SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1996
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-11805
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BALCOR REALTY INVESTORS-83
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(Exact name of registrant as specified in its charter)
Illinois 36-3189175
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Rd.
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
--------------
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
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<PAGE>
BALCOR REALTY INVESTORS-83
(An Illinois Limited Partnership)
BALANCE SHEETS
June 30, 1996 and December 31, 1995
(Unaudited)
ASSETS
1996 1995
-------------- --------------
Cash and cash equivalents $ 7,720,039 $ 2,734,729
Escrow deposits 987,877 1,694,777
Accounts and accrued interest receivable 241,722 64,523
Prepaid expenses 310,467 184,700
Deferred expenses, net of accumulated
amortization of $548,667 in 1996 and
$702,304 in 1995 506,017 648,778
-------------- --------------
9,766,122 5,327,507
-------------- --------------
Investment in real estate
Land 7,442,093 8,885,606
Buildings and improvements 44,643,808 54,739,601
-------------- --------------
52,085,901 63,625,207
Less accumulated depreciation 22,611,079 26,928,743
-------------- --------------
Investment in real estate, net of
accumulated depreciation 29,474,822 36,696,464
-------------- --------------
$ 39,240,944 $ 42,023,971
============== ==============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Accounts payable $ 82,256 $ 141,244
Due to affiliates 46,446 24,811
Accrued liabilities, principally real
estate taxes 437,802 938,309
Security deposits 212,727 260,819
Mortgage note payable - affiliate 734,154 734,154
Mortgage notes payable 36,408,333 45,673,057
-------------- --------------
Total liabilities 37,921,718 47,772,394
-------------- --------------
Limited Partners' capital (deficit)
(75,005 Interests issued and
outstanding) 4,360,420 (2,269,466)
General Partner's deficit (3,041,194) (3,478,957)
-------------- --------------
Total partners' capital (deficit) 1,319,226 (5,748,423)
-------------- --------------
$ 39,240,944 $ 42,023,971
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS-83
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1996 and 1995
(Unaudited)
1996 1995
-------------- --------------
Income:
Rental and service $ 7,014,806 $ 7,940,287
Interest on short-term investments 83,995 220,603
Settlement income 208,250
-------------- --------------
Total income 7,307,051 8,160,890
-------------- --------------
Expenses:
Interest on mortgage notes payable 1,788,573 2,239,699
Depreciation 799,056 975,972
Amortization of deferred expenses 85,936 85,738
Property operating 2,574,272 3,060,716
Real estate taxes 602,565 712,056
Property management fees 346,323 398,323
Administrative 280,730 304,601
-------------- --------------
Total expenses 6,477,455 7,777,105
-------------- --------------
Income before gain on sale of property
and extraordinary items 829,596 383,785
Gain on sale of property 7,982,491 2,711,565
-------------- --------------
Income before extraordinary items 8,812,087 3,095,350
-------------- --------------
Extraordinary items:
Gain on forgiveness of debt 40,653
Debt extinguishment expenses (56,825) (99,153)
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Total extraordinary items (56,825) (58,500)
-------------- --------------
Net income $ 8,755,262 $ 3,036,850
============== ==============
Income before extraordinary items
allocated to General Partner $ 440,604 $ 154,768
============== ==============
Income before extraordinary items
allocated to Limited Partners $ 8,371,483 $ 2,940,582
============== ==============
Income before extraordinary items
per Limited Partnership Interest
(75,005 issued and outstanding) $ 111.61 $ 39.21
============== ==============
<PAGE>
BALCOR REALTY INVESTORS-83
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1996 and 1995
(Unaudited)
(Continued)
1996 1995
-------------- --------------
Extraordinary items allocated to
General Partner $ (2,841) $ (2,925)
============== ==============
Extraordinary items allocated to
Limited Partners $ (53,984) $ (55,575)
============== ==============
Extraordinary items per Limited
Partnership Interest (75,005
issued and outstanding) $ (0.72) $ (0.74)
============== ==============
Net income allocated to General Partner $ 437,763 $ 151,843
============== ==============
Net income allocated to Limited Partners $ 8,317,499 $ 2,885,007
============== ==============
Net income per Limited Partnership Interest
(75,005 issued and outstanding) $ 110.89 $ 38.47
============== ==============
Distributions to Limited Partners $ 1,687,613 $ 675,046
============== ==============
Distributions per Limited Partnership
Interest (75,005 issued and
outstanding) $ 22.50 $ 9.00
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS-83
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1996 and 1995
