<PAGE> 1
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, 1998
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
--------------------------------------------------
(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 $100
--------------------------------------------------
(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
--- ---
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 409 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,
1998, 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: two are residential projects; fifteen
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, 1998, certain of the
property investments held by the Registrant underwent the changes described
below:
(a) Purchases:
On April 8, 1998, the Registrant invested $415,000 in M&J/Clarkfair
Limited Partnership, which has a 9% interest in Clarkfair LLC. Clarkfair LLC is
the sole owner of two limited liability companies, namely Marketfair North LLC
and Shops at Clark's Pond LLC, which were formed to acquire the following
described properties:
Marketfair North - a 136,989 square foot shopping center
in Clay, New York
Shops at Clark's Pond - a 208,325 square foot shopping center
in South Portland, Maine
On April 10, 1998, the Registrant invested $64,000 to obtain a 26.44%
ownership in M&J/Eden Prairie Limited Partnership, which has a 10% interest in
Eden Prairie LLC, which acquired a 70,689 square foot shopping center in Eden
Prairie, Minnesota.
(b) Sales:
On July 6, 1998, the property owned by the Registrant at 23 East
Flagler Street in Miami, Florida, was sold to G.S. Holding Company of South
Florida for net cash proceeds of $1,827,048, resulting in a gain on sale of
$1,363,791, classified as other income on the consolidated statement of
operations.
(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, 1998:
PROPERTIES INVOLVING NET LEASES
23 EAST FLAGLER, MIAMI, FLORIDA
The property is a three-story commercial building located in downtown
Miami, Florida. On July 6, 1998, the property was sold to G.S. Holding Company
of South Florida for net cash proceeds of $1,827,048, resulting in a gain on
sale of $1,363,791, classified as other income on the consolidated statement of
operations.
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
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
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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.
The property was sold on February 25, 1999. The Registrant will not
receive any proceeds since the outstanding indebtedness on the property is in
excess of the sales price.
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.
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, 1998.
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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 $471,682
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.
On January 6, 1999, a repayment of the first mortgage occurred. The
payment of the outstanding balance of $1,902,315 along with a prepayment premium
of $19,023 and contingent interest of $611,855 was facilitated by a $2,585,875
capital call to the partners. The Registrant's share of that capital call was
$359,625.
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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 Limited Partnership, 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 net 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 of $1,562,500 was made by third parties on
behalf of M&J/Grove. The Registrant guaranteed $520,833, an amount which
approximates 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 (DOVER FARMS APARTMENTS)
The Registrant holds a 74.69% interest in L-C Office Partnership IV,
which, through two investment partnerships, has a 53.9% effective 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. 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.
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In addition, the Registrant owns limited partnership interests in the
partnerships scheduled below whose sole asset is an interest in Lake Cook Office
Development Building IV Limited Partnership, one of the investment partnerships
referred to above. The following is a recap of these interests:
<TABLE>
<CAPTION>
Owned by Ownership in
Registrant Lake Cook Development
------------------------ ---------------------
<S> <C> <C> <C>
Partnership # of Units % Interest % Interest
----------- ---------- ---------- ----------
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 11, "M&J/Retail Limited
Partnership") and an investment in Tango Bay Suites (see Page 11) debentures.
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.
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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. In October 1998, the principal amount of
proceeds available under the loan was increased by $450,000. As of December 31,
1998, the principal amount of the loan outstanding was $4,834,000.
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 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.
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M&J/EDEN PRAIRIE LIMITED PARTNERSHIP
On April 10, 1998, the Registrant invested $64,000 to obtain a 26.44%
ownership in M&J/Eden Prairie Limited Partnership, which has a 10% interest in
Eden Prairie LLC, which acquired a 70,689 square foot shopping center in Eden
Prairie, Minnesota.
The property was acquired with a $6,950,000 mortgage bearing interest at
7.2% per annum. The term of the loan is ten years.
PROPERTIES INVOLVING PROMISSORY NOTES
TANGO BAY SUITES, ORLANDO, FLORIDA
At December 31, 1998, 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.
In July 1998, the property was refinanced. The property is encumbered with
a first mortgage loan of $7,300,000 bearing interest at an annual rate of 7.13%.
The loan is to be amortized over a 30-year schedule, with a balloon payment of
the unpaid principal balance due on September 1, 2008.
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 Limited Partnership, 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 ownership in this
partnership from 56.97% to 52.75%.
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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, 1998, 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.
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.
In 1998, M&J/Retail invested $415,000 to acquire a 64.95% investment in
M&J/Clarkfair Limited Partnership, which has a 9% interest in Clarkfair LLC.
Clarkfair LLC is the sole owner of two limited liability companies, namely
Marketfair North LLC and Shops at Clark's Pond LLC, which were formed to acquire
the following described properties:
Marketfair North - a 136,989 square foot shopping center in
Clay, New York
Shops at Clark's Pond - a 208,325 square foot shopping center in
South Portland, Maine
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In addition to the above cash contributions, M&J/Retail has posted two
letters of credit totaling $500,000 as additional collateral with the mortgagee
of Marketfair North. These letters of credit, which expire on March 16, 1999,
renew automatically until the underlying obligations are satisfied. The general
partner of M&J/Clarkfair Limited Partnership has indemnified M&J/Retail for 10%,
or $50,000, of these letters of credit. In the event that the mortgagee is
entitled to liquidate the letters of credit, M&J/Retail will be required to fund
$450,000 of the obligation. At that time, M&J/Retail's interest in M&J/Clarkfair
Limited Partnership will increase from 64.95% to 82.74%.
On April 30, 1998, three properties owned by M&J/Retail (Archer - Central,
Irving - Kimball and Melrose - Kimball) had their mortgages refinanced. The
principal terms of the three loans are as follows:
<TABLE>
<CAPTION>
Principal Annual Amortization
Property Amount Interest Rate Schedule Maturity
---------------- ----------- ------------- ------------ -------
<S> <C> <C> <C> <C>
Archer - Central $ 2,350,000 7.40% 30 years 4/30/08
Irving - Kimball 1,325,000 7.58 30 years 4/30/08
Melrose - Kimball 991,000 7.58 30 years 4/30/08
</TABLE>
The existing mortgages in the amounts of $1,997,870, $1,316,725 and $1,135,099,
respectively, were paid off, resulting in net refinancing proceeds of $54,621.
By virtue of these refinancings, the aggregate annual debt service will be
reduced from $475,464 to $391,101.
On July 8, 1998, a property owned by M&J/Retail, the Harlem & North
shopping center in Oak Park, Illinois, was refinanced. The principal amount of
the new first mortgage loan is $2,550,000 bearing interest at an annual rate of
7.27%. The loan is to be amortized over a 30-year schedule, with a balloon
payment of the unpaid principal balance on July 1, 2008. The existing mortgage
loan of $2,104,641 was paid off, resulting in net refinancing proceeds of
$440,500.
On September 8, 1998, a property owned by M&J/Retail, Oak Lawn Promenade
shopping centerin Oak Lawn, Illinois, was refinanced. The principal of the new
first mortgage loan is $2,790,000 bearing interest at an annual rate of 7.25%.
The loan is to be amortized over a 30-year schedule, with a balloon payment of
the unpaid principal balance on October 1, 2008. The existing mortgage loan of
$2,542,752 was paid off, resulting in net refinancing proceeds of $31,675.
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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>
Harlem & North 22,775 1.00 $ 2,550,000 7.27% 07/01/08
Diversey & Sheffield 16,500 .75 2,000,000 7.875% 04/01/99
Oak Lawn Promenade 32,576 1.95 2,790,000 7.25% 10/01/08
Oak Lawn Square 9,746 .67 890,000 8.25% 04/01/99
Broadway-Berwyn 33,385 1.44 2,750,000 8.20% 07/31/00
Irving-Kimball 14,062 .55 1,325,000 7.58% 04/30/08
Melrose-Kimball 9,653 .36 991,000 7.58% 04/30/08
Archer-Central 29,426 1.49 2,350,000 7.40% 04/30/08
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 $16,794,000
======= ====== ===========
</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 was due
in May 1998. During 1993, the Registrant exercised an option to adjust the
interest rate to 8.875%.
14
<PAGE> 15
On June 8, 1998, the property was refinanced. The principal amount of the
new first mortgage loan is $4,500,000 bearing interest at an annual rate of
7.13%. The loan is to be amortized over a 30-year schedule, with a balloon
payment of the unpaid principal balance due on August 1, 2008. The existing
mortgage loan of $2,690,185 was paid off, resulting in net refinancing proceeds
of $1,642,123.
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 April 2002.
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.
15
<PAGE> 16
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
16
<PAGE> 17
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, 1998, was approximately:
<TABLE>
<CAPTION>
Title of Class Number of Record Holders
-------------- ------------------------
<S> <C>
Unit of Limited Partnership Interest 409
</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.
17
<PAGE> 18
ITEM 6 - SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------
1998 1997 1996 1995
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
OPERATING RESULTS
(IN THOUSANDS)
Total Revenue $ 11,420 $ 9,516 $ 9,874 $ 12,135
Net Income (Loss)* $ 1,920 $ 1,136 $ (99) $ (2,327)
PARTNERSHIP UNIT DATA
(PER PARTNERSHIP UNIT)
Net Income (Loss):
General Partner* $ 11.23 $ 6.42 $ (.55) $ (13.00)
Limited Partner* 11.23 6.42 (.55) (13.00)
Cash Distributions Paid:
General Partner $ 4.30 $ 2.75 $ -- $ --
Limited Partner 4.30 2.75 -- --
</TABLE>
* Includes gain (loss) on sale of real estate properties
<TABLE>
<CAPTION>
December 31,
---------------------------------------------
1998 1997 1996 1995
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
FINANCIAL POSITION DATA
Total Assets (In thousands) $ 48,781 $ 45,385 $ 45,595 $ 55,075
Net Book Value Per Unit $ 60.25 $ 53.31 $ 49.12 $ 49.67
</TABLE>
18
<PAGE> 19
ITEM 7 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - 1998 COMPARED TO 1997
For the year ended December 31, 1998, income from partnerships was $518,297
compared to $1,823,711 for the comparative period of 1997. The decrease in 1998
is primarily due to the gain on the sale of Duke Realty Limited Partnership
units and the income generated by the Northlake Tower Limited Partnership
refinancing. Both events occurred in 1997.
