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 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 0-11126
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BALCOR EQUITY PROPERTIES-XII
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(Exact name of registrant as specified in its charter)
Illinois 36-3169763
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Balcor Plaza
4849 Golf Road, Skokie, Illinois 60077-9894
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
--------------
Securities registered pursuant to Section 12(b) of the Act: None
----
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
-----------------------------
(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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
<PAGE>
PART I
Item 1. Business
- ----------------
Balcor Equity Properties-XII (the "Registrant") is a limited partnership formed
in 1981 under the laws of the State of Illinois. The Registrant raised
$37,447,000 from sales of Limited Partnership Interests. The Registrant's
operations consist exclusively of investment in and operation of
income-producing real property, and all financial information included in this
report relates to this industry segment.
The Registrant utilized the net offering proceeds to acquire seven real
property investments and a minority joint venture interest in one additional
real property. Three properties have been disposed of, including the property
in which the Registrant held a minority joint venture interest. The Registrant
currently owns the five remaining properties described under "Properties" (Item
2). The Partnership Agreement generally provides that the proceeds of any sale
or refinancing of the Registrant's properties will not be reinvested in new
acquisitions.
During 1994, institutionally owned and managed multi-family residential
properties in many markets continued to experience favorable operating
conditions combined with relatively low levels of new construction. These
favorable operating conditions were supported by the strong pattern of national
economic growth which contributed to job growth and rising income levels in
most local economies. However, some rental markets continue to remain extremely
competitive; therefore, the General Partner's goals are to maintain high
occupancy levels, while increasing rents were possible, and to monitor and
control operating expenses and capital improvement requirements at the
properties. Of the Registrant's five properties, during 1994 three generated
positive cash flow and two generated marginal cash flow deficits.
Historically, real estate investments have experienced the same cyclical
characteristics affecting most other types of long-term investments. While
real estate values have generally risen over time, the cyclical character of
real estate investments, together with local, regional and national market
conditions, has resulted in periodic devaluations of real estate in particular
markets, as has been experienced in the last few years. As a result of these
factors, it has become necessary for the Registrant to retain ownership of many
of its properties for longer than the holding period for the assets originally
described in the Prospectus. The General Partner examines the operations of
each property and each local market in conjunction with the Registrant's long-
term dissolution strategy when determining the optimal time to sell each of the
Registrant's properties.
During 1994, the Registrant refinanced two mortgage notes and repaid a note to
the seller of a property at a discount. See Item 7. Liquidity and Capital
Resources, for additional information.
The Registrant, by virtue of its ownership of real estate, is subject to
federal and state laws and regulations covering various environmental issues.
Management of the Registrant utilizes the services of environmental consultants
to assess a wide range of environmental issues and to conduct tests for
environmental contamination as appropriate. The General Partner is not aware
of any potential liability due to environmental issues or conditions that would
be material to the Registrant.
The officers and employees of Balcor Partners-XII, the General Partner of the
Registrant, and its affiliates perform services for the Registrant. The
Registrant currently has no employees engaged in its operations.
Item 2. Properties
- ------------------
As of December 31, 1994, the Registrant owns the five properties described
<PAGE>
below.
Location Description of Property
- -------- -----------------------
Jacksonville, Florida Brierwood Apartments: a 196 unit apartment
complex located on approximately 17 acres.
Baytown, Texas Cedar Ridge Apartments: a 276 unit apartment
complex located on approximately 13 acres.
Atlanta, Georgia Defoors Creek Apartments: a 300 unit apartment
complex located on approximately 39 acres.
Pasadena, Texas Sandridge Apartments - Phase I: a 308 unit
apartment complex located on approximately
12 acres.
Tempe, Arizona Somerset Village Apartments: a 276 unit apartment
complex located on approximately 14 acres.
Each of the above properties is held subject to various mortgages and other
forms of financing.
In the opinion of the General Partner, the Registrant has provided for adequate
insurance coverage for its real estate investment properties.
See Notes to Financial Statements for other information regarding real property
investments.
Item 3. Legal Proceedings
- -------------------------
The Registrant is not subject to any material pending legal proceedings, nor
were any such proceedings terminated during the fourth quarter of 1994.
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
No matters were submitted to a vote of the Limited Partners of the Registrant
during 1994.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
- ---------------------------------------------------------------------
Matters
- -------
There has not been an established public market for Limited Partnership
Interests and it is not anticipated that one will develop; therefore, the
market value of the Limited Partnership Interests cannot reasonably be
determined. For information regarding previous distributions, see Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources, below.
As of December 31, 1994, the number of record holders of Limited Partnership
Interests of the Registrant was 4,037.
Item 6. Selected Financial Data
- -------------------------------
Year ended December 31,
----------------------------------------------------------
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
Total income $ 8,743,519 $ 8,223,415 $ 8,308,626 $ 7,787,677 $ 7,673,631
Loss before
extraordinary
items (1,032,968) (952,362) (445,671) (1,132,755) (1,235,751)
Net (loss) income (682,968) (755,843) 3,048,526 (1,132,755) (1,235,751)
Net (loss) income
per Limited Part-
nership Interest (18.06) (19.98) 80.60 (29.95) (32.67)
Total assets 27,188,193 27,222,063 28,297,996 29,287,679 31,058,011
Mortgage notes
payable 30,487,859 30,815,836 31,133,258 33,277,367 33,544,683
Item 7. Management's Discussion and Analysis of Financial Condition and
- -----------------------------------------------------------------------
Results of Operations
- ---------------------
Summary of Operations
- ---------------------
Balcor Equity Properties - XII (the "Partnership") has recognized extraordinary
gains related to the forgiveness of debt during each of 1994, 1993 and 1992,
which significantly impacted the Partnership's operating results. Further
discussion of the Partnership's operations is summarized below.
