February 28, 2000
United States
Securities and Exchange Commission
Washington, D.C. 20549
RE: Shelter Properties V
Form 10-KSB
File No. 0-11574
To Whom it May Concern:
The accompanying Form 10-KSB for the year ended November 30, 1999 describes a
change in the method of accounting to capitalize exterior painting and major
landscaping, which would have been expensed under the old policy. The
Partnership believes that this accounting principle change is preferable because
it provides a better matching of expenses with the related benefit of the
expenditures and it is consistent with industry practice and the policies of the
Corporate General Partner.
Please do not hesitate to contact the undersigned with any questions or comments
that you might have.
Very truly yours,
Stephen Waters
Real Estate Controller
FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d)
Form 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the fiscal year ended November 30, 1999
[ ] 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 0-11574
SHELTER PROPERTIES V
(Name of small business issuer in its charter)
South Carolina 57-0721855
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
Issuer's telephone number
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 the 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. Yes X No___
State issuer's revenues for its most recent fiscal year. $14,649,000
State the aggregate market value of the voting 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 November 30, 1999. 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
Shelter Properties V (the "Partnership" or "Registrant") was organized as a
limited partnership under the laws of the State of South Carolina on August 21,
1981. The general partner responsible for management of the Partnership's
business is Shelter Realty V Corporation, a South Carolina corporation (the
"Corporate General Partner"). The only other general partner of the Partnership
was N. Barton Tuck, Jr. Mr. Tuck was not an affiliate of the Corporate General
Partner and was effectively prohibited by the Partnership's partnership
agreement (the "Partnership Agreement") from participating in the management of
the Partnership. In June 1999, Mr. Tuck's general partnership interest in the
Registrant was purchased by AIMCO Properties, L.P., an affiliate of the
Corporate General Partner. The Corporate General Partner is a subsidiary of
Apartment Investment and Management Company ("AIMCO"). The Partnership Agreement
provides that the Partnership is to terminate on December 31, 2023 unless
terminated prior to such date.
The Registrant is engaged in the business of operating and holding real estate
properties for investment. In 1983 and 1984, during its acquisition phase, the
Registrant acquired eight existing apartment properties. The Registrant
continues to own and operate seven of these properties. See "Item 2. Description
of Properties".
Commencing May 27, 1983, the Registrant offered, pursuant to a Registration
Statement filed with the Securities and Exchange Commission, up to 99,900 Units
of Limited Partnership Interest (the "Units") at a purchase price of $1,000 per
Unit with a minimum purchase of 5 Units ($5,000), or 2 Units ($2,000) for an
Individual Retirement Account. An additional 100 Units were purchased by the
Corporate General Partner.
The offering terminated on December 8, 1983. Upon termination of the offering,
the Registrant had accepted subscriptions for 52,538 Units, including 100 Units
purchased by the Corporate General Partner, for an aggregate of $52,538,000.
Unsold Units (numbering 47,462) were deregistered pursuant to Post Effective
Amendment No. 3 to the Registration Statement filed with the Securities and
Exchange Commission on December 21, 1983. The Registrant invested approximately
$38,900,000 of such proceeds in eight existing apartment properties. Since its
initial offering, the Registrant has not received, nor are limited partners
required to make, additional capital contributions.
The Registrant has no employees. Management and administrative services are
performed by the Corporate General Partner and by agents retained by the
Corporate General Partner. An affiliate of the Corporate General Partner has
been providing such property management services.
The real estate 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 Corporate 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 Corporate General Partner and its
affiliates own and/or control a significant number of apartment units in the
United States, such units represent an insignificant percentage of total
apartment units in the United States and competition for the apartments is
local.
Both the income and expenses of operating the properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar properties resulting from various
market conditions, increases/decreases in unemployment or population shifts,
changes in the 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.
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.
A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form
10-KSB.
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 AIMCO, a publicly traded real estate investment trust, with AIMCO
being the surviving corporation (the "Insignia Merger"). As a result, AIMCO
acquired 100% ownership interest in the Corporate General Partner. The Corporate
General Partner does not believe that this transaction has had or will have a
material effect on the affairs and operations of the Partnership.
<PAGE>
Item 2. Description of Properties
The following table sets forth the Registrant's investments in properties:
Date of
Property Purchase Type of Ownership Use
Foxfire Apartments 07/19/83 Fee ownership, subject Apartment
Atlanta, Georgia to first mortgage. (1) 266 units
Old Salem Apartments 08/25/83 Fee ownership, subject Apartment
Charlottesville, Virginia to first mortgage. 364 units
Woodland Village Apartments 09/01/83 Fee ownership, subject Apartment
Columbia, South Carolina to first mortgage. 308 units
Lake Johnson Mews Apartments 09/30/83 Fee ownership, subject Apartment
Raleigh, North Carolina to first mortgage. 201 units
The Lexington Green Apartments 10/31/83 Fee ownership, subject Apartment
Sarasota, Florida to first and second 267 units
mortgages. (1)
Millhopper Village Apartments 11/22/83 Fee ownership, subject Apartment
Gainesville, Florida to first mortgage. 136 units
Tar River Estates 01/18/84 Fee ownership, subject Apartment
Greenville, North Carolina to first and second 402 units
mortgages. (1)
(1) Property is held by a Limited Partnership which the Registrant owns a
99.99% interest in.
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.
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
- -------- ----- ------------ ---- ------ ---------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Foxfire Apartments $10,847 $ 6,689 5-29 yrs S/L $ 1,486
Old Salem Apartments 17,421 9,959 5-28 yrs S/L 2,849
Woodland Village
Apartments 12,301 7,147 5-30 yrs S/L 1,832
Lake Johnson Mews
Apartments 8,565 4,876 5-30 yrs S/L 1,191
The Lexington Green
Apartments 10,385 5,360 5-34 yrs S/L 2,507
Millhopper Village
Apartments 5,828 3,504 5-29 yrs S/L 765
Tar River Estates 10,614 6,541 5-27 yrs S/L 2,147
------ ------ ------
$75,961 $44,076 $12,777
====== ====== ======
</TABLE>
See "Note A" to the financial statements included in "Item 7" for a description
of the Partnership's depreciation policy and "Note J - Change in Accounting
Principle".
<PAGE>
Schedule of Property Indebtedness:
- ---------------------------------
The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>
Principal Principal
Balance At Stated Balance
November 30, Interest Period Maturity Due At
Property 1999 Rate Amortized Date(3) Maturity(3)
-------- ---- ---- --------- ------- -----------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Foxfire Apartments
1st mortgage $ 7,200 7.79% (1) 11/01/19 $ 59
Old Salem Apartments
1st mortgage 10,157 8.02% (1) 12/01/19 85
Woodland Village
Apartments
1st mortgage 4,950 7.33% none 11/01/03 4,950
Lake Johnson Mews
Apartments
1st mortgage 4,350 7.33% none 11/01/03 4,350
The Lexington Green
Apartments
1st mortgage 3,280 7.60% (2) 11/15/02 2,870
2nd mortgage 123 7.60% none 11/15/02 123
Millhopper Village
Apartments
1st mortgage 2,700 7.33% none 11/01/03 2,700
Tar River Estates
Apartments
1st mortgage 4,531 7.60% (2) 11/15/02 3,965
2nd mortgage 169 7.60% none 11/15/02 169
------ ------
37,460 $19,271
======
Less unamortized
discounts (238)
------
Total $37,222
======
</TABLE>
(1) The principal balance is being amortized over 240 months.
(2) The principal balance is being amortized over 257 months with a balloon
payment due November 15, 2002.
(3) See "Item 7. Financial Statements - Note C" for information with respect
to the Registrant's ability to repay these loans and other specific
details about the loans.
