UNITED STATES 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 EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-11779
S/M REAL ESTATE FUND VII, LTD.
(Exact name of registrant as specified in its charter)
Texas 75-1845682
(State or other jurisdiction of (I.R.S.Employer
Incorporation or organization) identification No.)
5520 LBJ Freeway, Suite 300, Dallas, Texas 75240
(Address of principal executive offices) (Zip code)
(214) 404-7100
(Registrant's telephone number, including area code)
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
Balance Sheets
March 31, December 31,
Assets 1995 1994
Land $ 962,216 $ 962,216
Building and improvements 7,650,943 7,603,046
8,613,159 8,565,262
Less-accumulated depreciation (4,184,375) (4,091,395)
4,428,784 4,473,867
Cash and cash equivalents 890,163 933,424
Cash held in escrow 117,390 92,855
Accounts receivable 14,445 12,301
Other assets 21,749 30,562
Total Assets $ 5,472,531 $ 5,543,009
Liabilities and Partners' Deficit
Liabilities:
Notes payable $ 6,380,912 $ 6,380,912
Accounts payable:
Trade 13,683 2,764
Affiliates 40,664 40,664
Accrued interest payable 694,724 717,721
Accrued expenses and other liabilities 88,231 86,965
Total Liabilities 7,218,214 7,229,026
Partners' Deficit:
General Partners (104,069) (103,472)
Limited Partners (1,641,614) (1,582,545)
Total Partners' Deficit (1,745,683) (1,686,017)
Total Liabilities and Partners' Deficit $ 5,472,531 $ 5,543,009
See accompanying notes to the financial statements.
Statement of Partners' Deficit
For the three months ended March 31, 1995
Limited General
Partners Partners Total
Balance at December 31, 1994 $(1,582,545) $ (103,472) $(1,686,017)
Net loss (59,069) (597) (59,666)
Balance at March 31, 1995 $(1,641,614) $ (104,069) $(1,745,683)
See accompanying notes to the financial statements.
Statements of Operations
For the three months ended March 31, 1995 and 1994
Income 1995 1994
Rental $ 319,720 $ 325,156
Interest 13,306 6,786
Total Income 333,026 331,942
Expenses
Property operating 165,822 181,091
Interest 121,550 120,784
Depreciation 92,980 91,915
General and administrative 12,340 19,538
Total Expenses 392,692 413,328
Net Loss $ (59,666) $ (81,386)
Net Loss Allocated:
To the General Partners (597) (814)
To the Limited Partners (59,069) (80,572)
$ (59,666) $ (81,386)
Per limited partnership unit
(11,080 outstanding) $(5.33) $(7.27)
See accompanying notes to the financial statements.
Statements of Cash Flows
For the three months ended March 31, 1995 and 1994
Cash Flows from Operating Activities: 1995 1994
Net loss $ (59,666) $ (81,386)
Adjustments to reconcile net loss to net
cash provided by (used for) operating activities:
Depreciation 92,980 91,915
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Cash held in escrow (24,535) 114,189
Accounts receivable (2,144) 2,719
Other assets 8,813 6,594
Accounts payable 10,919 (10,512)
Accrued interest payable (22,997) (15,779)
Accrued expenses and other liabilities 1,266 (138,700)
Net cash provided by
(used for) operating activities 4,636 (30,960)
Cash Flows from Investing Activities:
Additions to investment properties (47,897) ----
Net cash used for investing activities (47,897) ----
Net decrease in cash and cash equivalents (43,261) (30,960)
Cash and cash equivalents
at beginning of period 933,424 863,717
Cash and cash equivalents
at end of period $ 890,163 $ 832,757
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 144,547 $ 138,463
See accompanying notes to the financial statements.
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of March 31, 1995 and the results of operations and cash flows for
the three months ended March 31, 1995 and 1994 and the statement of changes in
partners' deficit for the three months ended March 31, 1995. Results of
operations for the periods are not necessarily indicative of the results to be
expected for the full year.
No significant events have occurred subsequent to fiscal year 1994, and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
Part I, Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
For the three months ended March 31, 1995, the Partnership's property,
Fifth Avenue Apartments ("Fifth Avenue"), generated sufficient cash flow to
meet both operating expenses and minimum required debt service pursuant to
the Partnership's Modified Plan of Reorganization. The mortgage secured by
Fifth Avenue, the principal and accrued interest of which totalled $7,075,636
as of March 31, 1995, matures on December 31, 1995. It is the General
Partners' intention to pursue efforts to sell the property or reach an
agreement with the lender for a further restructuring or extension of the
mortgage secured by Fifth Avenue during 1995. However, there can be no
assurances that such efforts will be successful. Although it is anticipated
that the property will generate cash flow to meet operating needs and required
debt service payments in the future, there can be no assurances that such
payments will be made.
Cash and cash equivalents totalled $890,163 at March 31, 1995, compared with
$933,424 at December 31, 1994. The $43,261 decrease is due to capital
expenditures of $47,897 offset by net cash provided by operations of $4,636.
Cash held in escrow increased to $117,390 at March 31, 1995, compared with
$92,855 at December 31, 1994. The $24,535 increase is attributable to escrow
contributions for insurance and real estate taxes offset by the payment of a
portion of Fifth Avenue's 1994 real estate taxes in January 1995.
Results of Operations
For the three months ended March 31, 1995, Partnership operations resulted
in a net loss of $59,666, compared to a net loss of $81,386 in the
corresponding 1994 period. The decrease in net loss is primarily attributable
to lower property operating expenses and general and administrative expenses.
Rental income at Fifth Avenue totalled $319,720 for the three months ended
March 31, 1995, compared to $325,156 for the corresponding 1994 period.
Occupancy at Fifth Avenue averaged approximately 94% for the three months ended
March 31, 1995, compared to approximately 95% for the corresponding period in
1994. The average rental income per occupied square foot at the property was
$8.07 for the three months ended March 31, 1995, up slightly from $8.05 for the
corresponding period in 1994.
Interest income totalled $13,306 for the quarter ended March 31, 1995, compared
to $6,786 for the corresponding 1994 period. The increase is a result of
higher interest rates and higher average cash balances compared with those of
the corresponding 1994 period.
Property operating expenses consist primarily of on-site personnel expenses,
utility costs, repair and maintenance costs, property management fees,
insurance and real estate taxes. Property operating expenses at Fifth Avenue
for the three months ended March 31, 1995 totalled $165,822, compared to
$181,091 for the three months ended March 31, 1994. The decrease is primarily
attributable to pool deck repair costs incurred in the first quarter of 1994.
General and administrative expenses totalled $12,340 for the quarter ended
March 31, 1995, compared to $19,538 for the corresponding 1994 period. The
higher balance for the 1994 period is primarily attributable to costs
recognized by the Partnership during the first quarter of 1994 associated with
the sale of Rockcreek Apartments in December 1993.
PART II OTHER INFORMATION
Items 1-4 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended March 31, 1995.
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.
S/M REAL ESTATE FUND VII, LTD.
BY: SM7 APARTMENT INVESTORS INC.
General Partner
Date: May 10, 1995
BY: /s/ Kenneth L. Zakin
Name: Kenneth L. Zakin
Title: Director and President
Date: May 10, 1995 BY: /s/ Daniel M. Palmier
Name: Daniel M. Palmier
Title: Vice President and
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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