<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1997
Commission File Number
0-12438
REAL ESTATE ASSOCIATES LIMITED V
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-3768810
9090 WILSHIRE BLVD., SUITE 201, BEVERLY HILLS, CALIFORNIA 90211
Registrant's Telephone Number, Including Area Code (310) 278-2191
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed with the Commission by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve months (or 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> 2
PART I.
ITEM 1. BUSINESS:
Real Estate Associates Limited V ("REAL V" or the "Partnership") is a limited
partnership which was formed under the laws of the State of California on May 7,
1982. On July 7, 1982, Real Estate Associates Limited V offered 1,950 units
consisting of 3,900 Limited Partnership Interests and Warrants to purchase 3,900
Additional Limited Partnership Interests through a public offering, managed by
E.F. Hutton, Inc.
The general partners of REAL V are National Partnership Investments Corp.
("NAPICO"), a California Corporation (the "Corporate General Partner"), and
National Partnership Investments Associates II ("NAPIA II"), a limited
partnership formed under the California Limited Partnership Act and consisting
of Mr. Charles H. Boxenbaum and 2 unrelated individuals as limited partners. The
business of REAL V is conducted primarily by NAPICO.
NAPICO is a wholly owned subsidiary of Casden Investment Corporation ("CIC"),
which is wholly owned by Alan I. Casden. The current members of NAPICO's Board
of Directors are Charles H. Boxenbaum, Bruce E. Nelson, Alan I. Casden and
Henry C. Casden.
REAL V holds limited partnership interests in nineteen local limited
partnerships as of December 31, 1997. Primarily all of these limited
partnerships own a low income housing project which is subsidized and/or has a
mortgage note payable to or insured by agencies of the federal or local
government.
In order to stimulate private investment in low income housing, the federal
government and certain state and local agencies have provided significant
ownership incentives, including among others, interest subsidies, rent
supplements, and mortgage insurance, with the intent of reducing certain market
risks and providing investors with certain tax benefits, plus limited cash
distributions and the possibility of long-term capital gains. There remain,
however, significant risks. The long-term nature of investments in government
assisted housing limits the ability of REAL V to vary its portfolio in response
to changing economic, financial and investment conditions; such investments are
also subject to changes in local economic circumstances and housing patterns, as
well as rising operating costs, vacancies, rent collection difficulties, energy
shortages and other factors which have an impact on real estate values. These
projects also require greater management expertise and may have higher operating
expenses than conventional housing projects.
Under recent adopted law and policy, HUD has determined not to renew HAP
contracts on a long term basis on the existing terms. In connection with
renewals of the HAP Contracts under such new law and policy, the amount of
rental assistance payments under renewed HAP Contracts will be based on market
rentals instead of above market rentals, which was generally the case under
existing HAP Contracts. As a result, existing HAP Contracts that are renewed in
the future on projects insured by the FHA will not provide sufficient cash flow
to permit owners of properties to meet the debt service requirements of these
existing FHA-insured mortgages. In order to address the reduction in payments
under HAP Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 (the "MAHRAA"), which was adopted
in October 1997, provides for the restructuring of mortgage loans insured by the
FHA with respect to properties subject to HAP Contracts that have been renewed
under the new policy. The restructured loans will be held by the current lender
or another lender. Under MAHRAA, an FHA-insured mortgage loan can be
restructured to reduce the annual debt service on such loan. There can be no
assurance that the Partnership will be permitted to restructure its mortgage
indebtedness pursuant to new HUD rules implementing MAHRAA or that the
Partnership would choose to restructure such mortgage indebtedness if it were
eligible to participate in the MAHRAA program. It should be noted that there are
uncertainties as to the economic impact on the Partnership of the combination
<PAGE> 3
of the reduced payments under the HAP Contracts and the restructuring of the
existing FHA-insured mortgage loans under MAHRAA. Accordingly, the General
Partners are unable to predict with certainty their impact on the Partnership's
future cash flow.
The partnerships in which REAL V has invested were, at least initially,
organized by private developers who acquired the sites, or options thereon, and
applied for applicable mortgage insurance and subsidies. REAL V became the
principal limited partner in these local limited partnerships pursuant to
arm's-length negotiations with these developers, or others, who act as general
partners. As a limited partner, REAL V's liability for obligations of the local
limited partnership is limited to its investment. The local general partner of
the local limited partnership retains responsibility for developing,
constructing, maintaining, operating and managing the project. Under certain
circumstances of default, REAL V has the right to replace the general partner of
the local limited partnership, but otherwise does not have control of sale or
financing, etc.
Although each of the partnerships in which REAL V has invested generally owns a
project which must compete in the market place for tenants, interest subsidies
and rent supplements from governmental agencies make it possible to offer these
dwelling units to eligible "low income" tenants at a cost significantly below
the market rate for comparable conventionally financed dwelling units in the
area.
<PAGE> 4
During 1997, all of the projects in which REAL V had invested were substantially
rented. The following is a schedule of the status as of December 31, 1997, of
the projects owned by local limited partnerships in which REAL V is a limited
partner.
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL V HAS AN INVESTMENT
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance
No. of Under Units Percentage of
Name & Location Units Section 8 Occupied Total Units
- --------------- ---------------- --------- -------- -------------
<S> <C> <C> <C> <C>
Bickerdike
Chicago, IL 140 140 139 99%
Canoga Park Apartments
Canoga Park, CA 14 14 14 100%
Castle Park Apartments
Normandy, MO 209 209 203 97%
Centennial Townhomes
Fort Wayne, IN 88 88 83 94%
Creekside Gardens
Loveland, CO 50 50 47 94%
Del Haven Manor
Jackson, MS 104 104 104 100%
Fox Run Apartments
Orange, TX 70 70 67 96%
Grandview Place Apartments
Missoula, MT 48 48 48 100%
Hamlin Estates
Los Angeles, CA 30 30 28 93%
Heritage Square
Texas City, TX 50 50 50 100%
North River Club Apartments
Oceanside, CA 56 56 56 100%
Palm Springs Senior
Citizens Housing 116 116 113 97%
Palm Springs, CA
</TABLE>
<PAGE> 5
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL V HAS AN INVESTMENT
DECEMBER 31, 1997
(CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance
No. of Under Units Percentage of
Name & Location Units Section 8 Occupied Total Units
- --------------- ---------------- --------- -------- --------------
<S> <C> <C> <C> <C>
Panorama City I
Los Angeles, CA 14 14 14 100%
Panorama City II
Los Angeles, CA 13 13 13 100%
Pine Lake Terrace Apartments
Garden Grove, CA 111 None 110 99%
Plummer Village
Los Angeles, CA 75 74 75 100%
Ranger Apartments
Ranger, TX 50 50 48 96%
Richland Three Rivers
Retirement Apartments
Richland, WA 40 40 39 98%
Robert Farrell Manor
Los Angeles, CA 35 35 35 100%
----- ---- ----- ---
TOTALS 1,313 1201 1,286 98%
===== ==== ===== ===
</TABLE>
<PAGE> 6
ITEM 2. PROPERTIES:
The local limited partnerships in which REAL V holds interests, owns various
multi-family rental properties. See Item 1 for information pertaining to these
properties.