During October and November 1999, the Partnership refinanced the mortgage notes
at Foxfire Apartments and Old Salem Apartments. Gross proceeds from the
refinancings were $7,200,000 and $10,157,000, respectively of which
approximately $4,519,000 and $6,287,000 was used to pay off the existing
mortgage notes. The new notes require monthly principal and interest payments at
fixed interest rates of 7.79% for Foxfire Apartments and 8.02% for Old Salem
Apartments. The old debt carried fixed interest rates of 7.50% and 10.375% with
maturities of 05/01/99 and 12/10/16.
Rental Rates and Occupancy:
Average annual rental rate and occupancy for 1999 and 1998 for each property is
as follows:
<TABLE>
<CAPTION>
Average Annual Average Annual
Rental Rates Occupancy
(per unit)
Property 1999 1998 1999 1998
-------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Foxfire Apartments $ 8,071 $ 7,776 94% 93%
Old Salem Apartments 7,578 7,402 96% 94%
Woodland Village Apartments 7,723 7,493 94% 93%
Lake Johnson Mews Apartments 8,710 8,389 95% 95%
The Lexington Green Apartments 7,918 7,762 97% 94%
Millhopper Village Apartments 8,462 8,129 96% 96%
Tar River Estates Apartments 6,366 6,176 82% 96%
</TABLE>
During September 1999, Tar River Estates was damaged by severe flooding which
affected certain areas of North Carolina. The property has incurred extensive
damage as a result of the flooding causing portions of the property to be
unavailable for occupancy since September 1999. It is expected that a majority
of the damage costs will be covered by insurance. The Corporate General Partner
is currently involved in discussions relating to the redevelopment of the
property and anticipates the start of construction in the near future.
The Corporate General Partner attributes the increase in occupancy at The
Lexington Green Apartments to management's intensified marketing efforts as well
as capital improvements to enhance the exterior of the property.
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 Corporate General Partner
believes that all of the properties are adequately insured. Each property is an
apartment complex which leases units for lease terms of one year or less. As of
November 30, 1999, no residential tenant leases 10% or more of the available
rental space. With the exception of Tar River Estates as noted above, all of the
properties are in good condition subject to normal depreciation and
deterioration as is typical for assets of this type and age.
<PAGE>
Schedule of Real Estate Taxes and Rates:
Real estate taxes and rates in 1999 for each property were:
1999 1999
Billing* Rate
------- ----
(in thousands)
Foxfire Apartments $102 3.79%
Old Salem Apartments 87 0.72%
Woodland Village Apartments 157 32.74%
Lake Johnson Mews Apartments 68 1.28%
The Lexington Green Apartments 194 2.47%
Millhopper Village Apartments 79 2.65%
Tar River Estates Apartments 136 1.46%
*These properties have a fiscal year different than the real estate tax year;
therefore, tax expense as stated in the Partnership's Consolidated Statement of
Operations does not agree to the 1999 billings.
Capital Improvements:
Foxfire Apartments: The Partnership completed approximately $299,000 in capital
expenditures at Foxfire Apartments as of November 30, 1999, consisting primarily
of roof improvements, exterior painting and floor covering replacement. These
improvements were funded primarily from operations. The Partnership is currently
evaluating the capital improvement needs of the property for the upcoming year.
The minimum amount to be budgeted is expected to be $300 per unit or $79,800.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Old Salem Apartments: The Partnership completed approximately $1,292,000 in
capital expenditures at Old Salem Apartments as of November 30, 1999, consisting
primarily of floor covering replacements, parking lot improvements, structural
building improvements, roof replacements and air conditioning upgrades. These
improvements were funded primarily from operations. The Partnership is currently
evaluating the capital improvement needs of the property for the upcoming year.
The minimum amount to be budgeted is expected to be $300 per unit or $109,200.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Woodland Village Apartments: The Partnership completed approximately $421,000 in
capital expenditures at Woodland Village Apartments as of November 30, 1999,
consisting primarily of roof replacements, exterior painting, floor covering
replacement and pool upgrades. These improvements were funded primarily from
replacement reserves and operations. The Partnership is currently evaluating the
capital improvement needs of the property for the upcoming year. The minimum
amount to be budgeted is expected to be $300 per unit or approximately $92,400.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Lake Johnson Mews Apartments: The Partnership completed approximately $270,000
in capital expenditures at Lake Johnson Mews Apartments as of November 30, 1999,
consisting primarily of floor covering replacement, interior and exterior
building improvements, and parking lot improvements. These improvements were
funded primarily from replacement reserves and operations. The Partnership is
currently evaluating the capital improvement needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $60,300. Additional improvements may be considered and will depend on the
physical condition of the property as well as replacement reserves and
anticipated cash flow generated by the property.
The Lexington Green Apartments: The Partnership completed approximately $464,000
in capital expenditures at The Lexington Green Apartments as of November 30,
1999, consisting primarily of landscaping, parking lot improvements, sewer
improvements and floor covering replacement. These improvements were funded
primarily from replacement reserves and operations. The Partnership is currently
evaluating the capital improvement needs of the property for the upcoming year.
The minimum amount to be budgeted is expected to be $300 per unit or $80,100.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Millhopper Village: The Partnership completed approximately $175,000 in capital
expenditures at Millhopper Village Apartments as of November 30, 1999,
consisting primarily of structural improvements and floor covering replacements.
These improvements were funded primarily from replacement reserves and
operations. The Partnership is currently evaluating the capital improvement
needs of the property for the upcoming year. The minimum amount to be budgeted
is expected to be $300 per unit or $40,800. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
Tar River Estates: The Partnership completed approximately $769,000 in capital
expenditures at Tar River Estates Apartments as of November 30, 1999, consisting
primarily of construction in progress due to damage from the September flood and
floor covering replacement. These improvements were funded primarily from
insurance proceeds, replacement reserves and operations. The Partnership is
currently evaluating the capital improvement needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $120,600 not including additional improvements required as a result of the
flood damage which will be covered by additional insurance proceeds. Additional
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and anticipated cash flow generated by
the property.
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 Corporate General Partner and several of their affiliated
partnerships and corporate entities. The action 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 and the Insignia Merger (see
"Item 7. Financial Statements, Note B - Transfer of Control"). The plaintiffs
seek monetary damages and equitable relief, including judicial dissolution of
the Partnership. On June 25, 1998, the Corporate 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 Corporate General Partner filed
demurrers to the amended complaint which were heard February 1999. Pending the
ruling on such demurrers, settlement negotiations commenced. On November 2,
1999, the parties executed and filed a Stipulation of Settlement, settling
claims, subject to final court approval, on behalf of the Partnership and all
limited partners who own units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Superior Court of the
State of California, County of San Mateo, at which time the Court set a final
approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing
the Court received various objections to the settlement, including a challenge
to the Court's preliminary approval based upon the alleged lack of authority of
class plaintiffs' counsel to enter the settlement. On December 14, 1999, the
Corporate General Partner and its affiliates terminated the proposed settlement.
Certain plaintiffs have filed a motion to disqualify some of the plaintiffs'
counsel in the action. The Corporate General Partner does not anticipate that
costs associated with this case will 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
---------------------------------------------------
During the fiscal quarter ended November 30, 1999, no matter was submitted to a
vote of security holders through the solicitation of proxies or otherwise.
PART II
Item 5. Market for Partnership Equity and Related Partner Matters
The Partnership, a publicly-held limited partnership, offered and sold 52,538
limited partnership units aggregating $52,538,000, inclusive of 100 units which
were purchased by the Corporate General Partner. The Partnership currently has
1,964 holders of record owning an aggregate of 52,538 Units. Affiliates of the
Corporate General Partner owned 26,024 units or approximately 49.53% at November
30, 1999. No public trading market has developed for the Units, and it is not
anticipated that such a market will develop in the future.
The following table sets forth the distributions made by the Partnership for the
years ended November 30, 1998 and 1999.
Distribution
Per Limited
Aggregate Partnership Unit
12/01/97 - 11/30/98 $3,554,000 (1) $ 67.49
12/01/98 - 11/30/99 3,073,000 (2) 57.84
(1) Consists of $2,436,000 of distributions which were paid during the year
ended November 30, 1998 and $1,118,000 of distributions which were paid
subsequent to the Registrant's November 30, 1998 fiscal year end. Consists
of $769,000 from operations and $2,785,000 from surplus funds.