For the year ended December 31, 1998, 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,
1998 1998 1998 1998
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Arlington LLC $1,001,118 $ - $ - $ 1,001,118
Northlake Tower Corporation - 4,033 - -
</TABLE>
On January 10, 1998, the Registrant made a distribution in the amount of
$42,729, or $.25 per unit.
On April 8, 1998, M&J/Retail Limited Partnership acquired a 64.95% investment in
M&J/Clarkfair Limited Partnership, which has a 9% interest in Clarkfair LLC.
Clarkfair LLC is the sole owner of two limited liability companies, namely
Marketfair North LLC and Shops at Clark's Pond LLC, which were formed to acquire
the following described properties:
Marketfair North - a 136,989 square foot shopping center in
Clay, New York
Shops at Clark's Pond - a 208,325 square foot shopping center in
South Portland, Maine
M&J/Retail Limited Partnership's interest is based on a capital contribution of
$415,000 funded as
<TABLE>
<S> <C>
As of March 31, 1998 $ 75,000
At the April 8, 1998, closing 84,928
May 13, 1998, funding 155,072
November 24, 1998, funding 100,000
----------
Total Initial Capital $ 415,000
==========
</TABLE>
In addition to the above cash contributions, M&J/Retail Limited Partnership has
posted two letters of credit totaling $500,000 as additional collateral with the
mortgagee of Marketfair North. These letters of credit, which expire on March
16, 1999, renew automatically until the underlying obligations are satisfied.
The general partner of M&J/Clarkfair Limited Partnership has indemnified
M&J/Retail Limited Partnership for 10%, or $50,000, of these letters of credit.
In the event that the mortgagee is entitled to liquidate the letters of credit,
M&J/Retail Limited Partnership will be required to fund $450,000 of the
obligation. At that time, M&J/Retail Limited Partnership's interest in
M&J/Clarkfair Limited Partnership will increase from 64.95% to 82.74%.
On April 10, 1998, the Registrant made a distribution in the amount of $230,737,
or $1.35 per unit.
On April 10, 1998, the Registrant invested $64,000 to obtain a 26.44% ownership
in M&J/Eden Prairie Limited Partnership, which has a 10% interest in Eden
Prairie LLC, which acquired a 70,689 square foot shopping center in Eden
Prairie, Minnesota.
19
<PAGE> 20
On April 30, 1998, three properties owned by M&J/Retail Limited Partnership
(Archer - Central, Irving - Kimball and Melrose - Kimball) had their mortgages
refinanced. The principal terms of the three loans are as follows:
<TABLE>
<CAPTION>
Principal Annual Amortization
Property Amount Interest Rate Schedule Maturity
-------- --------- ------------- ------------ --------
<S> <C> <C> <C> <C>
Archer - Central $ 2,350,000 7.40% 30 years 4/30/08
Irving - Kimball 1,325,000 7.58 30 years 4/30/08
Melrose - Kimball 991,000 7.58 30 years 4/30/08
</TABLE>
The existing mortgages in the amounts of $1,997,870, $1,316,725 and $1,135,099,
respectively, were paid off, resulting in net refinancing proceeds of $54,621.
By virtue of these refinancings, the aggregate annual debt service will be
reduced from $475,464 to $391,488.
On May 22, 1998, the Registrant made a loan of $125,175 to Arlington LLC. On
July 8, 1998, August 11, 1998, September 1, 1998, October 8, 1998, and December
21, 1998, loans in the amount of $375,179, $14,800, $314,650, $20,626 and
$150,688, respectively, were made, for a total loan receivable of $1,001,118.
The loan proceeds were used to facilitate the purchase of contiguous land
parcels adjacent to a shopping center in Arlington Heights, Illinois. Once the
required land is assembled, the shopping center will be expanded and
redeveloped, and the Registrant's loan will be converted to an equity position.
On June 8, 1998, a property owned by the Registrant, Naperville Office Court in
Naperville, Illinois, was refinanced with Column Financial. The principal amount
of the new first mortgage loan is $4,500,000 bearing interest at an annual rate
of 7.13%. The loan is to be amortized over a 30-year schedule, with a balloon
payment of the unpaid principal balance due on August 1, 2008. The existing
mortgage loan of $2,690,185 was paid off, resulting in net refinancing proceeds
of $1,642,123.
On June 26, 1998, the Registrant made a distribution in the amount of $401,652,
or $2.35 per unit.
On July 6, 1998, the property owned by the Registrant at 23 East Flagler Street
in Miami, Florida, was sold to G.S. Holding Company of South Florida for net
cash proceeds of $1,683,282, resulting in a gain on sale of $1,363,651,
classified as other income on the consolidated statement of operations.
On July 8, 1998, a property owned by M&J/Retail Limited Partnership, the Harlem
& North shopping center in Oak Park, Illinois, was refinanced. The principal
amount of the new first mortgage loan is $2,550,000 bearing interest at an
annual rate of 7.27%. The loan is to be amortized over a 30-year schedule, with
a balloon payment of the unpaid principal balance on July 1, 2008. The existing
mortgage loan of $2,104,641 was paid off, resulting in net refinancing proceeds
of $440,500.
On July 30, 1998, a property owned by the Registrant at 180 North Michigan
Avenue, Chicago, Illinois, was refinanced. The principal amount of the new first
mortgage loan is $7,300,000 bearing interest at an annual rate of 7.13%. The
loan is to be amortized over a 30-year schedule, with a balloon payment of the
unpaid principal balance due on September 1, 2008. The existing mortgage loan of
$6,733,888 was paid off, resulting in net refinancing proceeds of approximately
$400,000.
On September 8, 1998, a property owned by M&J/Retail Limited Partnership, Oak
Lawn Promenade shopping center in Oak Lawn, Illinois, was refinanced. The
principal of the new first mortgage loan is $2,790,000 bearing interest at an
annual rate of 7.25%. The loan is to be amortized over a 30-year schedule, with
a balloon payment of the unpaid principal balance on October 1, 2008. The
existing mortgage loan of $2,542,752 was paid off, resulting in net refinancing
proceeds of $31,675.
20
<PAGE> 21
On October 10, 1998, the Registrant paid off a loan payable to a general partner
and certain limited partners in the principal amount of $410,000 and $8,784 in
accrued interest.
On October 10, 1998, the Registrant made a distribution in the amount of
$59,821, or $.35 per unit.
21
<PAGE> 22
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.
22
<PAGE> 23
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 418 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.
23
<PAGE> 24
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.
24
<PAGE> 25
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.
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, 1999,
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, 1998, the amounts outstanding under this facility are
as follows:
<TABLE>
<S> <C>
Cash borrowings $ -
Letters of credit:
Waterfall Plaza/GE Capital
(expires 9/01/99) 80,000
209 W. Jackson/GE Capital
(expires 9/01/99) 150,000
Annex of Arlington/City of
Arlington (expires 11/15/99) 115,000
Annex of Arlington/GE Capital
(expires 11/15/99) 280,000
----------
Total Outstanding Amounts $ 625,000
==========
</TABLE>
The liquid assets of the Registrant increased as of December 31, 1998,
when compared to December 31, 1997, due to proceeds from sale of 23 East
Flagler.
The General Partners currently believe that the amount of working capital
reserves, when considered with the Registrant's projected cash flows from
operations in 1999 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, 1998 and 1997 29
Consolidated Statement of Operations,
Years Ended December 31, 1998, 1997 and 1996 30
Consolidated Statement of Partners' Capital,
Years Ended December 31, 1998, 1997 and 1996 31
Consolidated Statement of Cash Flows,
Years Ended December 31, 1998, 1997 and 1996 32
Notes to Consolidated Financial Statements,
December 31, 1998, 1997 and 1996 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 65. 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, 1998 and 1997, and the consolidated
results of their operations and their consolidated cash flows for the years
ended December 31, 1998, 1997 and 1996, 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 11, 1999
28
<PAGE> 29
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
DECEMBER 31, 1998 1997
- ------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
REAL ESTATE AND INVESTMENTS IN
REAL ESTATE PARTNERSHIPS
Real estate:
Land $ 5,998,791 $ 6,230,711
Buildings and improvements 46,755,663 46,862,244
Fixtures and equipment 113,106 116,955
----------- -----------
Total 52,867,560 53,209,910
Less accumulated depreciation 18,462,083 17,955,658
----------- -----------
Net Real Estate 34,405,477 35,254,252
Investments in real estate partnerships 3,960,550 3,642,820
----------- -----------
Total 38,366,027 38,897,072
----------- -----------
LOANS RECEIVABLE 1,847,019 849,934
----------- -----------
OTHER ASSETS
Cash 274,406 966,660
Short-term cash investments 4,825,000 2,220,000
Certificates of deposit - restricted 250,000 --
Accounts receivable 825,457 702,567
Prepaid expenses 3,837 818
Deposits 1,050,525 836,567
Deferred charges 1,339,072 911,756
----------- -----------
Total 8,568,297 5,638,368
----------- -----------
TOTAL ASSETS $48,781,343 $45,385,374
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
MORTGAGES AND LOANS PAYABLE
Mortgages payable $33,123,310 $30,653,730
Loans payable 11,027 672,975
----------- -----------
Total 33,134,337 31,326,705
----------- -----------
OTHER LIABILITIES
Accounts payable and accrued expenses 120,911 69,092
Accrued property taxes 2,353,683 2,378,995
Deferred state income taxes 200,000 200,000
Security deposits and prepaid rent 925,340 539,698
Accrued interest 34,500 72,847
----------- -----------
Total 3,634,434 3,260,632
----------- -----------
MINORITY INTEREST 1,715,413 1,685,777
----------- -----------
PARTNERS' CAPITAL (178,972 units in both 1998 and 1997
authorized and 170,916 units in both 1998 and 1997 issued) 10,297,159 9,112,260
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $48,781,343 $45,385,374
=========== ===========
</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, 1998 1997 1996
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUE
Rental $ 9,652,147 $ 9,200,711 $ 9,388,112
Interest 372,634 223,582 169,168
Other 1,395,420 91,896 316,876
------------ ------------ ------------
Total 11,420,201 9,516,189 9,874,156
------------ ------------ ------------
PARTNERSHIP INVESTMENTS' INCOME
Share of net income 518,297 1,823,771 409,843
Provision for loss in book value -- -- (273,000)
------------ ------------ ------------
Total 518,297 1,823,771 136,843
------------ ------------ ------------
EXPENSES
Operating 3,206,210 2,920,960 3,121,511
Real estate taxes 2,266,448 2,441,588 2,460,946
Depreciation and amortization 1,830,312 1,753,085 1,719,377
Interest 2,426,794 2,626,037 2,740,843
General and administrative 107,735 115,926 86,750
------------ ------------ ------------
Total 9,837,499 9,857,596 10,129,427
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS 2,100,999 1,482,364 (118,428)
MINORITY INTEREST IN SUBSIDIARIES'
NET INCOME (LOSS) (181,161) (346,203) 19,384
------------ ------------ ------------
