FORM 10-KSB ANNUAL OR TRANSITIONAL REPORT
UNDER SECTION 13 OR 15(D)
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [No Fee Required]
For the fiscal year ended December 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period from to
Commission file number 0-11864
NATIONAL PROPERTY INVESTORS 6
(Name of small business issuer in its charter)
California 13-3140364
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 .
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year. $10,766,000.
State the aggregate market value of the partnership interests held by non-
affiliates computed by reference to the price at which the partnership interests
were sold, or the average bid and asked prices of such partnership interests, as
of a specified date within the past 60 days. Market value information for
Registrant's partnership interests is not available. No market exists for the
limited partnership interests of the Registrant, and, therefore, no aggregate
market value can be determined.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
PART I
ITEM 1. DESCRIPTION OF BUSINESS
National Property Investors 6 (the "Partnership" or "Registrant") is a publicly-
held limited partnership organized under the Uniform Limited Partnership laws of
California as of October 15, 1982. The Partnership's managing general partner
is NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General
Partner"), a Florida corporation. The Partnership Agreement provides that the
Partnership is to terminate on December 31, 2006 unless terminated prior to such
date.
The Partnership, through its public offering of Limited Partnership Units, sold
109,600 units aggregating $54,800,000. The general partners contributed capital
in the amount of $1,000 for a 1% interest in the Partnership. Since its initial
offering, the Registrant has not received, nor are limited partners required to
make, additional capital contributions. The Partnership currently owns and
operates six apartment complexes.
The Partnership is engaged in the business of operating and holding real
properties for investment. The Partnership currently owns six apartment
complexes. The Managing General Partner of the Partnership intends to maximize
the operating results and, ultimately, the net realizable value of each of the
Partnership's properties in order to achieve the best possible return for the
investors. Such results may best be achieved by holding and operating the
properties or through property sales or exchanges, refinancings, debt
restructurings or relinquishment of the assets. The Partnership intends to
evaluate each of its holdings periodically to determine what it believes to be
the most appropriate strategy for each of the assets.
The Partnership has no full time employees. Management and administrative
services are provided by the Managing General Partner and by agents retained by
the Managing General Partner. These services were provided by an affiliate of
the Managing General Partner for the years ended December 31, 1998 and 1997.
The business in which the Partnership is engaged is highly competitive. There
are other residential properties within the market area of the Registrant's
properties. The number and quality of competitive properties, including those
which may be managed by an affiliate of the Managing General Partner in such
market area, could have a material effect on the rental market for the
apartments at the Registrant's properties and the rents that may be charged for
such apartments. While the Managing General Partner and its affiliates are a
significant factor in the United States in the apartment industry, competition
for the apartments is local. In addition, various limited partnerships have
been formed by the Managing General Partner and/or affiliates to engage in
business which may be competitive with the Registrant.
There have been, and it is possible there may be other, federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership monitors its properties for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain
cases environmental testing has been performed, which resulted in no material
adverse conditions or liabilities. In no case has the Partnership received
notice that it is a potentially responsible party with respect to an
environmental clean up site.
Both the income and expenses of operating the remaining properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
an oversupply of similar properties resulting from overbuilding, increases in
unemployment or population shifts, reduced availability of permanent mortgage
financing, changes in zoning laws, or changes in patterns or needs of users. In
addition, there are risks inherent in owning and operating residential
properties because such properties are susceptible to the impact of economic and
other conditions outside of the control of the Partnership.
Transfer of Control
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia Financial Group, Inc. ("Insignia") acquired all of the
issued and outstanding shares of stock of National Property Investors, Inc.
("NPI"), the sole shareholder of NPI Equity. On December 31, 1996, Insignia
transferred its interest in NPI Equity to IPT.
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia and IPT merged into Apartment Investment and
Management Company ("AIMCO"), a publicly traded real estate investment trust,
with AIMCO being the surviving corporation (the "Insignia Merger"). As a
result, AIMCO acquired a 100% ownership interest in the Managing General
Partner. The Managing General Partner does not believe that this transaction
will have a material effect on the affairs and operations of the Partnership.
ITEM 2. DESCRIPTION OF PROPERTIES
The following table sets forth the Partnership's investments in properties:
Date of
Property Purchase Type of Ownership Use
Ski Lodge Apartments 07/19/84 Fee ownership, subject Apartment
Montgomery, Alabama to a first mortgage 522 units
Panorama Terrace II Apartments 10/16/84 Fee ownership, subject Apartment
Birmingham, Alabama to a first mortgage 116 units
Place du Plantier Apartments 05/01/84 Fee ownership, subject Apartment
Baton Rouge, Louisiana to a first mortgage 268 units
Fairway View I Apartments 05/31/84 Fee ownership, subject Apartment
Baton Rouge, Louisiana to a first mortgage 242 units
Colony at Kenilworth Apartments 03/15/84 Fee ownership, subject Apartment
Towson, Maryland to a first mortgage 383 units
Alpine Village Apartments 10/16/84 Fee ownership, subject Apartment
Birmingham, Alabama to a first mortgage 160 units
SCHEDULE OF PROPERTIES:
Set forth below for each of the Registrant's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.
Gross
Property Carrying Accumulated Federal
Value Depreciation Rate Method Tax Basis
(in thousands) (in thousands)
Ski Lodge $15,355 $10,801 5-27.5 yrs. S/L $ 2,934
Panorama Terrace II 4,578 2,976 5-27.5 yrs. S/L 1,283
Place du Plantier 10,736 7,017 5-27.5 yrs. S/L 2,832
Fairway View I 9,546 6,343 5-27.5 yrs. S/L 2,341
Colony at Kenilworth 20,906 13,846 5-27.5 yrs. S/L 4,043
Alpine Village 5,419 3,341 5-27.5 yrs. S/L 1,725
Total $66,540 $44,324 $15,158
See "Note B" of the financial statements included in "Item 7. Financial
Statements" for a description of the Partnership's depreciation policy.
SCHEDULE OF PROPERTY INDEBTEDNESS:
The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1998 Rate Amortized Date Maturity (2)
(in thousands) (in thousands)
Ski Lodge $ 6,800 7.33% (1) 11/01/03 $ 6,800
Panorama Terrace II 1,450 7.33% (1) 11/01/03 1,450
Place du Plantier 3,800 7.33% (1) 11/01/03 3,800
Fairway View I 4,000 7.33% (1) 11/01/03 4,000
Colony at Kenilworth 7,985 7.33% (1) 11/01/03 7,985
Alpine Village 2,100 7.33% (1) 11/01/03 2,100
$26,135 $26,135
(1) Interest only payments
(2) See "Item 7. Financial Statements - Note D" for information with respect to
the Registrant's ability to prepay these loans and other specific details
about the loans.
RENTAL RATES AND OCCUPANCY:
Average annual rental rate and occupancy for 1998 and 1997 for each property.
Average Annual Average Annual
Rental Rates Occupancy
Property 1998 1997 1998 1997
Ski Lodge $5,042/unit $4,993/unit 94% 93%
Panorama Terrace II 6,045/unit 6,036/unit 91% 89%
Place du Plantier 6,316/unit 5,907/unit 92% 92%
Fairway View I 6,507/unit 6,218/unit 96% 94%
Colony at Kenilworth 8,737/unit 8,599/unit 87% 85%
Alpine Village 6,278/unit 6,137/unit 93% 92%
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties are subject to competition from other
residential apartment complexes in the area. The Managing General Partner
believes all of the properties are adequately insured. Each property is an
apartment complex which leases units for lease terms of one year or less. No
residential tenant leases 10% or more of the available rental space. All of the
properties are in good physical condition subject to normal depreciation and
deterioration as is typical for assets of this type and age.
