,129,236
180 North Michigan Avenue,
Chicago, Illinois 1,061,120 12,690,030 13,751,150
Highland Park,
Highland Park, Illinois 158,000 3,646,185 3,804,185
Waterfall Plaza,
Orland Park, Illinois 317,400 1,672,320 1,989,720
<CAPTION>
LIFE ON WHICH
ACCUMULATED DATE OF DATE DEPRECIATION IS
DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED
------------ ------------ -------- ---------------
23 East Flagler Street -
Department Store
Miami, Florida $ 695,759 1928 1966 25 Years
Fairplay Foods,
Chicago, Illinois 1,562,842 1963 1968 25 Years
Naperville Office Court,
Naperville, Illinois 1,936,004 1980 1986 25 Years
180 North Michigan Avenue,
Chicago, Illinois 7,688,546 1926 1968 35 Years
Renovated in 1967 building
Highland Park,
Highland Park, Illinois 1,016,901 1931 1988 30 Years
Renovated in 1972
Waterfall Plaza,
Orland Park, Illinois 184,704 1980 1993 40 Years
</TABLE>
73
<PAGE> 74
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT
DECEMBER 31, 1997
--------------------------------------
BUILDINGS LIFE ON WHICH
AND ACCUMULATED DATE OF DATE DEPRECIATION IS
LAND IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED
----------- ------------ ----------- ------------ ------------ -------- ---------------
Ten Strip Shopping Centers:
<S> <C> <C> <C> <C> <C> <C> <C>
Oak Lawn Promenade,
Oak Lawn, Illinois $ 429,456 $ 3,966,292 $ 4,395,748 $ 1,057,786 1986 1987 40 Years
Oak Lawn Square,
Oak Lawn, Illinois 136,325 1,394,843 1,531,168 342,188 1982 1987 40 Years
Broadway Festival,
Chicago, Illinois 355,696 3,358,499 3,714,195 864,757 1984 1987 40 Years
Irving Kimball,
Chicago, Illinois 180,521 1,817,964 1,998,485 402,598 1987 1988 40 Years
Melrose Kimball,
Chicago, Illinois 155,195 1,396,752 1,551,947 340,461 1987 1988 40 Years
Archer Central,
Chicago, Illinois 267,483 2,617,546 2,885,029 616,889 1985 1988 40 Years
Evergreen Commons,
Evergreen Park, Illinois 70,307 652,760 723,067 156,487 1987 1988 40 Years
111 and Western,
Chicago, Illinois 76,295 719,931 796,226 167,858 1987 1988 40 Years
Diversey and Sheffield,
Chicago, Illinois 254,657 2,307,879 2,562,536 517,402 1984 1989 40 Years
Harlem North Shopping Center,
Oak Park, Illinois 310,000 2,942,155 3,252,155 321,222 1980 1993 40 Years
----------- ----------- ----------- -----------
TOTAL $ 6,230,711 $46,862,244 $53,165,261 $17,872,404
=========== =========== =========== ===========
</TABLE>
74
<PAGE> 75
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
1 - RECONCILIATION OF COSTS OF REAL ESTATE DURING EACH
OF THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
------------ ----------- ----------- ------------- -----------
BUILDING AND BUILDING IMPROVEMENTS -
YEAR ENDED DECEMBER 31, 1997
<S> <C> <C> <C> <C> <C>
23 East Flagler - Department Store,
Miami, Florida $ 695,759 $ 87,710 $ -- $ -- $ 783,469
Fairplay Foods,
Chicago, Illinois 1,562,842 -- -- -- 1,562,842
Naperville Office Court,
Naperville, Illinois 5,280,411 52,366 -- -- 5,332,777
180 North Michigan Avenue,
Chicago, Illinois 11,995,525 694,505 -- -- 12,690,030
Freeport Office,
Dallas, Texas -- -- -- -- --
Highland Park,
Highland Park, Illinois 3,567,887 78,298 -- -- 3,646,185
Waterfall Plaza,
Orland Park, Illinois 1,672,320 -- -- -- 1,672,320
</TABLE>
75
<PAGE> 76
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
------------- ----------- ----------- ------------ -----------
Ten Strip Shopping Centers:
<S> <C> <C> <C> <C> <C>
Oak Lawn Promenade,
Oak Lawn, Illinois $ 3,894,692 $ 71,600 $ -- $ -- $ 3,966,292
Oak Lawn Square,
Oak Lawn, Illinois 1,313,304 81,539 -- -- 1,394,843
Broadway Festival,
Chicago, Illinois 3,358,499 -- -- -- 3,358,499
Irving Kimball,
Chicago, Illinois 1,727,824 90,140 -- -- 1,817,964
Melrose Kimball,
Chicago, Illinois 1,396,752 -- -- -- 1,396,752
Archer Central,
Chicago, Illinois 2,617,546 -- -- -- 2,617,546
Evergreen Commons,
Evergreen Park, Illinois 652,760 -- -- -- 652,760
111 and Western,
Chicago, Illinois 686,652 33,279 -- -- 719,931
Diversey and Sheffield,
Chicago, Illinois 2,307,879 -- -- -- 2,307,879
Harlem North Shopping Center,
Oak Park, Illinois 2,942,155 -- -- -- 2,942,155
----------- ----------- ---------- ---------- -----------
TOTAL $45,672,807 $ 1,189,437 $ -- $ -- $46,862,244
=========== =========== ========== ========== ===========
</TABLE>
76
<PAGE> 77
FIRST WILKOW
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
