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, 1995
-----------------
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
------------- -------------
Commission file number 0-11126
-------
BALCOR EQUITY PROPERTIES-XII
------------------------------------------------------
(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.)
2355 Waukegan Road
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
--------------
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.
Overall, the investment real estate market saw gradual improvement over the
last year. This improvement has taken place in an environment of generally low
interest rates and little or no new supply, parameters which may not exist in
the next few years. Demand for real estate space, while projected to improve in
line with the overall economy, is also vulnerable to external forces. The major
challenges facing the real estate industry today include increased
international competition, corporate restructurings, new computer and
communications technologies, an aging population and potential revisions of the
tax code. In addition, the increased flow of capital to real estate through new
vehicles such as commercial mortgage-backed securities and REITs could spur new
construction at unsupportable levels, as well as impact existing property
values.
Operationally, existing apartment properties continued to register occupancy
percentages in the 90s, with average rents rising at an annual rate of between
3 and 4 percent. Apartments are still considered one of the top real estate
asset classes in terms of performance. However, some markets are experiencing
new construction of rental units which, if unrestrained, could impact the
performance of existing properties. Most of the new construction is aimed at
the two segments of the rental market which are growing the fastest: low-income
households and upper-income households who prefer to rent rather than own. Of
all the major asset classes, apartments typically display the least volatility
in terms of property values.
The General Partner had previously advised the Limited Partners that its
strategy was to sell the Registrant's remaining assets over the next two to
three years. The General Partner also stated that the timing of the liquidation
could be lengthened or shortened due to changes in market conditions, economic
factors, interest rates and unforeseen events. Since November 1995, the General
Partner believes that the market for multifamily housing properties has become
increasingly favorable to sellers of these properties. This belief is based on
the results of the sales and marketing activities of various other partnerships
affiliated with the Registrant. These favorable market conditions are in part
attributable to the increasing strength of the capital markets and the re-entry
of REITs into the acquisition market. The General Partner intends to begin
marketing the remaining five properties in the Registrant for sale. If the
<PAGE>
current market conditions for sales remain favorable and the General Partner
can obtain appropriate sales prices, the Registrant's liquidation strategy may
be accelerated.
The Registrant received notice of an unsolicited offer for the purchase of
limited partnership interests ("tender offer") in November 1995. The tender
offer was made by Walton Street Capital Acquisition Co. L.L.C. ("Walton
Street"). Walton Street stated that their primary motive in making the offer
was to make a profit from the purchase of the interests. Walton Street acquired
11.15% of the total interests outstanding in the Registrant and assigned the
interests to its affiliate, WIG XII Partners. The Registrant incurred
administrative costs in responding to the tender offer.
The Registrant received notice of an unsolicited offer for the purchase of
limited partnership interests ("tender offer") on March 11, 1996. The tender
offer was made by Metropolitan Acquisition VII, L.L.C. ("Metropolitan").
Metropolitan is an affiliate of Insignia Financial Group, Inc., which provides
property management services to all of the Registrant's properties.
Metropolitan has stated that their primary motive in making the offer is to
make a profit from the purchase of the interests. Metropolitan is seeking to
acquire up to 30% of the total interests outstanding in the Registrant. The
Registrant will incur administrative costs in responding to the tender offer
and may incur additional costs if additional tender offers are made in the
future. The General Partner cannot predict with any certainty what the impact
of this tender offer or any future tender offers will have on the operations or
management of the Registrant.
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, 1995, the Registrant owns the five properties described
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.
<PAGE>
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
- -------------------------
Proposed class action
- ---------------------
On February 29, 1996, a proposed class action complaint was filed, Raymond
Masri vs. Lehman Brothers, Inc., et al., Case No. 96/103727 (Supreme Court of
the State of New York, County of New York). The Registrant, additional limited
partnerships which were sponsored by The Balcor Company, three limited
partnerships sponsored by the predecessor of Lehman Brothers, Inc. (together
with the Registrant and the affiliated partnerships, the "Defendant
Partnerships"), Lehman Brothers, Inc. and Smith Barney Holdings, Inc. are
defendants. The complaint alleges, among other things, common law fraud and
deceit, negligent misrepresentation and breach of fiduciary duty relating to
the disclosure of information in the offering of limited partnership interests
in the Defendant Partnerships. The complaint seeks judgment for compensatory
damages equal to the amount invested in the Defendant Partnerships by the
proposed class plus interest accrued thereon; general damages for injuries
arising from the defendants' actions; recovery from the defendants of all
profits received by them as a result of their actions relating to the Defendant
Partnerships; exemplary damages; attorneys' fees and other costs.