REAL ESTATE TAXES AND RATES:
Real estate taxes and rates in 1998 for each property were:
1998 1998
Billing Rate
(in thousands)
Ski Lodge $ 93 3.45%
Panorama Terrace II 27 1.45%
Place du Plantier 42 9.89%
Fairway View I 57 9.89%
Colony at Kenilworth 216 4.48%
Alpine Village 46 1.36%
CAPITAL IMPROVEMENTS:
Ski Lodge Apartments
During the year ended December 31, 1998 the Partnership completed approximately
$245,000 of capital improvement projects at Ski Lodge Apartments consisting
primarily of floor covering and appliance replacements and repairs to the
property's roofs, electrical upgrades and pool repairs. These improvements were
funded through replacement reserves and operating cash flow. Based on a report
received from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the Managing General Partner on interior
improvements, it is estimated that the property requires approximately $203,000
of capital improvements over the near term. Capital improvement projects
planned for 1999 include, but are not limited to, of parking lot repairs,
recreational facility improvements, pool repairs, roof replacements, structural
improvements, grounds lighting, appliances and floor covering replacements, and
electrical and air conditioning upgrades. These improvements are expected to
cost approximately $322,000.
Panorama Terrace Apartments
During the year ended December 31, 1998, the Partnership completed approximately
$121,000 of capital improvement projects at Panorama Terrace II consisting
primarily of air conditioning upgrades, roof replacements and floor covering
replacements. These improvements were funded through replacement reserves and
operating cash flow. Based on a report received from an independent third party
consultant analyzing necessary exterior improvements and estimates made by the
Managing General Partner on interior improvements, it is estimated that the
property requires approximately $110,000 of capital improvements over the near
term. Capital improvements planned for 1999 include, but are not limited to,
roof replacements, appliances and carpet repairs. These improvements are
expected to cost approximately $116,000.
Place du Plantier Apartments
During the year ended December 31, 1998, the Partnership completed approximately
$212,000 of capital improvement projects at Place du Plantier Apartments,
consisting primarily of roof replacements, floor covering replacements, pool
repairs and appliances upgrades. These improvements were funded through
replacement reserves and operating cash flow. Based on a report received from
an independent third party consultant analyzing necessary exterior improvements
and estimates made by the Managing General Partner on interior improvements, it
is estimated that the property requires approximately $376,000 of capital
improvements over the near term. Capital improvement projects planned for 1999
include, but are not limited to, plumbing upgrades, roof replacements, parking
lot improvements, landscaping, appliances, interior decoration upgrades, air
conditioning upgrades and floor covering replacements. These improvements are
expected to cost approximately $425,000.
Fairway View II Apartments
During the year ended December 31, 1998, the Partnership completed approximately
$293,000 of capital improvement projects at Fairway View II, consisting
primarily of building improvements, including siding, balconies, stairwells and
roof replacements, and appliance and floor covering replacements. These
improvements were funded through replacement reserves and operating cash flow.
Based on a report received from an independent third party consultant analyzing
necessary exterior improvements and estimates made by the Managing General
Partner on interior improvements, it is estimated that the property requires
approximately $455,000 of capital improvements over the near term. Capital
improvement projects planned for 1999 include, but are not limited to, parking
lot repairs, roof replacements, recreational facility improvements, landscaping
and fencing and floor covering replacements. These improvements are expected to
cost approximately $401,000.
Colony of Kenilworth
During the year ended December 31, 1998, the Partnership completed approximately
$1,123,000 of capital improvement projects at Colony of Kenilworth, consisting
primarily of building improvements, electrical upgrades, and floor covering
replacements. These improvements were funded through replacement reserves and
operating cash flow. Based on a report received from an independent third party
consultant analyzing necessary exterior improvements and estimates made by the
Managing General Partner on interior improvements, it is estimated that the
property requires approximately $2,840,000 of capital improvements over the near
term. Capital improvement projects planned for 1999 include, but are not
limited to, building improvements, exterior painting roof replacements, carpet
and vinyl replacements, and parking lot repairs. These improvements are
expected to cost approximately $1,184,000.
Alpine Apartments
During the year ended December 31, 1998, the Partnership completed approximately
$227,000 of capital improvement projects at Alpine Apartments, consisting
primarily of building improvements, air conditioning upgrades and carpet
replacements. These improvements were funded through replacement reserves and
operating cash flow. Based on a report received from an independent third party
consultant analyzing necessary exterior improvements and estimates made by the
Managing General Partner on interior improvements, it is estimated that the
property requires approximately $96,000 of capital improvements over the near
term. Capital improvement projects planned for 1999 include, but are not
limited to, building improvements, air conditioning upgrades, appliance
replacements, and floor covering replacements. These improvements are expected
to cost approximately $115,000.
ITEM 3. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and managing entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia and entities which were, at
the time, affiliates of Insignia ("Insignia Affiliates") of interests in certain
general partner entities, past tender offers by Insignia Affiliates as well as a
recently announced agreement between Insignia and AIMCO. The complaint seeks
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner has
filed demurrers to the amended complaint which were heard during February 1999.
No ruling on such demurrers has been received. The Managing General Partner
does not anticipate that costs associated with this case, if any, to be material
to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The unit holders of the Partnership did not vote on any matter during the
quarter ended December 31, 1998.
PART II
ITEM 5. MARKET FOR PARTNERSHIP EQUITY AND RELATED PARTNER MATTERS
The Partnership, a publicly-held limited partnership, offered and sold 109,600
limited partnership units aggregating $54,800,000. The Partnership currently
has 3,346 holders of record owning an aggregate of 109,600 Units. An affiliate
of the Managing General Partner owned 48,033 units or 43.83% at December 31,
1998. No public trading market has developed for the Units, and it is not
anticipated that such a market will develop in the future.
Cash distributions from operations of approximately $3,652,000 ($32.99 per
limited partnership unit) and $1,561,000 ($14.10 per limited partnership unit)
were made during the years ended December 31, 1998 and 1997, respectively. In
additions, for the year ended December 31, 1998, the Partnership distributed
approximately 13,750,000 ($124.20 per limited partnership unit) of sale proceeds
relating to the sale of The Village Apartments joint venture. Future cash
distributions will depend on the levels of net cash generated from operations,
refinancings, property sales and the availability of cash reserves. The
Partnership's distribution policy will be reviewed on a quarterly basis. There
can be no assurance, however, that the Partnership will generate sufficient
funds from operations after required capital expenditures to permit any
additional distributions to its partners in 1999 or subsequent periods.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-KSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained in this Form 10-KSB and the other filings with the Securities and
Exchange Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations, including forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operation. Accordingly,
actual results could differ materially from those projected in the forward-
looking statements as a result of a number of factors, including those
identified herein.
This item should be read in conjunction with the financial statements and other
items contained elsewhere in this report.
Results of Operations
The Partnership's net income for the year ended December 31, 1998, was
approximately $13,803,000 as compared to a net loss of approximately $538,000
for the year ended December 31, 1997. (See "Note E" of the financial statements
for a reconciliation of these amounts to the Partnership's federal taxable
income (loss)). The increase in net income is primarily attributable to the
increase in the Partnership's share of the net income of the tenant-in-common
property, as a result of the gain recognized on the sale of the Village, as
discussed below.
On June 30, 1998, the Partnership's tenant-in-common property, The Village
Apartments, located in Voorhees Township, New Jersey, was sold to an
unaffiliated party for an adjusted sales price of approximately $30,102,000.
After repayment of the mortgage note payable and closing expenses, the net
proceeds from the sale were approximately $18,211,000. The sale resulted in
a gain of approximately $19,946,000 for the joint venture and an
extraordinary loss on early extinguishment of debt of approximately $840,000,
representing prepayment penalties and the write off of the remaining unamortized
loan costs. The Partnership's equity in the net income of the tenant-in-common
property was approximately $14,612,000 for the year ended December 31, 1998,
as compared to approximately $74,000 for the corresponding period in 1997.
Excluding the equity in income of the Village, the Partnership incurred a net
loss of approximately $809,000 for the year ended December 31, 1998, as compared
to a net loss of approximately $612,000 for the corresponding period in 1997.
The increase in net loss is primarily attributable to an increase in total
expenses which more than offset an increase in total revenues. Revenues
increased due to increases in both rental and other income. The increase in
rental revenue was due to increased rental rates at Place du Plantier, Fairway
View I, Colony at Kenilworth and Alpine Village.
Expenses increased for the year ended December 31, 1998 as compared to December
31, 1997 due to increases in depreciation expense, general and administrative
expense and the payment of an incentive compensation fee to the general partner
of approximately $916,000. These increases were partially offset by a decrease
in operating expense and the recognition in 1997 of a loss on disposal of
property of approximately $152,000 resulting from the write off of the remaining
basis of roofs at several of the Partnership's investment properties.