Operations
- ----------
1994 Compared to 1993
- ---------------------
As a result of higher rental and/or occupancy rates primarily at the Cedar
Ridge, Defoors Creek and Somerset Village apartment complexes, rental and
service income increased for 1994 when compared to 1993.
Interest expense on mortgage notes payable decreased during 1994 when compared
to 1993 primarily due to the interest rate reduction on the Somerset Village
mortgage loan during the third quarter of 1993 in accordance with the loan
agreement.
Due to the retirement and replacement of the Sandridge - Phase I Apartments'
<PAGE>
second mortgage loan with an unsecured General Partner loan, the Partnership
recognized interest on short-term loans during 1994.
The refinancings of the Sandridge - Phase I, Cedar Ridge, and Brierwood
apartment complexes' first mortgage loans during 1994 and 1993 required the
payment of deferred expenses which are amortized over the terms of the mortgage
notes payable. As a result, amortization expense increased for 1994 as compared
to 1993.
Property operating expense increased for 1994 when compared to 1993 primarily
due to higher insurance premiums at all properties as well as higher utility
expenses at the Defoors Creek and Cedar Ridge apartment complexes.
Higher expenditures for painting and roof repairs at the Defoors Creek
Apartments and roof repairs at the Sandridge - Phase I Apartments resulted in
an increase in maintenance and repairs expense during 1994 as compared to 1993.
This was partially offset by a decrease at the Cedar Ridge Apartments due to
significant repairs and interior upgrades completed during 1993.
As a result of increased data processing, accounting, portfolio management and
legal fees, administrative expenses increased during 1994 when compared to
1993.
In July 1994, the Partnership repaid the $500,000 note payable to the seller of
the Sandridge - Phase I Apartments for $150,000, resulting in an extraordinary
gain on debt forgiveness of $350,000.
In April 1993, the Cedar Ridge Apartments first mortgage loan was refinanced.
The Partnership obtained a discount in connection with the repayment of the
prior loan which resulted in an extraordinary gain on debt forgiveness of
$196,519.
1993 Compared to 1992
- ---------------------
As a result of higher rental rates at the Brierwood, DeFoors Creek, Sandridge
Phase - I and Somerset Village apartment complexes, rental and service income
increased during 1993 as compared to 1992. This increase was partially offset
by a decrease in rental and service income at the Cedar Ridge Apartments due to
a decrease in occupancy levels.
Participation in income from joint venture with an affiliate ceased in 1992,
since Countryside Village Apartments, in which the Partnership held a minority
joint venture interest, was sold during the first quarter of 1992. The
Partnership's 1992 participation includes its share of the gain on sale of the
property.
Interest expense on mortgage notes payable decreased during 1993 as compared to
1992 as the second mortgage note owed to the seller of the Cedar Ridge
apartment complex was forgiven in 1992 as part of a negotiated settlement and
the first mortgage was refinanced in the second quarter of 1993 at a lower
interest rate. Additionally, the interest rate on the Somerset Village
underlying mortgage was reduced in accordance with the loan documents during
the second quarter of 1993.
The refinancing of the Cedar Ridge mortgage resulted in the payment of deferred
expenses which are now being amortized over the term of the mortgage. As a
result, amortization expense increased for 1993 as compared to 1992.
Primarily as a result of repairs and interior upgrades at the Cedar Ridge and
Sandridge - Phase I apartment complexes, which included painting, carpet
replacement, and roof and pool repairs, maintenance and repairs expense
increased during 1993 as compared to 1992.
Real estate taxes increased during 1993 as compared to 1992 due to an increase
in the assessed valuation for the DeFoors Creek apartment complex and a higher
<PAGE>
tax rate for the Sandridge - Phase I apartment complex.
As a result of increased legal, postage, data processing and accounting costs,
administrative expenses increased during 1993 as compared to 1992.
In June 1992, the Partnership reached a settlement with the seller of the Cedar
Ridge Apartments pursuant to which the seller has forgiven a $1,833,727 note
owed to the seller by the Partnership plus accrued interest thereon of
$1,660,470. This transaction resulted in a $3,494,197 extraordinary gain on
forgiveness of debt for financial statement purposes.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased slightly as of December 31, 1994
when compared to December 31, 1993. The Partnership's cash flow provided by
operating activities was generated by cash flow from the properties, which was
partially offset by administrative expenses. A portion of this cash was used in
investing activities, which consisted of capital expenditures for improvements
at Brierwood Apartments. Additional cash was used in financing activities,
which consisted of the proceeds from the Sandridge - Phase I and Brierwood loan
refinancings less principal payments on the Partnership's mortgage notes
payable, partial repayment of loans payable-affiliate and payment of costs and
escrows associated with the loan refinancings. See Note 3 of Notes to Financial
Statements for additional information regarding the refinancings.
During August 1994, the Sandridge - Phase I Apartments' second mortgage loan of
$1,692,596 from an affiliate of the General Partner was retired and replaced
with an unsecured General Partner loan. The Partnership partially repaid the
loan during 1994 and owes approximately $1,026,000 to the General Partner at
December 31, 1994. This loan is expected to be repaid from available cash flow
from future property operations, and from proceeds received from the
disposition or refinancing of the Partnership's real estate investments, prior
to any distributions to Limited Partners.
Although an affiliate of the General Partner has, in certain circumstances,
provided mortgage loans for certain properties to the Partnership, there can be
no assurance that loans of this type will be available from either an affiliate
or the General Partner in the future. The General Partner may continue to
provide additional short-term loans to the Partnership or to fund working
capital needs or property operating deficits, although there is no assurance
that such loans will be available. Should such short-term loans not be
available, the General Partner will seek alternative third party sources of
financing working capital. However, the current economic environment and its
impact on the real estate industry make it unlikely that the Partnership would
be able to secure financing from third parties to fund working capital needs or
operating deficits. Should additional borrowings be needed and not be available
either through the General Partner or third parties, the Partnership may be
required to dispose of some of its properties to satisfy these obligations.