NET INCOME (LOSS) $ 1,919,838 $ 1,136,161 $ (99,044)
============ ============ ============
UNITS - AUTHORIZED AND ISSUED
General Partner 7,650 7,550 7,174
Limited Partner 163,266 163,366 171,798
NET INCOME (LOSS) PER UNIT
General Partner $ 11.23 $ 6.42 $ (.55)
Limited Partner 11.23 6.42 (.55)
BOOK VALUE OF A UNIT
General Partner $ 60.25 $ 53.31 $ 49.12
Limited Partner 60.25 53.31 49.12
CASH DISTRIBUTIONS
General Partner $ 4.30 $ 2.75 $ --
Limited Partner 4.30 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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------------
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
------------ ------------ ------------
<S> <C> <C> <C>
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
Add (deduct):
Income for the year ended
December 31, 1998 85,930 1,833,908 1,919,838
To reflect changes in partnership
capital between general and limited
partners - net 9,100 (9,100) --
Cash distributions for the year ended
December 31, 1998 (32,895) (702,044) (734,939)
------------ ------------ ------------
BALANCE - DECEMBER 31, 1998 $ 478,752 $ 9,818,407 $ 10,297,159
============ ============ ============
</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, 1998 1997 1996
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 1,919,838 $ 1,136,161 $ (99,044)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 1,830,312 1,753,085 1,719,377
Amortization of debt forgiveness income (257,436) (71,903) (72,642)
Net gain on disposal of land, building
and improvements (1,363,651) -- (108,194)
Provision for loss in book value -- -- 273,000
Income from partnerships (518,297) (1,823,771) (409,843)
Changes in assets and liabilities:
Increase in accounts receivable and
prepaid expenses - net (125,909) (1,009) (21,370)
Increase in deposits (213,958) (121,514) (116,181)
Increase (decrease) in accounts payable
and accrued expenses 51,819 (113,883) (57,115)
Increase (decrease) in accrued property taxes (25,312) 50,069 26,838
Increase (decrease) in security deposits
and prepaid rent 385,642 135,191 (77,232)
Increase (decrease) in accrued interest (38,347) 3,737 (20,611)
----------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,644,701 946,163 1,036,983
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in restricted cash (250,000) -- --
Investment in land, building and
furniture and equipment (904,036) (1,189,437) (629,987)
Investment in partnerships (543,707) (449,769) (139,983)
Investments in loans receivable (1,001,118) (2,976) (74,635)
Investment in deferred charges (primarily
unamortized broker commissions) (824,447) (263,585) (308,956)
Proceeds from sale of real estate,
net of selling expenses 1,683,282 -- 3,836,988
Proceeds from sale of investment
in partnership/corporation -- 1,028,212 --
Partnership investment draws 744,274 2,782,557 227,299
Increase (decrease) in minority interest 29,636 236,003 (88,085)
Collection of notes receivable 4,033 377,316 303,000
----------- ----------- -----------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (1,062,083) 2,518,321 3,125,641
----------- ----------- -----------
</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, 1998 1997 1996
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of mortgages and notes payable $(19,740,932) $ (1,313,021) $ (3,857,920)
Proceeds from mortgage financing 21,805,999 22,490 10,316
Proceeds from loans payable -- 520,250 500,000
Distributions to partners (734,939) (492,173) --
Redemption of limited partnership units -- (322,240) --
------------ ------------ ------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 1,330,128 (1,584,694) (3,347,604)
------------ ------------ ------------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 1,912,746 1,879,790 815,020
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 3,186,660 1,306,870 491,850
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 5,099,406 $ 3,186,660 $ 1,306,870
============ ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid during the year $ 2,722,577 $ 2,694,203 $ 3,109,453
Write-off of fully depreciated
leasehold improvements 230,998 -- --
</TABLE>
See accompanying notes to consolidated financial statements. 33
<PAGE> 34
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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. 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.
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.
34
<PAGE> 35
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
The Partnership is working to resolve the potential impact of
the year 2000 on the ability of the Partnership's computerized
information systems to accurately process information that may
be date-sensitive. Any of the Partnership's programs that
recognize a date using "00" as the year 1900 rather than the
year 2000 could result in error or system failures. The
Partnership utilizes a number of computer programs across its
entire operation. The Partnership has not completed its
assessment but currently believes that costs of addressing
this will not have a material adverse impact on the
Partnership's financial position. However, no estimates can be
made as to the potential adverse impact resulting from the
failure of third-party service providers and vendors to
prepare for the year 2000. The Partnership is attempting to
identify those risks as well as to receive compliance
certificates from all third parties that have a material
impact on the Partnership's operations.
Debt forgiveness income was being amortized as a reduction of
interest expense over the remaining term of the related loan
using the effective interest method. This debt forgiveness
income was written off in 1998 upon loan refinancing.
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
</TABLE>
35
<PAGE> 36
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Property Method Life
-------- ------ ----
<S> <C> <C>
Freeport Office*
a. Building Straight Line 40 years
b. Improvements Straight Line Various
c. Furniture and equipment Straight Line Various
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
* The Freeport Office Building was sold in 1996.
</TABLE>
36
<PAGE> 37
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
L-C Office Partnership IV $ 6,085 $ -- $ --
XXI Office Plaza Associates 37,536 37,536 27,291
Hawdel Limited Partnership -- -- (163,664)(b)
M&J/Grove Limited Partnership (31,204) (31,205) 208,519
Rosemont 28 Limited Partnership (2,864) (2,865) (3,559)
M&J/Crossroads Limited Partnership 283,394 (12,527) (23,349)
M&J/Eden Prairie Limited Partnership 5,327(a) -- --
Duke Realty Limited Partnership 64,643(a) 876,332(c) 100,502(a)
M&J/Largo Limited Partnership -- 40,157(c) (119,000)(b)
222 Fee Associates 392(a) 290(a) 319(a)
5601 N. Sheridan Associates 1,008(a) 864(a) 576(a)
First Candlewick Associates 6,600(a) 6,050(a) 22,055(a)
Second Wilkow Venture 5,418(a) 6,107(a) 2,364(a)
Wilkow/Retail Partners Limited Partnership 165(a) 111(a) 120(a)
Lake Cook Office Development IV 49(a) -- --
M&J/Hotel Investors Limited Partnership 22,734(a) -- --
M&J/Mid Oak Limited Partnership 11,127(a) -- --
Northlake Tower Limited Partnership 107,887(a) 902,921(a) 84,669(a)
----------- ----------- -----------
$ 518,297 $ 1,823,771 $ 136,843
=========== =========== ===========
</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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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, 1998:
<TABLE>
<CAPTION>
Rosemont
28 XXI Office
Limited Plaza
Partnership Associates
----------- ----------
(d) (b)
<S> <C> <C>
BALANCE SHEET
Real estate - net of
accumulated depreciation $ $5,186,573
Current assets 1,675,224
Other assets 8,177
------ ----------
TOTAL ASSETS $ $6,869,974
====== ==========
Mortgages payable $ $1,902,315
Other liabilities 743,162
Partners' capital 4,224,497
------ ----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ $6,869,974
====== ==========
STATEMENT OF OPERATIONS
Revenue $ $1,699,441
Less: Operating expenses 940,032
Other expenses 234,805
Depreciation 429,628
------ ----------
NET INCOME $ $ 94,976
====== ==========
</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.
(e) Investment previously reported as Lake Cook Office Development.
38
<PAGE> 39
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
M&J/Grove Dover
Limited Farms
Partnership Apartments
----------- ----------
(d) (d)(e)
<S> <C> <C>
BALANCE SHEET
Real estate - net of
accumulated depreciation $ $
Current assets
Other assets
--------- ----------
TOTAL ASSETS $ $
========= ==========
Mortgages payable $ $
Other liabilities
Partners' capital (deficit)
--------- ----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) $ $
========= ==========
STATEMENT OF OPERATIONS
Revenue $ $
Less: Operating expenses
Other expenses
Depreciation
--------- ----------
NET INCOME (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.
(e) Investment previously reported as Lake Cook Office Development.
39
<PAGE> 40
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
Rosemont Sun Pointe
28 XXI Office Place
Limited Plaza Limited
Partnership Associates Partnership
----------- ---------- -----------
(a) (b) (a)
<S> <C> <C> <C>
BALANCE SHEET
Real estate - net of
accumulated depreciation $ 1,909,955 $ 5,075,548 $ 2,310,382
Current assets 4,272 1,912,065 226,179
Other assets 174 8,336 6,504
----------- ----------- -----------
TOTAL ASSETS $ 1,914,401 $ 6,995,949 $ 2,543,065
=========== =========== ===========
Mortgages payable $ -- $ 2,213,992 $ 125,231
Other liabilities 21,256 652,436 18,364
Partners' capital 1,893,145 4,129,521 2,399,470
----------- ----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 1,914,401 $ 6,995,949 $ 2,543,065
=========== =========== ===========
STATEMENT OF OPERATIONS
Revenue $ 103 $ 1,884,588 $ 251,921
Less: Operating expense 12,606 902,931 92,184
Other expenses -- 299,772 761
Depreciation -- 429,057 21,447
----------- ----------- -----------
NET INCOME (LOSS) $ (12,503) $ 252,828 $ 137,529
=========== =========== ===========
</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.
(e) Investment previously reported as Lake Cook Office Development.
40
<PAGE> 41
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2221 Camden
Court M&J/Grove Dover
Office Limited Farms
Building Partnership Apartments
------------ ----------- ----------
(a) (a) (a) (e)
<S> <C> <C> <C>
BALANCE SHEET
Real estate - net of
accumulated depreciation $ 6,866,362 $ 9,412,696 $13,735,688
Current assets 573,034 121,462 411,392
Other assets 272,705 179,861 801,899
----------- ----------- -----------
TOTAL ASSETS $ 7,712,101 $ 9,714,019 $14,948,979
=========== =========== ===========
Mortgages payable $ 8,082,869 $ 6,323,316 $14,225,895
Other liabilities 195,562 343,203 444,420
Partners' capital (deficit) (566,330) 3,047,500 278,664
----------- ----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) $ 7,712,101 $ 9,714,019 $14,948,979
=========== =========== ===========
STATEMENT OF OPERATIONS
Revenue $ 49,203 $ 1,654,463 $ 2,900,919
Less: Operating expenses 82,739 775,117 1,271,317
Other expenses 33,722 550,508 1,299,803
Depreciation 22,745 310,610 323,997
----------- ----------- -----------
NET INCOME (LOSS) $ (90,003) $ 18,228 $ 5,802
=========== =========== ===========
</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.