1 - RECONCILIATION OF COSTS OF REAL ESTATE DURING EACH
OF THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 - Continued
<TABLE>
<CAPTION>
Balance at Balance
Beginning of Addition Other Charges at End
Year at Cost Retirements Add (Deduct) of Year
----------- ----------- ------------ ------------ -------------
BUILDING AND BUILDING IMPROVEMENTS -
YEAR ENDED DECEMBER 31, 1996
<S> <C> <C> <C> <C> <C>
23 East Flagler - Department Store,
Miami, Florida $ 695,759 $ -- $ -- $ -- $ 695,759
Fairplay Foods,
Chicago, Illinois 1,562,842 -- -- -- 1,562,842
Naperville Office Court,
Naperville, Illinois 5,065,453 254,987 40,029 -- 5,280,411
180 North Michigan Avenue,
Chicago, Illinois 11,870,761 124,764 -- -- 11,995,525
Freeport Office,
Dallas, Texas 11,472,870 -- -- (11,472,870) --
Highland Park,
Highland Park, Illinois 3,517,726 50,161 -- -- 3,567,887
Waterfall Plaza,
Orland Park, Illinois 1,639,404 32,916 -- -- 1,672,320
</TABLE>
77
<PAGE> 78
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
------------ ------------ ------------- ------------- -------
<S> <C> <C> <C> <C> <C>
Ten Strip Shopping Centers:
Oak Lawn Promenade,
Oak Lawn, Illinois $ 3,880,389 $ 14,303 $ -- $ -- $ 3,894,692
Oak Lawn Square,
Oak Lawn, Illinois 1,311,990 1,314 -- -- 1,313,304
Broadway Festival,
Chicago, Illinois 3,347,234 11,265 -- -- 3,358,499
Irving Kimball,
Chicago, Illinois 1,642,428 85,396 -- -- 1,727,824
Melrose Kimball,
Chicago, Illinois 1,396,752 -- -- -- 1,396,752
Archer Central,
Chicago, Illinois 2,617,546 -- -- -- 2,617,546
Evergreen Commons,
Evergreen Park, Illinois 652,760 -- -- -- 652,760
111 and Western,
Chicago, Illinois 686,652 -- -- -- 686,652
Diversey and Sheffield,
Chicago, Illinois 2,302,638 5,241 -- -- 2,307,879
Harlem North Shopping Center,
Oak Park, Illinois 2,876,817 65,338 -- -- 2,942,155
------------ ------------ ------------ ------------ ------------
TOTAL $ 56,540,021 $ 645,685 $ 40,029 $(11,472,870) $ 45,672,807
============ ============ ============ ============ ============
</TABLE>
78
<PAGE> 79
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
1 - RECONCILIATION OF COSTS OF REAL ESTATE DURING EACH
OF THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 - Continued
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
----------- ----------- ----------- --------------- -----------
BUILDING AND BUILDING IMPROVEMENTS -
YEAR ENDED DECEMBER 31, 1995
<S> <C> <C> <C> <C> <C>
23 East Flagler - Department Store,
Miami, Florida $ 695,759 $ -- $ -- $ -- $ 695,759
Fairplay Foods,
Chicago, Illinois 1,562,842 -- -- -- 1,562,842
Naperville Office Court,
Naperville, Illinois 4,704,984 360,469 -- -- 5,065,453
180 North Michigan Avenue,
Chicago, Illinois 11,739,472 131,289 -- -- 11,870,761
Buschwood,
Carrollwood, Florida -- -- -- -- --
Freeport Office,
Dallas, Texas 12,770,775 102,095 -- (1,400,000)(A) 11,472,870
Highland Park,
Highland Park, Illinois 3,491,603 26,123 -- -- 3,517,726
Tango Bay Suites,
Orlando, Florida 6,099,144 -- 6,099,144 -- --
Waterfall Plaza,
Orland Park, Illinois 1,570,086 69,318 -- -- 1,639,404
</TABLE>
See accompanying notes to financial statements
79
<PAGE> 80
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
----------- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Ten Strip Shopping Centers:
Oak Lawn Promenade,
Oak Lawn, Illinois $ 3,871,900 $ 8,489 $ -- $ -- $ 3,880,389
Oak Lawn Square,
Oak Lawn, Illinois 1,286,757 25,233 -- -- 1,311,990
Broadway Festival,
Chicago, Illinois 3,307,949 39,285 -- -- 3,347,234
Irving Kimball,
Chicago, Illinois 1,642,428 -- -- -- 1,642,428
Melrose Kimball,
Chicago, Illinois 1,396,752 -- -- -- 1,396,752
Archer Central,
Chicago, Illinois 2,617,546 -- -- -- 2,617,546
Evergreen Commons,
Evergreen Park, Illinois 652,760 -- -- -- 652,760
111 and Western,
Chicago, Illinois 686,652 -- -- -- 686,652
Diversey and Sheffield,
Chicago, Illinois 2,302,638 -- -- -- 2,302,638
Harlem North Shopping Center,
Oak Park, Illinois 2,790,000 86,817 -- -- 2,876,817
----------- ----------- ----------- ----------- -----------
TOTAL $63,190,047 $ 849,118 $ 6,099,144 $(1,400,000) $56,540,021
=========== =========== =========== =========== ===========
</TABLE>
(A) Reflects the write-down of the building based on estimated loss on
1996 disposition (see Note 11 of the financial statements).