ITEM 3. LEGAL PROCEEDINGS:
As of December 31, 1997, REAL V's Corporate General Partner was a plaintiff or
defendant in several lawsuits. None of these suits were related to REAL V.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED SECURITY
HOLDER MATTERS:
The Limited Partnership Interests are not traded on a public exchange but were
sold through a public offering managed by E.F. Hutton Inc. It is not
anticipated that any public market will develop for the purchase and sale of any
partnership interest. Limited Partnership interests may be transferred only if
certain requirements are satisfied. At December 31, 1997, there were 1,497
registered holders of units in REAL V. No distributions have been made from the
inception of the Partnership to December 31, 1997. The Partnership has invested
in certain government assisted projects under programs which in many instances
restrict the cash return available to project owners. The Partnership was not
designed to provide cash distributions to investors in circumstances other than
refinancing or disposition.
<PAGE> 7
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Loss From Operations $ (515,423) $ (287,542) $ (287,216) $ (305,798) (336,239)
Distributions From
Limited Partnerships
Recognized as Income 381,171 215,140 221,276 218,651 245,331
Equity in Income of
Limited Partnerships
and amortization of
acquisition costs 503,765 371,644 455,651 393,230 262,614
----------- ----------- ----------- ----------- -----------
Net Income $ 369,513 $ 299,242 $ 389,711 $ 306,083 $ 171,706
=========== =========== =========== =========== ===========
Net Income per Limited
Partnership Interest $ 47 $ 38 $ 50 $ 39 $ 22
=========== =========== =========== =========== ===========
Total assets $ 3,795,448 $ 3,259,178 $ 2,979,971 $ 2,592,397 $ 2,255,550
=========== =========== =========== =========== ===========
Investments in Limited
Partnerships $ 1,616,811 $ 1,305,672 $ 1,103,818 $ 884,383 $ 659,376
=========== =========== =========== =========== ===========
</TABLE>
<PAGE> 8
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL AND RESULTS OF
OPERATIONS:
LIQUIDITY
The Partnership's primary sources of funds include interest income on money
market funds and certificates of deposit and distributions from local
partnerships in which the Partnership has invested. It is not expected that any
of the local limited partnerships in which the Partnership has invested will
generate cash flow sufficient to provide for distributions to the Partnership's
limited partners in any material amount.
CAPITAL RESOURCES
REAL V received $9,750,000 in subscriptions for units of limited partnership
interests (at $5,000 per unit) during the period July 7, 1982, to October 4,
1982, pursuant to a registration statement on Form S-11. As of March 31, 1983,
REAL V received an additional $9,765,000 in subscriptions pursuant to the
exercise of warrants and the sale of additional limited partnership interests.
RESULTS OF OPERATIONS
The Partnership was formed to provide various benefits to its partners as
discussed in Item 1. It is anticipated that the local limited partnerships in
which REAL V has invested could produce tax losses for as long as 20 years. Tax
benefits will decline over time as the advantages of accelerated depreciation
are greatest in the earlier years, as deductions for interest expense will
decrease as mortgage principal is amortized and as the Tax Reform Act of 1986
limits the deductions available.
At December 31, 1997, the Partnership has investments in 19 limited
partnerships, all of which own housing projects that were substantially all
rented. The Partnership, as a limited partner, is entitled to 75% to 99% of the
profits and losses of the local limited partnerships. The Partnership accounts
for its investments in the local limited partnerships on the equity method,
thereby adjusting its investment balance by its proportionate share of the
income or loss of the local limited partnerships. Equity in losses of limited
partnerships is recognized in the financial statements until the limited
partnership investment account is reduced to a zero balance. Losses incurred
after the limited partnership investment account is reduced to zero are not
recognized. Limited partners are not liable for losses beyond their contributed
capital. The Partnership has a positive investment balance in only three local
limited partnerships.
Distributions received from limited partnerships are recognized as return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent distributions
received are recognized as income.
The total income (losses) from the 19 local limited partnerships that were
allocated to the Partnership were $265,000, $(59,000) and $(41,000) for the
years ended December 31, 1997, 1996 and 1995, respectively. However, because
losses incurred after the investment account is reduced to a zero balance are
not recognized, the Partnership recognized equity in income of limited
partnerships, substantially all from the three partnerships with a positive
investment balance, of $503,765, $371,644 and $455,651 for the years ended
December 31, 1997, 1996 and 1995, respectively. During the year ended December
31, 1996, the Partnership contributed $19,568 to a local limited partnership,
thereby allowing the Partnership to recognize a loss from that partnership in
that amount, which reduced the income recognized from the partnerships with
positive investment balances. There were no contributions in 1997 and 1995. The
cumulative amount of the unrecognized equity in losses of certain limited
partnerships was approximately $7,664,000 and $6,389,000 as of December 31, 1997
and 1996, respectively.
<PAGE> 9
Distributions from the local limited partnerships in which the Partnership did
not have a positive investment balance were $381,171, $215,140 and $221,276 for
the years ended December 31, 1997, 1996 and 1995, respectively. These amounts
were recognized as income on the accompanying statements of operations, in
accordance with the equity method of accounting.
As of December 31, 1997, 1996 and 1995, the Partnership has cash and cash
equivalents of $2,178,637, $1,953,506 and $1,876,153, respectively.
Substantially all of these amounts are on deposit with two high credit quality
financial institutions, earning interest. In addition, as a result of changing
financial institutions where the cash and cash equivalents are on deposit, the
interest rate earned on such deposits in 1997 was significantly greater than in
prior years. This resulted in the Partnership earning $93,956, $65,261 and
$60,997 in interest income for the years ended December 31, 1997, 1996 and 1995,
respectively. The amount of interest income varies with market rates available
on deposits and with the amount of funds available for investment. Cash
equivalents can be converted to cash to meet obligations of the Partnership as
they arise. The Partnership intends to continue investing available funds in
this manner. Should the Partnership complete the sale of interests, its
obligations may be reduced and a distribution of cash may be disbursed to the
partners.
A recurring partnership expense is the annual management fee. The fee is payable
to the Corporate General Partner of the Partnership and is calculated at .4
percent of the Partnership's invested assets. The management fee is paid to the
Corporate General Partner for its continuing management of partnership affairs.
The fee is payable beginning with the month following the Partnership's initial
investment in a local limited partnership. Since the invested assets have not
changed during each of the three years in the period ended December 31, 1997,
management fees have remained constant at $254,448 for each of these years.