(Unaudited)
1996 1995
-------------- --------------
Income:
Rental and service $ 3,418,444 $ 3,921,590
Interest on short-term investments 39,799 106,456
-------------- --------------
Total income 3,458,243 4,028,046
-------------- --------------
Expenses:
Interest on mortgage notes payable 876,460 1,098,152
Depreciation 389,329 478,737
Amortization of deferred expenses 41,121 43,742
Property operating 1,316,992 1,571,839
Real estate taxes 310,441 345,687
Property management fees 168,546 197,343
Administrative 166,953 173,539
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Total expenses 3,269,842 3,909,039
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Income before gain on sale of property
and extraordinary item 188,401 119,007
Gain on sale of property 7,982,491 2,711,565
-------------- --------------
Income before extraordinary item 8,170,892 2,830,572
Extraordinary item:
Debt extinguishment expenses (56,825) (99,153)
-------------- --------------
Net income $ 8,114,067 $ 2,731,419
============== ==============
Income before extraordinary item
allocated to General Partner $ 408,544 $ 141,529
============== ==============
Income before extraordinary item
allocated to Limited Partners $ 7,762,348 $ 2,689,043
============== ==============
Income before extraordinary item
per Limited Partnership Interest
(75,005 issued and outstanding) $ 103.49 $ 35.85
============== ==============
Extraordinary item allocated to
General Partner $ (2,841) $ (4,958)
============== ==============
Extraordinary item allocated to
Limited Partners $ (53,984) $ (94,195)
============== ==============
<PAGE>
BALCOR REALTY INVESTORS-83
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1996 and 1995
(Unaudited)
(Continued)
1996 1995
-------------- --------------
Extraordinary item per Limited
Partnership Interest (75,005
issued and outstanding) $ (0.72) $ (1.26)
============== ==============
Net income allocated to General Partner $ 405,703 $ 136,571
============== ==============
Net income allocated to Limited Partners $ 7,708,364 $ 2,594,848
============== ==============
Net income per Limited Partnership Interest
(75,005 issued and outstanding) $ 102.77 $ 34.59
============== ==============
Distribution to Limited Partners $ 1,350,090 $ 337,523
============== ==============
Distribution per Limited Partnership
Interest (75,005 issued and
outstanding $ 18.00 $ 4.50
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS-83
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1996 and 1995
(Unaudited)
1996 1995
-------------- --------------
Operating activities:
Net income $ 8,755,262 $ 3,036,850
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on forgiveness of debt (40,653)
Debt extinguishment expenses 56,825 99,153
Gain on sale of property (7,982,491) (2,711,565)
Depreciation of properties 799,056 975,972
Amortization of deferred expenses 85,936 85,738
Net change in:
Escrow deposits 706,900 267,303
Accounts and accrued interest
receivable (177,199) (70,674)
Prepaid expenses (125,767) (194,326)
Accounts payable (58,988) (17,773)
Due to affiliates 21,635 (65,019)
Accrued liabilities, principally
real estate taxes (500,507) (733,955)
Security deposits (48,092) (38,353)
-------------- --------------
Net cash provided by operating activities 1,532,570 592,698
-------------- --------------
Investing activities:
Redemption of restricted investment 700,000
Proceeds from sale of real estate 14,529,423 954,428
Payment of selling costs (124,346) (168,597)
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Net cash provided by investing activities 14,405,077 1,485,831
-------------- --------------
Financing activities:
Distributions to Limited Partners (1,687,613) (675,046)
Repayment of mortgage note payable -
affiliate (38,742)
Proceeds from issuance of mortgage
notes payable 11,980,000
Repayment of mortgage note payable (8,951,783) (11,254,363)
Principal payments on mortgage notes
payable (312,941) (411,562)
Payment of deferred expenses (300,729)
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Net cash used in financing activities (10,952,337) (700,442)
-------------- --------------
<PAGE>
Net change in cash and cash equivalents 4,985,310 1,378,087
Cash and cash equivalents at beginning
of period 2,734,729 5,950,452
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Cash and cash equivalents at end of period $ 7,720,039 $ 7,328,539
============== ==============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS-83
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
A reclassification has been made to the previously reported 1995 statements in
order to provide comparability with the 1996 statements. This reclassification
has not changed the 1995 results. In the opinion of management, all adjustments
necessary for a fair presentation have been made to the accompanying statements
for the six months and quarter ended June 30, 1996 and all such adjustments are
of a normal and recurring nature.