80
<PAGE> 81
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
2 - RECONCILIATIONS OF ACCUMULATED DEPRECIATION OF REAL ESTATE
DURING EACH OF THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
------------ ---------- ----------- ------------- --------
YEAR ENDED DECEMBER 31, 1997
<S> <C> <C> <C> <C> <C>
23 East Flagler - Department Store,
Miami, Florida $ 695,759 $ -- $ -- $ -- $ 695,759
Fairplay Foods,
Chicago, Illinois 1,562,842 -- -- -- 1,562,842
Naperville Office Court,
Naperville, Illinois 1,724,097 211,907 -- -- 1,936,004
180 North Michigan Avenue,
Chicago, Illinois 7,189,911 498,635 -- -- 7,688,546
Freeport Office,
Dallas, Texas -- -- -- -- --
Highland Park,
Highland Park, Illinois 891,655 125,246 -- -- 1,016,901
Waterfall Plaza,
Orland Park, Illinois 142,896 41,808 -- -- 184,704
</TABLE>
81
<PAGE> 82
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
------------ ---------- ----------- ------------- --------
<S> <C> <C> <C> <C> <C>
Ten Strip Shopping Centers:
Oak Lawn Promenade,
Oak Lawn, Illinois $ 959,918 $ 97,868 $ -- $ -- $ 1,057,786
Oak Lawn Square,
Oak Lawn, Illinois 308,461 33,727 -- -- 342,188
Broadway Festival,
Chicago, Illinois 780,794 83,963 -- -- 864,757
Irving Kimball,
Chicago, Illinois 359,073 43,525 -- -- 402,598
Melrose Kimball,
Chicago, Illinois 305,542 34,919 -- -- 340,461
Archer Central,
Chicago, Illinois 551,450 65,439 -- -- 616,889
Evergreen Commons,
Evergreen Park, Illinois 140,168 16,319 -- -- 156,487
111 and Western,
Chicago, Illinois 150,205 17,653 -- -- 167,858
Diversey and Sheffield,
Chicago, Illinois 459,705 57,697 -- -- 517,402
Harlem North Shopping Center,
Oak Park, Illinois 247,666 73,556 -- -- 321,222
----------- ----------- -------- ---------- -----------
TOTAL $16,470,142 $ 1,402,262 $ -- $ -- $17,872,404
=========== =========== ======== ========== ===========
</TABLE>
82
<PAGE> 83
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
2 - RECONCILIATIONS OF ACCUMULATED DEPRECIATION OF REAL ESTATE
DURING EACH OF THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
----------- ----------- ----------- ------------ -----------
YEAR ENDED DECEMBER 31, 1996
<S> <C> <C> <C> <C> <C>
23 East Flagler - Department Store,
Miami, Florida $ 695,759 $ -- $ -- $ -- $ 695,759
Fairplay Foods,
Chicago, Illinois 1,562,842 -- -- -- 1,562,842
Naperville Office Court,
Naperville, Illinois 1,528,906 206,013 10,822 -- 1,724,097
180 North Michigan Avenue,
Chicago, Illinois 6,704,663 485,248 -- -- 7,189,911
Freeport Office,
Dallas, Texas 4,370,870 -- -- (4,370,870) --
Highland Park,
Highland Park, Illinois 769,619 122,036 -- -- 891,655
Waterfall Plaza,
Orland Park, Illinois 101,714 41,182 -- -- 142,896
</TABLE>
83
<PAGE> 84
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
----------- ----------- ----------- ----------- -----------
Ten Strip Shopping Centers:
<S> <C> <C> <C> <C> <C>
Oak Lawn Promenade,
Oak Lawn, Illinois $ 862,691 $ 97,227 $ -- $ -- $ 959,918
Oak Lawn Square,
Oak Lawn, Illinois 275,639 32,822 -- -- 308,461
Broadway Festival,
Chicago, Illinois 696,988 83,806 -- -- 780,794
Irving Kimball,
Chicago, Illinois 317,592 41,481 -- -- 359,073
Melrose Kimball,
Chicago, Illinois 270,623 34,919 -- -- 305,542
Archer Central,
Chicago, Illinois 486,010 65,440 -- -- 551,450
Evergreen Commons,
Evergreen Park, Illinois 123,848 16,320 -- -- 140,168
111 and Western,
Chicago, Illinois 133,039 17,166 -- -- 150,205
Diversey and Sheffield,
Chicago, Illinois 402,086 57,619 -- -- 459,705
Harlem North Shopping Center,
Oak Park, Illinois 174,621 73,045 -- -- 247,666
----------- ----------- ----------- ----------- -----------
TOTAL $19,477,510 $ 1,374,324 $ 10,822 $(4,370,870) $16,470,142
=========== =========== =========== =========== ===========
</TABLE>
84
<PAGE> 85
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
2 - RECONCILIATIONS OF ACCUMULATED DEPRECIATION OF REAL ESTATE
DURING EACH OF THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 - Continued