Under recent adopted law and policy, HUD has determined not to renew HAP
contracts on a long term basis on the existing terms. In connection with
renewals of the HAP Contracts under such new law and policy, the amount of
rental assistance payments under renewed HAP Contracts will be based on market
rentals instead of above market rentals, which was generally the case under
existing HAP Contracts. As a result, existing HAP Contracts that are renewed in
the future on projects insured by the FHA will not provide sufficient cash flow
to permit owners of properties to meet the debt service requirements of these
existing FHA-insured mortgages. In order to address the reduction in payments
under HAP Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 (the "MAHRAA"), which was adopted
in October 1997, provides for the restructuring of mortgage loans insured by
the FHA with respect to properties subject to HAP Contracts that have been
renewed under the new policy. The restructured loans will be held by the
current lender or another lender. Under MAHRAA, an FHA-insured mortgage loan
can be restructured to reduce the annual debt service on such loan. There can
be no assurance that the Partnership will be permitted to restructure its
mortgage indebtedness pursuant to the new HUD rules implementing MAHRAA or that
the Partnership would choose to restructure such mortgage indebtedness if it
were eligible to participate in the MAHRAA program. It should be noted that
there are uncertainties as to the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA.
Accordingly, the General Partners are unable to predict with certainty their
impact on the Partnership's future can flow.
As a result of the foregoing, the Partnership is undergoing an extensive review
of disposition, refinancing or re-engineering alternatives for the properties in
which the limited partnerships have invested and are subject to HUD mortgage and
rental subsidy programs. The partnership has incurred expenses in connection
with this review by various third party professionals, including accounting,
legal, valuation, structural and engineering costs, which amounted to $233,793
for the year ended December 31, 1997.
A real estate investment trust ("REIT") organized by an affiliate of NAPICO has
advised the Partnership that it intends to make a proposal to purchase from the
Partnership certain of the limited Partnership interests held for investment by
the Partnership.
<PAGE> 10
The REIT proposes to purchase such limited partner interests for cash, which it
plans to raise in connection with a private placement of its equity securities.
The purchase is subject to, among other things, (i) consummation of such
private placement by the REIT; (ii) the purchase of the general partner
interests in the local limited partnerships by the REIT; (iii) the approval of
HUD and certain state housing finance agencies; (iv) the consent of the limited
partners to the sale of the local limited partnership interests held for
investment by REAL V; and (v) the consummation of a minimum number of purchase
transactions with other Casden affiliated partnerships. As of March 31, 1998,
the REIT had completed buy-out negotiations with a majority of the general
partners of the local limited partnerships.
A proxy is contemplated to be sent to the limited partners setting forth the
terms and conditions of the purchase of the limited partners' interests held
for investment by the Partnership, together with certain amendments to the
Partnership Agreement and other disclosures of various conflicts of interest
in connection with the transaction.
Operating expenses, other than management fees, consist of legal and accounting
fees for services rendered to the Partnership and administrative expenses, which
were generally consistent for the three years presented. Legal and accounting
fees were $56,789, $50,013 and $40,173 for the years ended December 31, 1997,
1996 and 1995, respectively. Administrative expenses were $298,142, $48,342 and
$53,592 for the years ended December 31, 1997, 1996 and 1995, respectively.
Included in administrative expenses are reimbursements to NAPICO for certain
expenses, which totalled $20,978, $19,287 and $17,820 for the years ended
December 31, 1997, 1996 and 1995, respectively. Also included in administrative
expenses for 1997 is $233,793, approximately $178,000 of which
is included in accounts payable at December 31, 1997, related to the
aforementioned third-party review of the properties owned by the local
partnerships.
The results of operations of the local limited partnerships were fairly constant
during the years ended December 31, 1997, 1996 and 1995. Contributing to the
relative stability of operations at the local partnerships is the fact that
substantially all of the local partnerships are operating apartment projects
which are subsidized and have mortgage notes payable to or insured by agencies
of the federal or local government.
Total revenue for the 19 local partnerships has remained fairly constant, and
was $12,911,000, $12,644,000 and $12,614,000 for the years ended December 31,
1997, 1996 and 1995, respectively.
Total expenses for the 19 local partnerships remained fairly consistent, and
were $12,637,000, $12,702,000 and $12,703,000 for the years ended December 31,
1997, 1996 and 1995, respectively.
The total net income (loss) for the 19 local partnerships for 1997, 1996 and
1995 aggregated $268,000, $(59,000) and $(89,000), respectively. The income
(losses) allocated to the Partnership were $265,000, $(59,000) and $(41,000) for
1997, 1996 and 1995, respectively.
The Partnership, as a limited partner in the local limited partnerships in which
it has invested, is subject to the risks incident to the construction,
management, and ownership of improved real estate. The Partnership investments
are also subject to adverse general economic conditions, and accordingly, the
status of the national economy, including substantial unemployment, changing
legislation and concurrent inflation, could increase vacancy levels, rental
payment defaults, and operating expenses, which in turn, could substantially
increase the risk of operating losses for the projects.
The Partnership has assessed the potential impact of the Year 2000 computer
systems issue on its operations. The Partnership believes that no significant
actions are required to be taken by the Partnership to address the issue and
that the impact of the Year 2000 computer systems issue will not materially
affect the Partnership's future operating results or financial condition.
<PAGE> 11
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE:
Not applicable.
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED V
(A California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
DECEMBER 31, 1997
<PAGE> 13
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Real Estate Associates Limited V
(A California limited partnership)
We have audited the accompanying balance sheets of Real Estate Associates
Limited V (a California limited partnership) as of December 31, 1997 and 1996,
and the related statements of operations, partners' equity (deficiency) and cash
flows for each of the three years in the period ended December 31, 1997. Our
audits also included the financial statement schedules listed in the index on
item 14. These financial statements and financial statement schedules are the
responsibility of the management of the Partnership. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain limited partnerships, the investments in which are reflected in the
accompanying financial statements using the equity method of accounting. The
investments in these limited partnerships represent 36 percent and 31 percent of
total assets as of December 31, 1997 and 1996, respectively, and the equity in
income of these limited partnerships represents 32 percent, 40 percent and 42
percent of the total net income of the Partnership for the years ended December
31, 1997, 1996 and 1995, respectively, and represent a substantial portion of
the investee information in Note 2 and the financial statement schedules. The
financial statements of these limited partnerships are audited by other
auditors. Their reports have been furnished to us and our opinion, insofar as it
relates to the amounts included for these limited partnerships, is based solely
on the reports of the other auditors.
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 our audits and the reports of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Real Estate Associates Limited V as of December 31,
1997 and 1996, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1997 in conformity with
generally accepted accounting principles. Also, in our opinion, based on our
audits and the reports of other auditors, such financial statement schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
April 6, 1998
<PAGE> 14
[PHILIP ROOTBERG & COMPANY, LLP LETTERHEAD]
Independent Auditor's Report
To the Partners
West Town Housing Partners
We have audited the accompanying balance sheet of West Town Housing Partners (a
limited partnership) - F.H.A. Project No. 071-35490/IL06-0054-042 as of December
31, 1997 and 1996, and the related statements of profit and loss, partners'
capital and cash flows for the three years ended December 31, 1997. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. 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 West Town Housing Partners -
F.H.A. Project No. 071-35490/IL06-0054-042 as of December 31, 1997 and 1996, and
the results of its operations, changes in partners' capital and its cash flows
for the three years ended December 31, 1997, in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 27, 1998, on our consideration of the Partnership's internal
control and a report dated January 27, 1998, on its compliance with laws and
regulations.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
listed on the preceding contents page are presented for purposes of additional
analysis to comply with HUD reporting requirements and are not a required part
of the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/ Philip Rootberg & Company, LLP
Chicago, Illinois
January 27, 1998
<PAGE> 15
[JCCS LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Grandview Place
(A Limited Partnership)
Missoula, Montana
We have audited the accompanying balance sheets of Grandview Place (A Limited
Partnership), HUD Project 093-35098 PM-L8, as of December 31, 1997 and 1996,
and the related statements of income, changes in partners' equity, and cash
flows for the three years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. 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 statements
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 Grandview Place (A Limited
Partnership), as of December 31, 1997 and 1996, and the results of its
operations, changes in partners' equity, and cash flows for the three years
then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 30, 1998, on our consideration of Grandview Place's internal
controls and reports dated January 30, 1998, on its compliance with laws and
regulations.