2. Interest Expense:
During the six months ended June 30, 1996 and 1995, the Partnership incurred
and paid interest expense on mortgage notes payable to non-affiliates of
$1,748,967 and $2,199,290, respectively.
3. Transactions with affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
six months and quarter ended June 30, 1996 are:
Paid
-----------------------
Six Months Quarter Payable
------------ --------- ----------
Reimbursement of expenses to
the General Partner, at cost $56,658 $34,082 $46,446
As of June 30, 1996, the Partnership has a $734,154 note payable outstanding to
The Balcor Company ("TBC"), an affiliate of the General Partner. This loan
relates to the Walnut Ridge - Phase II Apartments. During the six months ended
June 30, 1996 and 1995, the Partnership incurred interest expense on the TBC
loan of $39,606 and $40,409, and paid interest expense of $32,606 and $34,277,
respectively. Interest expense of $7,000 was payable as of June 30, 1996 and is
included in accrued liabilities on the balance sheet.
4. Property Sale:
In June 1996, the Partnership sold the Desert Sands Village Apartments in an
all cash sale for $14,529,423. From the proceeds of the sale, the Partnership
paid $8,951,783 to the third party mortgage holder in full satisfaction of the
first mortgage loan, and paid $124,346 in selling costs. The basis of the
property was $6,422,586 which is net of accumulated depreciation of $5,116,720.
For financial statement purposes, the Partnership recognized a gain of
$7,982,491 from the sale of this property.
<PAGE>
5. Extraordinary Item:
In connection with the sale of the Desert Sands Village Apartments in June
1996, the remaining unamortized deferred expenses in the amount of $56,825 were
recognized as an extraordinary item and classified as debt extinguishment
expense.
6. Subsequent Event:
In July 1996, the Partnership made a distribution of $5,775,385 ($77.00 per
Interest) to the holders of Limited Partnership Interests. This amount includes
the regular quarterly distribution of $6.00 per Interest from Net Cash
Receipts, a special distribution from Net Cash Receipts reserves of $6.00 per
Interest and a special distribution of Net Cash Proceeds of $65.00 per Interest
from the June 1996 sale of the Desert Sands Village Apartments.
<PAGE>
BALCOR REALTY INVESTORS-83
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Realty Investors-83 (the "Partnership") is a limited partnership formed
in 1981 to invest in and operate income-producing real property. The
Partnership raised $75,005,000 from sales of Limited Partnership Interests and
utilized these proceeds to acquire eleven real property investments and a
minority joint venture interest in one additional real property. Prior to 1996,
four properties and the property in which the Partnership held a minority joint
venture interest were sold or relinquished through foreclosure to the lenders.
During 1996, the Partnership sold one additional property. The Partnership
continues to operate its six remaining properties.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1995 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
Summary of Operations
- ---------------------
The Partnership recognized a substantially larger gain related to the sale of
Desert Sands Village Apartments during June 1996 as compared to the gain
recognized during June 1995 related to the sale of North Cove Apartments. This
was the primary reason for the increase in net income for the six months and
quarter ended June 30, 1996 as compared to the same periods in 1995. Further
discussion of the Partnership's operations is summarized below.
1996 Compared to 1995
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1996 and 1995 refer
to both the six months and quarters ended June 30, 1996 and 1995.
The sale of North Cove Apartments in June 1995 resulted in decreases in rental
and service income, interest expense on mortgage notes payable, depreciation,
property operating expenses, real estate taxes and property management fees
during 1996 as compared to 1995.
Due to lower average cash balances as a result of a special distribution to
Limited Partners in October 1995, interest income on short-term investments
decreased during 1996 as compared to 1995.
The Partnership reached a settlement with the seller of the Deer Oaks
Apartments in February 1996 and received $208,250 of settlement income relating
primarily to amounts due from the seller under the management and guarantee
agreement.