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
---------- ---------- ----------- ------------ ----------
YEAR ENDED DECEMBER 31, 1995
<S> <C> <C> <C> <C> <C>
23 East Flagler - Department Store,
Miami, Florida $ 695,759 $ -- $ -- $ -- $ 695,759
Fairplay Foods,
Chicago, Illinois 1,562,842 -- -- -- 1,562,842
Naperville Office Court,
Naperville, Illinois 1,335,365 193,541 -- -- 1,528,906
180 North Michigan Avenue,
Chicago, Illinois 6,244,563 460,100 -- -- 6,704,663
Buschwood,
Carrollwood, Florida -- -- -- -- --
Freeport Office,
Dallas, Texas 3,970,515 400,355 -- -- 4,370,870
Highland Park,
Highland Park, Illinois 648,402 121,217 -- -- 769,619
Tango Bay Suites,
Orlando, Florida 276,423 -- 276,423 -- --
Waterfall Plaza,
Orland Park, Illinois 61,840 39,874 -- -- 101,714
</TABLE>
85
<PAGE> 86
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCE AT BALANCE
BEGINNING OF ADDITION OTHER CHARGES AT END
YEAR AT COST RETIREMENTS ADD (DEDUCT) OF YEAR
------------ ------------ ----------- ------------- -------
<S> <C> <C> <C> <C> <C>
Ten Strip Shopping Centers:
Oak Lawn Promenade,
Oak Lawn, Illinois $ 765,819 $ 96,872 $ -- $ -- $ 862,691
Oak Lawn Square,
Oak Lawn, Illinois 243,307 32,332 -- -- 275,639
Broadway Festival,
Chicago, Illinois 613,687 83,301 -- -- 696,988
Irving Kimball,
Chicago, Illinois 276,532 41,060 -- -- 317,592
Melrose Kimball,
Chicago, Illinois 235,704 34,919 -- -- 270,623
Archer Central,
Chicago, Illinois 419,629 66,381 -- -- 486,010
Evergreen Commons,
Evergreen Park, Illinois 107,529 16,319 -- -- 123,848
111 and Western,
Chicago, Illinois 115,873 17,166 -- -- 133,039
Diversey and Sheffield,
Chicago, Illinois 344,313 57,773 -- -- 402,086
Harlem North Shopping Center,
Oak Park, Illinois 104,625 69,996 -- -- 174,621
----------- ----------- ----------- ---------- -----------
TOTAL $18,022,727 $ 1,731,206 $ 276,423 $ -- $19,477,510
=========== =========== =========== ========== ===========
</TABLE>
86
<PAGE> 87
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
3 - BASIS OF REAL ESTATE FOR FEDERAL INCOME TAX PURPOSES
<TABLE>
<CAPTION>
BUILDING
AND
LAND IMPROVEMENTS
----------- ------------
(A)
First Wilkow Venture:
<S> <C> <C>
23 East Flagler - Department Store $ 266,738 $ 94,007
Fairplay Foods 502,093 236,289
180 North Michigan Avenue 1,079,535 4,864,006
Naperville Office Court 299,723 1,839,148
Waterfall Plaza 243,321 594,700
----------- -----------
Subtotal 2,391,410 7,628,150
----------- -----------
Subsidiaries:
Highland Park 158,000 2,791,735
Ten Strip Centers:
Harlem North 321,384 2,729,013
Oak Lawn Promenade 429,456 2,908,508
Oak Lawn Square 136,325 1,052,658
Broadway Festival 355,696 2,493,740
Irving Kimball 180,521 1,380,400
Melrose Kimball 155,195 1,056,291
Archer Central 267,483 2,000,658
Evergreen Commons 70,307 496,273
111 and Western 76,295 587,037
Diversey and Sheffield 254,657 1,790,473
----------- -----------
Subtotal 2,405,319 19,286,786
----------- -----------
Total Consolidated $ 4,796,729 $26,914,936
=========== ===========
</TABLE>
(A) Net of accumulated depreciation
87
<PAGE> 88
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND
DRAWINGS RECEIVED FROM AFFILIATES AND OTHER PERSONS
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
BALANCE
BALANCE AT ADDITIONS DEDUCTIONS AT END
BEGINNING OF ----------------------- ------------------------------------
YEAR INCOME OTHER LOSS DRAWS OTHER OF YEAR
---------- ---------- ---------- ---------- ---------- ----------- ----------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
<S> <C> <C> <C> <C> <C> <C> <C>
Registrant:
L-C Office Partnership IV $ -- $ -- $ 175,097(A) $ -- $ -- $ -- $ 175,097
Realdal Venture -- -- -- -- -- -- --
M&J/Westwood Limited Partnership -- -- -- -- -- -- --
XXI Office Plaza Associates 433,935 37,536 -- -- -- -- 471,471
DB/F Office Ltd. Partnership -- -- -- -- -- -- --
M&J/Quorum Associates -- -- -- -- -- -- --