The Partnership classifies the cash flow of its properties as either positive,
a marginal deficit or a significant deficit, each after consideration of debt
service payments unless otherwise indicated. A deficit is considered to be
significant if it exceeds $250,000 annually or 20% of the property's rental and
service income. The Partnership defines cash flow generated from its properties
as an amount equal to the property's revenue receipts less property related
expenditures, which include debt service payments. During 1994 and 1993, the
Brierwood, Defoors Creek and Somerset Village apartment complexes generated
positive cash flow and the Cedar Ridge Apartments generated a marginal cash
flow deficit. The Sandridge - Phase I Apartments generated a marginal cash flow
deficit during 1994 as compared to positive cash flow during 1993 primarily due
to increased maintenance and repair expenditures for roof repairs required by
the new lender.
While the cash flow of certain of the Partnership's properties has improved,
the General Partner continues to pursue a number of actions aimed at improving
<PAGE>
the cash flow of the Partnership's properties including refinancing of mortgage
loans, improving property operating performance, and seeking rent increases
where market conditions allow. As of December 31, 1994, the occupancy rates of
the Partnership's properties ranged from 94 to 98%.Despite improvements in the
local economies and rental markets where certain of the Partnership's
properties are located, the General Partner believes that continued ownership
of many of the properties is in the best interest of the Partnership in order
to maximize potential returns to Limited Partners. As a result, the Partnership
will continue to own these properties for longer than the holding period of the
assets originally described in the prospectus.
Each of the Partnership's properties is owned through the use of third-party
mortgage loan financing and, therefore, the Partnership is subject to the
financial obligations required by such loans. See Note 3 of Notes to Financial
Statements for information concerning outstanding balances, maturity dates and
interest rates related to each of these mortgage loans. As a result of the
General Partner's efforts to obtain loan modifications as well as refinancings
of many existing loans, the Partnership has no third party financing which
matures prior to 1998.
To date, investors have received distributions of Net Cash Receipts of $70 and
Net Cash Proceeds of $60.50 totaling $130.50 per $1,000 Interest, as well as
certain tax benefits. Future distributions will depend on improved cash flow
from the Partnership's remaining properties and proceeds from future property
sales, as to both of which there can be no assurances. In light of results to
date and current market conditions, the General Partner does not anticipate
that investors will recover all of their original capital.
The General Partner has recently completed the outsourcing of the financial
reporting and accounting services, transfer agent and investor records
services, and computer operations and systems development functions that
provided services to the Partnership. All of these functions are now being
provided by independent third parties. Additionally, Allegiance Realty Group,
Inc., which has provided property management services to all of the
Partnership's properties, was sold to a third party. Each of these transactions
occurred after extensive due diligence and competitive bidding processes. The
General Partner does not believe that the cost of providing these services to
the Partnership, in the aggregate, will be materially different to the
Partnership during 1995 when compared to 1994.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
Item 8. Financial Statements and Financial Statement Supplementary Data
- -----------------------------------------------------------------------
See Index to Financial Statements and Financial Statement Schedule in this Form
10-K.
The supplemental financial information specified by Item 302 of Regulation S-K
is not applicable.
The net effect of the differences between the financial statements and the tax
returns is summarized as follows:
December 31, 1994 December 31, 1993
----------------------- -------------------------
Financial Tax Financial Tax
Statements Returns Statements Returns
---------- --------- ---------- ---------
Total assets $27,188,193 $14,566,994 $27,222,063 $14,731,853
<PAGE>
Partners' deficit
accounts:
General Partner (595,303) (1,537,719) (588,473) (1,527,950)
Limited Partners (4,529,965) (16,096,255) (3,853,827) (14,887,830)
Net income (loss):
General Partner (6,830) (9,769) (7,559) 14,713
Limited Partners (676,138) (1,208,425) (748,284) (912,537)
Per Limited Part-
nership Interest (18.06) (32.27) (19.98) (24.37)
Item 9. Changes in and Disagreements with Accountants on Accounting and
- -----------------------------------------------------------------------
Financial Disclosure
- --------------------
There have been no changes in or disagreements with accountants on any matter
of accounting principles, practices or financial statement disclosure.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
- -----------------------------------------------------------
(a) Neither the Registrant nor Balcor Partners-XII, its General Partner, has a
Board of Directors.
(b, c & e) The names, ages and business experiences of the executive officers
and significant employees of the General Partner of the Registrant are as
follows:
TITLE OFFICERS
----- --------
Chairman, President and Chief Thomas E. Meador
Executive Officer
Executive Vice President, Allan Wood
Chief Financial Officer and
Chief Accounting Officer
Senior Vice President Alexander J. Darragh
First Vice President Daniel A. Duhig
First Vice President Josette V. Goldberg
First Vice President Alan G. Lieberman
First Vice President Brian D. Parker
and Assistant Secretary
First Vice President John K. Powell, Jr.
First Vice President Reid A. Reynolds
First Vice President Thomas G. Selby
Thomas E. Meador (July 1947) joined Balcor in July 1979. He is Chairman,
President and Chief Executive Officer and has responsibility for all ongoing
day-to-day activities at Balcor. He is a Director of The Balcor Company.
Prior to joining Balcor, Mr. Meador was employed at the Harris Trust and
Savings Bank in the commercial real estate division where he was involved in
various lending activities. Mr. Meador received his M.B.A. degree from the
Indiana University Graduate School of Business.
Allan Wood (January 1949) joined Balcor in August 1983 and, as Balcor's Chief
Financial Officer and Chief Accounting Officer, is responsible for the
financial and administrative functions. He is also a Director of The Balcor
Company. Mr. Wood is a Certified Public Accountant. Prior to joining Balcor,
he was employed by Price Waterhouse where he was involved in auditing public
and private companies.