(2) Consists of $3,073,000 of cash from operations.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves, and the timing of debt
maturities, refinancings and/or property sales. The Partnership's distribution
policy is 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 2000 or subsequent periods. See "Item 2. Description of Properties -
Capital Improvements" for information relating to anticipated capital
expenditures at the properties. In addition, the Partnership may be restricted
from making distributions if the amount in the reserve account for each property
maintained by the mortgage lender for The Lexington Green Apartments and Tar
River Estates Apartments is less than $400 per apartment unit for each
respective property for a total of $267,600. As of November 30, 1999, the
reserve accounts were fully funded with approximately $482,000 on deposit with
the mortgage lender.
Several tender offers were made by various parties, including affiliates of the
general partners, during the fiscal years ended November 30, 1999 and 1998. As a
result of these tender offers at November 30, 1999, AIMCO and its affiliates own
26,024 units of limited partnership units in the Partnership representing
approximately 49.53% of the outstanding units. Subsequent to November 30, 1999,
an affiliate of the General Partners acquired an additional 7,222 units, or
approximately 13.75%, pursuant to a tender offer. It is possible that AIMCO or
its affiliates will make one or more additional offers to acquire additional
limited partnership interests in the Partnership for cash or in exchange for
units in the operating partnership of AIMCO. Consequently, AIMCO is 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 Corporate General Partner because of
their affiliation with the Corporate General Partner.
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 consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Registrant's net income for the year ended November 30, 1999 was
approximately $1,965,000 as compared to approximately $1,431,000 for the year
ended November 30, 1998. (See "Note D" of the consolidated financial statements
for a reconciliation of these amounts to the Registrant's federal taxable
income). The increase in net income is due to an increase in total revenues and
to a lesser extent, a decrease in total expenses.
Total revenues increased due to an increase in rental income and to a lesser
extent, a casualty gain resulting from a fire at Woodland Village Apartments.
The increase in rental income is due primarily to the increase in average annual
rental rates at all seven of the Registrant's investment properties and the
increase in occupancy at the Foxfire, Old Salem, Woodland Village and The
Lexington Green Apartments which was slightly offset by a decrease in occupancy
at Tar River Estates Apartments due to the September 1999 flood as discussed
below. The increase in rental income is partially offset by a decrease in other
income, which is due primarily to lower interest income as a result of a
decrease in interest bearing cash balances as a result of distributions paid
during 1999.
Total expenses decreased primarily due to a decrease in operating expense, which
was partially offset by small increases in general and administrative, property
taxes and depreciation expense. Operating expense decreased due to decreases in
insurance and maintenance expenses. Insurance expense decreased at all of the
investment properties due to a change in insurance carriers during the current
fiscal year. Maintenance expense decreased for the year ended November 30, 1999
due to the completion during such fiscal year of various projects performed to
enhance the appearance of all of the investment properties. The increase in net
income was partially offset by an extraordinary loss as a result of the
refinancing of the mortgages at the Foxfire and Old Salem Apartments.
General and administrative expenses increased slightly for the comparable
period. Included in general and administrative expense at both November 30, 1999
and 1998 are management reimbursements to the Corporate General Partner allowed
under the Partnership Agreement. In addition, costs associated with the
quarterly and annual communications with investors and regulatory agencies and
the annual audits and appraisals required by the Partnership Agreement are also
included.
In September 1999, Tar River Estates was damaged by severe flooding which
affected certain areas of North Carolina. It is estimated that the property has
incurred $6,323,000 in damages as a result of this flooding. Subsequent to
November 30, 1999 insurance proceeds of $2,464,000 have been received to cover
lost rents and damage to the property. It is anticipated that the costs incurred
to restore the property will be fully covered by insurance. The Corporate
General Partner is currently involved in discussions relating to the
redevelopment of the property and anticipates the start of construction in the
near future.
In July 1999, Woodland Village Apartments experienced a fire, which resulted in
the destruction of six apartment units. The property incurred damages of
approximately $324,000 and estimated lost rents of approximately $13,000.
Insurance proceeds of $332,000 will be received to cover the damages and lost
rents, resulting in a casualty gain of $210,000.
Effective December 1, 1998, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Corporate General Partner. The effect of the change in 1999 was
to increase income before the change by approximately $325,000 ($6.12 per
limited partnership unit). The accounting principle change will not have an
effect on cash flow, funds available for distributions or fees payable to the
Corporate General Partner or affiliates.
As part of the ongoing business plan of the Registrant, the Corporate 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 Corporate 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 Corporate General Partner will be able to sustain such a
plan.
Liquidity and Capital Resources
At November 30, 1999, the Registrant had cash and cash equivalents of
approximately $7,795,000 as compared to approximately $3,375,000 at November 30,
1998. The increase in cash and cash equivalents of approximately $4,420,000 is
primarily due to approximately $5,377,000 of cash provided by operating
activities and approximately $1,711,000 of cash provided by financing activities
which was partially offset by approximately $2,668,000 of cash used in investing
activities. Cash provided by financing activities consisted primarily of net
proceeds received as a result of the refinancing of the mortgages of Foxfire and
Old Salem Apartments which was partially offset by partner distributions,
repayment of the existing mortgages and, to a lesser extent, payments of
principal made on the mortgages encumbering the Registrant's properties. Cash
used in investing activities consisted of property improvements and replacements
which was partially offset by net withdrawals from escrow accounts maintained by
the mortgage lender and insurance proceeds received from the fire at Woodland
Village. The Registrant invests its working capital reserves in money market
accounts.
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 investment properties to adequately maintain the
physical assets and other operating needs of the Registrant and to comply with
Federal, state, local, legal and regulatory requirements. The Partnership is
currently evaluating the capital improvement needs of the properties for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $583,200. Additional improvements may be considered and will depend on the
physical condition of the properties as well as replacement reserves and
anticipated cash flow generated by the properties.
The additional capital expenditures will be incurred only if cash is available
from operations and 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 $37,222,000, net of discount, is amortized over
varying periods with balloon payments of approximately $19,271,000 ranging from
November 15, 2002 to December 1, 2019. The Corporate General Partner may attempt
to refinance such indebtedness and/or sell the properties prior to such maturity
date. If the properties cannot be refinanced or sold for a sufficient amount,
the Registrant will risk losing such properties through foreclosure.
During October and November 1999, the Partnership refinanced the mortgage notes
at Foxfire and Old Salem Apartments, respectively. Gross proceeds from the
refinancings were $7,200,000 and $10,157,000, respectively, of which
approximately $4,519,000 and $6,287,000 respectively was used to pay off the
existing mortgage notes. The new notes require monthly principal and interest
payments at fixed interest rates of 7.79% for Foxfire Apartments and 8.02% for
Old Salem Apartments. The old debt carried fixed interest rates of 7.50% and
10.375% with maturities beginning in May 1999.
During the year ended November 30, 1999, cash distributions of approximately
$4,191,000 were paid of which $1,118,000 related to a payable at November 30,
1998. The remaining $3,073,000 ($3,039,000 of which was paid to the limited
partners, $57.84 per limited partnership unit) was paid from operations. For the
year ended November 30, 1998, distributions of approximately $3,554,000 were
declared, of which $2,436,000, was paid during such year and $1,118,000 of which
was paid in December 1998. Of the 1998 declared distributions of approximately
$3,554,000 (approximately $3,546,000 was paid to the limited partners, or $67.49
per limited partnership unit), approximately $769,000 of this was from
operations and approximately $2,785,000 was from surplus funds. Future cash
distributions will depend on the levels of net cash generated from operations,
the availability of cash reserves, and the timing of debt maturities,
refinancings and/or property sales. The Partnership's distribution policy is
reviewed on a quarterly basis. There can be no assurance, however, that the
Partnership will generate sufficient funds from operations, after planned
capital improvement expenditures, to permit any additional distributions to its
partners in 2000 or subsequent periods. In addition, the Partnership may be
restricted from making distributions if the amount in the reserve account for
each property maintained by the mortgage lender for The Lexington Green
Apartments and Tar River Estates Apartments is less than $400 per apartment unit
for each respective property for a total of $267,600. As of November 30, 1999,
the reserve accounts were fully funded with approximately $482,000 on deposit
with the mortgage lender.