The defendants intend to vigorously contest this action. No class has been
certified as of this date. Management of each of the defendants believes they
have meritorious defenses to contest the claims. It is not determinable at this
time whether or not an unfavorable decision in this action would have a
material adverse impact on the Registrant.
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 1995.
<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 Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources, below.
As of December 31, 1995, the number of record holders of Limited Partnership
Interests of the Registrant was 4,021.
Item 6. Selected Financial Data
- -------------------------------
Year ended December 31,
----------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
Total income $9,271,354 $ 8,743,519 $ 8,223,415 $ 8,308,626 $ 7,787,677
Loss before
extraordinary
items (547,006) (1,032,968) (952,362) (445,671) (1,132,755)
Net (loss) income (547,006) (682,968) (755,843) 3,048,526 (1,132,755)
Net (loss) income
per Limited Part-
nership Interest (14.46) (18.06) (19.98) 80.60 (29.95)
Total assets 25,940,108 27,188,193 27,222,063 28,297,996 29,287,679
Mortgage notes
payable 30,082,916 30,487,859 30,815,836 31,133,258 33,277,367
Item 7. Management's Discussion and Analysis of Financial Condition and
- -----------------------------------------------------------------------
Results of Operations
- ---------------------
Operations
- ----------
Summary of Operations
- ---------------------
Balcor Equity Properties - XII (the "Partnership") experienced improved
operations during 1995 primarily as a result of increased rental income. In
addition, the Partnership recognized extraordinary gains related to the
forgiveness of debt during 1994 and 1993, which impacted the Partnership's
operating results. Further discussion of the Partnership's operations is
summarized below.
<PAGE>
1995 Compared to 1994
- ---------------------
As a result of higher rental rates at all of the Partnership's properties,
rental and service income increased during 1995 as compared to 1994.
As a result of higher average interest rates, interest income on short-term
investments increased during 1995 as compared to 1994.
The August 1994 retirement of the Sandridge - Phase I Apartments' second
mortgage loan resulted in a decrease in interest expense on mortgage notes
payable during 1995 when compared to 1994. However, the refinancing of the
Brierwood and Sandridge - Phase I apartment complexes' first mortgage loans in
1994 resulted in higher outstanding principal balances and increased interest
expense which partially offset this decrease.
Due to the retirement and replacement of the Sandridge - Phase I Apartments'
second mortgage loan with an unsecured General Partner loan in August 1994,
interest on short-term loans increased for 1995 as compared to 1994.
During 1994, the Brierwood and Sandridge - Phase I apartment complexes' first
mortgage loans were refinanced and the remaining deferred expenses relating to
the original loan were fully amortized. As a result, amortization expense
decreased during 1995 as compared to 1994.
The Partnership incurred legal, consulting, printing and postage costs in
connection with a tender offer during the fourth quarter of 1995. As a result,
administrative expenses increased during 1995 as compared to 1994.
In July 1994, the Partnership repaid a $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.
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'
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.
<PAGE>
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 also contributed to the
increase in property operating expenses. 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 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.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased slightly as of December 31, 1995
when compared to December 31, 1994. 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 and DeFoors Creek apartment complexes. Additional cash was used in
financing activities, which consisted of proceeds from the release of capital
improvement escrows, less principal payments on the Partnership's mortgage
notes payable and the partial repayment of loans payable-affiliate.