The increase in depreciation expense was due to the increase in capital assets
over 1997. The increase in general and administrative expenses was due to the
costs associated with the sale of The Village (described above) and Partnership
management fees of $152,000 paid in connection with the 1998 distributions of
cash from operations.
Operating expenses decreased for the year ended December 31, 1998, as compared
to the corresponding period in 1997, as a result of various rehabilitation
projects completed in 1997 at Ski Lodge and Colony at Kenilworth Apartments. At
Ski Lodge Apartments, the decrease was due to the completion of an exterior
painting project in 1997. Projects completed in 1997 at Colony at Kenilworth
Apartments include exterior building improvements, exterior painting and parking
lot repairs.
Included in general and administrative expenses at both December 31, 1998 and
1997 are reimbursements to the Managing General Partner allowed under the
Partnership Agreement associated with its management of the Partnership. In
addition, costs associated with the quarterly and annual communications with
investors and regulatory agencies and the annual audit required by the
Partnership Agreement are also included.
As part of the ongoing business plans of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. As part of this plan, the Managing General Partner attempts to protect
the Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due
to changing market conditions, which can result in the use of rental concessions
and rental reductions to offset softening market conditions, there is no
guarantee that the Managing General Partner will be able to sustain such a plan.
Capital Resources and Liquidity
At December 31, 1998, the Partnership had cash and cash equivalents of
approximately $1,501,000, as compared to approximately $2,329,000 at December
31, 1997. The decrease in cash and cash equivalents is due to approximately
$3,132,000 of cash provided by operating activities and approximately
$13,442,000 of cash provided by investing activities which was offset by
approximately $17,402,000 of cash used in financing activities. Cash provided by
investing activities consists of distributions from the tenant-in-common
property partially offset by capital improvements while cash used in financing
activities consists of distributions to partners. The Partnership invests its
working capital in a money market account.
The Managing General Partner has extended to the Partnership a $500,000 line of
credit. At the present time, the Partnership has no outstanding amounts due
under this line of credit, and the Managing General Partner does not anticipate
the need to borrow in the near future. Other than cash and cash equivalents the
line of credit is the Partnership's only unused source of liquidity.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Registrant and to comply with Federal,
state, and local legal and regulatory requirements. The Registrant has budgeted
approximately $2.6 million in capital improvements for all of the Registrant's
properties in 1999. Budgeted capital improvements include roof replacements,
carpet and vinyl replacements, appliances, parking lot improvements,
landscaping, air conditioning upgrades, exterior painting, building improvements
and fencing. The capital expenditures will be incurred only if cash is
available from operations or from Partnership reserves. To the extent that such
budgeted capital improvements are completed, the Registrant's distributable cash
flow, if any, may be adversely affected at least in the short term.
The Registrant's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Registrant. The mortgage
indebtedness of approximately $26,135,000 matures November 1, 2003 with balloon
payments due at maturity. The Managing General Partner will attempt to
refinance such indebtedness and/or sell the properties prior to such maturity
date. If the property cannot be refinanced or sold for a sufficient amount, the
Registrant will risk losing such property through foreclosure.
Cash distributions from operations of approximately $3,652,000 and $1,561,000
were made during the years ended December 31, 1998 and 1997, respectively. In
addition, for the year ended December 31, 1998, the Partnership distributed
approximately $13,750,000 of sale proceeds relating to the sale of The Village
Apartments joint venture. The Registrant's distribution policy is reviewed on a
quarterly basis. There can be no assurance, however, that the Registrant will
generate sufficient funds from operations to permit further distributions to its
partners in 1999 or subsequent periods.
Year 2000 Compliance
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership
is dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Over the past two years, the Managing Agent has determined that it will be
required to modify or replace significant portions of its software and certain
hardware so that those systems will properly utilize dates beyond December 31,
1999. The Managing Agent presently believes that with modifications or
replacements of existing software and certain hardware, the Year 2000 issue can
be mitigated. However, if such modifications and replacements are not made or
not completed in time, the Year 2000 issue could have a material impact on the
operations of the Partnership.
The Managing Agent's plan to resolve Year 2000 issues involves four Phases:
assessment, remediation, testing, and implementation. To date, the Managing
Agent has fully completed its assessment of all the information systems that
could be significantly affected by the Year 2000, and has begun the remediation,
testing and implementation phases on both hardware and software systems.
Assessments are continuing in regards to embedded systems. The status of each
is detailed below.
Status of Progress in Becoming Year 2000 Compliant, Including Timetable for
Completion of Each Remaining Phase
Computer Hardware:
During 1997 and 1998, the Managing Agent identified all of the computer systems
at risk and formulated a plan to repair or replace each of the affected systems.
In August 1998, the mainframe system used by the Managing Agent became fully
functional. In addition to the mainframe, PC-based network servers and routers
and desktop PCs were analyzed for compliance. The Managing Agent has begun to
replace each of the non-compliant network connections and desktop PCs and, as of
December 31, 1998, had completed approximately 75% of this effort.
The total cost to the Managing Agent to replace the PC-based network servers,
routers and desktop PCs is expected to be approximately $1.5 million of which
$1.3 million has been incurred to date. The remaining network connections and
desktop PCs are expected to be upgraded to Year 2000 compliant systems by March
31, 1999.
Computer software:
The Managing Agent utilizes a combination of off-the-shelf, commercially
available software programs as well as custom-written programs that are designed
to fit specific needs. Both of these types of programs were studied, and
implementation plans written and executed with the intent of repairing or
replacing any non-compliant software programs.
During 1998, the Managing Agent began converting the existing property
management and rent collection systems to its management properties Year 2000
compliant systems. The estimated additional costs to convert such systems at
all properties, is $200,000, and the implementation and the testing process is
expected to be completed by March 31, 1999.
The final software area is the office software and server operating systems.
The Managing Agent has upgraded all non-compliant office software systems on
each PC and has upgraded 80% of the server operating systems. The remaining
server operating systems are planned to be upgraded to be Year 2000 compliant by
March 31, 1999.
Operating Equipment:
The Managing Agent has operating equipment, primarily at the property sites,
which needed to be evaluated for Year 2000 compliance. In September 1997, the
Managing Agent began taking a census and inventory of embedded systems
(including those devices that use time to control systems and machines at
specific properties, for example elevators, heating, ventilating, and air
conditioning systems, security and alarm systems, etc.).
The Managing Agent has chosen to focus its attention mainly upon security
systems, elevators, heating, ventilating and air conditioning systems, telephone
systems and switches, and sprinkler systems. While this area is the most
difficult to fully research adequately, management has not yet found any major
non-compliance issues that put the Managing Agent at risk financially or
operationally. The Managing Agent intends to have a third-party conduct an
audit of these systems and report their findings by March 31, 1999.
Any of the above operating equipment that has been found to be non-compliant to
date has been replaced or repaired. To date, these have consisted only of
security systems and phone systems. As of December 31, 1998 the Managing Agent
has evaluated approximately 86% of the operating equipment for the Year 2000
compliance.
The total cost incurred for all properties managed by the Managing Agent as of
December 31, 1998 to replace or repair the operating equipment was approximately
$400,000. The Managing Agent estimates the cost to replace or repair any
remaining operating equipment is approximately $325,000, which is expected to be
completed by April 30, 1999.
The Managing Agent continues to have "awareness campaigns" throughout the
organization designed to raise awareness and report any possible compliance
issues regarding operating equipment within our enterprise.
Nature and Level of Importance of Third Parties and Their Exposure to the Year
2000
The Managing Agent continues to conduct surveys of its banking and other vendor
relationships to assess risks regarding their Year 2000 readiness. The Managing
Agent has banking relationships with three major financial institutions, all of
which have indicated their compliance efforts will be complete before May 1999.
The Managing Agent has updated data transmission standards with two of the three
financial institutions. The Managing Agent's contingency plan in this regard is
to move accounts from any institution that cannot be certified Year 2000
compliant by June 1, 1999.
The Partnership does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors who share
information systems (external agent). To date the Partnership is not aware of
any external agent with a Year 2000 compliance issue that would materially
impact the Partnership's results of operations, liquidity, or capital resources.
However, the Partnership has no means of ensuring that external agents will be
Year 2000 compliant.