Several tender offers were made by various parties, including affiliates of the
Corporate General Partner, during the fiscal years ended November 30, 1999 and
1998. As a result of these tender offers at November 30, 1999, AIMCO and its
affiliates own 26,024 units of limited partnership units in the Partnership
representing approximately 49.53% of the outstanding units. Subsequent to
November 30, 1999, an affiliate of the general partners acquired an additional
7,222 units, or approximately 13.75%, pursuant to a tender offer. It is possible
that AIMCO or its affiliates will make one or more additional offers to acquire
additional limited partnership interests in the Partnership for cash or in
exchange for units in the operating partnership of AIMCO. Consequently, AIMCO is
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 Corporate General Partner because
of their affiliation with the Corporate General Partner.
Subsequent Event
On January 3, 2000 the Partnership elected to change its fiscal year end from
November 30, to December 31, effective for the period ending December 31, 1999.
Year 2000 Compliance
General Description
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 Corporate General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have recognized a date using "00" as the year 1900 rather than the year
2000. This could have resulted 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.
Computer Hardware, Software and Operating Equipment
In 1999, the Managing Agent completed all phases of its Year 2000 program by
completing the replacement and repair of any hardware or software system or
operating equipment that was not yet Year 2000 compliant. The Managing Agent's
hardware and software systems and its operating equipment are now Year 2000
compliant. As of February 25, 2000, no material failure or erroneous results
have occurred in the Managing Agent's computer applications related to the
failure to reference the Year 2000.
Third Parties
To date, the Managing Agent is not aware of any significant supplier or
subcontractor (external agent) or financial institution of the Partnership that
has a Year 2000 issue that would have a material impact on the Partnership's
results of operations, liquidity or capital resources. However, the Managing
Agent has no means of ensuring or determining the Year 2000 compliance of
external agents. At this time, the Managing Agent does not believe that a Year
2000 issue of any non-compliant external agent will have a material impact on
the Partnership's financial position or results of operations.
Costs
The total cost of the Managing Agent's Year 2000 project was approximately $3.2
million and was funded from operating cash flows.
Risks Associated with the Year 2000
The Managing Agent completed all necessary phases of its Year 2000 program in
1999, and did not experience system or equipment malfunctions related to a
failure to reference the Year 2000. The Managing Agent or Partnership have not
been materially adversely effected by disruptions in the economy generally
resulting from the Year 2000 issue.
At this time, the Managing Agent does not believe that the Partnership's
businesses, results of operations or financial condition will be materially
adversely effected by the Year 2000 issue.
Contingency Plans Associated with the Year 2000
The Managing Agent has not had to implement contingency plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.
Item 7. Financial Statements
SHELTER PROPERTIES V
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
Consolidated Balance Sheet - November 30, 1999
Consolidated Statements of Operations - Years ended November 30, 1999
and 1998
Consolidated Statements of Changes in Partners' (Deficit) Capital - Years
ended November 30, 1999 and 1998
Consolidated Statements of Cash Flows - Years ended November 30, 1999
and 1998
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Shelter Properties V
We have audited the accompanying consolidated balance sheet of Shelter
Properties V as of November 30, 1999, and the related consolidated statements of
operations, changes in partners' (deficit) capital and cash flows for each of
the two years in the period ended November 30, 1999. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's 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 consolidated financial position of Shelter Properties
V at November 30, 1999, and the consolidated results of its operations and its
cash flows for each of the two years in the period ended November 30, 1999, in
conformity with accounting principles generally accepted in the United States.
As discussed in Note J to the financial statements, the Partnership changed its
method of accounting to capitalize the cost of exterior painting and major
landscaping effective December 1, 1998.
/s/ ERNST & YOUNG LLP
Greenville, South Carolina
February 7, 2000
<PAGE>
SHELTER PROPERTIES V
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
November 30, 1999
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Cash and cash equivalents $ 7,795
Receivables and deposits 3,457
Restricted escrows 958
Other assets 941
Investment properties:
Land $ 4,242
Buildings and related personal property 71,719
-------
75,961
Less accumulated depreciation (44,076) 31,885
------- -------
$ 45,036
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 1,814
Tenant security deposit liabilities 272
Accrued property taxes 381
Other liabilities 1,086
Mortgage notes payable 37,222
Partners' (Deficit) Capital
General partners $ (341)
Limited partners (52,538 units
issued and outstanding) 4,602 4,261
------- -------
$ 45,036
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended November 30,
1999 1998
Revenues:
Rental income $13,648 $13,238
Other income 791 878
Casualty gain 210 --
------ ------
Total revenues 14,649 14,116
------ ------
Expenses:
Operating 5,575 5,810
General and administrative 406 387
Depreciation 2,969 2,951
Interest 2,718 2,729
Property taxes 866 808
------ ------
Total expenses 12,534 12,685
------ ------
Income before extraordinary item 2,115 1,431
Extraordinary item-loss on early
extinguishment of debt (150) --
------ ------
Net income (Note D) $ 1,965 $ 1,431
====== ======
Net income allocated to general partners (1%) $ 20 $ 14
Net income allocated to limited partners (99%) 1,945 1,417
------ ------
$ 1,965 $ 1,431
====== ======
Net income per limited partnership unit:
Income before extraordinary item $ 39.85 $ 26.97
Extraordinary item (2.83) --
------- ------
Net income $ 37.02 $ 26.97
====== ======
Distributions per limited partnership unit $ 57.84 $ 67.49
====== ======
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 52,538 $ 2 $52,538 $52,540
====== ====== ====== ======
Partners' (deficit) capital
at November 30, 1997 52,538 $ (333) $ 7,825 $ 7,492
Distribution to partners -- (8) (3,546) (3,554)
Net income for the year ended
November 30, 1998 -- 14 1,417 1,431
------ ------ ------ ------
Partners' (deficit) capital at
November 30, 1998 52,538 (327) 5,696 5,369
Distribution to partners (34) (3,039) (3,073)
Net income for the year
ended November 30, 1999 -- 20 1,945 1,965
------ ------ ------ ------
Partners' (deficit) capital
at November 30, 1999 52,538 $ (341) $ 4,602 $ 4,261
====== ====== ====== ======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
SHELTER PROPERTIES V
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Years Ended
November 30,
1999 1998
Cash flows from operating activities:
<S> <C> <C>
Net income $ 1,965 $ 1,431
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 2,969 2,951
Extraordinary loss on early extinguishment of debt 150 --
Casualty gain (210) --
Amortization of discounts and loan costs 168 182
Change in accounts:
Receivables and deposits (828) (252)
Other assets (432) 67
Accounts payable 1,063 58
Tenant security deposit liabilities (88) (2)
Accrued property taxes (21) 194
Other liabilities 641 9
------ ------
Net cash provided by operating activities 5,377 4,638
------ ------
Cash flows from investing activities:
Property improvements and replacements (3,142) (1,086)
Net withdrawals from restricted escrows 155 136
Insurance proceeds 319 --
------ ------
Net cash used in investing activities (2,668) (950)
------ ------
Cash flows from financing activities:
Proceeds from refinancing 17,357 --
Payoff of principal on mortgage notes (10,806) --
Payments on mortgage notes payable (506) (474)
Loan costs (143) --
Partners' distributions (4,191) (3,186)
------ ------
Net cash provided by (used in) financing
activities 1,711 (3,660)
------ ------
Net increase in cash and cash equivalents 4,420 28
Cash and cash equivalents at beginning of period 3,375 3,347
------ ------
Cash and cash equivalents at end of period $ 7,795 $ 3,375
====== ======
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,570 $ 2,550
====== ======
Supplemental disclosure of non-cash activity:
Distribution payable $ -- $ 1,118
Property improvements and replacements $ (548) $ --
Accounts payable $ 548 $ --
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
SHELTER PROPERTIES V
Notes to Consolidated Financial Statements
Note A - Organization and Significant Accounting Policies
Organization: Shelter Properties V (the "Partnership" or "Registrant") was
organized as a limited partnership under the laws of the State of South Carolina
on August 21, 1981. The general partner responsible for management of the
Partnership's business is Shelter Realty V Corporation, a South Carolina
corporation (the "Corporate General Partner"). The only other general partner of
the Partnership was N. Barton Tuck, Jr. Mr. Tuck was not an affiliate of the
Corporate General Partner and was effectively prohibited by the Partnership's
partnership agreement (the "Partnership Agreement") from participating in the
management of the Partnership. In June 1999, Mr. Tuck's general partnership
interest in the Registrant was purchased by AIMCO Properties, L.P., an affiliate
of the Corporate General Partner. The Corporate General Partner is a subsidiary
of Apartment Investment and Management Company ("AIMCO"). The Partnership
Agreement provides that the Partnership is to terminate on December 31, 2023
unless terminated prior to such date. The Partnership commenced operations on
July 19, 1983, and completed its acquisition of apartment properties on January
18, 1984. The Partnership operates seven apartment properties located in the
South and Southeast.