During 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 has partially repaid
the loan and owes $705,724 to the General Partner at December 31, 1995. 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 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
<PAGE>
expenditures, which include debt service payments. During 1995 and 1994, the
DeFoors Creek and Somerset Village apartment complexes generated positive cash
flow. The Cedar Ridge and Sandridge - Phase I apartment complexes generated
positive cash flow during 1995 as compared to marginal cash flow deficits
during 1994 primarily due to improved occupancy and rental rates, and lower
property operating and maintenance expenditures. The Brierwood Apartments
generated a marginal cash flow deficit during 1995 as compared to positive cash
flow for 1994, primarily due to exterior painting expenditures in 1995. As of
December 31, 1995, the occupancy rates of the Partnership's properties ranged
from 94% to 98%.
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
the cash flow of the Partnership's properties, including improving property
performance and seeking rent increases where market conditions allow.
The General Partner had previously advised the Limited Partners that its
strategy was to sell the Partnership's remaining assets over the next two to
three years. The General Partner also stated that the timing of the
liquidation could be lengthened or shortened due to changes in market
conditions, economic factors, interest rates and unforeseen events. Since
November, 1995, the General Partner believes that the market for multifamily
housing properties has become increasingly favorable to sellers of these
properties. This belief is based on the results of the sales and marketing
activities of various other partnerships affiliated with the Partnership.
These favorable market conditions are in part attributable to the increasing
strength of the capital markets and the re-entry of REITs into the acquisition
market. The General Partner intends to begin marketing the remaining five
properties in the Partnership for sale. If the current market conditions for
sales remain favorable and the General Partner can obtain appropriate sales
prices, the Partnership's liquidation strategy may be accelerated.
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. 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.
In 1995, the Financial Accounting Standards Board issued Statement No. 121
"Accounting for the Impairment of Long-Lived Assets for Long-Lived Assets to be
Disposed Of" which establishes accounting standards for impairment of
long-lived assets and long-lived assets to be disposed of. This statement has
been adopted by the Partnership as of January 1, 1995, and did not have a
material impact on the financial position or results of operations of the
Partnership.
<PAGE>
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, 1995 December 31, 1994
----------------------- -------------------------
Financial Tax Financial Tax
Statements Returns Statements Returns
---------- --------- ---------- ---------
Total assets $25,940,108 $13,228,239 $27,188,193 $14,566,994
Partners' deficit
accounts:
General Partner (600,773) (1,520,767) (595,303) (1,537,719)
Limited Partners (5,071,501) (16,863,381) (4,529,965) (16,096,255)
Net income (loss):
General Partner (5,470) (16,952) (6,830) (9,769)
Limited Partners (541,536) (767,126) (676,138) (1,208,425)
Per Limited Part-
nership Interest (14.46) (20.49) (18.06) (32.27)
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
Senior Vice President Alexander J. Darragh
Senior Vice President Josette V. Goldberg
Senior Vice President Alan G. Lieberman
Senior Vice President, Chief Brian D. Parker
Financial Officer, Treasurer
and Assistant Secretary
Senior Vice President John K. Powell, Jr.
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. He is
also Senior Vice President of American Express Company and is responsible for
its real estate operations worldwide. 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.
Alexander J. Darragh (February 1955) joined Balcor in September 1988 and is
responsible for due diligence analysis and real estate advisory services for
Balcor and American Express Company. He also has supervisory responsibility
for Balcor's environmental matters. Mr. Darragh received masters' degrees in
Urban Geography from Queen's University and in Urban Planning from
Northwestern University.
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 MIS functions. Ms. Goldberg has been
designated as a Senior Human Resources Professional (SHRP).
Alan G. Lieberman (June 1959) joined Balcor in May 1983 and is responsible for
Balcor's property sales and capital markets functions. Mr. Lieberman is a
Certified Public Accountant.
Brian D. Parker (June 1951) joined Balcor in March 1986 and, as Chief Financial
Officer and Chief Accounting Officer, is responsible for Balcor's financial,
legal and treasury functions. He is a Director of The Balcor Company. Mr.
Parker is a Certified Public Accountant and holds an M.S. degree in Accountancy
from DePaul University.