The Managing Agent does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will have a
material impact on the financial position or results of operations of the
Partnership. However, the effect of non-compliance by external agents is not
readily determinable.
Costs to Address Year 2000
The total cost of the Year 2000 project to the Managing Agent is estimated at
$3.5 million and is being funded from operating cash flows. To date, the
Managing Agent has incurred approximately $2.8 million ($0.6 million expensed
and $2.2 million capitalized for new systems and equipment) related to all
phases of the Year 2000 project. Of the total remaining project costs,
approximately $0.5 million is attributable to the purchase of new software and
operating equipment, which will be capitalized. The remaining $0.2 million
relates to repair of hardware and software and will be expensed as incurred.
The Partnership's portion of these costs are not material.
Risks Associated with the Year 2000
The Managing Agent believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. As noted above, the Managing Agent has not
yet completed all necessary phases of the Year 2000 program. In the event that
the Managing Agent does not complete any additional phases, certain worst case
scenarios could occur. The worst case scenarios could include elevators,
security and heating, ventilating and air conditioning systems that read
incorrect dates and operate with incorrect schedules (e.g., elevators will
operate on Monday as if it were Sunday). Although such a change would be
annoying to residents, it is not business critical.
In addition, disruptions in the economy generally resulting from Year 2000
issues could also adversely affect the Partnership. The Partnership could be
subject to litigation for, among other things, computer system failures,
equipment shutdowns or failure to properly date business records. The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.
Contingency Plans Associated with the Year 2000
The Managing Agent has contingency plans for certain critical applications and
is working on such plans for others. These contingency plans involve, among
other actions, manual workarounds and selecting new relationships for such
activities as banking relationships and elevator operating systems.
ITEM 7. FINANCIAL STATEMENTS
NATIONAL PROPERTY INVESTORS 6
LIST OF FINANCIAL STATEMENTS
Reports of Independent Auditors
Balance Sheet - December 31, 1998
Statements of Operations - Years ended December 31, 1998 and 1997
Statement of Changes in Partners' Capital (Deficit) - Years ended December 31,
1998 and 1997
Statements of Cash Flows - Years ended December 31, 1998 and 1997
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors'
To the Partners
National Property Investors 6
We have audited the accompanying balance sheet of National Property Investors 6
as of December 31, 1998, and the related statements of operations, changes in
partners' capital (deficit) and cash flows for the year 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 audit 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
the Partnership's management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides 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 National Property Investors 6
at December 31, 1998, and the results of its operations and its cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Greenville, South Carolina
March 3, 1999
Independent Auditors' Report
To the Partners
National Property Investors 6
Greenville, South Carolina
We have audited the accompanying statements of operations, changes in partners'
capital (deficit) and cash flows of National Property Investors 6 (a limited
partnership)(the "Partnership") for the year 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits 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 results of its operations and its cash flows of
National Property Investors 6 for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
/S/ IMOWITZ KOENIG & CO., LLP
Certified Public Accountants
New York, NY
January 26, 1998
NATIONAL PROPERTY INVESTORS 6
BALANCE SHEET
December 31, 1998
(in thousands, except unit data)
Assets
Cash and cash equivalents $ 1,501
Receivables and deposits 515
Restricted escrows 969
Other assets 855
Investment properties (Notes D and G):
Land $ 4,349
Buildings and related personal property 62,191
66,540
Less accumulated depreciation (44,324) 22,216
$ 26,056
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 452
Tenant security deposits payable 207
Payable to affiliate (Note F) 916
Accrued property taxes 130
Other liabilities 346
Mortgage notes payable (Note D) 26,135
Partners' Capital (Deficit)
Limited partners' (109,600 units issued and
outstanding) $ (1,561)
General partner's (569) (2,130)
$ 26,056
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 6
STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1998 1997
Revenues:
Rental income $ 9,920 $ 9,498
Other income 846 833
Total revenues 10,766 10,331
Expenses:
Operating 4,674 5,144
Interest 2,051 2,059
Depreciation 2,781 2,700
General and administrative 680 432
Property taxes 473 456
Incentive compensation fee (Note F) 916 --
Loss on disposal of property -- 152
Total expenses 11,575 10,943
Equity in net income of tenant-in-common
property (Note H) 15,250 74
Income (loss) before extraordinary item 14,441 (538)
Equity in extraordinary loss on early extinguishment
of debt of tenant-in-common (Note H) (638) --
Net income (loss) $13,803 $ (538)
Net income (loss) allocated to general partner (1%) $ 138 $ (5)
Net income (loss) allocated to limited partners (99%) 13,665 (533)
$13,803 $ (538)
Per limited partnership unit:
Income (loss) before extraordinary item $130.44 $ (4.86)
Extraordinary item (5.76) --
Net income (loss) $124.68 $ (4.86)
Distributions per limited partnership unit $157.19 $ 14.10
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 6
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner's Partners' Total
Original capital contributions 109,600 $ 1 $ 54,800 $ 54,801
Partners' (deficit) capital at
December 31, 1996 109,600 $ (512) $ 4,080 $ 3,568
Net loss for the year ended
December 31, 1997 -- (5) (533) (538)
Distribution to partners -- (16) (1,545) (1,561)
Partners' (deficit) capital at
December 31, 1997 109,600 (533) 2,002 1,469
Net income for the year ended
December 31, 1998 -- 138 13,665 13,803
Distributions to partners -- (174) (17,228) (17,402)
Partners' deficit at
December 31, 1998 109,600 $ (569) $ (1,561) $ (2,130)
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 6
STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
1998 1997
Cash flows from operating activities:
Net income (loss) $ 13,803 $ (538)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 2,781 2,700
Amortization of loan costs 136 143
Loss on disposal of property 15 152
Equity in net income of tenant-in-
common property (15,250) (74)
Equity in extraordinary loss in early
extinguishment of debt of tenant-in-common 638 --
Change in accounts:
Receivables and deposits (39) 48
Other assets 27 (26)
Accounts payable 84 (289)
Tenant security deposits payable 13 (40)
Accrued property taxes (8) 99
Payable to affiliates 916 --
Other liabilities 16 (139)
Net cash provided by operating activities 3,132 2,036
Cash flows from investing activities:
Net withdrawals from (deposits to)
restricted escrows 718 (114)
Property improvements and replacements (1,990) (2,582)
Distributions from tenant-in-common property 14,714 1,292
Net cash provided by (used in) investing activities 13,442 (1,404)
Cash flows from financing activities:
Loan costs paid -- (54)
Distributions paid (17,402) (12,182)
Net cash used in financing activities (17,402) (12,236)
Net decrease cash and cash equivalents (828) (11,604)
Cash and cash equivalents at beginning of period 2,329 13,933
Cash and cash equivalents at end of period $ 1,501 $ 2,329
Supplemental information:
Cash paid for interest $ 1,916 $ 1,916
At December 31, 1998 fixed additions of $231,000 were included in accounts
payable.
Supplemental disclosure of non-cash financing activity:
Distributions payable to partners of $10,621,000 were accrued at December 31,
1996 and paid in January 1997.
See Accompanying Notes to Financial Statements
NATIONAL PROPERTY INVESTORS 6
Notes to Financial Statements
December 31, 1998
NOTE A - CHANGE IN METHOD OF REPORTING THE OWNERSHIP OF TENANT-IN-COMMON
PROPERTY
National Property Investors 6 (the "Partnership" or "Registrant") owned a
75.972% interest in The Village Apartments (the "Village") (see "Note H"). On
June 30, 1998, the property was sold. Through the third quarter of 1997, the
Partnership consolidated its pro rata share of assets, liabilities and
operations of the Village. During the fourth quarter of 1997, the Partnership
decided to reflect its interest in the Village utilizing the equity method due
to the inability of the Partnership to control the major operating and financial
policies of the Village.
NOTE B - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization:
The Partnership was organized under the Uniform Limited Partnership Laws of
California as of October 15, 1982, for the purpose of acquiring and operating
income-producing residential real estate. The Partnership currently owns three
apartment complexes in Alabama, two apartment complexes in Louisiana and one
apartment complex in Maryland. The Managing General Partner of the Partnership
is NPI Equity Investments, Inc. ("NPI Equity" or the "Managing General
Partner"). The Partnership will terminate on December 31, 2006, unless
previously terminated, in accordance with the terms of the Agreement of Limited
Partnership. Limited partners' units are at a stated value of $500. A total of
109,600 units of the limited partnership were issued for aggregate capital
contributions of $54,800,000. In addition, the general partners contributed a
total of $1,000 to the Partnership.