Alexander J. Darragh (February 1955) joined Balcor in September 1988 and has
primary responsibility for the Portfolio Advisory Group. He is responsible for
due diligence analysis and real estate advisory services in support of asset
management, institutional advisory and capital markets functions. Mr. Darragh
has supervisory responsibility of Balcor's Investor Services, Investment
Administration, Fund Management and Land Management departments. Mr. Darragh
received masters' degrees in Urban Geography from Queens's University and in
Urban Planning from Northwestern University.
Daniel A. Duhig (October 1956) joined Balcor in November 1986 and is
responsible for the Asset Management Department relating to real estate
investments made by Balcor and its affiliated partnerships, including
negotiations for modifications or refinancings of real estate mortgage
investments and the disposition of real estate investments.
Josette V. Goldberg (April 1957) joined Balcor in January 1985 and has primary
responsibility for all human resources matters. In addition, she has
supervisory responsibility for Balcor's administrative and MIS departments.
Ms. Goldberg has been designated as a Senior Human Resources Professional
<PAGE>
(SHRP).
Alan G. Lieberman (June 1959) joined Balcor in May 1983 and is responsible for
the Property Sales and Capital Markets Groups. Mr. Lieberman is a Certified
Public Accountant.
Brian D. Parker (June 1951) joined Balcor in March 1986 and is responsible for
Balcor's corporate and property accounting, treasury and budget activities.
Mr. Parker is a Certified Public Accountant and holds an M.S. degree in
Accountancy from DePaul University.
John K. Powell, Jr. (June 1950) joined Balcor in September 1985 and is
responsible for the administration of the investment portfolios of Balcor's
partnerships and for Balcor's risk management functions. Mr. Powell received a
Master of Planning degree from the University of Virginia. He has been
designated a Certified Real Estate Financier by the National Society for Real
Estate Finance and is a full member of the Urban Land Institute.
Reid A. Reynolds (April 1950) joined Balcor in March 1981 and is involved with
the asset management of residential properties for Balcor. Mr. Reynolds is a
licensed Real Estate Broker in the State of Illinois.
Thomas G. Selby (July 1955) joined Balcor in February 1984 and has
responsibility for various Asset Management functions, including oversight of
the residential portfolio. From January 1986 through September 1994, Mr. Selby
was Regional Vice President and then Senior Vice President of Allegiance Realty
Group, Inc., an affiliate of Balcor providing property management services.
Mr. Selby was responsible for supervising the management of residential
properties in the western United States.
(d) There is no family relationship between any of the foregoing officers.
(f) None of the foregoing officers or employees are currently involved in any
material legal proceedings nor were any such proceedings terminated during the
fourth quarter of 1994.
Item 11. Executive Compensation
- -------------------------------
The Registrant has not paid and does not propose to pay any remuneration to the
executive officers and directors of Balcor Partners-XII, the General Partner.
Certain of these officers receive compensation from The Balcor Company (but not
from the Registrant) for services performed for various affiliated entities,
which may include services performed for the Registrant. However, the General
Partner believes that any such compensation attributable to services performed
for the Registrant is immaterial to the Registrant. See Note 7 of Notes to
Financial Statements for the information relating to transactions with
affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
(a) No person owns of record or is known by the Registrant to own beneficially
more than 5% of the outstanding Limited Partnership Interests of the
Registrant.
(b) Balcor Partners-XII and its officers and partners own as a group the
following Limited Partnership Interests in the Registrant:
Amount
Beneficially
Title of Class Owned Percent of Class
-------------- ------------- ----------------
Limited Partnership
<PAGE>
Interests 70 Interests Less than 1%
Relatives and affiliates of the partners and officers of the General Partner
own nine Limited Partnership Interests.
(c) The Registrant is not aware of any arrangements, the operation of which may
result in a change of control of the Registrant.
Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------
(a & b) See Note 7 of Notes to Financial Statements for additional information
relating to transactions with affiliates.
See Note 2 of Notes to Financial Statements for information relating to the
Partnership Agreement and the allocation of distributions and profits and
losses.
(c) No management person is indebted to the Registrant.
(d) The Registrant has no outstanding agreements with any promoters.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
- -----------------------------------------------------------------------
(a)
(1 & 2) See Index to Financial Statements and Financial Statement Schedule in
this Form 10-K.
(3) Exhibits:
(3) The Amended and Restated Agreement of Limited Partnership set forth as
Exhibit 3 to the Registrant's Post-Effective Amendment No. 1 to the
Registration Statement on Form S-11 dated June 28, 1983 (Registration
No. 2-76947) is incorporated herein by reference.
(4) Certificate of Limited Partnership set forth as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-11 dated July 2, 1982
(Registration No. 2-76947) and Form of Confirmation regarding Interests in the
Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q for
the quarter ended June 30, 1992 (Commission File No. 0-11126) are hereby
incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for 1994 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended December 31, 1994.
(c) Exhibits: See Item 14(a)(3) above.
(d) Financial Statement Schedule: See Index to Financial Statements and
Financial Statement Schedule in this Form 10-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of l934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BALCOR EQUITY PROPERTIES-XII
By: /s/Allan Wood
---------------------
Allan Wood
Executive Vice President, and Chief
Accounting and Financial Officer
(Principal Accounting and Financial
Officer) of Balcor Partners-XII, the
General Partner
Date: March 24, 1995
---------------------------
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.