<PAGE>
John K. Powell Jr. (June 1950) joined Balcor in September 1985 and is
responsible for portfolio and asset management matters relating to Balcor's
partnerships. Mr. Powell also has supervisory responsibility for Balcor's risk
management and investor services functions. He received a Master of Planning
degree from the University of Virginia. Mr. Powell 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.
(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 1995.
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) The following entity is the sole Limited Partner which owns beneficially
more than 5% of the outstanding Limited Partnership Interests of the
Registrant:
Name and Amount and
Address of Nature of Percent
Beneficial Beneficial of
Title of Class Owner Ownership Class
- -------------------------------------------------------------------------------
Limited WIG XII 4,176.9 11.15%
Partnership Partners Limited
Interests Chicago, Partnership
Illinois Interests
(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
Interests 70 Interests Less than 1%
<PAGE>
Relatives and affiliates of the partners and officers of the General Partner
own twelve Limited Partnership Interests.
(c) A tender offer for limited partnership interests in the Registrant was
completed on December 22, 1995 pursuant to which WIG XII Partners acquired
11.15% of the outstanding interests. Such ownership by WIG XII Partners permits
WIG XII Partners to call a meeting of the Limited Partners to vote on any
matter appropriate for Limited Partner approval.
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 3 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 Schedules 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 1995 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended December 31, 1995.
(c) Exhibits: See Item 14(a)(3) above.
(d) Financial Statement Schedules: 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/Brian D. Parker
--------------------------------
Brian D. Parker
Senior Vice President, and Chief
Financial Officer (Principal
Accounting and Financial
Officer) of Balcor Partners-XII, the
General Partner
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.
Signature Title Date
- ---------------------- ------------------------------ ------------
President and Chief Executive
Officer (Principal Executive
Officer) of Balcor Partners-XII,
/s/Thomas E. Meador the General Partner March 28, 1996
- -------------------- --------------
Thomas E. Meador
Senior Vice President, and Chief
Financial Officer (Principal
Accounting Officer) of
Balcor Partners-XII, the General
/s/Brian D. Parker Partner March 28, 1996
- -------------------- --------------
Brian D. Parker
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Report of Independent Accountants
Financial Statements:
Balance Sheets, December 31, 1995 and 1994
Statements of Partners' Deficit, for the years ended December 31, 1995, 1994
and 1993
Statements of Income and Expenses, for the years ended December 31, 1995, 1994
and 1993
Statements of Cash Flows, for the years ended December 31, 1995, 1994 and 1993
Notes to Financial Statements
Financial Statement Schedule:
III - Real Estate and Accumulated Depreciation, as of December 31, 1995
Financial Statement Schedules, other than that 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, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995, 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 20, 1996
<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
BALANCE SHEETS
December 31, 1995 and 1994
ASSETS
1995 1994
------------- -------------
Cash and cash equivalents $ 146,052 $ 203,497
Escrow deposits 1,626,624 1,772,962
Accounts and accrued interest receivable 87,969 11,597
Prepaid expenses 95,080
Deferred expenses, net of accumulated
amortization of $157,220 in 1995 and
$96,606 in 1994 431,158 491,772
------------- -------------
2,386,883 2,479,828
------------- -------------
Investment in real estate:
Land 4,359,906 4,359,906
Buildings and improvements 39,176,170 39,058,120
------------- -------------
43,536,076 43,418,026
Less accumulated depreciation 19,982,851 18,709,661
------------- -------------
Investment in real estate, net of
accumulated depreciation 23,553,225 24,708,365
------------- -------------
$ 25,940,108 $ 27,188,193
============= =============
LIABILITIES AND PARTNERS' DEFICIT
Loans payable - affiliate $ 705,724 $ 1,025,724
Accounts payable 127,828 124,906
Due to affiliates 21,406 103,393
Accrued real estate taxes 516,588 427,130
Security deposits 157,920 144,449
Mortgage notes payable 30,082,916 30,487,859
------------- -------------
Total liabilities 31,612,382 32,313,461
Limited Partners' deficit (37,447
Interests issued and outstanding) (5,071,501) (4,529,965)
General Partner's deficit (600,773) (595,303)
------------- -------------
Total partners' deficit (5,672,274) (5,125,268)
------------- -------------
$ 25,940,108 $ 27,188,193
============= =============
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, 1995, 1994, and 1993
Partners' Deficit Accounts
------------------------------------------