Hawdel Limited Partnership 690,350 -- -- -- 690,350 -- --
M&J/Grove Limited Partnership 600,000 -- -- 31,205 11,772 -- 557,023
Rosemont 28 Limited Partnership 557,519 -- 3,438(A) 2,865 -- -- 558,092
First Ron Venture -- -- -- -- -- -- --
TOP Investors Limited Partnership -- -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------- ----------
Total Registrant 2,281,804 37,536 178,535 34,070 702,122 -- 1,761,683
M&J/Crossroads Limited Partnership(B) 259,900 -- -- 12,527 29,700 -- 217,673
---------- ---------- ---------- ---------- ---------- ----------- ----------
TOTAL INVESTMENTS - EQUITY METHOD $2,541,704 $ 37,536 $ 178,535 $ 46,597 $ 731,822 $ -- $1,979,356
========== ========== ========== ========== ========== =========== ==========
(A) Additional investment.
(B) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
</TABLE>
88
<PAGE> 89
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND
DRAWINGS RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- ---------- --------
BALANCE AT ADDITIONS DEDUCTIONS BALANCE
BEGINNING OF ------------------------ ---------------------------------- AT END
YEAR INCOME OTHER LOSS DRAWS OTHER OF YEAR
------------- ----------- --------- -------- --------- ----------- -----------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD
<S> <C> <C> <C> <C> <C> <C> <C>
Duke Realty Limited Partnership $ 468,904 $ 876,332(C) $ -- $ -- $ 81,305 $1,028,277 $ 235,654
Metro Class A Investors Limited
Partnership -- -- -- -- -- -- --
Park 100 Equity Investors Limited
Partnership -- -- -- -- -- -- --
Park 100 Mortgage Investors Limited
Partnership -- -- -- -- -- -- --
M&J/Largo Limited Partnership 575,227 40,157(C) -- -- 615,384 -- --
North LaSalle Street Limited Partnership -- -- -- -- -- -- --
Second Daltex Venture -- -- -- -- -- -- --
21st M&J Associates 99,900 -- -- -- -- -- 99,900
222 Fee Associates 6,728 290 -- -- 290 -- 6,728
5601 N. Sheridan Associates 29,916 864 -- -- 864 -- 29,916
First Candlewick Associates 125,950 6,050 -- -- 6,050 -- 125,950
M&J/Two Market Limited Partnership -- -- -- -- -- -- --
Orhow Associates 70,000 -- -- -- -- -- 70,000
Second Wilkow Venture 64,813 6,107 -- -- 6,107 -- 64,813
Wilkow/Retail Partners L.P. 2,799 111 -- -- 111 -- 2,799
544 Arizona Associates -- -- -- -- -- -- --
Lake Cook Office Development IV -- -- 1,224(B) -- -- -- 1,224
M&J/Hotel Investors Limited Partnership -- -- 200,000(B) -- -- -- 200,000
M&J/Mid Oak Limited Partnership -- -- 70,000(B) -- -- -- 70,000
</TABLE>
89
<PAGE> 90
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND
DRAWINGS RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
BALANCE AT ADDITIONS DEDUCTIONS BALANCE
BEGINNING OF ----------------------- ----------------------------------- AT END
YEAR INCOME OTHER LOSS DRAWS OTHER OF YEAR
------------ ----------- ----------- -------- --------- ---------- -----------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD - Continued
<S> <C> <C> <C> <C> <C> <C> <C>
Registrant:
Fifth Arizona Associates $ -- $ -- $ -- $ -- $ -- $ -- $ --
Fifth Orlando Associates -- -- -- -- -- -- --
Monterey Village Associates -- -- -- -- -- -- --
Pre-Vest Associates -- -- -- -- -- -- --
Seventh M&J Associates -- -- -- -- -- -- --
First Apollo Associates -- -- -- -- -- -- --
M&J/LaSalle L.P. 6,480 -- -- -- -- -- 6,480
Wilkow/Grove L.P. -- -- -- -- -- -- --
Wilkow/Metro Partners L.P. -- -- -- -- -- -- --
---------- ---------- ---------- ------- ---------- ---------- ----------
Total Registrant 1,450,717 929,911 271,224 -- 710,111 1,028,277 913,464
Northlake Tower Limited Partnership (A) 1,187,628 902,921 -- -- 1,340,549 -- 750,000
---------- ---------- ---------- ------- ---------- ---------- ----------
TOTAL INVESTMENTS - COST METHOD $2,638,345 $1,832,832 $ 271,224 $ -- $2,050,660 $1,028,077 $1,663,464
========== ========== ========== ======= ========== ========== ==========
</TABLE>
(A) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(B) Additional investment.