Uses of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Allocation of Income, Loss and Distributions:
Income, loss and distributions of cash of the Partnership are allocated between
general and limited partners in accordance with the provisions of the
Partnership Agreement.
Fair Value of Financial Instruments:
Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures about
Fair Value of Financial Instruments", as amended by SFAS No. 119, "Disclosures
about Derivative Financial Instruments and Fair Value of Financial Instruments",
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate fair value. Fair value is defined in the SFAS as the amount at which
the instruments could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The Partnership believes
that the carrying amount of its financial instruments (except for long term
debt) approximates their fair value due to the short term maturity of these
instruments. The fair value of the Partnership's long term debt, after
discounting the scheduled loan payments to maturity, approximates its carrying
balance.
Cash and Cash Equivalents:
Includes cash on hand and in banks, money market accounts and certificates of
deposit with original maturities less than 90 days. At certain times, the
amount of cash deposited at a bank may exceed the limit on insured deposits.
Depreciation:
Depreciation is provided by the straight-line method over the estimated lives of
the apartment properties and related personal property. For Federal income tax
purposes, the accelerated cost recovery method is used (1) for real property
over 15 years for additions prior to March 16, 1984, 18 years for additions
after March 15, 1984 and before May 9, 1985, and 19 years for additions after
May 8, 1985, and before January 1, 1987, and (2) for personal property over 5
years for additions prior to January 1, 1987. As a result of the Tax Reform Act
of 1986, for additions after December 31, 1986, the modified accelerated cost
recovery method is used for depreciation of (1) real property over 27 1/2 years
and (2) personal property additions over 7 years.
Loan Costs:
Loan costs of approximately $1,003,000, less accumulated amortization of
approximately $295,000, are included in other assets and are being amortized on
a straight-line basis over the life of the loans.
Tenant Security Deposits:
The Partnership requires security deposits from lessees for the duration of the
lease and such deposits are included in receivables and deposits. Deposits are
refunded when the tenant vacates, provided the tenant has not damaged its space
and is current on its rental payments.
Leases:
The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership recognizes income as earned on its leases. In addition, the
Managing General Partner's policy is to offer rental concessions during
particularly slow months or in response to heavy competition from other similar
complexes in the area. Concessions are charged against rental income as
incurred.
Investment Properties:
Investment properties consist of six apartment complexes and are stated at cost.
Acquisition fees are capitalized as a cost of real estate. In accordance with
Financial Accounting Standards Board Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
the Partnership records impairment losses on long-lived assets used in
operations when events and circumstances indicate that the assets might be
impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying amounts of those assets. Costs of apartment
properties that have been permanently impaired have been written down to
appraised value. No adjustments for impairment of value were recorded in the
years ended December 31, 1998 or 1997.
Segment Reporting:
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Standards No. 131, Disclosure about Segments of an Enterprise and
Related Information, which is effective for years beginning after December 15,
1997. Statement 131 established standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers (See "Note J" for required disclosure).
Advertising:
The Partnership expenses the costs of advertising as incurred. Advertising costs
of approximately $162,000 and $203,000 for the years ended December 31, 1998 and
1997, respectively, were charged to expense as incurred.
Income Taxes:
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statement of the Partnership.
Reclassification:
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
NOTE C - TRANSFER OF CONTROL
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company, a publicly traded real
estate investment trust, with AIMCO being the surviving corporation (the
"Insignia Merger"). As a result, AIMCO ultimately acquired a 100% ownership
interest in Insignia Properties Trust ("IPT"), the entity which controls the
Managing General Partner. The Managing General Partner does not believe that
this transaction will have a material effect on the affairs and operations of
the Partnership.
NOTE D - MORTGAGE NOTES PAYABLE
The principle terms of the mortgage notes payable are as follows:
Principal Monthly Principal
Balance At Interest Stated Balance
December 31, Only Interest Maturity Due At
Property 1998 Payment Rate Date Maturity
(in thousands) (in thousands)
Ski Lodge $ 6,800 $ 42 7.33% 11/01/03 $ 6,800
Panorama Terrace II 1,450 9 7.33% 11/01/03 1,450
Place du Plantier 3,800 23 7.33% 11/01/03 3,800
Fairway View I 4,000 24 7.33% 11/01/03 4,000
Colony at Kenilworth 7,985 49 7.33% 11/01/03 7,985
Alpine Village 2,100 13 7.33% 11/01/03 2,100
$26,135 $ 160 $26,135
The mortgage notes payable are nonrecourse and are secured by pledge of the
Partnership's properties and by pledge of revenues from the respective rental
properties. The notes include prepayment penalties if repaid prior to maturity.
Further, the properties may not be sold subject to existing indebtedness.
Scheduled principal payments on the mortgage notes payable subsequent to
December 31, 1998, are as follows (in thousands):
1999 --
2000 --
2001 --
2002 --
2003 26,135
$26,135
NOTE E - INCOME TAXES
The Partnership has received a ruling from the Internal Revenue Service that it
will be classified as a partnership for Federal income tax purposes.
Accordingly, no provision for income taxes is made in the financial statements
of the Partnership. Taxable income or loss of the Partnership is reported in
the income tax returns of its partners.
The following is a reconciliation of reported net income (loss) and Federal
taxable income (loss) (in thousands, except per unit data):
1998 1997
Net income (loss) as reported $13,803 $ (538)
Add (deduct):
Depreciation differences 301 205
Prepaid rent 173 48
Gain on sale of the Village 5,175 --
Interest capitalized for income
Tax reporting -- 133
Other 157 135
Federal taxable income (loss) $19,609 $ (17)
Federal taxable income (loss) per limited
partnership unit $177.13 $ (.15)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net liabilities as reported $(2,130)
Land and buildings (1,543)
Accumulated depreciation (5,515)
Syndication and distribution costs 6,295
Prepaid rent 266
Other 146
Net liabilities - tax basis $(2,481)
NOTE F - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following amounts were incurred to
the Managing General Partner and affiliates during the year ended December 31,
1998 and 1997:
1998 1997
(in thousands)
Property management fees (included in
operating expenses) $ 536 $ 508
Reimbursement for services of affiliates
(included in operating, general and
administrative expenses, and investment
properties) (1) 384 443
Partnership management fees (included in
general and administrative expenses) 152 --
Non-accountable reimbursement (included in
general and administrative expenses) 150 139
Incentive management fee 916 --
(1) Included in "reimbursements for services of affiliates" for the years ended
December 31, 1998 and 1997, is approximately $80,000 and $205,000,
respectively, in reimbursements for construction oversight costs.
During the years ended December 31, 1998 and 1997, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates approximately $536,000 and
$508,000 for the years ended December 31, 1998 and 1997, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $384,000 and
$443,000 for the years ended December 31, 1998 and 1997, respectively.
In addition approximately $916,000 of incentive management fees resulting from
the sale of The Village were accrued in 1998. These fees are payable to the
Managing General Partner but are subordinate to the limited partners receiving a
preferred return, specified in the partnership agreement (see below for a
further discussion of incentive management fees).
AIMCO currently owns, through an affiliate, a total of 48,033 limited
partnership units or 43.826%. Consequently, AIMCO could be in a position to
significantly influence all voting decisions with respect to the Registrant.
Under the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Managing General Partner because of their
affiliation with the Managing General Partner. However, the affiliate is
required to vote its Units acquired from DeForest Ventures II, L.P. on January
19, 1996, (i) against any proposal to increase the fees and other compensation
payable by the Partnership to the Managing General Partner or to affiliates; and
(ii) on all other matters submitted by it or its affiliates, in proportion to
the votes cast by non-tendering unitholders. Except for the foregoing, no other
limitations are imposed on the affiliate's right to vote each Unit acquired.
For the period January 1, 1997 to August 31, 1997, the Partnership insured its
properties under a master policy through an agency affiliated with the Managing
General Partner with an insurer unaffiliated with the Managing General Partner.