Principles of Consolidation: The financial statements include all the accounts
of the Partnership and its two 99.99% owned partnerships. The Corporate General
Partner of the consolidated partnerships is Shelter Realty V Corporation.
Shelter Realty V Corporation may be removed as the general partner of the
consolidated partnerships by the Registrant; therefore, the consolidated
partnerships are controlled and consolidated by the Registrant. All significant
interpartnership balances have been eliminated.
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 Cash Distributions: Cash distributions by the Partnership are
allocated between general and limited partners in accordance with the provisions
of the Partnership Agreement. The Partnership Agreement defines net cash from
operations as revenue received less operating expenses paid, adjusted for
certain specified items which primarily include mortgage payments on debt,
property improvements and replacements not previously reserved, and the effects
of other adjustments to reserves including reserve amounts deemed necessary by
the Corporate General Partner. In the following notes to the consolidated
financial statements, whenever "net cash from operations" is used, it has the
aforementioned meaning. The following is a reconciliation of the subtotal in the
accompanying consolidated statements of cash flows captioned "net cash provided
by operating activities" to "net cash from operations", as defined in the
Partnership Agreement. However, "net cash from operations" should not be
considered an alternative to net income as an indicator of the Partnership's
operating performance or to cash flows as a measure of liquidity.
Years Ended November 30,
1999 1998
---- ----
(in thousands)
Net cash provided by operating activities $ 5,377 $ 4,638
Property improvements and replacements (3,142) (1,086)
Payments on mortgage notes payable (506) (474)
Changes in reserves for net operating
liabilities (335) (74)
Changes in restricted escrows, net 155 136
Additional operating reserves (1,549) (1,240)
------ ------
Net cash from operations $ -- $ 1,900
===== ======
The Corporate General Partner reserved approximately $1,549,000 and $1,240,000
at November 30, 1999 and 1998, respectively, to fund capital improvements and
repairs at its properties.
The following table sets forth the distributions made by the Partnership for the
years ended November 30, 1998 and 1999.
Distribution
Per Limited
Aggregate Partnership Unit
12/1/97 - 11/30/98 $3,554,000 (1) $ 67.49
12/1/98 - 11/30/99 3,073,000 (2) 57.84
(1) Consists of $2,436,000 of distributions which were paid during the year
ended November 30, 1998 and $1,118,000 of distributions which were paid
subsequent to the Registrant's November 30, 1998 fiscal year end. Consists
of $769,000 from operations and $2,785,000 from surplus funds.
(2) Consists of $3,073,000 of cash from operations.
The Partnership Agreement provides that 99% of distributions of net cash from
operations are allocated to the limited partners until they receive net cash
from operations for such fiscal year equal to 7% of their adjusted capital
values (as defined in the Partnership Agreement), at which point the general
partners will be allocated all net cash from operations until they have received
distributions equal to 10% of the aggregate net cash from operations distributed
to partners for such fiscal year. Thereafter, the general partners will be
allocated 10% of any distributions of remaining net cash from operations for
such fiscal year.
All distributions of distributable net proceeds (as defined in the Partnership
Agreement) from property dispositions and refinancings will be allocated to the
limited partners until each limited partner has received an amount equal to a
cumulative 7% per annum return of the average of the limited partners' adjusted
capital value, less any prior distributions of net cash from operations and
distributable net proceeds, and has also received an amount equal to the limited
partners' adjusted capital value. Thereafter, the general partners receive 1% of
the selling prices of properties sold where they acted as a broker, after which
the limited partners will be allocated 85% of any remaining distributions of
distributable net proceeds and the general partners will receive 15%.
Distributions may be restricted by the requirement to deposit net operating
income (as defined in the mortgage notes for The Lexington Green and Tar River
Estates Apartments) into the Reserve Account until the Reserve Account is funded
in an amount equal to a minimum of $400 and a maximum of $1,000 per apartment
unit for each respective property for a total of $267,600 to $669,000. As of
November 30, 1999, this Reserve Account totaled approximately $482,000 which
includes interest earned on these funds.
Undistributed Net Proceeds from Refinancing: At November 30, 1998, all proceeds
from prior refinancings had been distributed. At November 30, 1999, the
Partnership had a balance of $6,280,000 of undistributed net proceeds from
refinancings which occurred in 1999.
Allocation of Profits, Gains, and Losses: Profits, gains and losses of the
Partnership are allocated between general and limited partners in accordance
with the provisions of the Partnership Agreement.
For any fiscal year, to the extent that profits, not including gains from
property dispositions, do not exceed distributions of net cash from operations,
such profits are allocated in the same manner as such distributions. In any
fiscal year in which profits, not including gains from property dispositions,
exceed distributions of net cash from operations, such excess is treated on a
cumulative basis as if it constituted an equivalent amount of distributable net
proceeds and is allocated together with, and in the same manner as, that portion
of gain described in the second sentence of the following paragraph.
Any gain from property dispositions attributable to the excess, if any, of the
indebtedness relating to a property immediately prior to the disposition of such
property over the Partnership's adjusted basis in the property shall be
allocated to each partner having a negative capital account balance, to the
extent of such negative balance. The balance of any gain shall be treated on a
cumulative basis as if it constituted an equivalent amount of distributable net
proceeds and shall be allocated to the general partners to the extent that
general partners would have received distributable net proceeds in connection
therewith; the balance shall be allocated to the limited partners. However, the
interest of the general partners will be equal to at least 1% of each gain at
all times during the existence of the Partnership. Accordingly, net income as
shown in the consolidated statement of operations and changes in partners'
(deficit) capital for 1999 was allocated 99% to the limited partners and 1% to
the general partners. Net income per limited partnership unit was computed by
dividing the net income allocated to the limited partners by 52,538 units
outstanding.
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.
Other Reserves: The general partners may designate a portion of cash generated
from operations as "other reserves" in determining net cash from operations. The
general partners designated as other reserves an amount equal to the net
liabilities related to the operations of apartment properties during the current
fiscal year that are expected to require the use of cash during the next fiscal
year. The changes in other reserves during 1999 and 1998 were a decrease of
approximately $335,000 and $74,000, respectively, which amounts were determined
by considering changes in the balances of receivables and deposits, other
assets, accounts payable, tenant security deposit liabilities, accrued taxes and
other liabilities. At this time, the general partners expect to continue to
adjust other reserves based on the net change in the aforementioned account
balances.
Cash and Cash Equivalents: Includes cash on hand and in banks and money market
accounts. At certain times, the amount of cash deposited at a bank may exceed
the limit on insured deposits.