JUNKERMIER, CLARK, CAMPANELLA, STEVENS, P.C.
Certified Public Accountants
Kalispell, Montana
January 30, 1998
-1-
<PAGE> 16
Independent Auditors' Report
Partners
Richland Senior Associates,
a limited partnership
Richland, Washington
We have audited the accompanying balance sheets of Richland Senior Associates,
a limited partnership, Project No. 171-35196, as of December 31, 1997 and 1996,
and the related statements of operations, partners' equity (deficit) and cash
flows for each of the three years in the period ended December 31, 1997. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. 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 Richland Senior Associates, a
limited partnership, as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued reports
dated January 16, 1998, on our consideration of the Partnership's internal
controls and on its compliance with laws and regulations.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting data required by HUD is
presented for purposes of additional analysis and is not a required part of the
basic financial statements of the Partnership. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
/s/ BADER MARTIN ROSS & SMITH, P.S.
January 16, 1998
Bader Martin Ross & Smith, P.S.
Seattle, Washington
<PAGE> 17
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 1,616,811 $ 1,305,672
CASH AND CASH EQUIVALENTS (Note 1) 2,178,637 1,953,506
----------- -----------
TOTAL ASSETS $ 3,795,448 $ 3,259,178
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Accounts payable $ 176,735 $ 9,978
----------- -----------
COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)
PARTNERS' EQUITY (DEFICIENCY):
General partners (121,158) (124,854)
Limited partners 3,739,871 3,374,054
----------- -----------
3,618,713 3,249,200
----------- -----------
TOTAL LIABILITIES AND PARTNERS'
EQUITY $ 3,795,448 $ 3,259,178
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 18
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
INTEREST INCOME $ 93,956 $ 65,261 $ 60,997
--------- --------- ---------
OPERATING EXPENSES:
Legal and accounting 56,789 50,013 40,173
Management fees - general partner (Note 3) 254,448 254,448 254,448
Administrative (Note 3) 298,142 48,342 53,592
--------- --------- ---------
Total operating expenses 609,379 352,803 348,213
--------- --------- ---------
LOSS FROM OPERATIONS (515,423) (287,542) (287,216)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) 381,171 215,140 221,276
EQUITY IN INCOME OF LIMITED
PARTNERSHIP AND AMORTI-
ZATION OF ACQUISITION
COSTS (Note 2) 503,765 371,644 455,651
--------- --------- ---------
NET INCOME $ 369,513 $ 299,242 $ 389,711
========= ========= =========
NET INCOME PER LIMITED PARTNERSHIP
INTEREST (Note 1) $ 47 $ 38 $ 50
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 19
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
---------- ---------- ----------
<S> <C> <C> <C>
EQUITY (DEFICIENCY),
January 1, 1995 $ (131,744) $2,691,991 $2,560,247
Net income for 1995 3,897 385,814 389,711
---------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1995 (127,847) 3,077,805 2,949,958
Net income for 1996 2,993 296,249 299,242
---------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1996 (124,854) 3,374,054 3,249,200
Net income for 1997 3,696 365,817 369,513
---------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1997 $ (121,158) $3,739,871 $3,618,713
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 20
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 369,513 $ 299,242 $ 389,711
Adjustments to reconcile net income to
net cash used in operating activities:
Equity in income of limited partnerships
and amortization of acquisition costs (503,765) (371,644) (455,651)
Increase (decrease) in accounts payable 166,757 (20,035) (2,137)
----------- ----------- -----------
Net cash provided by (used in) operating activities 32,505 (92,437) (68,077)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital contributions to limited partnerships -- (19,568) --
Distributions from limited partnerships recognized
as a return of capital 192,626 189,358 236,216
----------- ----------- -----------
Net cash provided by investing activities 192,626 169,790 236,216
----------- ----------- -----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 225,131 77,353 168,139
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 1,953,506 1,876,153 1,708,014
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 2,178,637 $ 1,953,506 $ 1,876,153
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 21
REAL ESTATE ASSOCIATES LIMITED V
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Real Estate Associates Limited V (the "Partnership"), formed under the
California Limited Partnership Act, was organized on May 7, 1982. The
Partnership was formed to invest primarily in other limited
partnerships, which own and operate primarily federal, state or local
government-assisted housing projects. The general partners of the
Partnership are National Partnership Investments Corp. (NAPICO), the
corporate general partner and a wholly owned subsidiary of Casden
Investment Corp., and National Partnership Investments Associates II
(NAPIA II), a limited partnership. The business of REAL V is conducted
primarily by NAPICO.
The Partnership offered and issued 1,950 units of limited partner
interests through a public offering. Each unit was comprised of two
limited partner interests and a warrant granting the investor the right
to purchase two additional limited partner interests. An additional
3,908 interests were issued from the exercise of warrants and the sale
of interests associated with warrants not exercised. The general
partners have a 1 percent interest in profits and losses of the
Partnership. The limited partners have the remaining 99 percent interest
in proportion to their respective investments.
The Partnership shall be dissolved only upon the expiration of 52
complete calendar years (December 31, 2034) from the date of the
formation of the Partnership or the occurrence of other events as
specified in the Partnership agreement.
Upon total or partial liquidation of the Partnership or the disposition
or partial disposition of a project or project interest and distribution
of the proceeds, the general partners will be entitled to a liquidation
fee as stipulated in the Partnership agreement. The limited partners
will have a priority return equal to their invested capital attributable
to the project(s) or project interest(s) sold and shall receive from the
sale of the project(s) or project interest(s) an amount sufficient to
pay state and federal income taxes, if any, calculated at the maximum
rate then in effect. The general partners' liquidation fee may accrue
but shall not be paid until the limited partners have received
distributions equal to 100 percent of their capital contributions.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Method of Accounting for Investments in Limited Partnerships
The investments in limited partnerships are accounted for on the equity
method. Acquisition, selection and other costs related to the
acquisition of the projects have been capitalized as part of the
investment account and are being amortized on a straight line basis over
the estimated lives of the underlying assets, which is generally 30
years.
5
<PAGE> 22
REAL ESTATE ASSOCIATES LIMITED V
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Net Income Per Limited Partnership Interest
Net income per limited partner interest was computed by dividing the
limited partners' share of net income by the number of limited
partnership interests outstanding during the year. The number of limited
partnership interests was 7,808 for all years presented.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity of three months or less. The
Partnership has its cash and cash equivalents on deposit primarily with
two high credit quality financial institutions. Such cash and cash
equivalents are in excess of the FDIC insurance limit.
