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 fiscal year ended December 31, 1995 or
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
to
Commission file number 0-6146
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
(Exact name of registrant as specified in its charter)
Michigan 38-1954699
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6100 Glades Road, Suite 205
Boca Raton, Florida 33434
(Address of principal executive offices) (Zip Code)
(407) 487-6700
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports 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 report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
FORM 10-K
INDEX
PART I Page
Item 1 Business. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2 Properties. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 3 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 5
Item 4 Submission of Matters To a Vote of Security Holders . . . . . 5
PART II
Item 5 Market for Registrant's Partnership Units
and Related Security Holder Matters . . . . . . . . . . . . 5
Item 6 Selected Financial Data . . . . . . . . . . . . . . . . . . . 6
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 7
Item 8 Financial Statements and Supplementary Data . . . . . . . . . 8
(a) Independent Auditors' Report. . . . . . . . . . . . . . . 9
(b) Statements of Financial Condition, as of
December 31, 1995 and 1994. . . . . . . . . . . . . . . 10
(c) Statements of Operations, for each of the years in the
three year period ended December 31, 1995 . . . . . . . 11
(d) Statements of Changes in Partners' Capital, for each
of the years in the three year period ended
December 31, 1995 . . . . . . . . . . . . . . . . . . . 12
(e) Statements of Cash Flows, for each of the years in the
three year period ended December 31, 1995 . . . . . . . 13
(f) Notes to Financial Statements . . . . . . . . . . . . . . 14
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure. . . . . . . . . . . . . . . . . . 22
PART III
Item 10 Directors and Executive Officers of the Registrant. . . . . . 22
Item 11 Executive Compensation. . . . . . . . . . . . . . . . . . . . 22
Item 12 Security Ownership of Certain
Beneficial Owners and Management. . . . . . . . . . . . . . 23
Item 13 Certain Relationships and Related Transactions. . . . . . . . 24
PART IV
Item 14 Exhibits, Financial Statement Schedules, and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . 25
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
FORM 10-K
PART I
ITEM 1 BUSINESS
Formation of the Partnership
The registrant, MultiVest Real Estate Fund, Ltd. (Series I) ("Partnership"), is
a Michigan limited partnership which was formed in 1971 primarily to invest in,
operate and dispose of improved real estate. The Partnership is operated by its
(corporate) general partner, MultiVest Real Estate, Inc., a Delaware corporation
("General Partner").
The Partnership originally invested its funds in apartment complexes and
shopping centers which the General Partner considered had a potential for profit
either through income or gain on resale. The Partnership also attempted to
provide tax shelter benefits for participants when feasible within its primary
investment objective.
Dissolution of the Partnership
The Partnership is in the process of dissolution pursuant to its Agreement of
Limited Partnership ("Partnership Agreement"), which provides that, upon a
dissolution, the assets of the Partnership are to be liquidated as promptly as
is consistent with obtaining their fair value.
The Partnership owns and operates Warwick Apartments located in Fort Worth,
Texas. The property is presently on the market for sale. Any sale will be
subject to a number of conditions, including first and foremost, a satisfactory
offer.
Summary of Business Operations for the Year Ended December 31, 1995
Operations of the Partnership consist of the ownership and operation of Warwick
Apartments in Fort Worth, Texas. As of December 31, 1995, the Partnership had 4
employees. Such employees are the on-site personnel at Warwick Apartments.
On May 5, 1995, Warwick Apartments sustained significant damage as a result of a
hailstorm which hit the Fort Worth, Texas area. Due to the damage, occupancy
at the property declined approximately 16%. Damage to the property has
subsequently been repaired and management is currently in the process of
re-marketing and leasing the vacant units. The Partnership is presently in
negotiations with the insurance carrier to reach a settlement with regard to
the damages and rental loss.
The sources of operating income for the Partnership primarily consist of
interest earned on funds held in reserve pursuant to the Partnership Agreement
and income from the operations of Warwick Apartments.
For additional information on 1995 operations, see Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
Future Business Operations of the Partnership
The General Partner anticipates continuation of the dissolution and winding up
of the Partnership. Future cash distributions to the Limited Partners will be
based on the cash flow (if any) from operations of, or sale of, Warwick
Apartments.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
Conflicts of Interest
The Partnership is subject to various conflicts of interest arising out of its
relationship with the General Partner and its affiliates. These conflicts
involve:
1. Competition by the Partnership with Other Partnerships for Management
Services: The General Partner serves as a general partner in three other
limited partnerships, all of which were formed to engage in similar
businesses as this Partnership, and two of which are presently being wound
up and liquidated. The General Partner may have conflicts of interest in
allocating management time, services and functions among the various
partnerships and any future partnerships and other entities which may be
organized; however, the General Partner believes that it has sufficient
staff to be fully capable of discharging its responsibilities to each
partnership and other entities.