(C) Includes gain on disposition of investment.
90
<PAGE> 91
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND
DRAWINGS RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- ----------- --------
BALANCE AT ADDITIONS DEDUCTIONS BALANCE
BEGINNING OF ------------------------ ------------------------------------- AT END
YEAR INCOME OTHER LOSS DRAWS OTHER OF YEAR
----------- ----------- ----------- ----------- ----------- ----------- -----------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
<S> <C> <C> <C> <C> <C> <C> <C>
Registrant:
L-C Office Partnership IV $ -- $ -- $ -- $ -- $ -- $ -- $ --
Realdal Venture -- -- -- -- -- -- --
M&J/Westwood Limited Partnership -- -- -- -- -- -- --
XXI Office Plaza Associates 406,644 27,291 -- -- -- -- 433,935
DB/F Office Ltd. Partnership -- -- -- -- -- -- --
M&J/Quorum Associates -- -- -- -- -- -- --
Hawdel Limited Partnership 854,014 -- -- 163,664(C) -- -- 690,350
M&J/Grove Limited Partnership 296,324 208,519 98,100(A) -- 2,943 -- 600,000
Rosemont 28 Limited Partnership 557,182 -- 3,896(A) 3,559 -- -- 557,519
First Ron Venture -- -- -- -- -- -- --
TOP Investors Limited Partnership -- -- -- -- -- -- --
---------- ---------- ----------- ---------- ---------- ----------- ----------
Total Registrant 2,114,164 235,810 101,996 167,223 2,943 -- 2,281,804
M&J/Crossroads Limited Partnership(B) 297,000 -- -- 23,349 13,751 -- 259,900
---------- ---------- ----------- ---------- ---------- ----------- ----------
TOTAL INVESTMENTS - EQUITY METHOD $2,411,164 $ 235,810 $ 101,996 $ 190,572 $ 16,694 $ -- $2,541,704
========== ========== =========== ========== ========== =========== ==========
</TABLE>
(A) Additional investment.
(B) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(C) Includes estimated loss on the 1997 disposition of the investment.