Restricted Escrows:
- ------------------
Capital Improvement Account - In conjunction with the 1996 refinancing of the
mortgage notes encumbering Woodland Village, Lake Johnson Mews and Millhopper
Village, capital improvement escrows totaling approximately $549,000 were
established with a portion of the proceeds from the new notes. During the year
ended November 30, 1999, the remaining funds were used to fund capital
improvement projects at Woodland Village, Lake Johnson Mews, and Millhopper
Village.
Repair Reserve - As a result of the November 1999 refinancing of Old Salem
Apartments, a repair escrow totaling approximately $142,000 was established with
a portion of the proceeds from the new note. These funds are to be used to
reimburse the property once the repairs stipulated in the note agreement are
completed.
Replacement Reserve - As part of the 1996 refinancing, Woodland Village, Lake
Johnson Mews, and Millhopper Village a deposit per unit between $275 and $348
per year was made with the mortgage company to establish and maintain a
Replacement Reserve designated for repairs and replacements at the properties.
At November 30, 1999, this reserve totaled approximately $289,000.
As part of the 1999 refinancing of Old Salem Apartments and Foxfire Apartments,
each property is required to deposit $6,825 and $6,650, respectively per month
with the mortgage company to establish and maintain a Replacement Reserve
designated for repairs and replacements at the properties. The accounts are to
be established January 1, 2000 and December 1, 1999, respectively.
Reserve Account - At the time of the refinancing of The Lexington Green and Tar
River Estates mortgage notes payable in 1992, a general reserve account was
established with the refinancing proceeds for each mortgaged property. These
funds were established to cover necessary repairs and replacements of existing
improvements, debt service, out of pocket expenses incurred for ordinary and
necessary administrative tasks, and payment of real property taxes and insurance
premiums. The Partnership is required to deposit net operating income (as
defined in the mortgage note) from each refinanced property to the respective
reserve account until they equal a minimum $400 per apartment unit or $267,600
in total. At November 30, 1999, this reserve totaled approximately $482,000
which includes interest earned on these funds.
Escrows for Taxes and Insurance: Escrows for all of the properties are held by
the Partnership. All escrowed funds are designated for the payment of real
estate taxes. These escrows, totaling approximately $684,000, are included in
receivables and 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
additions over 27 1/2 years and (2) personal property additions over 5 years.
Effective December 1, 1998 the Partnership changed its method to capitalize the
cost of exterior painting and major landscaping (see Note J).
Loan Costs: Loan costs of approximately $872,000, less accumulated amortization
of approximately $421,000, are included in other assets and are being amortized
on a straight-line basis over the life of the related loans. In connection with
the 1999 refinancing of Foxfire and Old Salem, additional loan costs of
approximately $143,000 were capitalized.
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. The security 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 Corporate 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 seven 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. The Corporate General Partner relies on the
annual appraisals performed by the outside appraisers for the estimated value of
the Partnership's properties. There are three recognized approaches or
techniques available to the appraiser. When applicable, these approaches are
used to process the data considered significant to each to arrive at separate
value indications. In all instances the experience of the appraiser, coupled
with his objective judgment, plays a major role in arriving at the conclusions
of the indicated value for which the final estimate of value is made. The three
approaches commonly known are the cost approach, the sales comparison approach,
and the income approach. The cost approach is often not considered to be
reliable due to the lack of land sales and the significant amount of
depreciation and, therefore, is often not presented. Upon receipt of the
appraisals, any property which is stated on the books of the Partnership above
the estimated value given in the appraisal, is written down to the estimated
value given by the appraiser. The appraiser assumes a stabilized occupancy at
the time of the appraisal and, therefore, any impairment of value is considered
to be permanent by the Corporate General Partner. No adjustments for impairment
of value were recorded in the years ended November 30, 1999 and 1998.
Segment Reporting: Statement of Financial Standards ("SFAS") No. 131, Disclosure
about Segments of an Enterprise and Related Information ("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 G"
for segment disclosures.
Advertising: The Partnership expenses the costs of advertising as incurred.
Advertising costs of approximately $152,000 and $159,000 for the years ended
November 30, 1999 and 1998, respectively, were charged to operating expense as
incurred.
Note B - 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 AIMCO, a publicly traded real estate investment trust, with AIMCO
being the surviving corporation (the "Insignia Merger"). As a result, AIMCO
acquired 100% ownership interest in the Corporate General Partner. The Corporate
General Partner does not believe that this transaction has had or will have a
material effect on the affairs and operations of the Partnership.
<PAGE>
Note C - Mortgage Notes Payable
The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>
Principal Monthly Principal
Balance At Payment Stated Balance
November 30, Including Interest Maturity Due At
Property 1999 Interest Rate Date Maturity
- -------- ---- -------- ---- ---- --------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Foxfire
1st mortgage $ 7,200 $ 59 7.79% 11/01/19 $ 59
Old Salem
1st mortgage 10,157 85 8.02% 12/01/19 85
Woodland Village
1st mortgage 4,950 30 7.33% 11/01/03 4,950
Lake Johnson Mews
1st mortgage 4,350 27 7.33% 11/01/03 4,350
The Lexington Green
1st mortgage 3,280 31 7.60% 11/15/02 2,870
2nd mortgage 123 1 7.60% 11/15/02 123
Millhopper Village
1st mortgage 2,700 16 7.33% 11/01/03 2,700
Tar River Estates
1st mortgage 4,531 43 7.60% 11/15/02 3,965
2nd mortgage 169 1 7.60% 11/15/02 169
------ ---- -------
37,460 $ 293 $ 19,271
==== =======
Less unamortized discounts (238)
------
Total $37,222
======
</TABLE>
The Partnership exercised interest rate buy-down options for Tar River Estates
and The Lexington Green when the debt was refinanced in October 1992, thereby
reducing the stated rate from 8.76% to 7.60%. The fee for the interest rate
reduction amounted to approximately $677,000 and is being amortized as a loan
discount on the interest method over the life of the loans. The unamortized
discount fee is reflected as a reduction of the mortgage notes payable and
increases the effective rate of the debt to 8.76%.
During October and November 1999, the Partnership refinanced the mortgage notes
at Foxfire and Old Salem Apartments, respectively. Gross proceeds from the
refinancings were $7,200,000 and $10,157,000, respectively, of which
approximately $4,519,000 and $6,287,000, respectively, was used to pay off the
existing mortgage notes. The new notes require monthly principal and interest
payments at fixed interest rates of 7.79% for Foxfire Apartments and 8.02% for
Old Salem Apartments. The old debt carried fixed interest rates of 7.50% and
10.375% with maturities of May 1999 and December 2016, respectively.
The mortgage notes payable are non-recourse and are secured by a pledge of the
respective apartment properties and by pledge of revenues from the respective
apartment properties. Certain of the notes require prepayment penalties if
repaid prior to maturity and prohibit resale of the properties subject to
existing indebtedness. The estimated fair value of the Partnership's aggregate
debt is approximately $37,460,000. This estimate is not necessarily indicative
of the amounts the Partnership may pay in actual market transactions.
Scheduled principal payments of mortgage notes payable subsequent to November
30, 1999 are as follows (in thousands):
2000 $ 721
2001 739
2002 7,863
2003 12,471
2004 509
Thereafter 15,157
------
$37,460
Note D - 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 consolidated 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 and Federal taxable
income (in thousands, except per unit data):
1999 1998
---- ----
Net income as reported $ 1,965 $ 1,431
Add (deduct):
Depreciation differences 1,635 (175)
Change in prepaid rental (70) 1
Casualty gain (210) --
Other (28) (4)
Change in other liabilities 26 68
------ ------
Federal taxable income $ 3,318 $ 1,321
====== ======
Federal taxable income per
limited partnership unit $ 62.52 $ 24.89
====== ======
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net assets as reported $ 4,261
Land and buildings 10,190
Accumulated depreciation (29,298)
Syndication fees 6,747
Other (1,248)
------
Net deficiency - tax basis $(9,348)
======
Note E - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Corporate General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for (i) certain
payments to affiliates for services and (ii) reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership. The following payments were
made to the Corporate General Partner and affiliates during the years ended
November 30, 1999 and 1998:
1999 1998
---- ----
(in thousands)
Property management fees (included in
operating expense) $ 725 $ 710
Reimbursement for services of affiliates
(included in operating, general and administrative
expenses and investment properties) 254 239
During the years ended November 30, 1999 and 1998, affiliates of the Corporate
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates approximately $725,000 and
$710,000 for the years ended November 30, 1999 and 1998, respectively.