2. Liability of General Partner to Other Partnerships: The General Partner is
generally liable for the Partnership's recourse obligations, to the extent
not paid by the Partnership. Because the General Partner is a general
partner in other limited partnerships, creditors of any of the partnerships
could seek to realize on the assets of the General Partner if that
partnership's assets were insufficient to satisfy its debts. Should the
General Partner at any time have insufficient assets to meet such
obligations, the General Partner could face conflicts of interest with
regard to the manner in which its assets are distributed to meet the
obligations.
3. Real Estate Commissions and Other Commissions Earned by Affiliates: To
the extent the Partnership sells Warwick Apartments or requires a
construction manager for repairs or construction at Warwick Apartments, the
Partnership may pay real estate commissions thereon to brokers or
construction management fees to the construction manager, including an
affiliate of the General Partner, subject to such restrictions and upon
such terms as are provided in the Partnership Agreement.
4. Provision for Property Management and Mortgage Servicing Services for the
Partnership by an Affiliate: An affiliate of the General Partner performs
property management and mortgage servicing for the Partnership. In the
opinion of the General Partner, such affiliate is engaged, in accordance
with the Partnership Agreement, on terms which are fair and reasonable and
no less favorable than could reasonably be obtained by the Partnership with
unaffiliated persons.
5. Provision for Legal Services: The firm of Honigman Miller Schwartz and
Cohn is counsel to the Partnership. It is also counsel to the General
Partner and its corporate affiliates. As such, it provides legal services
to the Partnership in connection with its operations, real property
investments and related matters at its usual rate for such services.
Competition
Warwick Apartments competes with similar properties in its vicinity (see Item 2,
"Properties").
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
ITEM 2 PROPERTIES
The following is a brief description of Warwick Apartments:
Year Percentage of
Number of Construction Occupancy at
Location Apt. Units Completed December 29, 1995
Fort Worth, Texas 100 Units 1971 71%
Warwick Apartments competes with properties which are of similar age and
construction, as well as with properties with more modern construction and
amenities. Occupancy at the property has been severely affected by damages
resulting from a hailstorm on May 5, 1995 (see Item I, "Business" for
additional information).
ITEM 3 LEGAL PROCEEDINGS
The Partnership is a defendant, from time to time, in various actions brought by
tenants, contractors, materialmen and others in connection with the
Partnership's property, many of which are covered by the liability insurance
maintained by the Partnership. The Partnership believes that the effect, if
any, of these suits on the financial condition of the Partnership will not be
material.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5 MARKET FOR REGISTRANT'S PARTNERSHIP UNITS AND RELATED SECURITY
HOLDER MATTERS.
To the best knowledge of the General Partner, there is no public trading market
for the Partnership Units. Since such a market does not exist for the resale
of the Units, market prices cannot be ascertained. There are approximately 417
holders of the Units as of December 31, 1995.
Cash Distributions to Partners
There were no cash distributions declared by the General Partner during the past
two years. Distributions are generally paid to the Partners in the quarter
subsequent to their declaration.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
ITEM 6 SELECTED FINANCIAL DATA
OPERATIONAL SUMMARY Years Ended December 31,
1995 1994 1993 1992 1991
Total revenues $ 386,237 $ 400,393 $ 386,918 $ 387,162 $ 377,887
Total expenses 556,553 515,380 511,321 551,322 552,565
Income from sold properties - - - - 86,505
(Loss) before real
estate transactions (170,316) (114,987) (124,403) (164,160) (88,173)
Real estate transactions 103,169 - - - 899,469
Net income (loss) $ (67,147) $(114,987) $(124,403) $(164,160) $ 811,296
Allocated to:
Limited Partners $ (66,529) $(113,929) $(123,259) $(162,650) $ 803,832
General Partner (618) (1,058) (1,144) (1,510) 7,464
$ (67,147) $(114,987) $(124,403) $(164,160) $ 811,296
Net income (loss) per
Partnership Unit based
on 1,087 average units
outstanding $ (61.77) $ (105.78) $ (114.45) $ (151.02) $ 746.36
Cash distributions to
Partners $ - $ 108,700 $ - $ - $1,195,700
Cash distributions per
Partnership Unit based
on 1,087 average units
outstanding $ - $ 100.00 $ - $ - $ 1,100.00
FINANCIAL CONDITION SUMMARY
Net investment in real
estate $ 443,767 $ 408,275 $ 504,038 $ 606,743 $ 748,344
Other assets 397,079 498,836 625,507 689,154 854,583
Total assets $ 840,846 $ 907,111 $1,129,545 $1,295,897 $1,602,927
Mortgage notes payable $ - $ - $ - $ 29,028 $ 112,342
Other liabilities 62,866 61,984 60,731 73,652 133,208
Total liabilities 62,866 61,984 60,731 102,680 245,550
Partners' capital 777,980 845,127 1,068,814 1,193,217 1,357,377
Total liabilities and
Partners' capital $ 840,846 $ 907,111 $1,129,545 $1,295,897 $1,602,927
Note: The above information and Item 7 - "Management's Discussion and Analysis
of Financial Condition and Results of Operations" should be read in
conjunction with the financial information contained in Item 8 and
elsewhere herein.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The current operations of the Partnership are centered on Warwick Apartments.