(e) Investment previously reported as Lake Cook Office Development.
41
<PAGE> 42
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996:
<TABLE>
<CAPTION>
Rosemont Sun Pointe
28 XXI Office Place
Limited Plaza Limited
Partnership Associates Partnership
----------- ---------- -----------
(a) (b) (a)
<S> <C> <C> <C>
BALANCE SHEET
Real estate - net of
accumulated depreciation $ 1,909,955 $ 5,421,987 $ 2,310,382
Current assets 1,846 1,543,617 226,179
Other assets 103 8,495 6,504
----------- ----------- -----------
TOTAL ASSETS $ 1,911,904 $ 6,974,099 $ 2,543,065
=========== =========== ===========
Mortgages payable $ -- $ 2,498,233 $ 125,231
Other liabilities 21,256 599,173 18,364
Partners' capital 1,890,648 3,876,693 2,399,470
----------- ----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 1,911,904 $ 6,974,099 $ 2,543,065
=========== =========== ===========
STATEMENT OF OPERATIONS
Revenue $ 307 $ 1,713,487 $ 755,131
Less: Operating expenses 15,830 931,886 521,987
Other expenses -- 164,015 13,242
Depreciation -- 432,710 176,469
----------- ----------- -----------
NET INCOME (LOSS) $ (15,523) $ 184,876 $ 43,433
=========== =========== ===========
</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.
(e) Investment previously reported as Lake Cook Office Development.
42
<PAGE> 43
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
2221 Camden
Court M&J/Grove Dover
Office Limited Farms
Building Partnership Apartments
----------- ----------- ----------
(a) (a) (a) (e)
<S> <C> <C> <C>
BALANCE SHEET
Real estate - net of
accumulated depreciation $ 6,866,362 $ 10,852,818 $ 15,006,791
Current assets 573,034 292,241 90,116
Other assets 272,705 15,000 158,619
------------ ------------ ------------
TOTAL ASSETS $ 7,712,101 $ 11,160,059 $ 15,255,526
============ ============ ============
Mortgages payable $ 8,082,869 $ 6,437,661 $ 14,400,686
Other liabilities 195,562 316,956 666,940
Partners' capital (deficit) (566,330) 4,405,442 187,900
------------ ------------ ------------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL (DEFICIT) $ 7,712,101 $ 11,160,059 $ 15,255,526
============ ============ ============
STATEMENT OF OPERATIONS
Revenue $ 1,784,216 $ 1,715,587 $ 1,488,804
Less: Operating expenses 770,142 701,826 766,642
Other expenses 698,901 690,101 770,648
Depreciation 385,505 303,516 187,045
------------ ------------ ------------
NET INCOME (LOSS) $ (70,332) $ 20,144 $ (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.
(e) Investment previously reported as Lake Cook Office Development.
43
<PAGE> 44
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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.
On February 25, 1999, the property was sold. The Partnership will not
receive any proceeds since the outstanding indebtedness on the property
is in excess of the sales price.
Hawdel Limited Partnership I and III
The Partnership had invested $1,320,000 to obtain 18.03% interests in
Hawdel Limited Partnership I and III, which owned 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.
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. 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.
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 was entitled to a 9%
cumulative cash flow priority on invested capital. 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.
44
<PAGE> 45
FIRST WILKOW VENTURE
(A Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 and 1996
- --------------------------------------------------------------------------------
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, 1998, 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 are 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.
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.
45
<PAGE> 46
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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, 1998.
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).
On January 6, 1999, a repayment of the first mortgage occurred. The
payment of the outstanding balance of $1,902,315 along with a
prepayment premium of $19,023 and contingent interest of $611,855 was
facilitated by a $2,585,875 capital call to the partners. The
Partnership's share of the capital call was $359,625.
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.
46
<PAGE> 47
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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 cotenancy 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. The Partnership contributed an additional
$175,097 in 1997 and $60,379 in 1998 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.
The property was acquired with a three-year first mortgage of
$4,550,000 bearing interest at 8.5% per annum. In October 1998, the
principal amount of proceeds available under the loan was increased by
$450,000. As of December 31, 1998, the principal amount of the loan
outstanding was $4,834,000.
47
<PAGE> 48
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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.
M&J/Eden Prairie Limited Partnership
On April 10, 1998, the Partnership invested $64,000 to obtain a 26.44%
ownership in M&J/Eden Prairie Limited Partnership, which has a 10%
interest in Eden Prairie LLC, which acquired a 70,689 square foot
shopping center in Eden Prairie, Minnesota.
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, 1998, 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, 1998, 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. An additional loss of $12,800 was
recognized in 1996.
48
<PAGE> 49
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
M&J/Retail Limited Partnership
The Partnership had 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 three 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 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 8, 1998,
M&J/Harlem Mortgage Limited Partnership refinanced the property with a
new first mortgage of $2,550,000 bearing interest at 7.27% per annum.
The loan matures July 1, 2008.
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. The loan was secured by Tower Corporation's partnership
interests in Tower and BSRT/M&J. On July 10, 1998, the loan was repaid
in full.
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. 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.
49
<PAGE> 50
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
The following is a summary of the financial position and results of
operations of the entities included in consolidation at December 31, 1998:
<TABLE>
<CAPTION>
M&J/ M&J/
Sheridan Retail
Limited Limited
Partnership Partnership
----------- -----------
<S> <C> <C>
BALANCE SHEET
Real estate - net of
accumulated depreciation $ 2,706,824 $18,339,164
Current assets 50,539 132,404
Other assets 55,748 2,272,004
----------- -----------
TOTAL ASSETS $ 2,813,111 $20,743,572
=========== ===========
Mortgages payable $ 1,365,748 $16,029,003
Other long-term payables 492,000 320,000
Current liabilities 188,132 1,387,406
Minority interest (114,265) 1,829,678
Partners' capital 881,496 1,177,485
----------- -----------
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 2,813,111 $20,743,572
=========== ===========
STATEMENT OF OPERATIONS
Revenue $ 420,280 $ 4,300,097
Less: Operating expenses 214,929 2,120,622
Other expenses 164,181 1,269,580
Depreciation 127,625 535,233
Minority interest (9,318) 190,479
----------- -----------
NET INCOME (LOSS) $ (77,137) $ 184,183
=========== ===========
</TABLE>
50
<PAGE> 51
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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
----------- -----------
<S> <C> <C>
BALANCE SHEET
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>
51
<PAGE> 52
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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
----------- ----------- -----------
<S> <C> <C> <C>
BALANCE SHEET
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>
52
<PAGE> 53
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
4 - LOANS RECEIVABLE - OTHER
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<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
December 31, 1999. 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
December 31, 1999. 15,091 15,091
Arlington LLC
Unsecured promissory note bearing interest at 9% issued in connection
with the purchase of land parcels in Arlington Heights, Illinois. The
note is due on December 31, 1999. 1,001,118 --
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. On July 10, 1998, the loan was repaid in full. -- 4,033
---------- ----------
$1,847,019 $ 849,934
========== ==========
</TABLE>
53
<PAGE> 54
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
5 - CERTIFICATES OF DEPOSIT
The Partnership considers certificates of deposit and commercial paper
with an original maturity of three months or less to be certificates
of deposit. Included in certificates of deposit at December 31, 1998,
are three commercial paper investments from LaSalle National
Corporation totaling $4,825,000, which mature on January 12, 1999. The
commercial paper is considered a held to maturity debt security and,
accordingly, is recorded at amortized cost, which approximates market
value.