91
<PAGE> 92
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND
DRAWINGS RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- ----------- --------
BALANCE AT ADDITIONS DEDUCTIONS BALANCE
BEGINNING OF ----------------- -------------------------------- AT END
YEAR INCOME OTHER LOSS DRAWS OTHER OF YEAR
------------ ------- ------- -------- -------- ------- --------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD
<S> <C> <C> <C> <C> <C> <C> <C>
Duke Realty Limited Partnership $468,904 $100,502 $ -- $ -- $100,502 $ -- $468,904
Metro Class A Investors Limited
Partnership -- -- -- -- -- -- --
Park 100 Equity Investors Limited
Partnership -- -- -- -- -- -- --
Park 100 Mortgage Investors Limited
Partnership -- -- -- -- -- -- --
M&J/Largo Limited Partnership 694,227 -- -- 119,000(C) -- -- 575,227
North LaSalle Street Limited Partnership -- -- -- -- -- -- --
Second Daltex Venture -- -- -- -- -- -- --
21st M&J Associates 99,900 -- -- -- -- -- 99,900
222 Fee Associates 6,728 319 -- -- 319 -- 6,728
5601 N. Sheridan Associates 29,916 576 -- -- 576 -- 29,916
First Candlewick Associates 125,950 22,055 -- -- 22,055 -- 125,950
M&J/Two Market Limited Partnership -- -- -- -- -- -- --
Orhow Associates 70,000 -- -- -- -- -- 70,000
Second Wilkow Venture 64,813 2,364 -- -- 2,364 -- 64,813
Wilkow/Retail Partners L.P. 2,799 120 -- -- 120 -- 2,799
544 Arizona Associates -- -- -- -- -- -- --
</TABLE>
92
<PAGE> 93
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND
DRAWINGS RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996:
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
BALANCE AT ADDITIONS DEDUCTIONS BALANCE
BEGINNING OF ------------------------ ------------------------------------ AT END
YEAR INCOME OTHER LOSS DRAWS OTHER OF YEAR
------------ ----------- ---------- ---------- ---------- ---------- ----------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD - Continued
<S> <C> <C> <C> <C> <C> <C> <C>
Registrant:
Fifth Arizona Associates $ -- $ -- $ -- $ -- $ -- $ -- $ --
Fifth Orlando Associates -- -- -- -- -- -- --
Monterey Village Associates -- -- -- -- -- -- --
Pre-Vest Associates -- -- -- -- -- -- --
Seventh M&J Associates -- -- -- -- -- -- --
First Apollo Associates -- -- -- -- -- -- --
M&J/LaSalle L.P. 6,480 -- -- -- -- -- 6,480
Wilkow/Grove L.P. -- -- -- -- -- -- --
Wilkow/Metro Partners L.P. -- -- -- -- -- -- --
--------- ---------- ---------- ---------- ---------- ---------- ----------
Total Registrant 1,569,717 125,936 -- 119,000 125,936 -- 1,450,717
Northlake Tower Limited
Partnership(A) 1,149,641 84,669(B) 37,987 -- 84,669 -- 1,187,628
--------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL INVESTMENTS - COST METHOD $2,719,358 $ 210,605 $ 37,987 $ 119,000 $ 210,605 $ -- $2,638,345
========== ========== ========== ========== ========== ========== ==========
</TABLE>
(A) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(B) Additional investment.
(C) Represents estimated loss on the 1997 disposition of the
investment.
93
<PAGE> 94
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND
DRAWINGS RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1995:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- ----------- --------
BALANCE AT ADDITIONS DEDUCTIONS BALANCE
BEGINNING OF ---------------------- ----------------------------------- AT END
YEAR INCOME OTHER LOSS DRAWS OTHER OF YEAR
------------ ---------- ---------- ---------- ---------- ---------- -------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
<S> <C> <C> <C> <C> <C> <C> <C>
Registrant:
L-C Office Partnership IV $ -- $ -- $ -- $ -- $ -- $ -- $ --
Realdal Venture -- -- -- -- -- -- --
M&J/Westwood Limited Partnership -- -- -- -- -- -- --
XXI Office Plaza Associates 278,602 128,042 -- -- -- -- 406,644
DB/F Office Ltd. Partnership -- -- -- -- -- -- --
M&J/Quorum Associates -- -- -- -- -- -- --
Hawdel Limited Partnership 888,365 -- -- 34,351 -- -- 854,014
M&J/Grove Limited Partnership 327,530 -- -- 31,206 -- -- 296,324
Rosemont 28 Limited Partnership 554,383 49 2,750(A) -- -- -- 557,182
First Ron Venture -- -- -- -- -- -- --
TOP Investors Limited Partnership -- -- -- -- -- -- --
First MW Associates 18,462 900 -- -- 8,650 10,712(B) --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Registrant 2,067,342 128,991 2,750 65,557 8,650 10,712 2,114,164
M&J/Crossroads Limited Partnership -- -- 297,000(C) -- -- -- 297,000
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL INVESTMENTS - EQUITY METHOD $2,067,342 $ 128,991 $ 299,750 $ 65,557 $ 8,650 $ 10,712 $2,411,164
========== ========== ========== ========== ========== ========== ==========
</TABLE>
(A) Additional investment.
(B) Investment was disposed of in 1995.