An affiliate of the Managing General Partner acquired, in the acquisition of a
business, certain financial obligations from an insurance agency which was later
acquired by the agent who placed the master policy. The agent assumed the
financial obligations to the affiliate of the Managing General Partner which
receives payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations was not
significant.
NPI Equity is entitled to receive 1% of the distributions of cash from
operations, sales, and refinancings and an allocation of 1% of the net income or
loss of the Partnership. NPI Equity received distributions of $174,000 and
$16,000 for the years ended December 31, 1998 and 1997.
NPI Equity has established a revolving credit facility (the "Partnership
Revolver") to be used to fund deferred maintenance and working capital needs of
the National Property Investors Partnership Series. The maximum draw available
to the Partnership under the Partnership Revolver is $500,000. Loans under the
Partnership Revolver will have a term of 365 days, be unsecured and bear
interest at the rate of 2% per annum in excess of the prime rate announced from
time to time by Chemical Bank, N.A. The maturity date of such borrowing will be
accelerated in the event of: (1) the removal of the Managing General Partner
(whether or not For Cause, as defined in the Partnership Agreement); (ii) the
sale or refinancing of a property by the Partnership, or; (iii) the liquidation
of the Partnership. The Partnership has not borrowed under the Partnership
Revolver, to date.
Upon the sale of the Partnership's property, NPI Equity will be entitled to an
incentive compensation fee equal to a declining percentage of the difference
between the total amount distributed to limited partners and the appraised value
of their investment at February 1, 1992. The percentage amount to be realized
by NPI Equity, if any, will be dependent upon the year in which the property is
sold. Payment of the incentive compensation fee is subordinated to the receipt
by the limited partners, of: (a) distributions from capital transaction proceeds
of an amount equal to their appraised investment in the Partnership at February
1, 1992; and (b) distributions from all sources (capital transactions as well as
cash flow) of an amount equal to six percent (6%) per annum cumulative, non-
compounded, on their appraised investment in the Partnership at February 1,
1992.
NOTE G - REAL ESTATE AND ACCUMULATED DEPRECIATION
Initial Cost
To Partnership
(in thousands)
Buildings Cost
and Related Capitalized
Personal Subsequent to
Description Encumbrances Land Property Acquisition
(in thousands) (in thousands)
Ski Lodge $ 6,800 $ 672 $11,587 $ 3,096
Panorama Terrace II 1,450 323 2,972 1,283
Place du Plantier 3,800 840 7,773 2,123
Fairway View I 4,000 762 7,048 1,736
Colony at Kenilworth 7,985 1,306 13,187 6,413
Alpine Village 2,100 359 3,515 1,545
Totals $26,135 $ 4,262 $46,082 $16,196
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1998
(in thousands)
Buildings
And
Related
Personal Accumulated Year Of Date Depreciable
Description Land Property Total Depreciation Construction Acquired Life-Years
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Ski Lodge $ 676 $14,679 $15,355 $10,801 1977 7/84 5-27.5
Panorama Terrace II 330 4,248 4,578 2,976 1973 10/84 5-27.5
Place du Plainter 844 9,892 10,736 7,017 1974 5/84 5-27.5
Fairway View I 767 8,779 9,546 6,343 1974 5/84 5-27.5
Colony at Kenilworth 1,366 19,540 20,906 13,846 1967 3/84 5-27.5
Alpine Village 366 5,053 5,419 3,341 1972 10/84 5-27.5
Totals $ 4,349 $62,191 $66,540 $44,324
</TABLE>
Reconciliation of Real Estate and Accumulated Depreciation:
Years Ended December 31,
1998 1997
Real Estate
Balance at beginning of year $64,370 $62,224
Property improvements and
replacements 2,221 2,582
Disposals of property (51) (436)
Balance at end of year $66,540 $64,370
Accumulated Depreciation
Balance at beginning of year $41,579 $39,163
Additions charged to expense 2,781 2,700
Disposals of property (36) (284)
Balance at end of year $44,324 $41,579
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1998 and 1997, is approximately $64,997,000 and $62,777,000. The
accumulated depreciation taken for Federal income tax purposes at December 31,
1998 and 1997, is approximately $49,839,000 and $47,393,000, respectively.
NOTE H - TENANT-IN-COMMON PROPERTY
The Partnership owned The Village as a tenant-in-common with National Property
Investors 5 ("NPI 5"), an affiliated public limited partnership. NPI 5 acquired
a 24.028% undivided interest with the Partnership owning the remaining 75.972%.
Effective December 31, 1997, the property was accounted for under the equity
method of accounting.
On June 30, 1998, The Village, located in Voorhees Township, New Jersey, was
sold to an unaffiliated party for an adjusted sales price of approximately
$30,102,000. After repayment of the mortgage note payable and closing expenses,
the net proceeds from the sale were approximately $18,211,000. The sale resulted
in a gain of approximately $19,946,000 for the Tenant-in-common Joint Venture
and an extraordinary loss on early extinguishment of debt of approximately
$840,000, representing prepayment penalties and the write off of the remaining
unamortized loan costs. The Partnership's equity in the net income of this
tenant-in-common property was approximately $15,250,000 for 1998. The
Partnership's equity in the extraordinary loss on early extinguishment of debt
was approximately $638,000 for 1998.
The Village tenant-in-common joint venture with NPI 5 was terminated in 1998
after the distribution from the proceeds from the sale.
Condensed statements of operations of the Village for the years ended December
31, 1998 and 1997 are as follows (in thousands):
1998 1997
Revenues:
Rental income $ 2,182 $ 4,376
Other income 150 248
Gain on sale of property 19,946 --
Total revenues 22,278 4,624
Expenses:
Operating and other expenses 1,244 2,761
Depreciation 395 778
Mortgage interest 486 988
Total expenses 2,125 4,527
Income before extraordinary loss 20,153 97
Extraordinary loss on early
extinguishment of debt 840 --
Net income $19,313 $ 97
NOTE I - DISTRIBUTIONS
During the year ended December 31, 1998, the Partnership distributed
approximately $3,652,000 of cash from operations and approximately $13,750,000
from sales proceeds relating to the sale of The Village joint venture. During
the year ended December 1997, the Partnership distributed approximately
$1,561,000 of cash from operations.
In December 1996, the Partnership declared a distribution of approximately
$10,621,000 payable to the partners. The distribution was paid in January 1997,
and represented net proceeds from the mortgage refinancings during 1996.
NOTE J - DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
Description of the types of products and services from which the reportable
segment derives its revenues: As defined by SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information", the Partnership has one
reportable segment: residential properties. The Partnership's residential
property segment consists of six apartment complexes in three states in the
United States. The Partnership rents apartment units to people for terms that
are typically less than twelve months.
Measurement of segment profit or loss: The Partnership evaluates performance
based on net income. The accounting policies of the reportable segment are the
same as those described in the summary of significant accounting policies.
Factors management used to identify the enterprise's reportable segment: The
Partnership's reportable segment consists of investment properties that offer
similar products and services. Although each of the investment properties are
managed separately, they have been aggregated into one segment as they provide
services with similar types of products and customers.
Segment information for the years 1998 and 1997 is shown in the tables below.
The "Other" Column includes partnership administration related items and income
and expense not allocated to the reportable segment.