Impairment of Long-Lived Assets
The Partnership reviews long-lived assets to determine if there has been
any permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable.
If the sum of the expected future cash flows is less than the carrying
amount of the assets, the Partnership recognizes an impairment loss.
2. INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 19 limited
partnerships. The partnerships own residential low income rental
projects consisting of 1,319 apartment units. The mortgage loans of
these projects are payable to or insured by various governmental
agencies.
The Partnership, as a limited partner, is entitled to 75 percent to 99
percent of the profits and losses in these limited partnerships.
Equity in losses of limited partnerships is recognized in the financial
statements until the limited partnership investment account is reduced
to a zero balance. Losses incurred after the limited partnership
investment account is reduced to zero are not recognized. Limited
partners are not liable for losses beyond their contributed capital. The
cumulative amount of the unrecognized equity in losses of certain
limited partnerships was approximately $7,664,000 and $6,389,000 as of
December 31, 1997 and 1996, respectively.
Distributions from the limited partnerships are accounted for as a
return of capital until the investment balance is reduced to zero or to
a negative amount equal to further capital contributions required.
Subsequent distributions received are recognized as income.
6
<PAGE> 23
REAL ESTATE ASSOCIATES LIMITED V
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
The following is a summary of the investments in limited partnerships
and reconciliation to the limited partnership accounts:
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Investment balance, beginning of year $ 1,305,672 $ 1,103,818
Capital contributions to limited partnership -- 19,568
Equity in income of limited partnerships 511,277 379,156
Amortization of capitalized acquisition
costs and fees (7,512) (7,512)
Cash distributions recognized as
a return of capital (192,626) (189,358)
----------- -----------
Investment balance, end of year $ 1,616,811 $ 1,305,672
=========== ===========
</TABLE>
The difference between the investment in the accompanying balance sheets
at December 31, 1997 and 1996, and the deficiency per the limited
partnerships' combined financial statements is due primarily to
cumulative unrecognized equity in losses of certain limited
partnerships, costs capitalized to the investment account and cumulative
distributions recognized as income.
Selected financial information from the combined financial statements of
the limited partnerships at December 31, 1997 and 1996 and for each of
the three years in the period ended December 31, 1997 is as follows:
Balance Sheets
--------------
<TABLE>
<CAPTION>
1997 1996
-------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 35,045 $ 36,620
======== ========
Total assets $ 43,820 $ 44,770
======== ========
Mortgages payable $ 49,994 $ 49,989
======== ========
Total liabilities $ 53,904 $ 53,423
======== ========
Deficiency of Real Estate Associates
Limited V $ (9,396) $ (8,059)
======== ========
Deficiency of other partners $ (688) $ (595)
======== ========
</TABLE>
7
<PAGE> 24
REAL ESTATE ASSOCIATES LIMITED V
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Statements of Operations
------------------------
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total revenue $ 12,911 $ 12,644 $ 12,614
======== ======== ========
Interest expense $ 5,281 $ 5,360 $ 5,517
======== ======== ========
Depreciation $ 1,911 $ 1,902 $ 1,886
======== ======== ========
Total expenses $ 12,637 $ 12,702 $ 12,703
======== ======== ========
Net income (loss) $ 268 $ (59) $ (89)
======== ======== ========
Net income (loss) allocable to the Partnership $ 265 $ (59) $ (41)
======== ======== ========
</TABLE>
Land and buildings, above, have been adjusted for the amount by which
the investment in the limited partnerships exceeds the Partnership's
share of the net book value of the underlying net assets of the investee
which are recorded at historical costs. Depreciation on the adjustment
is provided for over the estimated remaining useful lives of the
properties.
An affiliate of NAPICO is the general partner in 4 of the limited
partnerships included above, and another affiliate receives property
management fees of approximately 5 to 6 percent of their revenue. The
affiliate received property management fees of $42,600, $42,600 and
$41,359 in 1997, 1996 and 1995, respectively. The following sets forth
the significant data for these partnerships, reflected in the
accompanying financial statements using the equity method of accounting:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
(in thousands)
<S> <C> <C>
Total assets $ 3,628 $ 3,744
======= =======
Total liabilities $ 4,821 $ 4,864
======= =======
Deficiency of Real Estate Associates Limited V $(1,069) $(1,002)
======= =======
Deficiency of other partners $ (124) $ (117)
======= =======
Total revenue $ 913 $ 914 $ 914
======= ======= =======
Net loss $ (4) $ (37) $ (56)
======= ======= =======
</TABLE>
8
<PAGE> 25
REAL ESTATE ASSOCIATES LIMITED V
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (Continued)
Under recent adopted law and policy, HUD has determined not to renew HAP
contracts on a long term basis on the existing terms. In connection with
renewals of the HAP Contracts under such new law and policy, the amount
of rental assistance payments under renewed HAP contracts will be based
on market rentals instead of above market rentals, which was generally
the case under existing HAP Contracts. As a result, existing HAP
Contracts that are renewed in the future on projects insured by the FHA
will not provide sufficient cash flow to permit owners of properties to
meet the debt service requirements of these existing FHA-insured
mortgages. In order to address the reduction in payments under HAP
Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 (the "MAHRAA"), which was
adopted in October 1997, provides for the restructuring of mortgage
loans insured by the FHA with respect to properties subject to HAP
Contracts that have been renewed under the new policy. The restructured
loans will be held by the current lender or another lender. Under
MAHRAA, an FHA-insured mortgage loan can be restructured to reduce the
annual debt service on such loan. There can be no assurance that the
Partnership will be permitted to restructure its mortgage indebtedness
pursuant to the new HUD rules implementing MAHRAA or that the
Partnership would choose to restructure such mortgage indebtedness if it
were eligible to participate in the MAHRAA program. It should be noted
that there are uncertainties as to the economic impact on the
Partnership of the combination of the reduced payments under the HAP
Contracts and the restructuring of the existing FHA-insured mortgage
loans under MAHRAA. Accordingly, the General Partners are unable to
predict with certainty their impact on the Partnership's future cash
flow.
As a result of the foregoing, the Partnership is undergoing an extensive
review of disposition, refinancing or re-engineering alternatives for
the properties in which the limited partnerships have invested and are
subject to HUD mortgage and rental subsidy programs. The partnership has
incurred expenses in connection with this review by various third party
professionals, including accounting, legal, valuation, structural and
engineering costs, which amounted to $233,793 for the year ended
December 31, 1997.
A real estate investment trust organized by an affiliate of NAPICO has
advised the Partnership that it intends to make a proposal to purchase
from the Partnership certain of the limited partnership interests held
for investment, the Partnership.
The REIT proposes to purchase such limited partner interests for cash,
which it plans to raise in connection with a private placement of its
equity securities. The purchase is subject to, among other things, (i)
consummation of such private placement by the REIT; (ii) the purchase of
the general partner interests in the local limited partnerships by the
REIT; (iii) the approval of HUD and certain state housing finance
agencies; (iv) the consent of the limited partners to the sale of the
local limited partnership interests held for investment by REAL V; and
(v) the consummation of a minimum number of purchase transactions with
other Casden affiliated partnerships. As of March 31, 1998, the REIT
had completed buy-out negotiations with a majority of the general
partners of the local limited partnerships.