Affiliates of the Corporate General Partner received reimbursement of
accountable administrative expenses amounting to approximately $254,000 and
$239,000 for the years ended November 30, 1999 and 1998, respectively.
Several tender offers were made by various parties, including affiliates of the
general partners, during the fiscal years ended November 30, 1999 and 1998. As a
result of these tender offers at November 30, 1999, AIMCO and its affiliates own
26,024 units of limited partnership units in the Partnership representing
approximately 49.53% of the outstanding units. Subsequent to November 30, 1999,
an affiliate of the general partners acquired an additional 7,222 units, or
approximately 13.75%, pursuant to a tender offer. It is possible that AIMCO or
its affiliates will make one or more additional offers to acquire additional
limited partnership interests in the Partnership for cash or in exchange for
units in the operating partnership of AIMCO. Consequently, AIMCO is 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 Corporate General Partner because of
their affiliation with the Corporate General Partner.
Note F - Investment Properties and Accumulated Depreciation
<TABLE>
<CAPTION>
Initial Cost
To Partnership
--------------
(in thousands)
Buildings Cost
and Related Capitalized
Personal Subsequent to
Description Encumbrances Land Property Acquisition
----------- ------------ ---- -------- -----------
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Foxfire Apartments $ 7,200 $ 830 $ 9,122 $ 895
Old Salem Apartments 10,157 654 12,664 4,103
Woodland Village Apartments 4,950 605 9,135 2,561
Lake Johnson Mews Apartments 4,350 338 6,725 1,502
The Lexington Green Apartments 3,403 1,102 6,620 2,663
Millhopper Village Apartments 2,700 239 4,305 1,284
Tar River Estates Apartments 4,700 474 9,985 155
------ ------ ------ ------
Totals $37,460 $ 4,242 $58,556 $13,163
====== ====== ====== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At November 30, 1999
(in thousands)
Buildings
And
Related Date of Depreciable
Personal Accumulated Construc- Date Life-
Description Land Property Total Depreciation tion Acquired Years
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Foxfire
Atlanta, Georgia $ 830 $10,017 $10,847 $ 6,689 1969-1971 07/19/83 5-29
Old Salem
Charlottesville, Virginia 654 16,767 17,421 9,959 1969-1971 08/25/83 5-28
Woodland Village
Columbia, South Carolina 605 11,696 12,301 7,147 1974 09/01/83 5-30
Lake Johnson Mews
Raleigh, North Carolina 338 8,227 8,565 4,876 1972-1973 09/30/83 5-30
The Lexington Green
Sarasota, Florida 1,102 9,283 10,385 5,360 1973-1982 10/31/83 5-34
Millhopper Village
Gainesville, Florida 239 5,589 5,828 3,504 1970-1976 11/22/83 5-29
Tar River Estates
Greenville, North 474 10,140 10,614 6,541 1969-1972 01/18/84 5-27
Carolina
$ 4,242 $71,719 $75,961 $44,076
====== ====== ====== ======
Totals
</TABLE>
<PAGE>
Reconciliation of "Investment Properties and Accumulated Depreciation":
Years Ended November 30,
1999 1998
---- ----
(in thousands)
Real Estate
Balance at beginning of year $76,339 $75,253
Property improvements 3,690 1,086
Disposals of property (4,068) --
------ ------
Balance at end of year $75,961 $76,339
====== ======
Accumulated Depreciation
Balance at beginning of year $43,415 $40,464
Additions charged to expense 2,969 2,951
Disposals of property (2,308) --
------ ------
Balance at end of year $44,076 $43,415
====== ======
The aggregate cost of the real estate for Federal income tax purposes at
November 30, 1999 and 1998 is approximately $86,151,000 and $83,005,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at November 30, 1999 and 1998 is approximately $73,374,000 and $72,041,000,
respectively.
Note G - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership has one reportable segment: residential properties. The
Partnership's residential property segment consists of seven apartment complexes
located in Florida (2), South Carolina (1), Virginia (1), Georgia(1), and North
Carolina (2). The Partnership rents apartment units to tenants for terms that
are typically twelve months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit/(loss) before
depreciation. The accounting policies of the reportable segment are the same as
those of the Partnership as 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
is 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 ended November 30, 1999 and 1998 is shown in
the tables below. The "Other" column includes partnership administration related
items and income and expense not allocated to the reportable segment.
1999 Residential Other Totals
---- ----------- ----- ------
(in thousands)
Rental income $13,648 $ -- $13,648
Other income 746 45 791
Casualty gain 210 -- 210
Interest expense 2,718 -- 2,718
Depreciation 2,969 -- 2,969
General and administrative expense -- 406 406
Extraordinary loss (150) -- (150)
Segment profit (loss) 2,326 (361) 1,965
Total assets 38,376 6,660 45,036
Capital expenditures for
investment properties 3,690 -- 3,690
1998 Residential Other Totals
---- ----------- ----- ------
(in thousands)
Rental income $13,238 $ -- $13,238
Other income 757 121 878
Interest expense 2,729 -- 2,729
Depreciation 2,951 -- 2,951
General and administrative expense -- 387 387
Segment profit (loss) 1,697 (266) 1,431
Total assets 36,541 2,464 39,005
Capital expenditures for
investment properties 1,086 -- 1,086
<PAGE>
Note H - Casualty Event
In September 1999, Tar River Estates Apartments, was damaged by severe flooding
which affected certain areas of North Carolina. It is estimated that the
property has incurred approximately $6,323,000 in damages as a result of this
flooding. Subsequent to November 30, 1999 insurance proceeds of approximately
$2,464,000 have been received to cover lost rents and damage to the property.
The Partnership will record the insurance proceeds upon settlement of the claim
and/or receipt of the cash. It is anticipated that the costs incurred to restore
the property will be fully covered by insurance.
In July 1999, Woodland Village Apartments experienced a fire, which resulted in
the destruction of six apartment units. The property incurred damages of
approximately $324,000 and estimated lost rents of approximately $13,000.
Insurance proceeds of $332,000 will be received to cover the damages and lost
rents, resulting in a casualty gain of $210,000.
Note I - 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 Corporate General Partner and several of their affiliated
partnerships and corporate entities. The action 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 and the Insignia Merger (see
"Note B - Transfer of Control"). The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the Corporate 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 Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a Stipulation of Settlement, settling claims, subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999. Prior to the December 10, 1999 hearing the Court received various
objections to the settlement, including a challenge to the Court's preliminary
approval based upon the alleged lack of authority of class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Corporate General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. The
Corporate General Partner does not anticipate that costs associated with this
case will 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.
Note J - Change in Accounting Principle
Effective December 1, 1998, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Corporate General Partner. The effect of the change in 1999 was
to increase income before the change by approximately $325,000 ($6.12 per
limited partnership unit). The accounting principle change will not have an
effect on cashflow, funds available for distributions or fees payable to the
Corporate General Partner or affiliates.
Note K - Subsequent Event
On January 3, 2000 the Partnership elected to change its fiscal year end from
November 30, to December 31, effective for the period ending December 31, 1999.
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
--------------------------------------------------------------------
None.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The Registrant has no officers or directors. The Corporate General Partner is
Shelter Realty V Corporation. The names and ages of, as well as the position and
offices held by, the present executive officers and director of the Corporate
General Partner are set forth below. There are no family relationships between
or among any officers or directors.
Name Age Position
Patrick J. Foye 42 Executive Vice President and Director
Martha L. Long 40 Senior Vice President and Controller
Patrick J. Foye has been Executive Vice President and Director of the
Corporate 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.