54
<PAGE> 55
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
6 - MORTGAGES PAYABLE
The mortgages payable at December 31, 1998, consist of:
<TABLE>
<CAPTION>
PRINCIPAL PAYMENTS
OUTSTANDING -----------------------------------
ORIGINAL BALANCE DURING YEAR ENDED DECEMBER 31,
PRINCIPAL MONTHLY DECEMBER 31, -----------------------------------
AMOUNT PAYMENTS 1998 1999 2000 2001
----------- --------- ------------ -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
180 North Michigan, 7.13%
due monthly to September 1,
2008 (a) $7,300,000 $ 49,206 $7,274,875 $ 66,850 $ 71,846 $ 77,215
Naperville Office Court,
7.13% due monthly to
July 2008 (b) 4,500,000 30,337 4,481,725 41,417 43,759 47,770
Highland Park Medical Building,
8.88% due monthly to
October 1, 2001 (c) 1,425,000 12,711 1,365,748 32,562 35,574 1,297,612
Oak Lawn Promenade,
7.25% due monthly to
October 1, 2008 (d) 2,790,000 19,033 2,784,561 24,562 25,838 28,394
Oak Lawn Square,
8.53% due monthly to
April 1, 1999 (e) 890,000 7,335 693,730 693,730 -- --
Broadway - Berwyn, 8.20% due
monthly to July 31, 2000 (f) 2,750,000 23,346 2,541,331 70,517 2,470,814 --
Irving - Kimball, 7.58% due
monthly to April 30, 2008 (g) 1,325,000 9,337 1,317,099 11,122 11,714 12,940
Melrose - Kimball, 7.58% due
monthly to April 30, 2008 (h) 991,000 6,984 985,093 8,318 8,761 9,678
<CAPTION>
PRINCIPAL PAYMENTS
-------------------------------------------------
DURING YEAR ENDED DECEMBER 31,
------------------------------
2002 2003 THEREAFTER
----------- ------------- ------------
180 North Michigan, 7.13% <C> <C> <C>
due monthly to September 1,
2008 (a) $ 82,986 $ 89,188 $6,886,790
Naperville Office Court,
7.13% due monthly to
July 2008 (b) 51,340 55,176 4,242,263
Highland Park Medical Building,
8.88% due monthly to
October 1, 2001 (c) -- -- --
Oak Lawn Promenade,
7.25% due monthly to
October 1, 2008 (d) 30,553 32,876 2,642,338
Oak Lawn Square,
8.53% due monthly to
April 1, 1999 (e) -- -- --
Broadway - Berwyn, 8.20% due
monthly to July 31, 2000 (f) -- -- --
Irving - Kimball, 7.58% due
monthly to April 30, 2008 (g) 13,970 15,082 1,252,271
Melrose - Kimball, 7.58% due
monthly to April 30, 2008 (h) 10,448 11,280 936,608
</TABLE>
55
<PAGE> 56
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL PAYMENTS
OUTSTANDING -----------------------------
ORIGINAL BALANCE DURING YEAR ENDED DECEMBER 31,
PRINCIPAL MONTHLY DECEMBER 31, ------------------------------
AMOUNT PAYMENTS 1998 1999 2000
----------- --------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Archer - Central, 7.42% due
monthly to April 30, 2008 (i) $ 2,350,000 $ 16,303 $ 2,335,214 $ 20,477 $ 21,564
Diversey and Sheffield, 7.875%
due monthly to April 1, 1999 (j) 2,000,000 14,938 1,811,801 1,811,801 --
111th and Western,
8.25% due May 1, 1999 (k) 618,000 5,266 550,302 550,302 --
Evergreen Commons, 8.25% due
May 1, 1999 (l) 530,000 4,516 471,942 471,942 --
Harlem North Shopping Center,
7.27% due monthly to July 1,
2008 (m) 2,550,000 17,430 2,537,930 22,728 23,921
Waterfall Plaza, 9.65% due monthly
to April 1, 2002 (n) 2,100,000 12,232 2,268,444 -- --
47th and Halsted, 7% due monthly
to December 31, 2003 (o) 1,800,000 (o) 1,500,000 93,000 96,000
47th and Halsted, 4.96% due
at maturity on December 31,
2002 (p) 600,000 2,480 600,000 -- --
----------- ----------- -----------
TOTAL 33,519,795 $ 3,919,328 $ 2,809,791
=========== ===========
Fair market value
acquisition adjustment (n) (396,485)
-----------
TOTAL OUTSTANDING MORTGAGE BALANCE $33,123,310
===========
<CAPTION>
PRINCIPAL PAYMENTS
-----------------------------------------------------------------
DURING YEAR ENDED DECEMBER 31,
-----------------------------------------------
2001 2002 2003 THEREAFTER
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Archer - Central, 7.42% due
monthly to April 30, 2008 (i) $ 23,751 $ 25,601 $ 27,595 $ 2,216,226
Diversey and Sheffield, 7.875%
due monthly to April 1, 1999 (j) -- -- -- --
111th and Western,
8.25% due May 1, 1999 (k) -- -- -- --
Evergreen Commons, 8.25% due
May 1, 1999 (l) -- -- -- --
Harlem North Shopping Center,
7.27% due monthly to July 1,
2008 (m) 26,286 28,290 30,447 2,406,258
Waterfall Plaza, 9.65% due monthly
to April 1, 2002 (n) -- 2,268,444 -- --
47th and Halsted, 7% due monthly
to December 31, 2003 (o) 96,000 96,000 1,119,000 --
47th and Halsted, 4.96% due
at maturity on December 31,
2002 (p) -- 600,000 -- --
----------- ----------- ----------- -----------
TOTAL $ 1,619,646 $ 3,207,632 $ 1,380,644 $20,582,754
=========== =========== =========== ===========
Fair market value
acquisition adjustment (n)
TOTAL OUTSTANDING MORTGAGE BALANCE
</TABLE>
56
<PAGE> 57
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
(a) A balloon payment of $6,283,329 will be due September 1, 2008.
(b) A balloon payment of $3,946,123 will be due July 1, 2008.
(c) A balloon payment of $1,265,467 will be due October 1, 2001.
(d) A balloon payment of $2,453,725 will be due October 1, 2008.
(e) A balloon payment of $687,194 will be due April 1, 1999.
(f) A balloon payment of $2,413,643 will be due July 31, 2000.
(g) A balloon payment of $1,182,705 will be due April 30, 2008.
(h) A balloon payment of $884,574 will be due April 30, 2008.
(i) A balloon payment of $2,088,988 will be due April 30, 2008.
(j) A balloon payment of $1,805,684 will be due April 1, 1999.
(k) A balloon payment of $545,821 will be due May 1, 1999.
(l) A balloon payment of $468,099 will be due May 1, 1999.
(m) A balloon payment of $2,257,812 will be due July 1, 2008.
(n) A balloon payment of $2,268,444 will be due April 1, 2002. 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 February 1, 1999, and $8,000 from March 1, 1999,
to December 1, 2003, are to be made with the balance of $1,031,000
due on December 31, 2003.
(p) A balloon payment will be due on December 31, 2002.
57
<PAGE> 58
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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, 1998, 1997
and 1996, were $1,028,305, $853,890 and $907,244, respectively.
At December 31, 1998 and 1997, $23,969 and $39,785, 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, 1998, 1997 and
1996, to Wilkow & Wilkow, P.C. (a company owned by a general partner of the
Partnership) for services in the ordinary course of business were $33,343,
$32,787 and $37,901, respectively. For the years ended December 31, 1998,
1997 and 1996, $64,401, $84,731 and $62,792, 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 was due December 31,
1999. The loan was repaid on October 10, 1998, with interest accruing
through the date of repayment.
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 $11,027 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.
58
<PAGE> 59
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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.
Rental Income
Rental income received from M&J Wilkow, Ltd. (a company whose principal
shareholders are partners of the Partnership) was $175,530, $172,280 and
$172,279 for the years ended December 31, 1998, 1997 and 1996,
respectively, under a lease for office space.
8 - RENTALS RECEIVABLE UNDER OPERATING LEASES
Minimum future rentals receivable by the Partnership on noncancelable
operating leases as of December 31, 1998, are as follows:
<TABLE>
<CAPTION>
Year Ending
December 31, Total
------------ -------------
<S> <C>
1999 $ 6,509,000
2000 5,493,000
2001 4,445,000
2002 3,394,000
Thereafter 5,747,000
-------------
Total $ 25,588,000
=============
</TABLE>
9 - PARTNERS' CAPITAL
At December 31, 1998, general partner units totaled 7,650 units and the
general partners also beneficially owned 3,388 limited partner units.
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. After the redemption, there were 170,916 units
outstanding owned by 418 partners.
59
<PAGE> 60
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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, 1998, 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, 1999, 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, 1998, 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, had a $600,000 installment note facility
from LaSalle National Bank. The note paid interest at the prime rate plus
1% per annum. The outstanding note amount of $207,442 was repaid in full
in February 1998. See Note 3 for additional commitments and
contingencies.
As of December 31, 1998, the Partnership, through its investment in
M&J/Retail Limited Partnership, is required to maintain a certificate of
deposit of $250,000 with LaSalle National Bank. The certificate of
deposit is maintained as collateral for two $250,000 letters of credit
held by Market Fair North, of which M&J/Retail Limited Partnership is an
equity holder.
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.
These provisions were based upon market conditions and estimated future
cash flows.
60
<PAGE> 61
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
12 - SUBSEQUENT EVENTS
In January 1999, the Partnership made a distribution in the amount of
$59,821, or $.35 per unit.
In February 1999, the Partnership made a loan of $330,000 to Arlington
LLC.
In January 1999, the Partnership made a $359,625 capital contribution to
XXI Office Plaza Associates. This was the Partnership's share of a
$2,585,875 capital call made on December 23, 1998, by XXI Office Plaza
Associates. The proceeds were used to pay off the first mortgage.
In January 1999, the Partnership made temporary loans to the following
three partnerships:
<TABLE>
<CAPTION>
Partnership Amount
----------- --------------
<S> <C>
Orhow Associates $ 315,785
Cenbuil Venture 274,000
21st M&J Venture 413,740
</TABLE>
The loans are due on demand and earn interest at 9%. The three
partnerships' general partners are affiliated with the Partnership's
general partners.
61
<PAGE> 62
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:
<TABLE>
<CAPTION>
Name Position
---- --------
<S> <C>
Marc R. Wilkow General Partner
Clifton J. Wilkow General Partner
</TABLE>
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 49 General Counsel Brother of Clifton Wilkow
Partner
Clifton J. Wilkow General 46 None Brother of Marc Wilkow
Partner
</TABLE>
62
<PAGE> 63
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 16,181 9.47%
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, 1998:
<TABLE>
<CAPTION>
Amount
Beneficially Owned % of Owned
------------------ ----------
<S> <C> <C>
General Partnership Units 7,650 4.47%
Units of Limited
Partnership Interest 3,388 1.98%
</TABLE>
63
<PAGE> 64
(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, 1998, 1997 and
1996, were $1,028,305, $853,890 and $907,244, respectively (see Note 7 to
Consolidated Financial Statements).
Professional fees paid during the years ended December 31, 1998, 1997 and
1996, to Wilkow & Wilkow, P.C. for services in the ordinary course of business
were $33,343, $32,787 and $37,901, respectively.
Legal, tax and accounting services rendered in the years ended December
31, 1998, 1997 and 1996, by M&J Wilkow, Ltd. were $64,401, $84,731 and $62,792,
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.
64
<PAGE> 65
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:
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, 1998, 1997 and 1996 66
Schedule X - Supplementary Profit and Loss Information,
Years Ended December 31, 1998, 1997 and 1996 67
Schedule XI - Real Estate and Accumulated Depreciation,
Year Ended December 31, 1998 68
Notes to Schedule XI 72
Schedule XIII - Investments in, Equity in Earnings of, and
Drawings Received From Affiliates and Other Persons, Years
Ended December 31, 1998, 1997 and 1996 85
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 95
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during the year
ended December 31, 1998.