Signature Title Date
- ---------------------- ------------------------------ ------------
President and Chief Executive
Officer (Principal Executive
Officer) of Balcor Partners-XII,
/s/Thomas E. Meador the General Partner March 24, 1995
- -------------------- --------------
Thomas E. Meador
Executive Vice President, and Chief
Accounting and Financial Officer
(Principal Accounting Officer) of
Balcor Partners-XII, the General
/s/Allan Wood Partner March 24,1995
- -------------------- --------------
Allan Wood
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Report of Independent Accountants
Financial Statements:
Balance Sheets, December 31, 1994 and 1993
Statements of Partners' Deficit, for the years ended December 31, 1994, 1993
and 1992
Statements of Income and Expenses, for the years ended December 31, 1994, 1993
and 1992
Statements of Cash Flows, for the years ended December 31, 1994, 1993 and 1992
Notes to Financial Statements
Financial Statement Schedule:
III - Real Estate and Accumulated Depreciation, as of December 31, 1994
Financial Statement Schedules, other than the one listed, are omitted for the
reason that they are inapplicable or equivalent information has been included
elsewhere herein.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Balcor Equity Properties-XII:
We have audited the financial statements and the financial statement schedule
of Balcor Equity Properties-XII (An Illinois Limited Partnership) as listed in
the index of this Form 10-K. These financial statements and the financial
statement schedule are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule 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 Balcor Equity Properties-XII
at December 31, 1994 and 1993, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1994, in
conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly,
in all material respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
March 2, 1995
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
BALANCE SHEETS
December 31, 1994 and 1993
ASSETS
1994 1993
-------------- --------------
Cash and cash equivalents $ 203,497 $ 254,442
Escrow deposits 1,772,962 777,348
Accounts and accrued interest receivable 11,597 37,388
Deferred expenses, net of accumulated
amortization of $96,606 in 1994
and $243,446 in 1993 491,772 197,146
-------------- --------------
2,479,828 1,266,324
-------------- --------------
Investment in real estate:
Land 4,359,906 4,359,906
Buildings and improvements 39,058,120 39,037,306
-------------- --------------
43,418,026 43,397,212
Less accumulated depreciation 18,709,661 17,441,473
-------------- --------------
Investment in real estate, net
of accumulated depreciation 24,708,365 25,955,739
-------------- --------------
$ 27,188,193 $ 27,222,063
============== ==============
LIABILITIES AND PARTNERS' DEFICIT
Loan payable - affiliate $ 1,025,724
Accounts payable 124,906 $ 217,315
Due to affiliates 103,393 93,434
Accrued liabilities, principally real
estate taxes and interest 427,130 394,180
Security deposits 144,449 143,598
Mortgage note payable - affiliate 1,692,596
Mortgage notes payable 30,487,859 29,123,240
-------------- --------------
Total liabilities 32,313,461 31,664,363
Partners' deficit
(37,447 Limited Partnership
Interests issued and outstanding) (5,125,268) (4,442,300)
-------------- --------------
$ 27,188,193 $ 27,222,063
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
STATEMENTS OF PARTNERS' DEFICIT
for the years ended December 31, 1994, 1993 and 1992
Partners' Deficit Accounts
----------------------------------------------
General Limited
Total Partner Partners(A)
-------------- -------------- --------------
Balance at
December 31, 1991 $ (6,734,983) $ (611,399) $ (6,123,584)
Net income for the year
ended December 31, 1992 3,048,526 30,485 3,018,041
-------------- -------------- --------------
Balance at
December 31, 1992 (3,686,457) (580,914) (3,105,543)
Net loss for the year
ended December 31, 1993 (755,843) (7,559) (748,284)
-------------- -------------- --------------
Balance at
December 31, 1993 (4,442,300) (588,473) (3,853,827)
Net loss for the year
ended December 31, 1994 (682,968) (6,830) (676,138)
-------------- -------------- --------------
Balance at
December 31, 1994 $ (5,125,268) $ (595,303) $ (4,529,965)
============== ============== ==============
(A) Includes a $70,000 investment by the General Partner.
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the years ended December 31, 1994, 1993 and 1992
1994 1993 1992
-------------- -------------- --------------
Income:
Rental and service $ 8,722,222 $ 8,199,819 $ 8,095,100
Interest on short-term
investments 21,297 23,596 24,810
Participation in income
from joint venture
with an affiliate 188,716
-------------- -------------- --------------
Total income 8,743,519 8,223,415 8,308,626
-------------- -------------- --------------
Expenses:
Interest on mortgage
notes payable 2,892,591 2,977,647 3,168,285
Interest on short-term
loans 38,671
Depreciation 1,268,188 1,263,340 1,254,865
Amortization of deferred
expenses 77,934 56,916 48,407
Property operating 2,393,503 2,044,164 2,068,201
Maintenance and repairs 1,425,749 1,252,503 815,771
Real estate taxes 879,193 890,050 745,046
Property management fees 434,842 411,253 404,958
Administrative 365,816 279,904 248,764
-------------- -------------- --------------
Total expenses 9,776,487 9,175,777 8,754,297
-------------- -------------- --------------
Loss before extraordinary
item (1,032,968) (952,362) (445,671)
Extraordinary item:
Gain on forgiveness of
debt 350,000 196,519 3,494,197
-------------- -------------- --------------
Net (loss) income $ (682,968) $ (755,843) $ 3,048,526
============== ============== ==============
Loss before extraordinary
item allocated to
General Partner $ (10,330) $ (9,524) $ (4,457)
============== ============== ==============
Loss before extraordinary
item allocated to
Limited Partners $ (1,022,638) $ (942,838) $ (441,214)
============== ============== ==============
Loss before extraordinary
item per Limited
Partnership Interest
(37,447 issued and
and outstanding) $ (27.31) $ (25.18) $ (11.78)
============== ============== ==============
Extraordinary item
allocated to General
<PAGE>
Partner $ 3,500 $ 1,965 $ 34,942
============== ============== ==============
Extraordinary item
allocated to Limited
Partners $ 346,500 $ 194,554 $ 3,459,255
============== ============== ==============
Extraordinary item per
Limited Partnership
Interest (37,447
issued and outstanding) $ 9.25 $ 5.20 $ 92.38
============== ============== ==============
Net (loss) income
allocated to General
Partner $ (6,830) $ (7,559) $ 30,485
============== ============== ==============
Net (loss) income
allocated to Limited
Partners $ (676,138) $ (748,284) $ 3,018,041
============== ============== ==============