General Limited
Total Partner Partners (A)
-------------- ------------- -------------
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)
Net loss for the year
ended December 31, 1995 (547,006) (5,470) (541,536)
-------------- ------------- -------------
Balance at December 31, 1995 $ (5,672,274) $ (600,773) $ (5,071,501)
============== ============= =============
(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, 1995, 1994, and 1993
1995 1994 1993
-------------- ------------- -------------
Income:
Rental and service $ 9,240,631 $ 8,722,222 $ 8,199,819
Interest on short-term
investments 30,723 21,297 23,596
-------------- ------------- -------------
Total income 9,271,354 8,743,519 8,223,415
-------------- ------------- -------------
Expenses:
Interest on mortgage
notes payable 2,880,912 2,892,591 2,977,647
Interest on short-term
loans - affiliate 52,902 38,671
Depreciation 1,273,190 1,268,188 1,263,340
Amortization of deferred
expenses 60,614 77,934 56,916
Property operating 3,731,112 3,819,252 3,296,667
Real estate taxes 901,493 879,193 890,050
Property management fees 460,331 434,842 411,253
Administrative 457,806 365,816 279,904
-------------- ------------- -------------
Total expenses 9,818,360 9,776,487 9,175,777
-------------- ------------- -------------
Loss before extraordinary item (547,006) (1,032,968) (952,362)
Extraordinary item:
Gain on forgiveness of debt 350,000 196,519
-------------- ------------- -------------
Net loss $ (547,006) $ (682,968) $ (755,843)
============== ============= =============
Loss before extraordinary item
allocated to General Partner $ (5,470) $ (10,330) $ (9,524)
============== ============= =============
Loss before extraordinary item
allocated to Limited Partners $ (541,536) $ (1,022,638) $ (942,838)
============== ============= =============
Loss before extraordinary item
per Limited Partnership
Interest (37,447 issued
and outstanding) $ (14.46) $ (27.31) $ (25.18)
============== ============= =============
Extraordinary item allocated
to General Partner NONE $ 3,500 $ 1,965
============== ============= =============
Extraordinary item allocated
to Limited Partners NONE $ 346,500 $ 194,554
============== ============= =============
Extraordinary item per Limited
Partnership Interest (37,447
issued and outstanding) NONE $ 9.25 $ 5.20
============== ============= =============
Net loss allocated to General
Partner $ (5,470) $ (6,830) $ (7,559)
============== ============= =============
Net loss allocated to Limited
Partners $ (541,536) $ (676,138) $ (748,284)
============== ============= =============
Net loss per Limited
Partnership Interest (37,447
issued and outstanding) $ (14.46) $ (18.06) $ (19.98)
============== ============= =============
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, 1995, 1994, and 1993
1995 1994 1993
-------------- ------------- -------------
Operating activities:
Net loss $ (547,006) $ (682,968) $ (755,843)
Adjustments to reconcile net
loss to net cash provided
by operating activities:
Extraordinary gain on
forgiveness of debt (350,000) (196,519)
Depreciation of properties 1,273,190 1,268,188 1,263,340
Amortization of deferred
expenses 60,614 77,934 56,916
Net change in:
Escrow deposits (167,852) (149,547) 71,209
Accounts and accrued
interest receivable (76,372) 25,791 (33,727)
Prepaid expenses (95,080)
Accounts payable 2,922 (92,409) 70,728
Due to affiliates (81,987) 9,959 15,315
Accrued liabilities 89,458 32,950 12,836
Security deposits 13,471 851 (6,928)
-------------- ------------- -------------
Net cash provided by
operating activities 471,358 140,749 497,327
-------------- ------------- -------------
Investing activities:
Improvements to properties (118,050) (20,814) (174,963)
-------------- ------------- -------------
Net cash used in investing
activities (118,050) (20,814) (174,963)
-------------- ------------- -------------
Financing activities:
Proceeds from loan payable 195,000
- affiliate
Repayment of loan payable
- affiliate (515,000) (666,872)
Repayment of mortgage notes
payable (7,565,417) (4,900,000)
Proceeds from refinancing of
mortgage notes payable 9,701,000 5,180,000
Payment of deferred expenses (372,560) (111,754)
Funding of capital
improvement escrows (865,844) (454,250)
Proceeds from the release of
capital improvement escrows 314,190 19,777
Principal payments on
mortgage notes payable (404,943) (420,964) (386,392)
-------------- ------------- -------------
Net cash used in financing
activities (410,753) (170,880) (672,396)
-------------- ------------- -------------
Net change in cash and cash
equivalents (57,445) (50,945) (350,032)
Cash and cash equivalents at
beginning of year 203,497 254,442 604,474
-------------- ------------- -------------
Cash and cash equivalents at
end of year $ 146,052 $ 203,497 $ 254,442
============== ============= =============
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. Nature of the Partnership's Business:
Balcor Equity Properties-XII is engaged principally in the operation of
residential real estate located in various markets within the United States.