<PAGE>
In June 1996, the Partnership sold the Desert Sands Village Apartments and
recognized a gain on sale of $7,982,491. In connection with the sale, the
Partnership fully amortized the remaining deferred expenses in the amount of
$56,825. Additionally, in June 1995, the first mortgage loan collateralized by
Deer Oaks Apartments was refinanced, and a prepayment penalty of $43,153 was
incurred. Also in June 1995, the North Cove Apartments was sold and the
remaining unamortized deferred expenses in the amount of $56,000 were
recognized. For financial statement purposes, these three amounts were
recognized as extraordinary items and classified as debt extinguishment
expenses.
During 1995, the Partnership recognized an extraordinary gain on forgiveness of
debt of $40,653 in connection with the settlement reached with the seller of
the Springs Pointe and Desert Sands Village apartment complexes.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership increased by approximately $4,985,000 as
of June 30, 1996 when compared to December 31, 1995 due primarily to the net
proceeds received in connection with the June 1996 sale of the Desert Sands
Village Apartments. Cash flow of approximately $1,533,000 was provided by
operating activities during 1996 consisting primarily of cash flow from the
operations of the Partnership's properties, interest income on short-term
investments and settlement income received from the seller of the Deer Oaks
Apartments, which were partially offset by the payment of administrative
expenses. Cash provided by investing activities consisted of proceeds from the
sale of Desert Sands Village Apartments of approximately $14,529,000 less
selling costs of approximately $124,000. Cash used in financing activities
consisted of distributions to the Limited Partners of approximately $1,688,000,
the repayment of the mortgage note payable on Desert Sands Village Apartments
of approximately $8,952,000 and principal payments of approximately $313,000 on
mortgage notes payable.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered to be significant if it exceeds $250,000 annually or 20% of the
property's rental and service income. The Partnership defines cash flow
generated from its properties as an amount equal to the property's revenue
receipts less property related expenditures, which include debt service
payments. During 1996 and 1995, all of the Partnership's six remaining
properties generated positive cash flow. The North Cove Apartments, which was
sold in June 1995, generated a marginal cash flow deficit during 1995 prior to
its sale. The Desert Sands Village Apartments was sold in June 1996 and
generated positive cash flow in 1996 and 1995. As of June 30, 1996, the
occupancy rates of the Partnership's properties ranged from 94% to 97%.
While the cash flow of certain of the Partnership's properties have improved,
the General Partner continues to pursue a number of actions aimed at improving
the cash flow of the Partnership's properties including improving operating
performance and seeking rent increases where market conditions allow.
<PAGE>
The General Partner believes that the market for multifamily housing properties
is favorable to sellers of these properties. During June 1996, the Partnership
sold the Desert Sands Village Apartments. Currently, the Partnership has
entered into a contract to sell the Walnut Ridge - Phase I and Phase II
apartment complexes for a sale price of $20,000,000. The Partnership is
actively marketing the remaining properties in its portfolio. If current market
conditions remain favorable and the General Partner can obtain appropriate sale
prices, the Partnership's liquidation strategy will be accelerated.
In June 1996, the Partnership sold the Desert Sands Village Apartments in an
all cash sale for $14,529,423. From the proceeds of the sale, the Partnership
paid $8,951,783 to the third party mortgage holder in full satisfaction of the
first mortgage loan and paid $124,346 in selling costs. Pursuant to the terms
of the sale, $500,000 of the proceeds will be retained by the Partnership until
October 1996. The remainder of the proceeds were distributed to the Limited
Partners in July 1996. See Note 4 of Notes to Financial Statements for
additional information.
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. During 1997, approximately
$734,000 of loan financing on the Walnut Ridge - Phase II Apartments from an
affiliate of the General Partner matures. As mentioned above, this property is
currently under contract to be sold. Upon the sale of this property, the loan
will be repaid with proceeds from the sale.
In July 1996, the Partnership made a distribution of $5,775,385 ($77.00 per
Interest) to the holders of Limited Partnership Interests. This distribution
includes a regular quarterly distribution of $6.00 per Interest from Net Cash
Receipts, a special distribution of $6.00 per Interest from Net Cash Receipts
reserves and a special distribution from Net Cash Proceeds of $65.00 per
Interest in connection with the June 1996 sale of Desert Sands Village
Apartments. The level of the regular quarterly distribution remained unchanged
from the amount distributed for the first quarter of 1996. To date, including
the July 1996 distribution, investors have received distributions of Net Cash
Receipts of $93.50 and Net Cash Proceeds of $244.00, totaling $337.50 per
$1,000 Interest, as well as certain tax benefits. The General Partner expects
to continue quarterly distributions to Limited Partners based on the current
performance of the Partnership's properties. However, the level of future
distributions will depend on cash flow from the Partnership's remaining
properties, and proceeds from future property sales, as to all 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 investment.