Net (loss) income per
Limited Partnership
Interest (37,447
issued and outstanding) $ (18.06) $ (19.98) $ 80.60
============== ============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1994, 1993 and 1992
1994 1993 1992
-------------- -------------- --------------
Operating activities:
Net (loss) income $ (682,968) $ (755,843) $ 3,048,526
Adjustments to reconcile
net (loss) income to
net cash provided by
operating activities:
Extraordinary gain on
forgiveness of debt (350,000) (196,519) (3,494,197)
Participation in
income of joint
venture with an
affiliate (188,716)
Depreciation of
properties 1,268,188 1,263,340 1,254,865
Amortization of
deferred expenses 77,934 56,916 48,407
Net change in:
Escrow deposits (149,547) 71,209 13,828
Accounts and accrued
interest
receivable 25,791 (33,727) 11,677
Accounts payable (92,409) 70,728 6,581
Due to affiliates 9,959 15,315 (116,024)
Accrued liabilities 32,950 12,836 193,648
Security deposits 851 (6,928) (7,889)
-------------- -------------- --------------
Net cash provided
by operating activities 140,749 497,327 770,706
-------------- -------------- --------------
Investing activities:
Capital contribution to
joint venture with an
affiliate (48,822)
Improvements to properties (20,814) (174,963) (72,870)
-------------- -------------- --------------
Net cash used in investing
activities (20,814) (174,963) (121,692)
-------------- -------------- --------------
Financing activities:
Repayment of loan payable
- affiliate (666,872)
Proceeds from refinancing
of mortgage notes
payable 9,701,000 5,180,000
Repayment of mortgage
notes payable (7,565,417) (4,900,000)
Funding of capital
improvement escrows (865,844) (454,250)
Disbursement from capital
improvement escrows 19,777
Payment of deferred
expenses (372,560) (111,754) (19,272)
Principal payments on
mortgage notes payable (420,964) (386,392) (310,382)
-------------- -------------- --------------
Net cash used in financing
activities (170,880) (672,396) (329,654)
<PAGE>
-------------- -------------- --------------
Net change in cash and
cash equivalents (50,945) (350,032) 319,360
Cash and cash equivalents
at beginning of year 254,442 604,474 285,114
-------------- -------------- --------------
Cash and cash equivalents
at end of year $ 203,497 $ 254,442 $ 604,474
============== ============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies:
(a) Depreciation expense is computed using straight-line and accelerated
methods. Rates used in the determination of depreciation are based upon the
following estimated useful lives:
Years
-----
Buildings and improvements 22 to 30
Furniture and fixtures 5
Maintenance and repairs are charged to expense when incurred. Expenditures for
improvements are charged to the related asset account.
When properties are sold, the related costs and accumulated depreciation are
removed from the respective accounts. Any gain or loss on disposition is
recognized in accordance with generally accepted accounting principles.
The Partnership records its investments in real estate at cost, and
periodically assesses possible impairment to the value of its properties. In
the event that the General Partner determines that a permanent impairment in
value has occurred, the carrying basis of the property is reduced to its
estimated fair value.
(b) Deferred expenses consist of loan modification and refinancing fees which
are amortized over the terms of the respective agreements.
(c) Cash equivalents include all highly liquid investments with a maturity of
three months or less when purchased.
(d) The Partnership is not liable for Federal income taxes and each partner
recognizes his proportionate share of the Partnership loss or income in his tax
return; therefore, no provision for income taxes is made in the financial
statements of the Partnership.
2. Partnership Agreement:
The Partnership was organized on December 23, 1981; however, operations did not
commence until 1982. The Partnership Agreement provides for Balcor Partners-XII
to be the General Partner and for the admission of Limited Partners through the
sale of up to 40,000 Limited Partnership Interests at $1,000 per Interest,
37,447 of which were sold through November 30, 1982, the termination date of
the offering.
The Partnership Agreement provides that the General Partner will be allocated
1% of all profits and losses. One hundred percent of Net Cash Receipts
available for distribution shall be distributed to the holders of Interests.
However, there shall be accrued for the benefit of the General Partner as its
distributive share from operations an amount equivalent to 1% of the total Net
Cash Receipts being distributed which will be paid only out of Net Cash
Proceeds.
When and as the Partnership sells or refinances its properties, the Net Cash
Proceeds resulting therefrom, which are available for distribution, will be
distributed only to holders of Interests until such time as holders of
Interests have received an amount equal to their Original Capital plus certain
levels of return, as specified by the Partnership Agreement. Only after such
returns are made to the Limited Partners would the General Partner receive 20%
of further distributed Net Cash Proceeds. There have been no cash payments to
the General Partner under this provision to date.
<PAGE>
3. Mortgage Notes Payable:
Mortgage notes payable at December 31, 1994 and 1993 consisted of the following:
<TABLE>
<CAPTION>
Carrying Carrying Final
Amount of Amount of Current Matur- Current Estimated
Property Pledged Notes at Notes at Interest ity Monthly Balloon
as Collateral 12/31/94 12/31/93 Rate Date Payment Payment
- ----------------- ---------- ---------- -------- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Apartment Complexes
- -------------------
Brierwood (A) $3,776,116 $2,164,822 9.00% 2029 $29,635 None
Cedar Ridge (B) 5,027,260 5,057,721 10.05% 2000 44,782 $4,806,000
Cedar Ridge (B) 103,600 103,600 10.05% 2000 868 103,600
Defoors Creek 6,461,865 6,622,257 9.75% 2011 66,585 None
Defoors Creek 2,683,252 2,697,790 11.875% 1998 27,721 2,617,000
Sandridge I (C) 5,905,495 5,334,000 9.275% 2001 48,818 5,556,000
Sandridge I (D) 500,000
Somerset Village 6,530,271 6,643,050 7.875% 1998 52,659 6,083,000
----------- -----------
Mortgage Notes Payable -
Nonaffiliates 30,487,859 29,123,240
Mortgage Note Payable -
Affiliate:
Sandridge I (E) 1,692,596
----------- -----------
Total $30,487,859 $30,815,836
=========== ===========
</TABLE>
<PAGE>
(A) In September 1994, this loan was refinanced. The interest rate decreased
from 9.625% to 9.00%, the maturity date was extended from December 1994 to
October 2029 and the monthly payments increased from $27,500 to $29,635. A
portion of the proceeds from the new $3,780,000 first mortgage loan were used
to repay the existing first mortgage loan of $2,081,417.