65
<PAGE> 66
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<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
----------- ----------- ------- ----------- ----------
<S> <C> <C> <C> <C> <C>
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 $ -- $ -- $ -- $ -- $ --
=========== ======= ======= =========== =======
YEAR ENDED DECEMBER 31, 1998
Reserve for bad debts $ -- $ -- $ -- $ -- $ --
=========== ======= ======= =========== =======
Reserve for losses on loans $ -- $ -- $ -- $ -- $ --
=========== ======= ======= =========== =======
Reserve for valuation of investments $ -- $ -- $ -- $ -- $ --
=========== ======= ======= =========== =======
</TABLE>
66
<PAGE> 67
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE X - SUPPLEMENTARY PROFIT AND LOSS INFORMATION
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998 1997 1996
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. REPAIRS AND MAINTENANCE
Name of property:
180 North Michigan Avenue $ 412,461 $ 386,750 $ 427,928
Naperville 51,569 46,011 45,433
Freeport Office -- -- 22,555
Highland Park 44,448 55,057 64,468
Waterfall Plaza 13,600 6,687 7,313
Ten Retail Centers 146,680 89,549 114,989
---------- ---------- ----------
TOTAL $ 668,758 $ 584,054 $ 682,686
========== ========== ==========
2. DEPRECIATION, DEPLETION AND AMORTIZATION
OF FIXED AND INTANGIBLE ASSETS
Depreciation expense $1,433,181 $1,412,264 $1,384,141
Amortization expense 397,131 340,821 335,236
---------- ---------- ----------
TOTAL $1,830,312 $1,753,085 $1,719,377
========== ========== ==========
3. TAXES, OTHER THAN INCOME TAXES
Real estate taxes:
23 East Flagler - Department Store $ -- $ 62,753 $ 63,937
Fairplay Foods 238,367 235,062 218,820
Freeport Office -- -- 9,451
180 North Michigan Avenue 601,479 730,583 682,999
Naperville Office Court 110,121 111,196 103,278
Highland Park 48,201 44,170 44,219
Ten Retail Centers 1,133,580 1,118,974 1,163,665
Waterfall Plaza 134,700 138,850 142,401
Land - Fort Myers -- -- 32,176
---------- ---------- ----------
Total 2,266,448 2,441,588 2,460,946
Payroll taxes -- -- 14,453
Florida sales taxes 5,965 4,478 4,371
---------- ---------- ----------
TOTAL $2,272,413 $2,446,066 $2,479,770
========== ========== ==========
4. MANAGEMENT FEES $ 683,536 $ 655,936 $ 734,716
========== ========== ==========
5. RENTS
Ground rent - 180 North Michigan Avenue $ 11,855 $ 11,855 $ 13,549
========== ========== ==========
</TABLE>
67
<PAGE> 68
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INITIAL COST TO COST CAPITALIZED
COMPANY SUBSEQUENT TO ACQUISITION
------------------------ -------------------------
BUILDINGS
AND CARRYING
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS IMPROVEMENTS COST
----------- ------------ ---------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Fairplay Foods, Shopping
Chicago, Illinois Center $2,100,000 $ 429,877 $1,562,842 $ -- $ --
Naperville Office Court, Office
Naperville, Illinois Building 4,481,725 1,796,459 3,321,535 2,211,048 --
180 North Michigan Avenue, Office
Chicago, Illinois Building 7,274,875 1,061,120 6,550,000 6,327,269 --
Highland Park, Office
Highland Park, Illinois Building (A) 1,365,748 158,000 2,028,750 1,664,600 --
Waterfall Plaza, Shopping
Orland Park, Illinois Center 1,871,960 317,400 1,165,643 506,677 --
</TABLE>
68
<PAGE> 69
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INITIAL COST TO
COMPANY COST CAPITALIZED
-------------------------- SUBSEQUENT TO ACQUISITION
BUILDINGS ----------------------------
AND CARRYING
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS IMPROVEMENTS COST
----------- ------------ ----------- -------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Ten Strip Shopping Centers:
Oak Lawn Promenade, Shopping
Oak Lawn, Illinois Center (B) $ 2,784,561 $ 429,456 $ 3,865,100 $ 101,192 $ --
Oak Lawn Square, Shopping
Oak Lawn, Illinois Center (B) 693,730 136,325 1,226,921 206,408 --
Broadway Festival, Shopping
Chicago, Illinois Center (B) 2,541,331 355,696 3,201,267 244,484 --
Irving Kimball, Shopping
Chicago, Illinois Center (B) 1,317,099 180,521 1,624,686 197,597 --
Melrose Kimball, Shopping
Chicago, Illinois Center (B) 985,093 155,195 1,396,752 -- --
Archer Central, Shopping
Chicago, Illinois Center (B) 2,335,214 267,483 2,407,344 210,202 --
Evergreen Commons, Shopping
Evergreen Park, Illinois Center (B) 471,942 70,307 632,760 46,033 --
111 and Western, Shopping
Chicago, Illinois Center (B) 550,302 76,295 686,652 33,279 --
Diversey and Sheffield, Shopping
Chicago, Illinois Center (B) 1,811,800 254,657 2,291,911 67,115 --
Harlem North Shopping Center, Shopping
Oak Park, Illinois Center (B) 2,537,930 310,000 2,790,000 187,596 --
----------- ----------- ----------- ----------- ---------
Total $33,123,310 $ 5,998,791 $34,752,163 $12,003,500 $ --
=========== =========== =========== =========== =========
</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.
69
<PAGE> 70
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT
DECEMBER 31, 1998
---------------------------------------
BUILDINGS LIFE ON WHICH
AND ACCUMULATED DATE OF DATE DEPRECIATION IS
LAND IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED
----------- ------------ ----------- ------------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fairplay Foods,
Chicago, Illinois $ 429,877 $ 1,562,842 $ 1,992,719 $ 1,562,842 1963 1968 25 Years
Naperville Office
Naperville, Illinois 1,796,459 5,532,583 7,329,042 2,152,479 1980 1986 25 Years
180 North Michigan Avenue,
Chicago, Illinois 1,061,120 12,877,269 13,938,389 7,965,439 1926 1968 35 Years
Renovated in 1967
Highland Park,
Highland Park, Illinois 158,000 3,693,350 3,851,350 1,144,526 1931 1988 30 Years
Renovated in 1972
Waterfall Plaza,
Orland Park, Illinois 317,400 1,672,320 1,989,720 226,512 1980 1993 40 Years
</TABLE>
70
<PAGE> 71
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROSS AMOUNT AT WHICH CARRIED AT
DECEMBER 31, 1998
---------------------------------------
BUILDINGS LIFE ON WHICH
AND ACCUMULATED DATE OF DATE DEPRECIATION IS
LAND IMPROVEMENTS TOTAL DEPRECIATION CONSTRUCTION ACQUIRED COMPUTED
----------- ------------ ----------- ------------ ------------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ten Strip Shopping Centers:
Oak Lawn Promenade,
Oak Lawn, Illinois $ 429,456 $ 3,966,292 $ 4,395,748 $ 1,156,943 1986 1987 40 Years
Oak Lawn Square,
Oak Lawn, Illinois 136,325 1,433,329 1,569,654 377,441 1982 1987 40 Years
Broadway Festival,
Chicago, Illinois 355,696 3,445,751 3,801,447 949,849 1984 1987 40 Years
Irving Kimball,
Chicago, Illinois 180,521 1,822,283 2,002,804 447,207 1987 1988 40 Years
Melrose Kimball,
Chicago, Illinois 155,195 1,396,752 1,551,947 375,380 1987 1988 40 Years
Archer Central,
Chicago, Illinois 267,483 2,617,546 2,885,029 682,328 1985 1988 40 Years
Evergreen Commons,
Evergreen Park, Illinois 70,307 678,793 749,100 173,004 1987 1988 40 Years
111 and Western,
Chicago, Illinois 76,295 719,931 796,226 186,730 1987 1988 40 Years
Diversey and Sheffield,
Chicago, Illinois 254,657 2,359,026 2,613,683 575,953 1984 1989 40 Years
Harlem North Shopping Center,
Oak Park, Illinois 310,000 2,977,596 3,287,596 395,579 1980 1993 40 Years
----------- ----------- ----------- -----------
TOTAL $ 5,998,791 $46,755,663 $52,754,454 $18,372,212
=========== =========== =========== ===========
</TABLE>
71
<PAGE> 72
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
1 - RECONCILIATION OF COSTS OF REAL ESTATE DURING EACH
OF THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<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>
BUILDINGS AND IMPROVEMENTS -
YEAR ENDED DECEMBER 31, 1998
23 East Flagler - Department Store,
Miami, Florida $ 783,469 $ -- $ 783,469 $ -- $ --
Fairplay Foods,
Chicago, Illinois 1,562,842 -- -- -- 1,562,842
Naperville Office Court,
Naperville, Illinois 5,332,777 199,806 -- -- 5,532,583
180 North Michigan Avenue,
Chicago, Illinois 12,690,030 414,387 227,148 -- 12,877,269
Freeport Office,
Dallas, Texas -- -- -- -- --
Highland Park,
Highland Park, Illinois 3,646,185 47,165 -- -- 3,693,350
Waterfall Plaza,
Orland Park, Illinois 1,672,320 -- -- -- 1,672,320
</TABLE>
72
<PAGE> 73
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<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 $ 3,966,292 $ -- $ -- $ -- $ 3,966,292
Oak Lawn Square,
Oak Lawn, Illinois 1,394,843 38,486 -- -- 1,433,329
Broadway Festival,
Chicago, Illinois 3,358,499 87,252 -- -- 3,445,751
Irving Kimball,
Chicago, Illinois 1,817,964 4,319 -- -- 1,822,283
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 26,033 -- -- 678,793
111 and Western,
Chicago, Illinois 719,931 -- -- -- 719,931
Diversey and Sheffield,
Chicago, Illinois 2,307,879 51,147 -- -- 2,359,026
Harlem North Shopping Center,
Oak Park, Illinois 2,942,155 35,441 -- -- 2,977,596
----------- ----------- ----------- ---------- -----------
TOTAL $46,862,244 $ 904,036 $ 1,010,617 $ -- $46,755,663
=========== =========== =========== ========== ===========
</TABLE>
73
<PAGE> 74
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
1 - RECONCILIATION OF COSTS OF REAL ESTATE DURING EACH
OF THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 - Continued
<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>
BUILDINGS AND IMPROVEMENTS -
YEAR ENDED DECEMBER 31, 1997
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>
74
<PAGE> 75
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<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 $ 3,894,692 $ 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>
75
<PAGE> 76
FIRST WILKOW
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
1 - RECONCILIATION OF COSTS OF REAL ESTATE DURING EACH
OF THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 - Continued
<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>
BUILDINGS AND IMPROVEMENTS -
YEAR ENDED DECEMBER 31, 1996
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>
76
<PAGE> 77
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<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>
77
<PAGE> 78
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