2. Accounting Policies:
(a) The preparation of the financial statements in conformity with generally
accepted accounting principles requires the General Partner to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could vary from those estimates.
(b) 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.
(c) Effective January 1, 1995 the Partnership adopted Statement of Financial
Accounting Standards, No. 121 (SFAS 121), "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed Of". Under SFAS 121, the
Partnership records its investments in real estate at the lower of cost or fair
value, and periodically assesses, but not less than on an annual basis,
possible impairment to the value of its properties. The General Partner
estimates the fair value of its properties by dividing the property's expected
net operating income by a risk adjusted rate of return which considers economic
and demographic conditions in the market. In the event the General Partner
determines an impairment in value has occurred, and the carrying amount of the
real estate asset will not be recovered, a provision is recorded to reduce the
carrying basis of the property to its estimated fair value. The General Partner
considers the method referred to above to result in a reasonable measurement of
a property's fair value, unless other factors affecting the property's value
indicate otherwise.
(d) Deferred expenses consist of loan modification and refinancing fees which
are amortized over the terms of the respective agreements.
<PAGE>
(e) The Financial Accounting Standard Board's Statement No. 107, "Disclosures
About Fair Value of Financial Instruments", requires disclosure of fair value
information about financial instruments for which it is practicable to estimate
that value. Since quoted market prices are not available for the Partnership's
financial instruments, fair values have been based on estimates using present
value techniques. These techniques are significantly affected by the
assumptions used, including the discount rate and estimates of future cash
flows. In that regard, the derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many cases, may not
be realized in immediate settlement of the instrument. Statement No. 107 does
not apply to all balance sheet items and excludes certain financial instruments
and all non-financial instruments such as real estate and investment in joint
ventures from its disclosure requirements.
(f) Revenue is recognized on an accrual basis in accordance with generally
accepted accounting principles.
(g) Cash and cash equivalents include all unrestricted, highly liquid
investments with an original maturity of three months or less.
(h) 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.
(i) A reclassification has been made to the previously reported 1994 and 1993
financial statements to conform with the classification used in 1995. This
reclassification has not changed the 1994 or 1993 results.
3. 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>
4. Mortgage Notes Payable:
Mortgage notes payable at December 31, 1995 and 1994 consisted of the following:
<TABLE> Carrying Carrying Final
Amount of Amount of Current Matur- Current Estimated
Property Pledged Notes at Notes at Interest ity Monthly Balloon
as Collateral 12/31/95 12/31/94 Rate Date Payment Payment
- ----------------- ---------- ---------- -------- ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Apartment Complexes
- -------------------
Brierwood (A) $3,759,681 $3,776,116 9.000% 2029 $29,635 None
Cedar Ridge-first mortgage 4,993,591 5,027,260 10.050% 2000 44,782 $4,806,000
Cedar Ridge-second mortgage 103,600 103,600 10.050% 2000 868 103,600
DeFoors Creek-first mortgage 6,285,117 6,461,865 9.750% 2011 66,585 None
DeFoors Creek-second mortgage 2,666,889 2,683,252 11.875% 1998 27,721 2,617,000
Sandridge I (B) 5,865,753 5,905,495 9.275% 2001 48,818 5,556,000
Somerset Village 6,408,285 6,530,271 7.875% 1998 52,659 6,083,000
----------- -----------
Total $30,082,916 $30,487,859
=========== ===========
</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 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.