1998
Residential Other Totals
(in thousands)
Rental income $ 9,920 $ -- $ 9,920
Other income 682 164 846
Interest expense 2,051 -- 2,051
Depreciation 2,781 -- 2,781
General and administrative expense -- 680 680
Incentive compensation fee -- 916 916
Equity in income of tenant-in-common -- 15,250 15,250
Equity in extraordinary loss
of tenant-in-common -- 638 638
Segment profit 662 13,181 13,803
Total assets 25,463 593 26,056
Capital expenditures for investment
properties 2,221 -- 2,221
1997
Residential Other Totals
(in thousands)
Rental income $ 9,498 $ -- $ 9,498
Other income 633 200 833
Interest expense 2,059 -- 2,059
Depreciation 2,700 -- 2,700
General and administrative expense -- 432 432
Loss on disposal of assets (152) -- (152)
Equity in income of tenant-in-common -- 74 74
Segment loss (380) (158) (538)
Total assets 26,259 2,144 28,403
Capital expenditures for investment
properties 2,582 -- 2,582
NOTE K - LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and managing entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates as well as a recently
announced agreement between Insignia and Apartment Investment and Management
Company. The complaint seeks monetary damages and equitable relief, including
judicial dissolution of the Partnership. On June 25, 1998, the Managing General
Partner filed a motion seeking dismissal of the action. In lieu of responding
to the motion, the plaintiffs have filed an amended complaint. The Managing
General Partner has filed demurrers to the amended complaint which were heard
during February 1999. No ruling on such demurrers has been received. The
Managing General Partner does not anticipate that the costs associated with this
case, if any, to be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL
DISCLOSURES
Effective November 10, 1998, the Registrant dismissed its prior Independent
Auditors, Imowitz Koenig and Company LLP ("Imowitz"). Imowitz' Independent
Auditor's Report on the Registrant's financial statements for the calendar year
ended December 31, 1997 did not contain an adverse opinion or a disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope or
accounting principles. The decision to change Independent Auditors was approved
by the Managing General Partner's Directors. During the calendar year ended 1997
and through November 24, 1998, there were no disagreements between the
Registrant and Imowitz on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure which
disagreements if not resolved to the satisfaction of Imowitz, would have caused
it to make references to the subject matter of the disagreements in connection
with its reports.
Effective November 24, 1998, the Registrant engaged Ernst & Young LLP as its
Independent Auditors. During the last two calendar years and through November
10, 1998, the Registrant did not consult Ernst and Young LLP regarding any of
the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-B.
PART III
ITEM 9.DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.
National Property Investors 6 (the "Partnership" or the "Registrant") has no
officers or directors. The managing general partner is as follows:
Managing General Partner - The names and ages of, as well as the positions and
offices held by, the present executive officers and directors of NPI Equity
Investments, Inc. "NPI Equity" or "Managing General Partner") are set forth
below. There are no family relationships between or among any officers or
directors.
NAME Age Position
Patrick J. Foye 41 Executive Vice President and Director
Timothy R. Garrick 42 Vice President - Accounting and Director
Patrick J. Foye has been Executive Vice President and Director of the Managing
General Partner since October 1, 1998. Mr. Foye has served as Executive Vice
President of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow
offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long
Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.
Timothy R. Garrick has served as Vice President-Accounting of AIMCO and Vice
President-Accounting and Director of the Managing General Partner since October
1, 1998. Prior to that date, Mr. Garrick served as Vice President-Accounting
Services of Insignia Financial Group since June of 1997. From 1992 until June
of 1997, Mr. Garrick served as Vice President of Partnership Accounting and from
1990 to 1992 as an Asset Manager for Insignia Financial Group. From 1984 to
1990, Mr. Garrick served in various capacities with U.S. Shelter Corporation.
From 1979 to 1984, Mr. Garrick worked on the audit staff of Ernst & Whinney.
Mr. Garrick received his B.S. Degree from the University of South Carolina and
is a Certified Public Accountant.
ITEM 10. EXECUTIVE COMPENSATION
No directors and officers of the Managing General Partner received any
remuneration from the Registrant.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except as noted below, no person or entity was known by the Registrant to be the
beneficial owner of more than 5% of the Limited Partnership Units of the
Registrant as of December 31, 1998.
Entity Number of Units Percentage
Insignia Properties LP 48,033 43.83%
(an affiliate of AIMCO)
Insignia Properties LP is indirectly ultimately owned by AIMCO. Their business
address is 55 Beattie Place, Greenville, SC 29602.
No director or officer of the Managing General Partner owns any Units.
On January 19, 1996, Insignia NPI, LLC ("Insignia LLC") acquired 47,624 limited
partnership units (approximately 43.5% of the total outstanding partnership
units of the Partnership) from DeForest Ventures II, L.P., the entity which made
tender offers for units in 1994 and 1995. Insignia LLC subsequently transferred
these units to Insignia Properties L.P. ("IPLP").
As a result of its ownership of 48,003 limited partnership units, Insignia
Properties, L.P. ("Insignia LP") could be in a position to significantly
influence all voting decisions with respect to the Partnership. Under the
Partnership Agreement, unitholders holding a majority of the Units are entitled
to take action with respect to a variety of matters. When voting on matters,
Insignia LP would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Managing General Partner because of its
affiliation with the Managing General Partner. However, Insignia LP is required
to vote its Units acquired from DeForest II (i) against any proposal to increase
the fees and other compensation payable by the Partnership to the Managing
General Partner or to affiliates; and (ii) on all other matters submitted by it
or its affiliates, in proportion to the votes cast by non-tendering unitholders.
Except for the foregoing, no other limitations are imposed on Insignia LP's
right to vote each Unit acquired.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following amounts were incurred to
the Managing General Partner and affiliates during the year ended December 31,
1998 and 1997:
1998 1997
(in thousands)
Property management fees $ 536 $ 508
Reimbursement for services of affiliates (1) 384 443
Partnership management fees 152 --
Non-accountable reimbursement 150 139
Incentive management fee 916 --
(1) Included in "reimbursements for services of affiliates" for the years ended
December 31, 1998 and 1997, is approximately $80,000 and $205,000,
respectively, in reimbursements for construction oversight costs.
During the years ended December 31, 1998 and 1997, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates $536,000 and $508,000 for the
years ended December 31, 1998 and 1997, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $384,000 and
$443,000 for the years ended December 31, 1998 and 1997, respectively.
In addition approximately $916,000 of incentive management fees resulting from
the sale of The Village were accrued in 1998. These fees are payable to the
Managing General Partner but are subordinate to the limited partners receiving a
preferred return, specified in the partnership agreement (see below for a
further discussion of incentive management fees).
AIMCO currently owns, through an affiliate, a total of 48,033 limited
partnership units or 43.826%. Consequently, AIMCO could be in a position to
significantly influence all voting decisions with respect to the Registrant.
Under the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Managing General Partner because of their
affiliation with the Managing General Partner.
For the period January 1, 1997 to August 31, 1997, the Partnership insured its
properties under a master policy through an agency affiliated with the Managing
General Partner with an insurer unaffiliated with the Managing General Partner.
An affiliate of the Managing General Partner acquired, in the acquisition of a
business, certain financial obligations from an insurance agency which was later
acquired by the agent who placed the master policy. The agent assumed the
financial obligations to the affiliate of the Managing General Partner which
receives payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations was not
significant.
NPI Equity is entitled to receive 1% of the distributions of cash from
operations, sales, and refinancings and an allocation of 1% of the net income or
loss of the Partnership. NPI Equity received distributions of $174,000 and
$16,000 for the years ended December 31, 1998 and 1997.
NPI Equity has established a revolving credit facility (the "Partnership
Revolver") to be used to fund deferred maintenance and working capital needs of
the National Property Investors Partnership Series. The maximum draw available
to the Partnership under the Partnership Revolver is $500,000. Loans under the
Partnership Revolver will have a term of 365 days, be unsecured and bear
interest at the rate of 2% per annum in excess of the prime rate announced from
time to time by Chemical Bank, N.A. The maturity date of such borrowing will be
accelerated in the event of: (1) the removal of the Managing General Partner
(whether or not For Cause, as defined in the Partnership Agreement); (ii) the
sale or refinancing of a property by the Partnership, or; (iii) the liquidation
of the Partnership. The Partnership has not borrowed under the Partnership
Revolver, to date.
Upon the sale of the Partnership's property, NPI Equity will be entitled to an
incentive compensation fee equal to a declining percentage of the difference
between the total amount distributed to limited partners and the appraised value
of their investment at February 1, 1992. The percentage amount to be realized
by NPI Equity, if any, will be dependent upon the year in which the property is
sold. Payment of the incentive compensation fee is subordinated to the receipt
by the limited partners, of: (a) distributions from capital transaction proceeds
of an amount equal to their appraised investment in the Partnership at February
1, 1992; and (b) distributions from all sources (capital transactions as well as
cash flow) of an amount equal to six percent (6%) per annum cumulative, non-
compounded, on their appraised investment in the Partnership at February 1,
1992.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
See Exhibit Index contained herein.