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 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.
<PAGE>
BALCOR REALTY INVESTORS-83
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- --------------------------
Walnut Ridge Apartments, Phases I and II
- -----------------------------------------
As previously described, on June 28, 1996, the Partnership contracted to sell
Walnut Ridge Apartments, Phases I and II, to an unaffiliated party, BH TFL,
Inc., for a sale price of $20,000,000. Pursuant to the agreement of sale, the
purchaser is required to deposit $200,000 into an escrow account as earnest
money upon completion of the purchaser's due diligence review, which date has
been extended upon the agreement of the Partnership and the purchaser from July
23, 1996 to August 14, 1996. The closing date of the sale has been extended
from August 15, 1996 to September 19, 1996.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Amended and Restated Certificate of Limited Partnership set forth as
Exhibit 4.1 to Amendment No. 1 to Registrant's Registration Statement on
Form S-11 dated December 10, 1982 (Registration No. 2-79043) 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. 0-11805) are incorporated herein by reference.
(10) Material Contracts:
(a) Agreement of Sale relating to the sale of North Cove Apartments previously
filed as Exhibit (2) to the Registrant's Current Report on Form 8-K dated April
24, 1995 is incorporated herein by references.
(b)(i) Agreement of Sale and attachment thereto relating to the sale of Desert
Sands Village Apartments previously filed as Exhibit (2)(a) to the Registrant's
Current Report on Form 8-K dated April 23, 1996, is incorporated herein by
reference.
(b)(ii) Master Amendment and Agreement dated May 22, 1996 relating to the sale
of Desert Sands Village Apartments, is attached hereto.
(b)(iii) Master Amendment and Agreement #2 dated May 22, 1996 relating to the
sale of Desert Sands Village Apartments, is attached hereto.
(b)(iv) Letter Agreement dated May 22, 1996 relating to the sale of Desert
Sands Village Apartments, previously filed as Exhibit (99) to the Registrant's
Current Report on Form 8-K dated June 28, 1996, is incorporated herein by
reference.
<PAGE>
(c)(i) Agreement of Sale and attachment thereto relating to the sale of the
Walnut Ridge apartment complex, Phases I and II, previously filed as Exhibit
(2)(a) to the Registrant's Current Report on Form 8-K dated June 28, 1996 is
incorporated herein by reference.
(c)(ii) Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of the Walnut Ridge apartment complex, Phases I and II, previously filed
as Exhibit (2)(b) to the Registrant's Current Report on Form 8-K dated June 28,
1996 is incorporated herein by reference.
(c)(iii) Second Amendment to Agreement of Sale and Escrow Agreement dated July
23, 1996 relating to the sale of Walnut Ridge Apartments, Phases I and II, is
attached hereto.
(27) Financial Data Schedule of the Registrant for the six month period ending
June 30, 1996 is attached hereto.
(b) Reports on Form 8-K:
(i) A Current Report on Form 8-K dated April 23, 1996 was filed reporting the
contracts to sell the Desert Sands Village Apartments in Phoenix, Arizona and
the Eagle Crest - Phase I Apartments in Irving, Texas.
(ii) A Current Report on Form 8-K dated May 22, 1996 was filed reporting the
cancellation of the contract to sell the Eagle Crest - Phase I Apartments in
Irving, Texas.
(iii) A Current Report on Form 8-K dated June 28, 1996 was filed reporting the
contract to sell the Walnut Ridge apartment complex, Phases I and II in Corpus
Christi, Texas and the closing of the sale of the Desert Sands Village
Apartments in Phoenix, Arizona.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
BALCOR REALTY INVESTORS-83
By: /s/ Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners-XIII, the General Partner
By: /s/ Brian D. Parker
------------------------------
Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Partners-XIII, the
General Partner
Date: August 13, 1996
--------------------------
<PAGE>
MASTER AMENDMENT AND AGREEMENT
This Master Amendment and Agreement (this "Agreement") is entered into as
of this 22nd day of May, 1996 by and among the selling entities set forth on
the signature pages attached hereto (each entity being referred to herein as a
"Seller" and collectively as the "Sellers") and ERP Operating Limited
Partnership, an Illinois limited partnership ("Purchaser").