9
<PAGE> 26
REAL ESTATE ASSOCIATES LIMITED V
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (Continued)
A proxy is contemplated to be sent to the limited partners setting forth
the terms and conditions of the purchase of the limited partners'
interests held for investment by the Partnership, together with certain
amendments to the Partnership Agreement and other disclosures of various
conflicts of interest in connection with the transaction.
3. FEES AND EXPENSES DUE GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partners, the Partnership is obligated to NAPICO for an annual
management fee equal to .4 percent of the original invested assets of
the limited partnerships. Invested assets is defined as the costs of
acquiring project interests, including the proportionate amount of the
mortgage loans related to the Partnership's interest in the capital
accounts of the respective partnerships.
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $20,978, $19,287 and $17,820 in 1997, 1996
and 1995, respectively, and is included in operating expenses.
4. CONTINGENCIES
The corporate general partner of the Partnership is a plaintiff in
various lawsuits and has also been named as a defendant in other
lawsuits arising from transactions in the ordinary course of business.
In the opinion of management and the corporate general partner, the
claims will not result in any material liability to the Partnership.
The Partnership has assessed the potential impact of the Year 2000
computer systems issue on its operations. The Partnership believes that
no significant actions are required to be taken by the Partnership to
address the issue and that the impact of the Year 2000 computer systems
issue will not materially affect the Partnership's future operating
results or financial condition.
5. INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements since such taxes, if any, are the liability of the
individual partners. The major differences in tax and financial
reporting result from the use of different bases and depreciation
methods for the properties held by the limited partnerships. Differences
in tax and financial reporting also arise as losses are not recognized
for financial reporting purposes when the investment balance has been
reduced to zero or to a negative amount equal to further capital
contributions required.
11
<PAGE> 27
REAL ESTATE ASSOCIATES LIMITED V
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
6. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments. The carrying amount of assets
and liabilities reported on the balance sheets that require such
disclosure approximates fair value due to their short-term maturity.
7. FOURTH-QUARTER ADJUSTMENT
The Partnership's policy is to record its equity in income (loss) of
limited partnerships on a quarterly basis, using estimated financial
information furnished by the various local operating general partners.
The equity in income (loss) reflected in the accompanying annual
financial statements is based primarily upon audited financial
statements of the investee limited partnerships. The increase of
approximately $213,000, between the estimated nine-month equity in
income and the actual 1997 year end equity in income has been recorded
in the fourth quarter.
12
<PAGE> 28
SCHEDULE
REAL ESTATE ASSOCIATES LIMITED V
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
Year Ended December 31, 1997
-------------------------------------------------------------------------------
Cash Equity
Balance Capital Distri- In Balance
January Contri- butions Income December
Limited Partnerships 1, 1997 butions Received (Loss) 31, 1997
- -------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Bickerdike $ 632,573 $ $ (89,144) $ 328,341 $ 871,770
Canoga Park 41 (23,653) 23,612
Castlepark
Centennial Ft. Wayne
Creekside Gardens
Del Haven Manor
Fox Run
Grandview Place 134,550 (73,306) 32,717 93,961
Hamlin Estate
Heritage Estates
North River Club Apts
Palm Springs
Panorama City I
Panorama City II
Pine Lake Terrace
Plummer Village
Ranger Apts
Richland Elderly 538,508 (6,523) 119,095 651,080
Robert Farrell Manor
---------- ---------- ---------- ---------- ----------
$1,305,672 $ -- $ (192,626) $ 503,765 $1,616,811
========== ========== ========== ========== ==========
</TABLE>
<PAGE> 29
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED V
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
Year Ended December 31, 1996
--------------------------------------------------------------------------------
Cash Equity
Balance Capital Distri- In Balance
January Contri- butions Income December
Limited Partnerships 1, 1996 butions Received (Loss) 31, 1996
- -------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Bickerdike $ 469,653 $ $ (89,144) $ 252,064 $ 632,573
Canoga Park (1,725) 1,766 41
Castlepark
Centennial Ft. Wayne
Creekside Gardens
Del Haven Manor
Fox Run
Grandview Place 193,398 (91,967) 33,119 134,550
Hamlin Estate 19,568 (19,568)
Heritage Estates
North River Club Apts.
Palm Springs
Panorama City I
Panorama City II
Pine Lake Terrace
Plummer Village
Ranger Apts
Richland Elderly 440,767 (6,522) 104,263 538,508
Robert Farrell Manor
---------- ---------- ---------- ---------- ----------
$1,103,818 $ 19,568 $ (189,358) $ 371,644 $1,305,672
========== ========== ========== ========== ==========
</TABLE>
<PAGE> 30
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED V
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January Contri- butions In December
Limited Partnerships 1, 1995 butions Received Income 31, 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Bickerdike $ 275,290 $ $ (89,144) $ 283,507 $ 469,653
Canoga Park (6,124) 6,124 --
Castlepark
Centennial Ft. Wayne
Creekside Gardens
Del Haven Manor
Fox Run
Grandview Place 272,242 (126,112) 47,268 193,398
Hamlin Estate
Heritage Estates
North River Club Apts.
Palm Springs
Panorama City I
Panorama City II
Pine Lake Terrace
Plummer Village (8,872) 8,872
Ranger Apts
Richland Elderly 336,851 (5,964) 109,880 440,767
Robert Farrell Manor
---------- ---------- ---------- ---------- ----------
$ 884,383 $ -- $ (236,216) $ 455,651 $1,103,818
========== ========== ========== ========== ==========
</TABLE>
<PAGE> 31
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED V
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
NOTES: 1. Equity in income and losses in investments in limited
partnerships represents the Partnership's allocable share of the
net results of operations from the limited partnerships for the
year. Equity in losses of the limited partnerships will be
recognized until the investment balance is reduced to zero or
below zero to an amount equal to future capital contributions to
be made by the Partnership.
2. Cash distributions from the limited partnerships are treated as a
return of the investment and reduce the investment balance until
such time as the investment is reduced to an amount equal to
additional contributions. Distributions subsequently received
will be recognized as income.