Total revenues decreased $14,156 or 4% from 1994 to 1995. Rents and other
tenant charges decreased $32,612 or 9% due primarily to lost rents as a result
of damage sustained to various units during the hailstorm on May 5, 1995 (see
below). Insurance proceeds are anticipated to be sufficient to reimburse the
Partnership for lost rents. Other income increased $18,456 or 60% due primarily
to real estate tax refunds received on Warwick Apartments as a result of
assessment appeals for prior years.
The Partnership's total revenues increased $13,475 or 3% in 1994, as compared
to 1993. There was a $25,463 or 7% increase in rents and other tenant charges
due to an overall increase in occupancy at Warwick Apartments. Other income
decreased $11,988 or 28% in 1994, compared to 1993, due primarily to a refund
of real estate taxes in 1993 on Warwick Apartments as a result of an assessment
appeal.
The Partnership's total expenses increased $41,173 or 8% in 1995, as compared
to 1994. There was a $20,172 or 19% increase in repair and maintenance as
efforts continue to enhance the appearance and salability of Warwick Apartments.
Total expenses increased $4,059 or 1% in 1994, as compared to 1993. Utility
costs increased $2,617 or 3% from 1993 to 1994 due primarily to increased water
and sewer costs at Warwick Apartments as a result of increased consumption
during the fourth quarter. There was a $2,785 or 3% increase in depreciation
due to amortization of costs associated with improvements to the property during
1994.
On May 5, 1995, Warwick Apartments sustained significant damage as a result of a
hailstorm which hit the Fort Worth, Texas area. Due to the damage, occupancy
at the property declined approximately 16%. Damage to the property has
subsequently been repaired and management is currently in the process of
re-marketing and leasing the vacant units. The Partnership is presently in
negotiations with the insurance carrier to reach a settlement with regard to
the property damages and rental loss. As a result of the damage sustained, the
carrying value of the damaged property has been reduced along with the
corresponding accumulated depreciation, resulting in the recognition of net
gain from insurance proceeds related to storm damage of $103,169.
An allowance for loss on real estate in the amount of $525,000 was established
in 1991 based on an analysis of net realizable value of Warwick Apartments. The
property is currently on the market for sale.
The liquidity of the Partnership is dependent upon the timely receipt of cash
collections on rental revenue. There are no credit facilities currently in
place, and Limited Partners have no obligation to provide additional funds in
excess of their initial cash contributions. In order to protect the Partnership
in the event of a reduction in cash flow, management closely monitors the
Partnership's cash position and, when necessary, reserves adequate funds to
continue the operations of the Partnership in the foreseeable future. Funds
reserved are generally invested in short-term investments. The General Partner
believes that the Partnership maintains adequate liquidity on a short-term basis
as a result of its cash flow and reserve policies; however, there can be no
assurance of the continued performance of Warwick Apartments.
A decline in performance could have a negative effect upon the long-term
liquidity of the Partnership. Funds generated from operations have primarily
been used to meet Partnership obligations and, when possible, distribute funds
to the Partners. There was no distribution of funds during the year ended
December 31, 1995.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
PART II, continued
ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
For each of the years in
the three year period ended
December 31, 1995
Schedules omitted are not required, or the required information
is included in the financial statements or the notes thereto.
<PAGE>
Independent Auditors' Report
The Partners
MultiVest Real Estate Fund, Ltd. (Series I):
We have audited the accompanying statements of financial condition of MultiVest
Real Estate Fund, Ltd. (Series I) (a Michigan limited partnership) as of
December 31, 1995 and 1994, and the related statements of operations, changes
in partners' capital, and cash flows for each of the years in the three-year
period ended December 31, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these 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 financial statements referred to above present fairly, in
all material respects, the financial position of MultiVest Real Estate Fund,
Ltd. (Series I) (a Michigan limited partnership) at December 31, 1995 and 1994,
and the results of its operations and its cash flows for each of the years in
the three-year period ended December 31, 1995, in conformity with generally
accepted accounting principles.