2 - RECONCILIATIONS OF ACCUMULATED DEPRECIATION OF REAL ESTATE
DURING EACH OF THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<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>
YEAR ENDED DECEMBER 31, 1998
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 1,936,004 216,475 - - 2,152,479
180 North Michigan Avenue,
Chicago, Illinois 7,688,546 504,041 227,148 - 7,965,439
Freeport Office,
Dallas, Texas - - - - -
Highland Park,
Highland Park, Illinois 1,016,901 127,625 - - 1,144,526
Waterfall Plaza,
Orland Park, Illinois 184,704 41,808 - - 226,512
</TABLE>
78
<PAGE> 79
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<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 $ 1,057,786 $ 99,157 $ - $ - $ 1,156,943
Oak Lawn Square,
Oak Lawn, Illinois 342,188 35,253 - - 377,441
Broadway Festival,
Chicago, Illinois 864,757 85,092 - - 949,849
Irving Kimball,
Chicago, Illinois 402,598 44,609 - - 447,207
Melrose Kimball,
Chicago, Illinois 340,461 34,919 - - 375,380
Archer Central,
Chicago, Illinois 616,889 65,439 - - 682,328
Evergreen Commons,
Evergreen Park, Illinois 156,487 16,517 - - 173,004
111 and Western,
Chicago, Illinois 167,858 18,872 - - 186,730
Diversey and Sheffield,
Chicago, Illinois 517,402 58,551 - - 575,953
Harlem North Shopping Center,
Oak Park, Illinois 321,222 74,357 - - 395,579
------------- ----------- ----------- ------------- -------------
TOTAL $ 17,872,404 $1,422,715 $ 922,907 $ - $ 18,372,212
============= =========== =========== ============= =============
</TABLE>
79
<PAGE> 80
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
2 - RECONCILIATIONS OF ACCUMULATED DEPRECIATION OF REAL ESTATE
DURING EACH OF THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<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>
YEAR ENDED DECEMBER 31, 1997
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>
80
<PAGE> 81
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<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>
81
<PAGE> 82
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
2 - RECONCILIATIONS OF ACCUMULATED DEPRECIATION OF REAL ESTATE
DURING EACH OF THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<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>
YEAR ENDED DECEMBER 31, 1996
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>
82
<PAGE> 83
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<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 $ 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>
83
<PAGE> 84
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
- --------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
3 - BASIS OF REAL ESTATE FOR FEDERAL INCOME TAX PURPOSES
<TABLE>
<CAPTION>
BUILDINGS
AND
LAND IMPROVEMENTS
---- ------------
(A)
<S> <C> <C>
First Wilkow Venture:
Fairplay Foods $ 510,456 $ 259,368
180 North Michigan Avenue 1,081,659 4,901,044
Naperville Office Court 303,842 1,991,951
Waterfall Plaza 243,321 565,299
----------- ------------
Subtotal 2,139,278 7,717,662
----------- ------------
Subsidiaries:
Highland Park 158,000 2,728,235
Ten Strip Centers:
Harlem North 321,384 2,687,539
Oak Lawn Promenade 429,456 2,809,347
Oak Lawn Square 136,325 1,055,891
Broadway Festival 355,696 2,495,899
Irving Kimball 180,521 1,340,106
Melrose Kimball 155,195 1,021,372
Archer Central 267,483 1,935,219
Evergreen Commons 70,307 505,788
111 and Western 76,295 568,163
Diversey and Sheffield 254,657 1,783,077
----------- ------------
Subtotal 2,405,319 18,930,636
----------- ------------
Total Consolidated $ 4,544,597 $ 26,648,298
=========== ============
</TABLE>
(A) Net of accumulated depreciation
84
<PAGE> 85
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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C
-------- -------- --------
BALANCE AT ADDITIONS
BEGINNING OF ---------------------------
YEAR INCOME OTHER
------------- ------------ ----------
<S> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
Registrant:
L-C Office Partnership IV $ 175,097 $ 6,085 $60,379 (A)
Realdal Venture -- -- --
M&J/Westwood Limited Partnership -- -- --
XXI Office Plaza Associates 471,471 37,536 --
M&J/Quorum Associates -- -- --
Hawdel Limited Partnership -- -- --
M&J/Grove Limited Partnership 557,023 -- --
Rosemont 28 Limited Partnership 558,092 -- 3,896 (A)
First Ron Venture -- -- --
TOP Investors Limited Partnership -- -- --
---------- ---------- -------
Total Registrant 1,761,683 43,621 64,275
M&J/Crossroads Limited Partnership (B) 217,673 283,394 --
---------- ---------- -------
TOTAL INVESTMENTS - EQUITY METHOD $1,979,356 $ 327,015 $64,275
========== ========== =======
</TABLE>
<TABLE>
<CAPTION>
COLUMN D COLUMN E
-------- --------
DEDUCTIONS BALANCE
-------------------------------------- AT END
LOSS DRAWS OTHER OF YEAR
----------- ---------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
Registrant:
L-C Office Partnership IV $ -- $ 6,085 $ -- $ 235,476
Realdal Venture -- -- -- --
M&J/Westwood Limited Partnership -- -- -- --
XXI Office Plaza Associates -- -- -- 509,007
M&J/Quorum Associates -- -- -- --
Hawdel Limited Partnership -- -- -- --
M&J/Grove Limited Partnership 31,204 11,772 -- 514,047
Rosemont 28 Limited Partnership 2,864 -- -- 559,124
First Ron Venture -- -- -- --
TOP Investors Limited Partnership -- -- -- --
-------- -------- -------- ----------
Total Registrant 34,068 17,857 -- 1,817,654
M&J/Crossroads Limited Partnership (B) -- 501,067 -- --
-------- -------- -------- ----------
TOTAL INVESTMENTS - EQUITY METHOD $ 34,068 $518,924 $ -- $1,817,654
======== ======== ======== ==========
</TABLE>
(A) Additional investment.
(B) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
85
<PAGE> 86
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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998:
COLUMN A COLUMN B COLUMN C
-------- -------- --------
BALANCE AT ADDITIONS
BEGINNING OF ---------------------------
YEAR INCOME OTHER
------------- ------------ ----------
<S> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD
M&J/Eden Prairie Limited Partnership $ - $ 5,327 $64,000 (B)
Duke Realty Limited Partnership 235,654 64,643 -
Metro Class A Investors Limited
Partnership - - -
Park 100 Equity Investors Limited
Partnership - - -
Park 100 Mortgage Investors Limited
Partnership - - -
M&J/Largo Limited Partnership - - -
North LaSalle Street Limited Partnership - - -
Second Daltex Venture - - -
21st M&J Associates 99,900 - -
222 Fee Associates 6,728 392 -
5601 N. Sheridan Associates 29,916 1,008 -
First Candlewick Associates 125,950 6,600 -
M&J/Two Market Limited Partnership - - -
Orhow Associates 70,000 - -
Second Wilkow Venture 64,813 5,418 -
Wilkow/Retail Partners Limited Partnership 2,799 165 -
544 Arizona Associates - - -
Lake Cook Office Development IV 1,224 49 422 (B)
M&J/Hotel Investors Limited Partnership 200,000 22,734 - (B)
M&J/Mid Oak Limited Partnership 70,000 11,127 - (B)
Mid Oak Plaza LLC - - 10 (B)
</TABLE>
<TABLE>
<CAPTION>
COLUMN D COLUMN E
-------- --------
DEDUCTIONS BALANCE
-------------------------------------- AT END
LOSS DRAWS OTHER OF YEAR
----------- ---------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
M&J/Eden Prairie Limited Partnership $ - $ 5,327 $ - $ 64,000
Duke Realty Limited Partnership - 64,643 - 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 - - - -
North LaSalle Street Limited Partnership - - - -
Second Daltex Venture - - - -
21st M&J Associates - - - 99,900
222 Fee Associates - 392 - 6,728
5601 N. Sheridan Associates - 1,008 - 29,916
First Candlewick Associates - 6,600 - 125,950
M&J/Two Market Limited Partnership - - - -
Orhow Associates - - - 70,000
Second Wilkow Venture - 5,418 - 64,813
Wilkow/Retail Partners Limited Partnership - 165 - 2,799
544 Arizona Associates - - - -
Lake Cook Office Development IV - 49 - 1,646
M&J/Hotel Investors Limited Partnership - 22,734 - 200,000
M&J/Mid Oak Limited Partnership - 11,127 - 70,000
Mid Oak Plaza LLC - - - 10
</TABLE>
86
<PAGE> 87
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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1998:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C
-------- -------- --------
BALANCE AT ADDITIONS
BEGINNING OF ---------------------------
YEAR INCOME OTHER
------------- ------------ ----------
<S> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD - Continued
Registrant:
Fifth Arizona Associates -- $ -- $ --
Fifth Orlando Associates -- -- --
Monterey Village Associates -- -- --
Pre-Vest Associates -- -- --
Seventh M&J Associates -- -- --
First Apollo Associates -- -- --
M&J/LaSalle Limited Partnership 6,480 -- --
Wilkow/Grove Limited Partnership -- -- --
Wilkow/Metro Partners Limited
Partnership -- -- --
---------- ---------- ----------
Total Registrant 913,464 117,463 64,432
M&J/Clarkfair Limited Partnership (A) -- -- 415,000 (B)
Northlake Tower Limited Partnership (A) 750,000 107,887 --
---------- ---------- ----------
TOTAL INVESTMENTS - COST METHOD $1,663,464 $ 225,350 $ 479,432
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
COLUMN D COLUMN E
-------- --------
DEDUCTIONS BALANCE
-------------------------------------- AT END
LOSS DRAWS OTHER OF YEAR
----------- ---------- -------- ----------
<S> <C> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD - Continued
Registrant:
Fifth Arizona Associates $ -- $ -- $ -- $ --
Fifth Orlando Associates -- -- -- --
Monterey Village Associates -- -- -- --
Pre-Vest Associates -- -- -- --
Seventh M&J Associates -- -- -- --
First Apollo Associates -- -- -- --
M&J/LaSalle Limited Partnership -- -- -- 6,480
Wilkow/Grove Limited Partnership -- -- -- --
Wilkow/Metro Partners Limited
Partnership -- -- -- --
---------- ----------- ---------- ----------
Total Registrant -- 117,463 -- 977,896
M&J/Clarkfair Limited Partnership (A) -- -- -- 415,000
Northlake Tower Limited Partnership (A) -- 107,887 -- 750,000
---------- ----------- ---------- ----------
TOTAL INVESTMENTS - COST METHOD $ -- $225,350 $ -- $2,142,896
========== =========== ========== ==========
</TABLE>
(A) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
(B) Additional investment.