<PAGE> 32
REAL ESTATE ASSOCIATES LIMITED V
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL V HAS INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Number Outstanding Buildings,
of Mortgage Furnishing Accumulated Construction
Partnership/Location Apts. Loan Land & Equipment Total Depreciation Period
- ------------------------------ ------ ----------- ----------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Bickerdike 140 $7,329,138 $348,255 $8,158,434 $8,506,689 $3,210,354 1983
Chicago, IL
Canoga Park Apts. 14 772,260 197,662 840,371 1,038,033 441,002 1982-1983
Los Angeles, CA
Castle Park Apts. 209 8,117,309 337,676 10,724,440 11,062,116 5,129,824 1982-1983
Normandy, MO
Centennial Townhomes 88 2,568,770 80,987 2,956,246 3,037,233 1,256,908 1982-1983
Fort Wayne, IN
Creekside Gardens 50 1,709,780 197,447 1,785,603 1,983,050 657,733 1982-1983
Loveland, CO
Delhaven Manor 104 2,893,186 85,000 3,109,239 3,194,239 1,174,572 1982-1983
Jackson, MS
Foxrun Apts., Ltd. 70 1,999,809 56,892 2,469,447 2,526,339 1,348,225 1982-1983
Orange, TX
Grandview Place Apts. 48 1,626,586 183,000 1,934,312 2,117,312 728,896 1982-1983
Missoula, MT
Hamlin Estates 30 1,741,686 652,117 2,021,252 2,673,369 1,048,028 1982-1983
Los Angeles, CA
Heritage Square Inc. 50 1,468,914 106,000 1,688,638 1,794,638 955,910 1982-1983
Texas City, TX
North River Club Apts. 56 2,548,141 298,559 2,659,060 2,957,619 1,356,013 1982-1983
Oceanside, CA
Palm Springs Senior 116 4,216,003 - 5,198,495 5,198,495 2,817,415 (A)
Citizens Housing
Palm Springs, CA
Panorama City I 14 698,416 185,103 753,640 938,743 412,085 1982-1983
Los Angeles, CA
Panorama City II 13 652,198 184,451 689,502 873,953 379,850 1982-1983
Los Angeles, CA
Pine Lake Terrace Apts. 111 3,776,198 484,000 3,822,097 4,306,097 2,535,672 (A)
Garden Grove, CA
Plummer Village 75 3,181,912 612,258 3,233,300 3,845,558 1,545,850 1982-1983
Los Angeles, CA
Ranger Apts., Ltd. 55 1,659,089 40,508 2,250,328 2,290,836 1,450,573 1983-1984
Ranger, TX
Richland Three Rivers 41 1,337,199 - 1,416,226 1,416,226 594,242 1982-1983
Retirement Apts.
Richland, WA
Robert Farrell Manor 35 1,697,632 263,860 1,932,639 2,196,499 725,167 1982-1983
Los Angeles, CA
Additional carrying value of real 98,367 2,145,036 2,243,403 1,387,464
estate of invested limited
partnerships not recorded on
said limited partnerhsips
----- ----------- ---------- ----------- ----------- -----------
TOTAL 1,319 $49,994,228 $4,412,142 $59,788,305 $64,200,447 $29,155,783
===== =========== ========== =========== =========== ===========
</TABLE>
(A) This project was complete when REAL V entered the partnership
<PAGE> 33
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED V
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL V HAS INVESTMENTS
DECEMBER 31, 1997
NOTES: 1. Each local limited partnership is developing or has developed,
owns and operates the housing project. Substantially all project
costs, including construction period interest expense, are being
capitalized by the limited partnerships.
2. Depreciation is provided for by various methods over the
estimated useful lives of the projects. The estimated composite
useful lives of the buildings are generally from 25 to 40 years.
3. Investments in property and equipment:
<TABLE>
<CAPTION>
Buildings,
Furnishings,
And
Land Equipment Total
----------- ----------- -----------
<S> <C> <C> <C>
Balance at January 1, 1995 $ 4,368,142 $59,202,045 $63,570,187
Net additions during 1995 -- 233,573 233,573
----------- ----------- -----------
Balance at December 31, 1995 4,368,142 59,435,618 63,803,760
Net additions during 1996 44,000 88,695 132,695
----------- ----------- -----------
Balance at December 31, 1996 4,412,142 59,524,313 63,936,455
Net additions during 1997 0 263,992 263,992
----------- ----------- -----------
Balance at December 31, 1997 $ 4,412,142 $59,788,305 $64,200,447
=========== =========== ===========
</TABLE>
<PAGE> 34
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED V
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL V HAS INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Buildings,
Furnishings
and Equipment
-----------
<S> <C>
ACCUMULATED DEPRECIATION:
Balance, January 1, 1995 $23,725,973
Net additions, 1995 1,766,520
-----------
Balance, December 31, 1995 25,492,493
Net additions, 1996 1,823,889
-----------
Balance, December 31, 1996 27,316,382
Net additions, 1997 1,839,401
-----------
Balance, December 31, 1997 $29,155,783
===========
</TABLE>
<PAGE> 35
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
REAL ESTATE ASSOCIATES LIMITED V (the "Partnership") has no directors or
executive officers of its own.
National Partnership Investment Corp. ("NAPICO" or "the Managing General
Partner") is a wholly-owned subsidiary of Casden Investment Company, an
affiliate of The Casden Company. The following biographical information is
presented for the directors and executive officers of NAPICO with principal
responsibility for the Partnership's affairs.
CHARLES H. BOXENBAUM, 68, Chairman of the Board of Directors and Chief Executive
Officer of NAPICO.
Mr. Boxenbaum has been associated with NAPICO since inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was a
real estate broker with the Beverly Hills firm of Carl Rhodes Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers,
California Real Estate Association, National Institute of Real Estate Brokers,
Appraisal Institute, various mortgage banking seminars, and the North American
Property Forum held in London, England. In 1963, he was the winner of the Snyder
Award, the highest annual award offered by the National Association of Real
Estate Boards for Best Exchange. He is one of the founders and a past director
of the First Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a
member of the Board of Directors of the National Housing Council. Mr. Boxenbaum
received his Bachelor of Arts degree from the University of Chicago.
BRUCE E. NELSON, 46, President and a director of NAPICO.
Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved in
the identification, analysis, and negotiation of real estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time Mr. Nelson was engaged in
the private practice of law in Los Angeles. Mr. Nelson received his Bachelor of
Arts degree from the University of Wisconsin and is a graduate of the University
of Colorado School of Law. He is a member of the State Bar of California and is
a licensed real estate broker in California and Texas.
ALAN I. CASDEN, 52, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Corporation. Prior to
that, he was the president and chairman of Mayer Group, Inc., which he joined in
1975. He is also chairman of Mayer Management, Inc., a real estate management
firm. Mr. Casden has been involved in approximately $3 billion of real estate
financings and sales and has been responsible for the development and
construction of more than 12,000 apartment units and 5,000 single-family homes
and condominiums.
<PAGE> 36
Mr. Casden is a member of the American Institute of Certified Public Accountants
and of the California Society of Certified Public Accountants. Mr. Casden is a
member of the advisory board of the National Multi-Family Housing Conference,
the Multi-Family Housing Council, and the President's Council of the California
Building Industry Association. He also serves on the advisory board to the
School of Accounting of the University of Southern California. He holds a
Bachelor of Science and a Masters in Business Administration degree from the
University of Southern California.
HENRY C. CASDEN, 54, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden Company,
as well as a director of NAPICO since February 1988. He became secretary of both
companies in late 1994. From 1982 to 1988, Mr. Casden was of counsel and a
partner in the Los Angeles law firm of Troy, Casden & Gould. From 1978 to 1981,
he was of counsel and a partner in the Los Angeles law firm of Loeb & Loeb. From
1972 to 1978, Mr. Casden was a member of the Beverly Hills law firm of Fink &
Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BOB SCHAFER, 56, Senior Vice President of Finance.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years. Mr.