The Partnership's loans described above require current monthly payments of
principal and interest, except for the $103,600 Cedar Ridge second mortgage
loan which requires interest only payments.
Real estate with an aggregate carrying value of $23,553,225 at December 31,
1995 was pledged as collateral for the repayment of loans.
Future annual maturities of the above mortgage notes payable during each of the
next five years are summarized as follows:
1996 $ 444,000
1997 485,000
1998 9,119,000
1999 392,000
2000 5,299,000
During the years ended December 31, 1995, 1994 and 1993, the Partnership
incurred interest expense on mortgage notes payable to non-affiliates of
$2,880,912, $2,783,877 and $2,796,962, respectively. The Partnership paid
interest of $2,880,912, $2,783,877 and $2,796,962, respectively, during these
three years.
5. Management Agreements:
As of December 31, 1995, 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.
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 1995 in the financial statements is $203,168 less than the tax
loss of the Partnership for the same period.
<PAGE>
7. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/95 12/31/94 12/31/93
-------------- ---------------- --------------
Paid Payable Paid Payable Paid Payable
------ ------- ------ ------- ------ -------
Property management fees $39,770 None $393,340 $39,770 $400,683 $78,945
Reimbursement of
expenses to the
General Partner, at
cost:
Accounting 39,631 2,604 61,502 20,679 37,312 3,109
Data processing 22,121 2,125 34,079 6,337 17,224 5,588
Investor communica-
tions 4,890 None 18,146 4,630 17,379 1,448
Legal 18,918 2,199 12,222 5,000 6,555 547
Portfolio management 84,874 11,399 38,549 15,320 38,363 3,197
Other 3,460 192 8,947 2,513 9,751 600
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 paid interest expense of $72,184 in 1994 and $217,215 in 1993.
As of December 31, 1995, the General Partner loan had a balance of $705,724,
including accrued interest payable thereon of $2,887. During 1995 and 1994, the
Partnership made net principal repayments of $320,000 and $666,872,
respectively, on this loan. The Partnership incurred interest expense on the
loan of $52,902 in 1995 and $38,671 in 1994 and paid interest expense of
$59,159 in 1995 and $29,527 in 1994. 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, 1995 this rate was
6.307%.
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; however, the General Partner is reimbursed
for program expenses. The Partnership paid premiums to the deductible insurance
program of $55,758, $91,997 and $61,357 in 1995, 1994 and 1993, 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.
The General Partner may continue to make arrangements with an affiliate to
provide additional short-term loans to the Partnership to fund future working
capital needs or operating deficits, although there is no assurance that such
loans will be available. Should additional borrowings be needed and not be
available either through the General Partner or third parties, the Partnership
<PAGE>
may be required to dispose of some of its properties to satisfy these
obligations.
8. Extraordinary Items:
a) In July 1994, the $500,000 note due to the seller of the Sandridge - Phase I
Apartments was repaid for $150,000 resulting in an extraordinary gain on
forgiveness of debt of $350,000.
b) In April 1993, the loan collateralized by the Cedar Ridge Apartments 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.
9. Fair Values of Financial Instruments:
The carrying amounts and fair values of the Partnership's financial instruments
at December 31, 1995 are as follows:
The carrying value of cash and cash equivalents, accounts and accrued interest
receivable and accounts payable approximates fair value.
Mortgage Notes Payable: Based on borrowing rates available to the Partnership
at the end of 1995 for mortgage loans with similar terms and maturities, the
fair value of the mortgage notes payable approximates the carrying value.