R E C I T A L S
A. Each Seller and the Purchaser have entered into an Agreement of Sale
dated as of April 23, 1996 (herein called the "Purchase Agreement") for the
sale by such Seller to Purchaser of certain property described therein. All
capitalized terms which are used herein but which are not otherwise defined
herein shall have the meaning ascribed to such term in the applicable Purchase
Agreement.
B. Each Purchase Agreement provides that during the Approval Period,
Purchaser shall have the right to review the status of title of the Property
(including, determining what endorsements, if any, the Title Insurer will make
available to Purchaser).
C. Each Purchase Agreement further provides that each Seller will
deliver to Purchaser an Updated Survey and Purchaser shall have ten (10) days
from the date of receipt of the Updated Survey to approve the Updated Survey.
D. Purchaser has reviewed the status of title for each Property and has
reviewed certain of the Updated Surveys; provided, however, Purchaser and
Seller have not yet agreed upon "Permitted Exceptions" for each Property.
E. Purchaser and Seller desire to amend each Purchase Agreement to give
Purchaser and Seller until May 23, 1996 to agree upon Permitted Exceptions for
each Property.
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each Seller (with respect to the Purchase
Agreement to which such Seller is a party) and the Purchaser, hereby agree as
follows:
<PAGE>
A G R E E M E N T
1. RECITALS. The recitals set forth above are hereby incorporated
herein by reference as if same were fully set forth herein.
2. AMENDMENT. Purchaser and Seller hereby agree that Purchaser and
Seller shall have until the later of: (i) the expiration of the Approval Period
(as same may have been extended) or (ii) May 23, 1996 (the "Deadline Date") to
agree upon Permitted Exceptions for each Purchase Agreement (subject to
Purchaser's additional right to have 10 days to review Updated Surveys). If
Purchaser and Seller are unable to agree upon Permitted Exceptions on or prior
to the Deadline Date, then Seller shall have the right to elect to either
terminate the applicable Purchase Agreement, in which case the applicable
Earnest Money, including interest thereon, shall be returned to Purchaser
immediately following the applicable Seller's receipt of the Reports or (ii)
agree to cure the title objections identified by Purchaser as being
problematic, which cure may be effectuated by causing the Title Insurer, at
such Seller's expense, to insure over any objection, if applicable.
3. Miscellaneous
A. Except as modified herein, each Purchase Agreement shall remain
unmodified and in full force and effect.
B. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first above written.
[See Attached Signature Blocks]
<PAGE>
PURCHASER
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment
trust
By: /s/Daniel L. Baskes
----------------------------------
Name: Daniel L. Baskes
--------------------------------
Title: Attorney
-------------------------------
<PAGE>
Desert Sands Apartments
Roclab Investors-I, an Illinois limited
partnership
By: Balcor Partners-XIII, an Illinois general
partnership, a general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a general partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/Andrew Small - Attorney
----------------------------
Name: Andrew Small
----------------------------
Its: Attorney
----------------------------
<PAGE>
MASTER AMENDMENT AND AGREEMENT #2
This Amendment and Agreement #2 (this "Agreement") is entered into as of
this 22nd day of May, 1996 by and among the selling entities set forth on the
signature pages attached hereto (each entity being referred to herein as a
"Seller" and collectively as the "Sellers") and ERP Operating Limited
Partnership, an Illinois limited partnership ("Purchaser").
R E C I T A L S
A. Each Seller and the Purchaser have entered into an Agreement of Sale
dated as of April 23, 1996 (herein called the "Purchase Agreement") for the
sale by such Seller to Purchaser of certain property described therein. All
capitalized terms which are used herein but which are not otherwise defined
herein shall have the meaning ascribed to such terms in the applicable Purchase
Agreement.
B. Each Purchase Agreement provides that during the Approval Period,
Purchaser shall have the right to review the status of title of the Property
(including, determining what endorsements, if any, the Title Insurer will make
available to Purchaser).