March 21, 1996 KPMG Peat Marwick LLP
Fort Lauderdale, Florida
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
(a Michigan limited partnership)
STATEMENTS OF FINANCIAL CONDITION
December 31, 1995 and 1994
1995 1994
ASSETS
Investment in real estate
Land $ 180,051 $ 180,051
Buildings and improvements 1,412,867 1,638,115
Construction-in-progress 245,758 -
Allowance for loss on real estate (Note 11) (525,000) (525,000)
1,313,676 1,293,166
Less accumulated depreciation 869,909 884,891
Net investment in real estate
(Notes 2 and 9) 443,767 408,275
Other assets
Cash 32,795 78,583
Investments, at cost which
approximate market (Note 3) 342,791 396,500
Interest and other receivables 488 1,723
Prepaid insurance 18,505 19,530
Escrow deposits and other assets 2,500 2,500
Total other assets 397,079 498,836
Total assets $ 840,846 $ 907,111
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 7,090 $ 8,787
Accrued liabilities (Note 4) 40,329 37,540
Accrued liabilities to affiliates (Note 5) 5,987 5,747
Security deposits 9,460 9,910
Total liabilities 62,866 61,984
Contingencies (Note 12)
Partners' capital (Notes 6 and 7)
Limited Partners, 1,077 units 770,788 837,317
General Partner, 10 units 7,192 7,810
Total Partners' capital 777,980 845,127
Total liabilities and
Partners' capital $ 840,846 $ 907,111
See Notes to Financial Statements.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
(a Michigan limited partnership)
STATEMENTS OF OPERATIONS
For each of the years in the
three year period ended December 31, 1995
1995 1994 1993
Revenues
Rents and other tenant charges $ 336,822 $ 369,434 $ 343,971
Other income 49,415 30,959 42,947
386,237 400,393 386,918
Expenses
Maintenance, custodial salaries
and related expenses 73,404 67,893 67,914
Investment management fee - affiliate
(Note 5) 9,085 8,965 9,560
Real estate management fee - affiliate
(Note 5) 17,427 19,147 17,789
Depreciation 117,163 113,495 110,710
Property taxes 35,740 30,771 33,269
Insurance 19,878 20,790 31,603
Utilities 88,665 85,438 82,821
Repairs and maintenance 126,020 105,848 101,328
Legal and accounting 17,541 16,464 12,423
Interest (Note 10) - - 478
Administrative and other 51,630 46,569 43,426
556,553 515,380 511,321
Loss from existing assets (170,316) (114,987) (124,403)
Net gain from insurance proceeds
related to storm damage 103,169 - -
Net loss $ (67,147) $ (114,987) $ (124,403)
Allocated to
Limited partners, 1,077 units $ (66,529) $ (113,929) $ (123,259)
General partner, 10 units (Note 6) (618) (1,058) (1,144)
$ (67,147) $ (114,987) $ (124,403)
Net loss per Partnership unit
based on 1,087 average units
outstanding $ (61.77) $ (105.78) $ (114.45)
See Notes to Financial Statements.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
(a Michigan limited partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For each of the years in the
three year period ended December 31, 1995
General Limited
Partner Partners Total
Partners' capital January 1, 1993 11,012 1,182,205 1,193,217
Net loss for 1993 (1,144) (123,259) (124,403)
Balance, December 31, 1993 9,868 1,058,946 1,068,814
Net loss for 1994 (1,058) (113,929) (114,987)
Distribution to partners (1,000) (107,700) (108,700)
Balance, December 31, 1994 7,810 837,317 845,127
Net loss for 1995 (618) (66,529) (67,147)
Partners' capital
December 31, 1995 $ 7,192 $ 770,788 $ 777,980
Partnership units outstanding
at December 31, 1995, 1994
and 1993 10 1,077 1,087
See Notes to Financial Statements.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
(a Michigan limited partnership)
STATEMENTS OF CASH FLOWS
For each of the years in the
three year period ended December 31, 1995
Decrease in Cash and Cash Equivalents
1995 1994 1993
Operating Activities
Net loss $ (67,147) $ (114,987) $ (124,403)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Depreciation 117,163 113,495 110,710
Net gain from insurance proceeds
related to storm damage (103,169) - -
Changes in assets and liabilities:
Decrease (increase) in
interest and other receivables 1,235 (372) 696
Decrease in prepaid expenses 1,025 106 11,586
Decrease in escrow deposits - - 46,158
(Decrease) increase accounts payable (1,697) 3,246 (3,895)
Increase (decrease) in accrued
liabilities 2,789 1,863 (16,110)
Increase (decrease) in accrued
liabilities to affiliates 240 (679) 4,914
(Decrease) increase in security
deposits (450) (3,177) 2,170
Net cash (used in) provided by
operating activities (50,011) (505) 31,826
Investing Activities
Construction-in-progress, storm damage (245,758) - -
Capital improvements to real estate (14,188) (17,732) (8,005)
Net cash used in investing
activities (259,946) (17,732) (8,005)
Financing Activities
Insurance proceeds from storm damage 210,460 - -
Distributions to partners - (108,700) -
Principal payments on mortgage notes
payable - - (29,028)
Net cash provided by (used in)
financing activities 210,460 (108,700) (29,028)
Decrease in cash and cash equivalents (99,497) (126,937) (5,207)
Cash and cash equivalents - beginning
of year 475,083 602,020 607,227
Cash and cash equivalents - end
of year $ 375,586 $ 475,083 $ 602,020
See Notes to Financial Statements.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1995, 1994 and 1993
1. Summary of Significant Accounting Policies
Investment in Real Estate
The Partnership's investment in real estate is carried at the lower of cost
or estimated fair value. All expenditures for improvements are capitalized.