Schafer is a member of the California Society of Certified Public Accountants.
He holds a Bachelor of Science degree in accounting from Woodbury University,
Los Angeles.
PATRICIA W. TOY, 68, Senior Vice President - Communications and Assistant
Secretary.
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 37, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr. Walther
worked in the San Francisco law firm of Browne and Kahn which specialized in
construction litigation. Mr. Walther received his Bachelor of Arts Degree in
Political Science from the University of California, Santa Barbara and is a
graduate of the University of California, Davis, School of Law. He is a member
of the State Bar of Hawaii.
NAPICO and several of its officers, directors and affiliates, including Charles
H. Boxenbaum, Bruce E. Nelson and Alan I. Casden, consented to the entry, on
June 25, 1997, of an administrative cease and desist order by the U.S.
Securities and Exchange Commission (the "Commission"), without admitting or
denying any of the findings made by the Commission. The Commission found that
NAPICO and others had violated certain federal securities laws in connection
with transactions unrelated to the Partnership. The Commission's order did not
impose any cost, burden or penalty on any partnership managed by NAPICO and does
not impact NAPICO's ability to serve as the Partnership's Managing General
Partner.
<PAGE> 37
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS:
Real Estate Associates Limited V has no officers, employees or directors.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the Corporate General Partner
an annual management fee. The annual management fee is approximately equal to
.4% of the invested assets, including the Partnership's allocable share of the
mortgages related to real estate properties held by local limited partnerships.
The fee is earned beginning in the month the Partnership makes its initial
contribution to the limited partnership. In addition, the Partnership reimburses
the Corporate General Partner for certain expenses.
An affiliate of the Corporate General Partner is responsible for the on-site
property management for certain properties owned by the limited partnerships in
which the Partnership has invested.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
(a) Security Ownership of Certain Beneficial Owners
The General Partners own all of the outstanding general partnership
interests of REAL V; no person is known to own beneficially in excess
of 5% of the outstanding limited partnership interests.
(b) At December 31, 1997, security ownership of management is as listed:
<TABLE>
<CAPTION>
Percentage of
Amount and Outstanding
Nature of Limited
Beneficial Partner
Title of Class Beneficial Owner Owner Interests
- -------------- ---------------- ---------- -------------
<S> <C> <C> <C>
Limited Charles H. Boxenbaum
Partnership 780 Latimer Road
Interest Santa Monica, CA 90402 $10,000 *
Limited Bruce E. Nelson
Partnership 7036 Grasswood Avenue
Interest Malibu, CA 90265 $ 5,000 *
</TABLE>
* Cumulative limited partnership interests owned by corporate officers
or the general partner is less than 1% interest of total outstanding
limited partnership interests.
<PAGE> 38
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has no officers, directors or employees of its own. All of its
affairs are managed by the Corporate General Partner, National Partnership
Investments Corp. The Partnership is obligated to NAPICO for an annual
management fee equal to .4 percent of the original invested assets of the
limited partnerships. Invested assets is defined as the costs of acquiring
project interests, including the proportionate amount of the mortgage loans
related to the Partnership's interest in the capital accounts of the respective
partnerships. The management fee was $254,448 for each of the three years in the
period ended December 31, 1997.
The Partnership reimburses NAPICO for certain expenses. The reimbursement to
NAPICO was $20,978, $19,287 and $17,820 in 1997, 1996 and 1995, respectively,
and is included in operating expenses.
An affiliate of NAPICO is the general partner in 4 of the limited partnerships
in which the Partnership has an investment, and another affiliate receives
property management fees of approximately 5 to 6 percent of their revenue. The
affiliate received property management fees of $42,600, $42,600 and $41,359 in
1997, 1996 and 1995, respectively.
A real estate investment trust organized by an affiliate of NAPICO has advised
the Partnership that it intends to make a proposal to purchase from the
Partnership certain of the limited partnership interests held for investment by
the Partnership.
The REIT proposes to purchase such limited partner interests for cash, which it
plans to raise in connection with a private placement of its equity securities.
The purchase is subject to, among other things, (i) consummation of such private
placement by the REIT; (ii) the purchase of the general partner interests in the
local limited partnerships by the REIT; (iii) the approval of HUD and certain
state housing finance agencies; (iv) the consent of the limited partners to the
sale of the local limited partnership interests held for investment by REAL V;
and (v) the consummation of a minimum number of purchase transactions with other
Casden affiliated partnerships. As of March 31, 1998, the REIT had completed
buy-out negotiations with a majority of the general partners of the local
limited partnerships.
A proxy is contemplated to be sent to the limited partners setting forth the
terms and conditions of the purchase of the limited partners' interests held
for investment by the Partnership, together with certain amendments to the
Partnership Agreement and other disclosures of various conflicts of interest in
connection with the transaction.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 10-K:
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Balance Sheets as of December 31, 1997 and 1996.
Statements of Operations for the years ended December 31, 1997, 1996 and 1995.
Statement of Partners' Equity (Deficiency) for the years ended December 31,
1997, 1996 and 1995.
Statements of Cash Flows for the years ended December 31, 1997, 1996 and 1995.
Notes to financial statements.
<PAGE> 39
FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED V AND TO THE LIMITED PARTNERSHIPS
IN WHICH REAL ESTATE ASSOCIATES LIMITED V HAS INVESTMENTS:
Schedule - Investments in Limited Partnerships as of December 31, 1997, 1996 and
1995.
Schedule III - Real estate and accumulated depreciation, December 31, 1997.
The remaining schedules are omitted because the required information is included
in the financial statements and notes thereto or they are not applicable or not
required.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not incorporated.
The Partnership Agreement was filed with Form S-11 #277645 which is hereby
incorporated by reference.
(10) Material contracts: The registrant is not party to any material contracts,
other than the Restated Certificate and Agreement of Limited Partnership
dated May 7, 1982, and the nineteen contracts representing the partnership
investment in local limited partnerships as previously filed at the
Securities Exchange Commission, File #277645 which is hereby incorporated
by reference.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1997.
<PAGE> 40
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Los Angeles,
State of California.
REAL ESTATE ASSOCIATES LIMITED V
By: NATIONAL PARTNERSHIP INVESTMENTS CORP.
The General Partner
/s/ CHARLES H. BOXENBAUM
- -----------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer
/s/ BRUCE E. NELSON
- -----------------------------------
Bruce E. Nelson
Director and President
/s/ ALAN I. CASDEN
- ----------------------------------
Alan I. Casden
Director
/s/ HENRY C. CASDEN
- ----------------------------------
Henry C. Casden
Director
/s/ BOB E. SCHAFER
- ----------------------------------
Bob E. Schafer
Senior Vice President of Finance
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,178,637
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,178,637
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,795,448
<CURRENT-LIABILITIES> 176,735
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,618,713
<TOTAL-LIABILITY-AND-EQUITY> 3,795,448
<SALES> 0
<TOTAL-REVENUES> 978,892
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 609,379
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 369,513
<INCOME-TAX> 0
<INCOME-CONTINUING> 369,513
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 369,513
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