(C) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
94
<PAGE> 95
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND
DRAWINGS RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1995:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
BALANCE AT ADDITIONS DEDUCTIONS BALANCE
BEGINNING OF ------------------ ---------------------------------- AT END
YEAR INCOME OTHER LOSS DRAWS OTHER OF YEAR
------------ -------- ------- -------- -------- -------- ----------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD
<S> <C> <C> <C> <C> <C> <C> <C>
Duke Realty Limited Partnership $468,904 $134,752 $ -- $ -- $134,752 $ -- $468,904
Metro Class A Investors Limited
Partnership -- -- -- -- -- -- --
Park 100 Equity Investors Limited
Partnership -- -- -- -- -- -- --
Park 100 Mortgage Investors Limited
Partnership -- -- -- -- -- -- --
M&J/Largo Limited Partnership 694,227 -- -- -- -- -- 694,227
North LaSalle Street Limited Partnership -- -- -- -- -- -- --
Second Daltex Venture -- -- -- -- -- -- --
21st M&J Associates 99,900 -- -- -- -- -- 99,900
222 Fee Associates 6,728 406 -- -- 406 -- 6,728
5601 N. Sheridan Associates 28,254 544 1,662(D) -- 544 -- 29,916
First Candlewick Associates 116,050 3,000 9,900(D) -- 3,000 -- 125,950
M&J/Two Market Limited Partnership -- -- -- -- -- -- --
Orhow Associates 70,000 -- -- -- -- -- 70,000
S & S Venture 65,718 918 34,290(C) -- 100,926 -- --
Second Chase Venture 56,100 450 3,875(C) -- 60,425 -- --
Second Wilkow Venture 64,813 2,364 -- -- 2,364 -- 64,813
Wilkow/Retail Partners L.P. 2,799 120 -- -- 120 -- 2,799
544 Arizona Associates -- -- -- -- -- -- --
</TABLE>
95
<PAGE> 96
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XIII - INVESTMENTS IN, EQUITY IN EARNINGS OF, AND
DRAWINGS RECEIVED FROM AFFILIATES AND OTHER PERSONS - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1995:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C
-------- -------- --------
BALANCE AT ADDITIONS
BEGINNING OF ------------------------------
YEAR INCOME OTHER
---------- ---------- ---------------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD - Continued
<S> <C> <C> <C>
Registrant:
Fifth Arizona Associates $ -- $ -- $ --
Fifth Orlando Associates -- -- --
Monterey Village Associates -- -- --
Pre-Vest Associates -- -- --
Seventh M&J Associates -- -- --
First Apollo Associates -- -- --
M&J/LaSalle L.P. -- -- 6,480(B)
Wilkow/Grove L.P. -- -- --
Wilkow/Metro Partners L.P. -- -- --
---------- ---------- ---------------
Total Registrant 1,673,493 142,554 56,207
Northlake Tower Limited Partnership -- -- 1,149,641(A)
---------- ---------- ---------------
TOTAL INVESTMENTS - COST METHOD $1,673,493 $ 142,554 $ 1,205,848
========== ========== ===============
<CAPTION>
COLUMN D COLUMN E
-------- --------
DEDUCTIONS BALANCE
-------------------------------------------------- AT END
LOSS DRAWS OTHER OF YEAR
--------------- ---------- --------------- ----------
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD - Continued
<S> <C> <C> <C> <C>
Registrant:
Fifth Arizona Associates $ -- $ -- $ -- $ --
Fifth Orlando Associates -- -- -- --
Monterey Village Associates -- -- -- --
Pre-Vest Associates -- -- -- --
Seventh M&J Associates -- -- -- --
First Apollo Associates -- -- -- --
M&J/LaSalle L.P. -- -- -- 6,480
Wilkow/Grove L.P. -- -- -- --
Wilkow/Metro Partners L.P. -- -- -- --
--------------- ---------- --------------- ----------
Total Registrant -- 302,537 -- 1,569,717
Northlake Tower Limited Partnership -- -- -- 1,149,641
--------------- ---------- --------------- ----------
TOTAL INVESTMENTS - COST METHOD $ -- $ 302,537 $ -- $2,719,358
=============== ========== =============== ==========
</TABLE>
(A) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(B) Additional investment.
(C) Investment was disposed of in 1995.
(D) Distribution of assets from the liquidation of First MW
Associates.
96
<PAGE> 97
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:
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 ................. 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.
97
<PAGE> 98
INDEX TO EXHIBITS
Exhibit No. Description
(A) Agreement of Limited Partnership of First Wilkow Venture (filed
as Exhibit A or Prospectus for Exchange Offer of First Wilkow
Venture dated July 2, 1973).
(B) Amendments to Certificate of Limited Partnership filed as an
Exhibit to Annual Report on Form 10-K for 1983 which is hereby
incorporated by reference.
(C) Proxy Statement issued October 20, 1986, filed as Exhibit D to
the Annual Report on 10-K for 1986 which is hereby incorporated
by reference.
98
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 3,186,660
<SECURITIES> 0
<RECEIVABLES> 702,567
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,889,227
<PP&E> 53,209,910
<DEPRECIATION> 17,955,658
<TOTAL-ASSETS> 45,385,374
<CURRENT-LIABILITIES> 2,448,087
<BONDS> 31,326,705
0
0
<COMMON> 0
<OTHER-SE> 9,112,260
<TOTAL-LIABILITY-AND-EQUITY> 45,385,374
<SALES> 9,200,711
<TOTAL-REVENUES> 9,516,189
<CGS> 0
<TOTAL-COSTS> 2,920,960
<OTHER-EXPENSES> 2,557,514
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,626,037
<INCOME-PRETAX> 1,136,161
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,136,161
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,136,161
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