(B) In April 1993, this loan was refinanced. The original loan, which had an
outstanding balance of $5,205,649, including accrued interest of $94,619, was
repaid for $4,900,000 which, after netting the real estate tax escrow balance
of $109,130, represents a discount to the Partnership of $196,519, which was
recognized as an extraordinary gain. The Partnership used proceeds from the new
loans to repay the original loan. The new loans consist of a first mortgage
loan of $5,076,400 and a second mortgage loan of $103,600, bear interest at
10.05%, require monthly payments of $45,650 and mature in May 2000. The
original loan bore interest at 10.25% and required monthly payments totaling
$43,657.
(C) In July 1994, this loan was refinanced. The interest rate increased from
9.025% to 9.275%, the maturity date was extended from December 1994 to August
2001 and the monthly payments increased from $40,116 to $48,818. A portion of
the proceeds from the new $5,921,000 first mortgage loan were used to repay the
existing first mortgage loan of $5,334,000.
(D) In July 1994, the $500,000 note due to the seller was repaid for $150,000
resulting in an extraordinary gain on forgiveness of debt of $350,000.
(E) In August 1994, this loan was retired and replaced with an unsecured
General Partner loan. See Note 7 of Notes to Financial Statements for
additional information.
The Partnership's loans described above require current monthly payments of
principal and interest except for the Cedar Ridge second mortgage loan which
requires interest only payments.
Scheduled maturities of the above mortgage notes payable during each of the
next five years are summarized as follows:
1995 $ 405,000
1996 444,000
1997 485,000
1998 9,119,000
1999 392,000
During the years ended December 31, 1994, 1993 and 1992, the Partnership
incurred interest expense on mortgage notes payable to non-affiliates of
$2,783,877, $2,796,962 and $2,987,600, respectively. The Partnership paid
interest of $2,783,877, $2,796,962 and $2,856,735, respectively, during these
three years.
4. Management Agreements:
As of December 31, 1994, all of the properties owned by the Partnership are
under management agreements with a third-party management company. These
management agreements provide for annual fees of 5% of gross operating
receipts.
5. Investment in Joint Venture with an Affiliate:
The Partnership owned a 15.61% joint venture interest in Countryside Village
Apartments. In February 1992, the joint venture sold the property to an
unaffiliated party. No proceeds were available from the sale for distribution
to the Partnership or the affiliated joint venture partner. For financial
statement purposes, the joint venture recognized gains of approximately
$1,222,000 from the property sale and the repayment of the mortgage loans at
discounts, of which approximately $191,000 was the Partnership's share. In
addition to the gains, the Partnership was allocated its share of the loss from
<PAGE>
operations for 1992 resulting in net income recognized by the Partnership in
1992 of $188,716. The Partnership made a final contribution of $48,822 to the
joint venture to pay its share of liabilities and closing costs.
6. Tax Accounting:
The Partnership keeps its books in accordance with the Internal Revenue Code,
rules and regulations promulgated thereunder and existing interpretations
thereof. The accompanying financial statements, which are prepared in
accordance with generally accepted accounting principles, will differ from the
tax returns due to the different treatment of various items as specified in the
Internal Revenue Code. The net effect of these accounting differences is that
the net loss for 1994 in the financial statements is $535,226 less than the tax
loss of the Partnership for the same period.
7. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/94 12/31/93 12/31/92
-------------- ---------------- --------------
Paid Payable Paid Payable Paid Payable
------ ------- ------ ------- ------ -------
Property management fees $393,340 $39,770 $400,683 $78,945 $502,666 $68,375
Reimbursement of
expenses to the
General Partner, at
cost:
Accounting 61,502 20,679 37,312 3,109 47,833 3,555
Data processing 34,079 6,337 17,224 5,588 18,736 1,549
Investor communica-
tions 18,146 4,630 17,379 1,448 6,388 474
Legal 12,222 5,000 6,555 547 13,095 973
Portfolio management 38,549 15,320 38,363 3,197 22,614 1,681
Other 8,947 2,513 9,751 600 17,261 1,512
During August 1994, the $1,692,596 Sandridge - Phase I second mortgage loan
from an affiliate of the General Partner was retired and replaced with an
unsecured General Partner loan. Prior to retirement of the mortgage loan, the
Partnership incurred interest expense of $108,714 in 1994 and $180,685 in 1993
and 1992 and paid interest expense of $72,184 in 1994 and $180,685 in 1993 and
1992. As of December 31, 1994, the General Partner loan had a balance totaling
$1,025,724, plus accrued interest payable thereon of $9,144. During 1994, the
Partnership incurred interest expense on the General Partner loan of $38,671
and paid interest expense of $29,527. Interest expense on the General Partner
loan is computed at the American Express Company cost of funds rate plus a
spread to cover administrative costs. As of December 31, 1994 this rate was
6.562%.
The Partnership participates in an insurance deductible program with other
affiliated partnerships in which the program pays claims up to the amount of
the deductible under the master insurance policies for its properties. The
program is administered by an affiliate of the General Partner who receives no
fee for administering the program. The Partnership's premiums to the deductible
insurance program were $91,997, $61,357 and $56,067 for 1994, 1993 and 1992,
respectively.