C. Each Purchase Agreement further provides that each Seller will
deliver to Purchaser an Updated Survey and Purchaser shall have ten (10) days
from the date of receipt of the Updated Survey to approve the Updated Survey.
D. Purchaser has reviewed the status of title for each Property and has
reviewed certain of the Updated Surveys.
E. The Purchase Agreements further provide that promptly following the
Approval Period, Purchaser and each Seller will identify the exceptions to
title which have been agreed to by Purchaser and such Seller.
F. The parties desire to enter into this Agreement to identify the
"Permitted Exceptions" for each Property and to set forth the parties agreement
with respect to title and survey matters as of the date hereof and to also set
forth certain additional agreements of the parties.
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, each Seller (with respect to the Purchase
Agreement to which such Seller is a party) and the Purchaser, hereby agree as
follows:
<PAGE>
A G R E E M E N T
1. Surveys.
A. As of the date hereof, Purchaser has not yet received and/or
reviewed the Updated Surveys for the following properties:
(1) Briarwood Place
(2) Canyon Sands
(3) Desert Sands
(4) Sunnyoak Village
(5) Rosehill Pointe
(6) Post Place
In accordance with each Purchase Agreement, Purchaser shall have ten (10)
days following Purchaser's receipt of each Updated Survey to approve or
disapprove of the applicable Updated Survey, all as more specifically set forth
in each Purchase Agreement. If the Updated Survey is approved by Purchaser,
all items disclosed by the Updated Survey shall be "Permitted Exceptions".
B. In addition, Purchaser has reviewed and approved of the Updated
Surveys for the following properties.
(1) Brierwood Apts.
(2) Country Ridge
(3) Forest Ridge I
(4) Forest Ridge II
(5) Lakeville
(6) Mallard Cove
(7) Park Place I
(8) Park Place II
(9) Ridgetree I
(10) Ridgetree II
Each Seller (solely with respect to the Property owned by such Seller)
hereby agrees to reasonably assist Purchaser in causing the surveyor to correct
certain clean up items identified by Purchaser during its review of the Survey.
2. Title Matters. Purchaser has reviewed the title commitments for all
of the properties. Attached hereto as Exhibit A is a list of "Permitted
Exceptions" for each Property. Notwithstanding anything contained in this
Agreement or the exhibits hereto to the contrary, any Permitted Exceptions set
forth on Exhibit A which have the notation "awaiting survey" written next to
the applicable Permitted Exception (herein called "Survey Based Exceptions")
have not been agreed to by Purchaser because Purchaser has not yet reviewed the
Updated Survey which identifies the location of the applicable Permitted
Exception. Purchaser shall have until 10 days following Purchaser's receipt of
the Updated Survey to advise the applicable Seller, in writing, whether any
Survey Based Exception is or is not reasonably acceptable to Purchaser. If
Purchaser advises the applicable Seller that any Survey Based Exception is not
reasonably acceptable to Purchaser, then the applicable Seller shall have five
(5) business days following receipt of such notice, to elect to either
terminate the applicable Purchase Agreement, in which case the applicable
Earnest Money, including interest thereon, shall be returned to Purchaser
immediately following the applicable Seller's receipt of the Reports or (ii)
<PAGE>
agree to cure the title objections identified by Purchaser, which cure may be
effectuated by causing the Title Insurer, at such Seller's expense, to insure
over any objection, if applicable.
3. Assignment of Partnership Interests. If requested to do so by
Purchaser, each Seller hereby agrees, at no cost or expense to such Seller, to
cooperate in good faith with Purchaser in structuring the conveyance of
Property by the applicable Seller to Purchaser as a conveyance of title to such
Property by the applicable Seller into a partnership or limited liability
company having the applicable Seller and/or affiliates of the applicable Seller
as its sole partners (or members) and then, at closing, assigning to Purchaser
the partnership (or membership) interests in the partnership (or limited
liability company). In such case, the Purchaser hereby agrees to indemnify and
hold the applicable Seller harmless from and against any and all loss, cost,
expense, liability or damage (including reasonable attorneys fees) incurred by
such Seller arising out of Seller's conveyance in and out of such partnership
(or limited liability company) provided that such loss, cost, expense,
liability or damage (including reasonable attorneys fees) would not have been
suffered or incurred by such Seller if such Property had been conveyed directly
by such Seller to Purchaser.