The costs of repairs and maintenance are charged to expense as incurred.
Upon sale or retirement, the cost and related accumulated depreciation are
removed from the accounts and any gain or loss is reflected in income in
accordance with Statement of Financial Accounting Standards No. 66.
The Partnership adopted Statement of Financial Accounting Standards No. 121
- Accounting for the Impairment of Long Lived Assets and for Long Lived
Assets to be Disposed Of - as of January 1, 1995, and accordingly evaluates
its real estate investments periodically to assess whether any impairment
indications are present, including recurring operating losses and
significant adverse changes in legal factors or business climate that affect
the recovery of the recorded value. If any real estate investment is
considered impaired, a loss is provided to reduce the carrying value of the
property to its estimated fair value. The implementation of this standard
had no financial impact on the financial statements.
Depreciation
The Partnership depreciates land improvements, buildings and building
improvements using the straight-line method over the estimated useful lives
of the assets. Depreciation is computed using the following useful lives:
Years
Land Improvements 10 to 15
Buildings 16
Building Improvements 2 to 10
Accounting for Real Estate Sales
Sales of real estate are accounted for in accordance with Statement of
Financial Accounting Standards No. 66 - Accounting for Sales of Real Estate.
For sales of real estate where both cost recovery is reasonably certain
and the collectibility of the contract price is reasonably assured, but
the transactions do not meet the remaining requirements to be recorded on
the accrual basis, profit is recognized under the installment method, which
recognizes profit as collections of principal are received. If developments
subsequent to the adoption of the installment method occur which cause the
transaction to meet the requirements of the full accrual method, the
remaining deferred profit is recognized at that time.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts in the financial statements
and accompanying notes. Actual results could differ from those estimates.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
NOTES TO FINANCIAL STATEMENTS, continued
For the years ended December 31, 1995, 1994 and 1993
1. Summary of Significant Accounting Policies, continued
Fair Value of Financial Instruments
The fair values of the Partnership's financial instruments, including
mortgage notes and accounts receivable, mortgage notes and accounts payable,
accrued expenses, security deposits, and other financial instruments,
generally determined using the present value of estimated future cash flows
using a discount rate commensurate with the risks involved, approximate
their carrying or contract values.
Cash Equivalents
For purposes of the Statements of Cash Flows, all highly liquid investments
purchased with a maturity of three months or less are considered to be cash
equivalents. These investments consist principally of repurchase
agreements and Treasury Bills.
Storm Damage
Property damage resulting from a hail storm has been written off in the
fourth quarter based upon estimates obtained from general contractors
involved in the repair of the property. Repairs for property damage are
capitalized and included in construction in progress until completed. The
difference between the loss sustained and the insurance proceeds received
is recorded as a gain or loss related to storm damage. Management
anticipates additional proceeds to be received in 1996.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
NOTES TO FINANCIAL STATEMENTS, continued
<TABLE>
2. Real Estate and Accumulated Depreciation
Real estate and accumulated depreciation at December 31, 1995 consisted
of the following:
<CAPTION>
Cost
Partnership Capitalized Gross Amount at Which Life on Which
Cost to Subsequent to Carried at Close of Depreciation in
Re-acquire Re-acquisition Period Latest Statement
<S> Buildings and Building and Accumulated Date of Date of Operations is
Description Encumbrances Land Improvements Improvements Land Improvements Total Depreciation Construct'n Re-acquired Computed
Warwick
Apartments,
Fort Worth, <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Texas - 180,051 1,481,653 176,972 180,051 1,658,625 1,838,676* 869,909 1971 11/3/87 2 - 16 years
The cost basis of the property for federal tax purposes is $1,148,014. The primary
difference between such basis and the amount reflected in the financial statements
is a gain recognized for tax purposes on repossession of the property.