Allegiance Realty Group, Inc., an affiliate of the General Partner, managed all
of the Partnership's properties until the affiliate was sold to a third party
in November 1994.
8. Settlement With Seller:
<PAGE>
In June 1992, the Partnership reached a settlement with the seller of Cedar
Ridge Apartments. Under the terms of the settlement, the seller has forgiven a
$1,833,727 note owed to the seller by the Partnership plus accrued interest
thereon of $1,660,470. This transaction resulted in a $3,494,197 extraordinary
gain on forgiveness of debt.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1994
<CAPTION>
Col. A Col. B Col. C Col. D
- --------------------- -------- -------------------- ---------------------------------
Initial Cost Cost Adjustments
to Partnership Subsequent to Acquisition
-------------------- ---------------------------------
Buildings Carrying Reduction
Encum- and Im- Improve- Costs of Basis
Description brances Land provements ments (a) (b)
- --------------------- ------- -------- ------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Brierwood, a 196-unit
apt. complex in
Jacksonville, FL (e) $ 693,630 $ 4,001,370 $264,054 $24,069 None
Cedar Ridge, a 276-unit
apt. complex in
Baytown, TX (e) 650,000 7,177,000 191,575 11,928 None
Defoors Creek, a 300-
unit apt. complex in
Atlanta, GA (e) 1,205,000 10,380,000 30,613 30,770 None
Sandridge, a 308-unit
apt. complex in
Pasadena, TX (e) 925,000 7,115,000 None 9,527 None
Somerset Village, a 276-
unit apt. complex in
Tempe, AZ (e) 890,000 9,971,938 None 8,363 ($161,811)
---------- ----------- -------- ------- ---------
Total $4,363,630 $38,645,308 $486,242 $84,657 ($161,811)
========== =========== ======== ======= =========
</TABLE>
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1994
(Continued)
<CAPTION>
Col. A Col. E Col. F Col. G Col. H Col. I
- ------------------- -------------------------------- -------- -------- ------ --------------
Gross Amounts at Which Life Upon
Carried at Close of Period Which Depre-
------------------------------- ciation in
Buildings Accumulated Date Date Latest Income
and Im- Total Deprecia- of Con- Acq- Statement
Description Land provements (c)(d) tion(d) struction uired is Computed
- ------------------- -------- ---------- ---------- --------- --------- ----- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Brierwood, a 196-unit
apt. complex in
Jacksonville, FL $ 697,187 $ 4,285,936 $ 4,983,123 $ 2,424,591 1974 12/82 (f)
Cedar Ridge, a 276-unit
apt. complex in
Baytown, TX 650,990 7,379,513 8,030,503 3,261,864 1982 11/82 (f)
Defoors Creek, a 300-
unit apt. complex in
Atlanta, GA 1,208,200 10,438,183 11,646,383 5,038,363 1981 6/82 (f)
Sandridge, a 308-unit
apt. complex in
Pasadena, TX 926,097 7,123,430 8,049,527 3,354,799 1981 12/82 (f)
Somerset Village, a 276-
unit apt complex in
Tempe, AZ 877,432 9,831,058 10,708,490 4,630,044 1981 12/82 (f)
---------- ----------- ----------- -----------
Total $4,359,906 $39,058,120 $43,418,026 $18,709,661
========== =========== =========== ===========
</TABLE>
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
NOTES TO SCHEDULE III
(a) Consists of legal fees, appraisal fees, title costs and other related
professional fees.
(b) Beginning in 1986, guaranteed income earned on properties under the terms
of management and guarantee agreements was recorded by the Partnership as a
reduction of the basis of the property to which the guaranteed income related.
(c) The aggregate cost of land for Federal income tax purposes is $3,645,781
and the aggregate cost of buildings and improvements for Federal income tax
purposes is $31,070,628. The total of the above-mentioned is $34,716,409.
(d) Reconciliation of Real Estate
-----------------------------
1994 1993 1992
---------- ---------- ----------
Balance at beginning of year $43,397,212 $43,222,249 $43,149,379
Additions during year:
Improvements 20,814 174,963 72,870
----------- ----------- -----------
Balance at close of year $43,418,026 $43,397,212 $43,222,249
=========== =========== ===========
Reconciliation of Accumulated Depreciation
-------------------------------------------
1994 1993 1992
---------- ---------- ----------
Balance at beginning of year $17,441,473 $16,178,133 $14,923,268
Depreciation expense for
the year 1,268,188 1,263,340 1,254,865
----------- ----------- -----------
Balance at close of year $18,709,661 $17,441,473 $16,178,133
=========== =========== ===========
(e) See description of Mortgage Notes Payable in Note 4 of Notes to Financial
Statements.
(f) Depreciation expense is computed based upon the following estimated useful
lives:
Years
-----
Buildings and improvements 22 to 30
Furniture and fixtures 5
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 203
<SECURITIES> 0
<RECEIVABLES> 12
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1988
<PP&E> 43418
<DEPRECIATION> 18710
<TOTAL-ASSETS> 27188
<CURRENT-LIABILITIES> 800
<BONDS> 31514
<COMMON> 0
0
0
<OTHER-SE> 5125
<TOTAL-LIABILITY-AND-EQUITY> 27188
<SALES> 0
<TOTAL-REVENUES> 8744
<CGS> 0
<TOTAL-COSTS> 5133
<OTHER-EXPENSES> 1712
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2931
<INCOME-PRETAX> (1033)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1033)
<DISCONTINUED> 0
<EXTRAORDINARY> 350
<CHANGES> 0
<NET-INCOME> (683)
<EPS-PRIMARY> (27.31)
<EPS-DILUTED> (27.31)
</TABLE>