10. Subsequent Event:
On February 29, 1996, a proposed class action complaint was filed, Raymond
Masri vs. Lehman Brothers, Inc., et al., Case No. 96/103727 (Supreme Court of
the State of New York, County of New York). The Partnership, additional limited
partnerships which were sponsored by The Balcor Company, three limited
partnerships sponsored by the predecessor of Lehman Brothers, Inc. (together
with the Partnership and the affiliated partnerships, the "Defendant
Partnerships"), Lehman Brothers, Inc. and Smith Barney Holdings, Inc. are
defendants. The complaint alleges, among other things, common law fraud and
deceit, negligent misrepresentation and breach of fiduciary duty relating to
the disclosure of information in the offering of limited partnership interests
in the Defendant Partnerships. The complaint seeks judgment for compensatory
damages equal to the amount invested in the Defendant Partnerships by the
proposed class plus interest accrued thereon; general damages for injuries
arising from the defendants' actions; recovery from the defendants of all
profits received by them as a result of their actions relating to the Defendant
Partnerships; exemplary damages; attorneys' fees and other costs.
The defendants intend to vigorously contest this action. No class has been
certified as of this date. Management of each of the defendants believes they
have meritorious defenses to contest the claims. It is not determinable at this
time whether or not an unfavorable decision in this action would have a
material adverse impact on the Partnership.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1995
<CAPTION>
Col. A Col. B Col. C Col. D
- --------------------- -------- -------------------- --------------------------------
Initial Cost Cost Adjustments
to Partnership Subsequent to Acqisition
-------------------- --------------------------------
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 $298,548 $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 10,380,000 114,169 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 $604,292 $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, 1995
(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- Aqu- 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 $ 4,320,430 $ 5,017,617 $ 2,611,864 1974 12/82 (f)
Cedar Ridge, a 276-unit
apt. complex in
Baytown, TX 650,990 7,379,513 8,030,503 3,492,024 1982 11/82 (f)
DeFoors Creek, a 300-
unit apt. complex in
Atlanta, GA 1,208,200 10,521,739 11,729,939 5,366,079 1981 6/82 (f)
Sandridge, a 308-unit
apt. complex in
Pasadena, TX 926,097 7,123,430 8,049,527 3,577,071 1981 12/82 (f)
Somerset Village, a 276-
unit apt complex in
Tempe, AZ 877,432 9,831,058 10,708,490 4,935,813 1981 12/82 (f)
---------- ----------- ----------- -----------
Total $4,359,906 $39,176,170 $43,536,076 $19,982,851
========== =========== =========== ===========
</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 $31,188,678. The total of the above-mentioned is $34,834,459.
(d)
Reconciliation of Real Estate
------------------------------
1995 1994 1993
---------- ---------- ----------
Balance at beginning of year $43,418,026 $43,397,212 $43,222,249
Additions during year:
Improvements 118,050 20,814 174,963
----------- ----------- -----------
Balance at close of year $43,536,076 $43,418,026 $43,397,212
=========== =========== ===========
Reconciliation of Accumulated Depreciation
-------------------------------------------
1995 1994 1993
---------- ---------- ----------
Balance at beginning of year $18,709,661 $17,441,473 $16,178,133
Depreciation expense for
the year 1,273,190 1,268,188 1,263,340
----------- ----------- -----------
Balance at close of year $19,982,851 $18,709,661 $17,441,473
=========== =========== ===========
(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-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 146
<SECURITIES> 0
<RECEIVABLES> 88
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1956
<PP&E> 43536
<DEPRECIATION> 19983
<TOTAL-ASSETS> 25940
<CURRENT-LIABILITIES> 1530
<BONDS> 30083
0
0
<COMMON> 0
<OTHER-SE> 5672
<TOTAL-LIABILITY-AND-EQUITY> 25940
<SALES> 0
<TOTAL-REVENUES> 9271
<CGS> 0
<TOTAL-COSTS> 5093
<OTHER-EXPENSES> 1791
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2934
<INCOME-PRETAX> (547)
<INCOME-TAX> 0
<INCOME-CONTINUING> (547)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (547)
<EPS-PRIMARY> (14.46)
<EPS-DILUTED> (14.46)
</TABLE>