* Gross investment in real estate $ 1,838,676
Less: Allowance for loss on real estate (525,000)
$ 1,313,676
</TABLE>
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
NOTES TO FINANCIAL STATEMENTS, continued
2. Real Estate and Accumulated Depreciation, continued
SUMMARY OF CHANGES IN GROSS AMOUNT OF REAL ESTATE
AND ACCUMULATED DEPRECIATION
Gross Amount of Real Estate 1995 1994 1993
Balance at beginning of
period $ 1,293,166 $ 1,275,434 $ 1,267,429
Construction-in-progress 245,758 - -
Asset write-offs, storm
damage (239,436) - -
Improvements 14,188 17,732 8,005
Balance at close of period $ 1,313,676 $ 1,293,166 $ 1,275,434
Accumulated Depreciation 1995 1994 1993
Balance at beginning of
period $ 884,891 $ 771,396 $ 660,686
Accumulated depreciation
write-offs, storm-damage (132,145) - -
Depreciation expense 117,163 113,495 110,710
Balance at close of period $ 869,909 $ 884,891 $ 771,396
3. Investments
Title of Each Class Cost of Each Issue
1995 1994
Treasury Bills $ 247,791 $ 396,500
Repurchase Agreements 95,000 -
$ 342,791 $ 396,500
Investments are recorded at cost, which approximates market value, and have
maturities of three months or less. Yield on investments at December 31,
1995 was approximately 5.02%.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
NOTES TO FINANCIAL STATEMENTS, continued
4. Accrued Liabilities
Accrued liabilities at December 31, 1995 and 1994 consisted of the
following:
1995 1994
Payroll $ 1,994 $ 2,174
Utilities 2,181 3,647
Real estate taxes 36,154 31,719
$ 40,329 $ 37,540
5. Related-Party Transactions
The following list of expenses incurred and the related liabilities are a
result of transactions with affiliates:
M.V. National MultiVest Real
Properties, Inc. Estate, Inc.
For the year ended
December 31, 1995 1994 1993 1995 1994 1993
Real estate
management fee $17,427 $19,147 $17,789 - - -
Investment
management fee - - - $ 9,085 $ 8,965 $ 9,560
$17,427 $19,147 $17,789 $ 9,085 $ 8,965 $ 9,560
Accrued liabilities
December 31 $ 1,386 $ 1,534 $ 1,724 $ 4,601 $ 4,213 $ 4,702
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
NOTES TO FINANCIAL STATEMENTS, continued
5. Related-Party Transactions, continued
MultiVest Real Estate, Inc. is the Corporate General Partner of the
Partnership. The Partnership Agreement permits the Corporate General
Partner to provide certain services to the Partnership and to employ
certain affiliates of the Corporate General Partner to provide services
to the Partnership and obtain reimbursement therefor. The services
provided encompass:
(1) Investment management services - MultiVest Real Estate, Inc.
(2) Mortgage servicing - M.V. National Properties, Inc.
(3) Real estate management - M.V. National Properties, Inc.
Management is of the opinion that these transactions were executed for a
consideration approximately equivalent to that which would have been paid to
unaffiliated firms.
The Partnership Agreement provides that the General Partner is entitled to
an annual Investment Management Fee equal to 1/2 of 1% of the Partnership
assets as they appear on the year-end balance sheet of the Partnership
(prepared in accordance with generally accepted accounting principles),
except that there shall be no reduction for accumulated depreciation and
amortization. For the year ended December 31, 1995, the Corporate General
Partner earned an Investment Management Fee of $9,085.
In addition, under the Partnership Agreement, the General Partner is
entitled to an annual Performance Incentive Fee based upon the following
formula: The Performance Incentive Fee is earned only if the sum of (1)
net realized appreciation on the sale of Partnership property plus (2)
net income of the Partnership as determined by generally accepted
accounting principles after the deduction of depreciation and the General
Partner's fees (except the Performance Incentive Fee) from operations of
the Partnership plus (3) an amount equal to 50% of the depreciation taken
in that year, is equal to or in excess of 10% of total capital contributions
to the Partnership. The Performance Incentive Fee is payable on an annual
basis and ranges from 1/8 of 1% to 3/8 of 1% of gross Partnership assets
depending upon percentages determined by the above formula. A Performance
Incentive Fee was not earned by the Corporate General Partner in 1995,
1994 or 1993.