4. Miscellaneous
A. Except as modified herein, each Purchase Agreement shall remain
unmodified and in full force and effect.
B. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date and year first above written.
[See Attached Signature Blocks]
<PAGE>
PURCHASER
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment
trust
By: /s/Linda A. Menich
------------------------------------
Name: Linda A. Menich
------------------------------------
Title: Assistant Vice President
------------------------------------
<PAGE>
Desert Sands Apartments
Roclab Investors-I, an Illinois limited
partnership
By: Balcor Partners-XIII, an Illinois general
partnership, a general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a general partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/Alan Lieberman
---------------------------
Name: Alan Lieberman
---------------------------
Its: Senior Vice President
---------------------------
<PAGE>
Walnut Ridge I & II Apartments
AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is made and entered into as of the 2nd day of July, 1996, by and
among W.R. PARTNERS LIMITED PARTNERSHIP, an Illinois Limited Partnership
("Seller"), BH TFL, INC. ("Purchaser") and TICOR TITLE SERVICES ("Escrow
Agent").
W I T N E S S E T H:
WHEREAS, Seller and Purchaser are parties to that certain Agreement of
Sale entered into as of June 28, 1996 (the "Original Agreement"), pursuant to
which Seller agreed to sell to Purchaser, and Purchaser agreed to purchase from
Seller, the "Property" (as defined in the Original Agreement);
WHEREAS, pursuant to the Original Agreement Seller, Purchaser and Escrow
Agent entered into that certain Escrow Agreement, dated June 28, 1996 (the
"Escrow Agreement"); and
WHEREAS, Seller and Purchaser now desire to amend the Original Agreement
and the Escrow Agreement pursuant to the terms and provisions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and mutual
agreements contained herein, the payment of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller, Purchaser and Escrow Agent agree that the Original
Agreement and the Escrow Agreement are amended as follows:
1. All capitalized terms used in this Amendment, to the extent not
otherwise expressly defined herein, shall have the same meanings ascribed to
such terms in the Original Agreement.
2. The reference to July 8, 1996 in Paragraph 7a(i) of the Original
Agreement and Paragraph 2 of the Escrow Agreement are hereby deleted and "July
23, 1996" is hereby substituted in their place.
3. Notwithstanding anything to the contrary contained in the Original
Agreement and the Escrow Agreement, the Earnest Money shall be delivered by
Purchaser to Escrow Agent on or before July 23, 1996 in the event Purchaser
does not elect to terminate the Agreement pursuant to Paragraph 7a. of the
Agreement and Paragraph 2 of the Escrow Agreement.
<PAGE>
4. Except as amended herein, the terms and conditions of the Original
Agreement and the Escrow Agreement shall continue in full force and effect and
are hereby ratified in their entirety.
5. This Amendment may be executed in multiple counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same agreement.
Executed as of the date first written above.
SELLER:
W.R. PARTNERS LIMITED PARTNERSHIP,
an Illinois limited partnership
By: W.R. Partners, Inc., an Illinois corporation,
its general partner
By: /s/ Alan G. Lieberman
---------------------------------
Name: Alan G. Lieberman
---------------------------------
Its: Senior Vice President
---------------------------------
PURCHASER:
BH TFL, INC.
By: /s/ Harry Bookey
---------------------------------
Harry Bookey
President
ESCROW AGENT:
TICOR TITLE SERVICES
By:
--------------------------------
Its:
--------------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 7720
<SECURITIES> 0
<RECEIVABLES> 242
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9260
<PP&E> 52086
<DEPRECIATION> 22611
<TOTAL-ASSETS> 39241
<CURRENT-LIABILITIES> 779
<BONDS> 37142
0
0
<COMMON> 0
<OTHER-SE> 1319
<TOTAL-LIABILITY-AND-EQUITY> 39241
<SALES> 0
<TOTAL-REVENUES> 7307
<CGS> 0
<TOTAL-COSTS> 3523
<OTHER-EXPENSES> 1166
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1789
<INCOME-PRETAX> 8812
<INCOME-TAX> 0
<INCOME-CONTINUING> 8812
<DISCONTINUED> 0
<EXTRAORDINARY> (57)
<CHANGES> 0
<NET-INCOME> 8755
<EPS-PRIMARY> 110.89
<EPS-DILUTED> 110.89
</TABLE>