(b) Reports on Form 8-K filed during the fourth quarter of 1998:
Current Report on Form 8-K dated on October 1, 1998 and filed
October 16, 1998, disclosing change in control of the Partnership
from Insignia Financial Group, Inc. to AIMCO.
Current Report on Form 8-K dated on November 10, 1998 and filed
November 16, 1998, disclosing the dismissal of Imowitz Koenig &
Co., LLP as the Registrant's Independent Accountant.
Current Report on Form 8-K dated December 9, 1998 and filed
November 16, 1998, disclosing the engagement of Ernst & Young, LLP
as the Registrant's Independent Accountant.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NATIONAL PROPERTY INVESTORS 6
By: NPI EQUITY INVESTMENTS, INC.
Its Managing General Partner
By: /s/ Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/ Timothy R. Garrick
Timothy R. Garrick
Vice President - Accounting
Date: March 30, 1999
In accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
date indicated.
/s/ Patrick J. Foye Executive Vice President Date: March 30, 1999
Patrick J. Foye and Director
/s/ Timothy R. Garrick Vice President - Accounting Date: March 30, 1999
Timothy R. Garrick and Director
NATIONAL PROPERTY INVESTORS 6
EXHIBIT INDEX
Exhibit Number Description of Exhibit
2.1 NPI, Inc. Stock Purchase Agreement, dated as of August 17, 1995,
incorporated by reference to the Partnership's Current Report on
Form 8-K dated August 17, 1995.
2.2 Partnership Units Purchase Agreement dated as of August 17, 1995
incorporated by reference to Exhibit 2.1 to Form 8-K filed by
Insignia Financial Group, Inc. ("Insignia") with the Securities
and Exchange Commission on September 1, 1995.
2.3 Management Purchase Agreement dated as of August 17, 1995
incorporated by reference to Exhibit 2.2 to Form 8-K filed by
Insignia with the Securities and Exchange Commission on September
1, 1995.
2.4 Limited liability Company Agreement of Riverside Drive L.L.C.
dated as of August 17, 1995, Incorporated by reference to Exhibit
2.4 to Form 8-K filed by Insignia Financial Group, Inc. with the
Securities and Exchange Commission on September 1, 1995.
2.5 Agreement and Plan of Merger, dated as of October 1, 1998 by and
between AIMCO and IPT incorporated by reference to Exhibit 2.1 in
Registrant's Current Report on Form 8K dated as of October 1,
1998.
3.4 (a) Agreement of Limited Partnership, incorporated by reference
to Exhibit A to the Prospectus of the Partnership dated January
12, 1983, included in the Partnership's Registration Statement on
Form S-11 (Reg. No. 2-80141).
(b) Amendments to the Agreement of Limited Partnership,
incorporated by reference to the Definitive Proxy Statement of
the Partnership dated April 3, 1991.
(c) Amendments to the Partnership Agreement, incorporated by
reference to the Statement Furnished in Connection With The
Solicitation of the Registrant dated August 28, 1992.
10.13 Amended and Restated First Mortgage Note, dated September 30,
1993, made by the Partnership for the benefit of The Travelers
Insurance Company, as it pertains to The Village Apartments
incorporated by reference to the Partnership's Quarterly Report
on Form 10-Q for the period ended September 30, 1993.
10.15 Multifamily Note dated September 30, 1996, by and between the
Partnership, with respect to Alpine Village Apartments, and
Lehman Brothers Holdings Inc., a Delaware Corporation.
(Incorporated by reference to the Annual Report on Form 10-KSB
for the year ended December 31, 1996)
10.16 Amended and Restated Multifamily Note dated November 1, 1996, by
and between the Partnership, with respect to Alpine Village
Apartments, and Lehman Brothers Holdings Inc., a Delaware
Corporation. (Incorporated by reference to the Annual Report on
Form 10-KSB for the year ended December 31, 1996)
10.17 Multifamily Note dated September 30, 1996, by and between the
Partnership, with respect to Colony at Kenilworth Apartments, and
Lehman Brothers Holdings Inc., a Delaware Corporation
(Incorporated by reference to the Annual Report on Form 10-KSB
for the year ended December 31, 1996).
10.18 Amended and Restated Multifamily Note dated November 1, 1996, by
and between the Partnership, with respect to Colony at Kenilworth
Apartments, and Lehman Brothers Holdings Inc., a Delaware
Corporation. (Incorporated by reference to the Annual Report on
Form 10-KSB for the year ended December 31, 1996)
10.19 Multifamily Note dated September 30, 1996, by and between the
Partnership, with respect to Fairway View I Apartments, and
Lehman Brothers Holdings Inc., a Delaware Corporation.
(Incorporated by reference to the Annual Report on Form 10-KSB
for the year ended December 31, 1996)
10.20 Amended and Restated Multifamily Note dated November 1, 1996, by
and between the Partnership, with respect to Fairway View I
Apartments, and Lehman Brothers Holdings Inc., a Delaware
Corporation. (Incorporated by reference to the Annual Report on
Form 10-KSB for the year ended December 31, 1996)
10.21 Multifamily Note dated September 30, 1996, by and between the
Partnership, with respect to Place du Plantier Apartments, and
Lehman Brothers Holdings Inc., Delaware Corporation.
(Incorporated by reference to the Annual Report on Form 10-KSB
for the year ended December 31, 1996)
10.22 Amended and Restated Multifamily Note dated November 1, 1996, by
and between the Partnership, with respect to Place du Plantier
Apartments, and Lehman Brothers Holdings Inc., a Delaware
Corporation. (Incorporated by reference to the Annual Report on
Form 10-KSB for the year ended December 31, 1996)
10.23 Multifamily Note dated September 30, 1996, by and between the
Partnership, with respect to Panorama Terrace II Apartments, and
Lehman Brothers Holdings Inc., a Delaware Corporation.
(Incorporated by reference to the Annual Report on Form 10-KSB
for the year ended December 31, 1996)
10.24 Amended and Restated Multifamily Note dated November 1, 1996, by
and between the Partnership, with respect to Panorama Terrace II
Apartments, and Lehman Brothers Holdings Inc., a Delaware
Corporation. (Incorporated by reference to the Annual Report on
Form 10-KSB for the year ended December 31, 1996)
10.25 Multifamily Note dated September 30, 1996, by and between the
Partnership, with respect to Ski Lodge Apartments, and Lehman
Brothers Holdings Inc., a Delaware Corporation. (Incorporated by
reference to the Annual Report on Form 10-KSB for the year ended
December 31, 1996)
10.26 Amended and Restated Multifamily Note dated November 1, 1996, by
and between the Partnership, with respect to Ski Lodge
Apartments, and Lehman Brothers Holdings Inc., a Delaware
Corporation. (Incorporated by reference to the Annual Report on
Form 10-KSB for the year ended December 31, 1996)
10.27 Contract of Sale between Registrant and Hometown America, L.L.C.
incorporated by reference to exhibit (10.21; 10.22; 10.23) to the
Registrant's current report on Form 8-K dated July 16, 1998.
10.28 Amendment to Contract of Sale between Registrant and Hometown
America, L.L.C. incorporated by reference to exhibit (10.21;
10.22; 10.23) to the Registrant's current report on Form 8-K
dated July 16, 1998.
10.29 Second Amendment to Contract of Sale between Registrant and
Hometown America, L.L.C. incorporated by reference to exhibit
(10.21; 10.22; 10.23) to the Registrant's current report on Form
8-K dated July 16, 1998.
16 Letter dated November 11, 1998 from the Registrant's former
independent accountants regarding its concurrence with the
statements made by the Registrant; incorporated by reference to
the Registrant's Current Report on Form 8-K dated November 10,
1998.
27. Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from National
Property Investors 6 1998 Year-End 10-KSB and is qualified in its entirety by
reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000708870
<NAME> NATIONAL PROPERTY INVESTORS 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,501
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 66,540
<DEPRECIATION> 44,324
<TOTAL-ASSETS> 26,056
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 26,135
0
0
<COMMON> 0
<OTHER-SE> (2,130)
<TOTAL-LIABILITY-AND-EQUITY> 26,056
<SALES> 0
<TOTAL-REVENUES> 10,766
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 11,575
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,051
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (638)
<CHANGES> 0
<NET-INCOME> 13,803
<EPS-PRIMARY> 124.68
<EPS-DILUTED> 0<F2>
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