The Partnership Agreement also obligates the Partnership to reimburse the
Corporate General Partner for all expenses, including, but not limited to,
salaries, wages, legal and accounting fees and overhead expenses, reasonably
incurred by it in managing the business of the Partnership, and allows the
Corporate General Partner to employ affiliates or other subsidiaries to
render services to the Partnership as independent contractors. Affiliates
of the General Partner may be engaged to perform normal property management
services. For the year ended December 31, 1995, an affiliate earned $17,427
as its Property Management Fee.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
NOTES TO FINANCIAL STATEMENTS, continued
5. Related-Party Transactions, continued
In addition, the Partnership Agreement provides that the General Partner has
the right and power to employ persons in the operation and management of the
Partnership business, including, but not limited to, supervisory managing
agents, building management agents, insurance brokers, real estate brokers
and loan brokers, on such terms and for such compensation as the General
Partner shall determine. The General Partner is empowered to employ in such
capacities an affiliate or subsidiary of the General Partner on terms
comparable to those offered by unaffiliated firms.
6. General Partner Participation in Income, Loss, and Distributions
The General Partner participates in the income, loss, and distributions of
the Partnership in proportion of Partnership units owned to the total
Partnership units outstanding.
7. Income Taxes
MultiVest Real Estate Fund, Ltd. (Series I) is a Partnership and has no
liability for federal income taxes. The Partners include in their
individual income tax returns their proportionate share of any income or
loss of the Partnership.
Net loss, total assets and Partners' capital as reported in the accompanying
financial statements are less than net loss, total assets and Partners'
capital as reported in the Partnership's 1995 tax return by approximately
$25,981, $503,131 and $503,131, respectively. The following are differences
related to net loss as of and for the years ended December 31:
1995 1994 1993
Loss per books $ (67,147) $ (114,987) $(124,403)
Depreciation 77,150 73,876 71,274
Other (51,169) - -
Tax loss $ (41,166) $ (41,111) $ (53,129)
8. Dissolution of the Partnership
Pursuant to the Partnership Agreement, the Partnership was required to
obtain an independent appraisal of the Partnership's properties during 1981
for the purpose of determining the Net Asset Value (as defined in the
Partnership Agreement) of each Partnership Unit and to either repurchase
Limited Partnership Units, if offered by Limited Partners, or proceed with
the dissolution of the Partnership. The General Partner elected not to
purchase units offered by Limited Partners and proceeded with the
liquidation of the Partnership. The General Partner anticipates
continuation of its dissolution and winding up of the Partnership.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
NOTES TO FINANCIAL STATEMENTS, continued
9. Description of Partnership Operations and Leasing Arrangements
The Partnership operates exclusively in the real estate industry, investing
its funds in rental properties consisting primarily of apartment complexes.
The following is an analysis of the Partnership's investment in property
held for rent for residential purposes as of December 31, 1995:
Residential rental apartments $ 1,313,676
Less: Accumulated depreciation (869,909)
$ 443,767
Residential leases are for periods not exceeding one year.
10. Interest Expense
As of May 1, 1993, the final payment on the Warwick Apartments mortgage note
payable, the Partnership no longer incurs interest expense on the mortgage
note payable relative to Warwick Apartments.
1995 1994 1993
Existing property $ - $ - $ 478
$ - $ - $ 478
Cash paid during 1995, 1994 and 1993 for interest was $-0-, $-0-, and $478,
respectively.
11. Allowance for Loss on Real Estate
An allowance for loss on real estate was established in 1991 in the amount
of $525,000 based on an analysis of net realizable value of Warwick
Apartments.
12. Contingencies
The Partnership is a defendant, from time to time, in various actions
brought by tenants, contractors, materialmen and others in connection with
the Partnership's property, many of which are covered by the liability
insurance maintained by the Partnership. The Partnership believes that the
effect, if any, of these suits on the financial condition of the Partnership
will not be material.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
PART II, continued
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership has no directors or officers. The business policy-making
functions of the Partnership are carried on through the directors and executive
officers of the General Partner, who are listed below:
RICHARD L. DAVIS, age 46, is President, Chief Executive Officer and Director of
the General Partner and has been associated with the General Partner since
August 1981.
JAMES F. COLGAN, age 61, is a Director of the General Partner and has served in
that capacity since December 1987. Since March 1990, Mr. Colgan has been
President and Director of MultiVest, Inc. From November 1987 to March 1990 he
served as ChiefFinancial Officer of that company.
PAUL D. TOOMEY, age 45, is Vice President, Treasurer and Secretary of the
General Partner and has been associated with MultiVest Real Estate, Inc. in
various capacities since 1972.
There is no family relationship among any of the above named executive officers
and directors of the General Partner.