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, 1998, 1997 and 1996
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C
-------- -------- --------
BALANCE AT ADDITIONS
BEGINNING OF ---------------------------
YEAR INCOME OTHER
------------- ------------ ----------
<S> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
Registrant:
L-C Office Partnership IV $ -- $ -- $175,097 (A)
Realdal Venture -- -- --
M&J/Westwood Limited Partnership -- -- --
XXI Office Plaza Associates 433,935 37,536 --
M&J/Quorum Associates -- -- --
Hawdel Limited Partnership 690,350 -- --
M&J/Grove Limited Partnership 600,000 -- --
Rosemont 28 Limited Partnership 557,519 -- 3,438 (A)
First Ron Venture -- -- --
TOP Investors Limited Partnership -- -- --
---------- ------- --------
Total Registrant 2,281,804 37,536 178,535
M&J/Crossroads Limited Partnership (B) 259,900 -- --
---------- ------- --------
TOTAL INVESTMENTS - EQUITY METHOD $2,541,704 $37,536 $178,535
========== ======= ========
</TABLE>
<TABLE>
<CAPTION>
COLUMN D COLUMN E
-------- --------
DEDUCTIONS BALANCE
-------------------------------------- AT END
LOSS DRAWS OTHER OF YEAR
----------- ---------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
Registrant:
L-C Office Partnership IV $ -- $ -- $ -- $ 175,097
Realdal Venture -- -- -- --
M&J/Westwood Limited Partnership -- -- -- --
XXI Office Plaza Associates -- -- -- 471,471
M&J/Quorum Associates -- -- -- --
Hawdel Limited Partnership -- 690,350 -- --
M&J/Grove Limited Partnership 31,205 11,772 -- 557,023
Rosemont 28 Limited Partnership 2,865 -- -- 558,092
First Ron Venture -- -- -- --
TOP Investors Limited Partnership -- -- -- --
--------- ---------- --------- ----------
Total Registrant 34,070 702,122 -- 1,761,683
M&J/Crossroads Limited Partnership (B) 12,527 29,700 -- 217,673
--------- ---------- --------- ----------
TOTAL INVESTMENTS - EQUITY METHOD $ 46,597 $ 731,822 $ -- $1,979,356
========= ========== ========= ==========
</TABLE>
(A) Additional investment.
(B) Investment is owned by M&J/Retail Limited Partnership, which is
consolidated with the Registrant.
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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C
-------- -------- --------
BALANCE AT ADDITIONS
BEGINNING OF ---------------------------
YEAR INCOME OTHER
------------- ------------ ----------
<S> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD
Duke Realty Limited Partnership $ 468,904 $ 876,332 (C) $ --
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) --
North LaSalle Street Limited Partnership -- -- --
Second Daltex Venture -- -- --
21st M&J Associates 99,900 -- --
222 Fee Associates 6,728 290 --
5601 N. Sheridan Associates 29,916 864 --
First Candlewick Associates 125,950 6,050 --
M&J/Two Market Limited Partnership -- -- --
Orhow Associates 70,000 -- --
Second Wilkow Venture 64,813 6,107 --
Wilkow/Retail Partners Limited Partnership 2,799 111 --
544 Arizona Associates -- -- --
Lake Cook Office Development IV -- -- 1,224 (B)
M&J/Hotel Investors Limited Partnership -- -- 200,000 (B)
M&J/Mid Oak Limited Partnership -- -- 70,000 (B)
</TABLE>
<TABLE>
<CAPTION>
COLUMN D COLUMN E
-------- --------
DEDUCTIONS BALANCE
-------------------------------------- AT END
LOSS DRAWS OTHER OF YEAR
----------- ---------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD
Duke Realty Limited Partnership $ -- $ 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 -- 6 15,384 -- --
North LaSalle Street Limited Partnership -- -- -- --
Second Daltex Venture -- -- -- --
21st M&J Associates -- -- -- 99,900
222 Fee Associates -- 290 -- 6,728
5601 N. Sheridan Associates -- 864 -- 29,916
First Candlewick Associates -- 6,050 -- 125,950
M&J/Two Market Limited Partnership -- -- -- --
Orhow Associates -- -- -- 70,000
Second Wilkow Venture -- 6,107 -- 64,813
Wilkow/Retail Partners Limited Partnership -- 111 -- 2,799
544 Arizona Associates -- -- -- --
Lake Cook Office Development IV -- -- -- 1,224
M&J/Hotel Investors Limited Partnership -- -- -- 200,000
M&J/Mid Oak Limited Partnership -- -- -- 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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C
-------- -------- --------
BALANCE AT ADDITIONS
BEGINNING OF ---------------------------
YEAR INCOME OTHER
------------- ------------ ----------
<S> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD - Continued
Registrant:
Fifth Arizona Associates $ -- $ -- $ --
Fifth Orlando Associates -- -- --
Monterey Village Associates -- -- --
Pre-Vest Associates -- -- --
Seventh M&J Associates -- -- --
First Apollo Associates -- -- --
M&J/LaSalle Limited Partnership 6,480 -- --
Wilkow/Grove Limited Partnership -- -- --
Wilkow/Metro Partners Limited
Partnership -- -- --
---------- ---------- ----------
Total Registrant 1,450,717 929,911 271,224
Northlake Tower Limited Partnership (A) 1,187,628 902,921 --
---------- ---------- ----------
TOTAL INVESTMENTS - COST METHOD $2,638,345 $1,832,832 $ 271,224
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
COLUMN D COLUMN E
-------- --------
DEDUCTIONS BALANCE
-------------------------------------- AT END
LOSS DRAWS OTHER OF YEAR
----------- ---------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD - Continued
Registrant:
Fifth Arizona Associates $ -- $ -- $ -- $ --
Fifth Orlando Associates -- -- -- --
Monterey Village Associates -- -- -- --
Pre-Vest Associates -- -- -- --
Seventh M&J Associates -- -- -- --
First Apollo Associates -- -- -- --
M&J/LaSalle Limited Partnership -- -- -- 6,480
Wilkow/Grove Limited Partnership -- -- -- --
Wilkow/Metro Partners Limited
Partnership -- -- -- --
---------- ---------- ---------- ----------
Total Registrant -- 710,111 1,028,277 913,464
Northlake Tower Limited Partnership (A) -- 1,340,549 -- 750,000
---------- ---------- ---------- ----------
TOTAL INVESTMENTS - COST METHOD $ -- $2,050,660 $1,028,277 $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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996:
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C
-------- -------- --------
BALANCE AT ADDITIONS
BEGINNING OF ---------------------------
YEAR INCOME OTHER
------------- ------------ ----------
<S> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
Registrant:
L-C Office Partnership IV $ - $ -- $ --
Realdal Venture - -- --
M&J/Westwood Limited Partnership - -- --
XXI Office Plaza Associates 406,644 27,291
M&J/Quorum Associates - -- --
Hawdel Limited Partnership 854,014 -- --
M&J/Grove Limited Partnership 296,324 208,519 98,100 (A)
Rosemont 28 Limited Partnership 557,182 -- 3,896 (A)
First Ron Venture - -- --
TOP Investors Limited Partnership - -- --
---------- -------- ---------
Total Registrant 2,114,164 235,810 101,996
M&J/Crossroads Limited Partnership (B) 297,000 -- --
---------- -------- ---------
TOTAL INVESTMENTS - EQUITY METHOD $2,411,164 $235,810 $ 101,996
========== ======== =========
</TABLE>
<TABLE>
<CAPTION>
COLUMN D COLUMN E
-------- --------
DEDUCTIONS BALANCE
-------------------------------------- AT END
LOSS DRAWS OTHER OF YEAR
----------- ---------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE EQUITY METHOD
Registrant:
L-C Office Partnership IV $ -- $ -- $ -- $ --
Realdal Venture -- -- -- --
M&J/Westwood Limited Partnership -- -- -- --
XXI Office Plaza Associates -- -- -- 433,935
M&J/Quorum Associates -- -- -- --
Hawdel Limited Partnership 163,664 (C) -- -- 690,350
M&J/Grove Limited Partnership -- 2,943 -- 600,000
Rosemont 28 Limited Partnership 3,559 -- -- 557,519
First Ron Venture -- -- -- --
TOP Investors Limited Partnership -- -- -- --
-------- ------- ------- ----------
Total Registrant 167,223 2,943 -- 2,281,804
M&J/Crossroads Limited Partnership (B) 23,349 13,751 -- 259,900
-------- ------- ------- ----------
TOTAL INVESTMENTS - EQUITY METHOD $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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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
------------- ------------ ---------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD
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 Limited Partnership 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, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
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
------------- ------------ ---------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENTS IN PARTNERSHIPS ACCOUNTED
FOR BY THE COST METHOD - Continued
Registrant:
Fifth Arizona Associates $ -- $ -- $ -- $ -- $ -- $ -- $ --
Fifth Orlando Associates -- -- -- -- -- -- --
Monterey Village Associates -- -- -- -- -- -- --
Pre-Vest Associates -- -- -- -- -- -- --
Seventh M&J Associates -- -- -- -- -- -- --
First Apollo Associates -- -- -- -- -- -- --
M&J/LaSalle Limited Partnership 6,480 -- -- -- -- -- 6,480
Wilkow/Grove Limited Partnership -- -- -- -- -- -- --
Wilkow/Metro Partners Limited
Partnership -- -- -- -- -- -- --
---------- -------- ------- -------- -------- ----- ----------
Total Registrant 1,569,717 125,936 -- 119,000 125,936 -- 1,450,717
Northlake Tower Limited Partnership (A) 1,149,641 84,669 37,987 (B) -- 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
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: March 25, 1999
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 March 25, 1999.
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.
94
<PAGE> 95
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.
95
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 524,406
<SECURITIES> 0
<RECEIVABLES> 825,457
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,349,863
<PP&E> 52,867,560
<DEPRECIATION> 18,462,083
<TOTAL-ASSETS> 48,781,343
<CURRENT-LIABILITIES> 2,474,594
<BONDS> 33,134,337
0
0
<COMMON> 0
<OTHER-SE> 10,297,159
<TOTAL-LIABILITY-AND-EQUITY> 48,781,343
<SALES> 9,652,147
<TOTAL-REVENUES> 11,420,201
<CGS> 0
<TOTAL-COSTS> 3,206,210
<OTHER-EXPENSES> 2,374,183
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,426,794
<INCOME-PRETAX> 1,919,838
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,919,838
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,919,838
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