ITEM 11 EXECUTIVE COMPENSATION
The Partnership has no directors or officers. The General Partner, MultiVest
Real Estate, Inc., operates the Partnership.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
According to the Partnership's records, at January 1, 1996, a group consisting
of the following entities (through their affiliated general partners) is the
only individual, entity or group which is the beneficial owner or has the rights
to acquire beneficial ownership of more than 5% of the Limited Partnership
units:
Name of Amount & Nature of Percentage
Title of Class Beneficial Owner Beneficial Ownership of Class
$2500 Limited Liquidity Fund X 3 .279
Partnership Units
$2500 Limited Liquidity Fund XI 3 .279
Partnership Units
$2500 Limited Liquidity Fund XIII 9 .836
Partnership Units
$2500 Limited Liquidity Fund XIV 1 .093
Partnership Units
$2500 Limited Liquidity Fund XV 3 .279
Partnership Units
$2500 Limited Liquidity Fund XVI 4 .371
Partnership Units
$2500 Limited Liquidity Fund High Yield 4 .371
Partnership Units Institutional Investors
$2500 Limited Liquidity Fund Income 77 7.149
Partnership Units Growth Fund 87
$2500 Limited Liquidity Fund 52 45 4.178
Partnership Units
$2500 Limited Liquidity Fund 53 5 .464
Partnership Units
$2500 Limited Liquidity Fund Income 11 1.021
Partnership Units Growth 88
$2500 Limited Liquidity Fund Income 65 6.035
Partnership Units Growth 89
TOTAL 230 21.355%
The address for the above beneficial owners is P.O. Box 882044, San Francisco,
California 94188.
There are no parents of the Partnership. MultiVest Real Estate, Inc,. a
Delaware corporation, serves as General Partner of the Partnership and, as such,
controls its activities. The General Partner owns 10 General Partnership Units.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Under the Partnership Agreement, the General Partner is entitled to an annual
Investment Management Fee equal to 1/2 of 1% of the Partnership assets as they
appear on the year-end balance sheet of the Partnership (prepared in accordance
with generally accepted accounting principles), without a reduction for
accumulated depreciation and amortization. For the year ended December 31,
1995, the General Partner earned an Investment Management Fee of $9,085.
The Partnership Agreement entitles the General Partner to an annual Performance
Incentive Fee, based upon the following formula: The Performance Incentive Fee
is only earned if the sum of the following amounts equals or exceeds 10% of
total capital contributions to the Partnership: (1) net realized appreciation on
the sale of Partnership property; plus (2) net income of the Partnership as
determined by generally accepted accounting principles after the deduction of
depreciation and the General Partner's fees (except the Performance Incentive
Fee) from the operations of the Partnership; plus (3) an amount equal to 50% of
the depreciation taken in that year. The Performance Incentive Fee is payable on
an annual basis and ranges from 1/8 of 1% to 3/8 of 1% of gross Partnership
assets depending upon percentages determined by the above formula. The General
Partner did not earn a Performance Incentive Fee in 1995.
The Partnership Agreement also requires the Partnership to reimburse the General
Partner for all expenses, including salaries, wages, legal and accounting fees
and overhead expenses, reasonably incurred by it in managing the business of the
Partnership, and allows the General Partner to employ affiliates or other
subsidiaries of its parent to render services to the partnership as independent
contractors.
In addition, the Partnership Agreement provides that the General Partner has the
right and power to employ persons in the operation and management of the
Partnership business, including supervisory managing agents, building management
agents, insurance brokers, real estate brokers and loan brokers, on such terms
and for such compensation as the General Partner shall determine. The General
Partner may employ in such capacities an affiliate or subsidiary of the General
Partner on terms comparable to those offered by unaffiliated firms. An affiliate
of the General Partner is engaged to perform normal property management
services. For the year ended December 31, 1995, an affiliate earned $17,427
as its Property Management Fee.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
a) 1. Financial Statements.
See Index on Page 2 of this Form 10-K.
2. Financial Statement Schedules.
None.
3. Exhibits.
(3) Certificate of Limited Partnership - incorporated by
reference from annual report on Form 10-K for the
fiscal year ending 1983, Page 50.
(4) Agreement of Limited Partnership - incorporated by reference
from annual report on Form 10-K for the fiscal year ending
1983, Page 33.
b) Reports on Form 8-K
None.
<PAGE>
MULTIVEST REAL ESTATE FUND, LTD. (SERIES I)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
MULTIVEST REAL ESTATE FUND, LTD.
(SERIES I), a Michigan Limited
Partnership
By: MULTIVEST REAL ESTATE, INC.
a Delaware corporation
Its: Corporate General Partner
RICHARD L. DAVIS
Richard L. Davis
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: March 28, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
RICHARD L. DAVIS
Richard L. Davis
President, Chief Executive Officer
and Director
Date: March 28, 1996
JAMES F. COLGAN
James F. Colgan
Director
Date: March 28, 1996
JOHN J. KAMMERER
John J. Kammerer
(Principal Accounting Officer)
Date: March 28, 1996
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