Martha L. Long has been Senior Vice President and Controller of the Corporate
General Partner and AIMCO since October 1998, as a result of the acquisition of
Insignia Financial Group, Inc. From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997, retaining that title until October 1998. From 1988
to June 1994, Ms. Long was Senior Vice President and Controller for The First
Savings Bank, FSB in Greenville, South Carolina.
Item 10. Executive Compensation
None of the directors and officers of the Corporate 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 November 30, 1999.
Entity Number of Units Percentage
Cooper River Properties, LLC
(an affiliate of AIMCO) 2,722 5.181%
Insignia Properties LP
(an affiliate of AIMCO) 20,144 38.342%
AIMCO Properties LP
(an affiliate of AIMCO) 3,158 6.011%
Cooper River Properties LLC and Insignia Properties LP are indirectly ultimately
owned by AIMCO. Their business address is 55 Beattie Place, Greenville, South
Carolina 29602.
AIMCO Properties LP is indirectly ultimately owned by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado 80222.
No director or officer of the Corporate General Partner owns any Units. The
Corporate General Partner owns 100 Units as required by the terms of the
Partnership Agreement governing the Partnership. AIMCO Properties LP, the other
general partner acquired 3,158 Units during the current fiscal year.
Item 12. Certain Relationships and Related Transactions
The Partnership has no employees and is dependent on the Corporate General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for (i) certain
payments to affiliates for services and (ii) reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership. The following payments were
made to the Corporate General Partner and affiliates during the years ended
November 30, 1999 and 1998:
1999 1998
---- ----
(in thousands)
Property management fees (included in
operating expense) $ 725 $ 710
Reimbursement for services of affiliates
(included in general and administrative expenses
and investment properties) 254 239
During the years ended November 30, 1999 and 1998, affiliates of the Corporate
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates approximately $725,000 and
$710,000 for the years ended November 30, 1999 and 1998, respectively.
Affiliates of the Corporate General Partner received reimbursement of
accountable administrative expenses amounting to approximately $254,000 and
$239,000 for the years ended November 30, 1999 and 1998, respectively.
Several tender offers were made by various parties, including affiliates of the
general partners, during the fiscal years ended November 30, 1999 and 1998. As a
result of these tender offers at November 30, 1999, AIMCO and its affiliates own
26,024 units of limited partnership units in the Partnership representing
approximately 49.53% of the outstanding units. Subsequent to November 30, 1999,
an affiliate of the general partners acquired an additional 7,222 units, or
approximately 13.75%, pursuant to a tender offer. It is possible that AIMCO or
its affiliates will make one or more additional offers to acquire additional
limited partnership interests in the Partnership for cash or in exchange for
units in the operating partnership of AIMCO. Consequently, AIMCO is 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 Corporate General Partner because of
their affiliation with the Corporate General Partner.
<PAGE>
PART IV
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 18, Independent Accountants' Preferability Letter for
Change in Accounting Principle.
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
(b) Reports on Form 8-K filed during the fourth quarter of fiscal
year 1999:
None.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SHELTER PROPERTIES V
By: Shelter Realty V Corporation
Corporate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date:
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 on the date
indicated.
/s/Patrick J. Foye Executive Vice President Date:
Patrick J. Foye and Director
/s/Martha L. Long Senior Vice President and Date:
Martha L. Long Controller
<PAGE>
EXHIBIT INDEX
Exhibit
2.1 Agreement and Plan of Merger, dated as of October 1, 1998 by
and between AIMCO and IPT (incorporated by reference to
Current Report on Form 8-K, dated October 1, 1998).
3 See Exhibit 4(a)
3.1 Second Amended and Restated Bylaws of IPT, dated October 2,
1998 (incorporated by reference to Current Report on Form 8-K,
dated October 1, 1998).
4 (a) Amended and Restated Certificate and Agreement of Limited
Partnership (included as Exhibit A to the Prospectus of
Registrant dated May 27, 1983 contained in Amendment No. 1
to Registration Statement No. 2-81308, of Registrant filed
June 8, 1982 (the "Prospectus") and incorporated herein by
reference.)
(b) Subscription Agreement and Signature Page (included as
Exhibits 4(A) and 4 (B) to the Registration Statement,
incorporated herein by reference).
(c) Promissory Notes and Deed of Trust; Assignment of Leases,
Rents & Profits; and Security Agreement between The Mutual
Benefit Life Insurance Company and Shelter Properties V.
(Filed as Exhibit 4(c) to Form 10-K of Registrant filed
February 26, 1998 and incorporated herein by reference).
(d) Registrant agrees to furnish to the Securities and Exchange
Commission upon request a copy of any instrument with respect
to long term debt which does not exceed 10% of the total
assets of the Registrant.
10(i) Contracts related to acquisition of properties.
(a) Purchase Agreement dated May 23, 1983 between CFC 1978
Partnership C and U.S. Shelter Corporation to acquire
Foxfire Apartments.*
(b) Purchase Agreement dated May 14, 1983 between Old Salem and
U.S. Shelter Corporation to acquire Old Salem Apartments.*
(c) Purchase Agreement dated April 21, 1983 between Europco
Management Company of America and U.S. Shelter Corporation
to acquire Woodland Village Apartments.*
(d) Purchase Agreement dated May 6, 1983 between Europco
Management Company of America and U.S. Shelter Corporation
to acquire Lake Johnson Mews.*
*Filed as Exhibits 12(a) through 12(d), respectively, to
Amendment No. 1 of Registration Statement No. 2-81308 of
Registrant filed May 24, 1983 and incorporated herein by
reference.
(e) Purchase Agreement dated June 17, 1983 between The
Lexington Apartments and U.S. Shelter Corporation to
acquire The Lexington Apartments. (Filed as Exhibit 12(E)
to Post-Effective Amendment No. 1 of Registration Statement
No. 2-81308 of Registrant filed June 27, 1983 and
incorporated herein by reference).
(f) Purchase Agreement dated August 26, 1983 between James S.
Quincey and U.S. Shelter Corporation to acquire Millhopper
Village Apartments. (Filed as Exhibit 12(F) to
Post-Effective Amendment No. 1 of Registration Statement
No. 2-81308 of Registrant filed October 13, 1983 and
incorporated herein by reference).
(g) Purchase Agreement dated November 21, 1983 between
Southwest Realty, Ltd. and U.S. Shelter Corporation to
acquire Greenspoint Apartments. (Filed as Exhibit 10(A) to
Form 8-K of Registrant dated December 8, 1983 and
incorporated herein by reference).
(h) Purchase Agreement dated December 14, 1983 between Virginia
Real Estate Investors and U.S. Shelter Corporation to acquire
Tar River Estates. (Filed as Exhibit 10(B) to Form 8-K of
Registrant dated December 8, 1983 and incorporated herein by
reference).
(i) Promissory Note dated December 10, 1991 and Deed of Trust and
Security Agreement dated December 18, 1991 for the refinancing
of Old Salem Apartments. (Filed as Exhibit 3(d) to Form 10-K
of Registrant filed February 28, 1992 and incorporated herein
by reference).
(ii) Form of Management Agreement with U.S. Shelter Corporation
subsequently assigned to Shelter Management Group, L.P.
(now known as Insignia Management Group,L.P.).(Filed as Exhibit
10 (ii) to Form 10-K of Registrant filed February 26, 1988 and
incorporated herein by reference).
(iii) Contracts related to refinancing of debt:
(a) First Deeds of Trust and Security Agreements dated October 28,
1992 between New Shelter Properties V and Joseph Philip Forte
(Trustee) and First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing the following properties: Tar
River and The Lexington.**
(b) Second Deeds of Trust and Security Agreements dated October
28, 1992 between New Shelter Properties V Limited
Partnership and Joseph Philip Forte (Trustee) and First
Commonwealth Realty Credit Corporation, a Virginia
Corporation, securing the following properties: Tar River
and The Lexington.**
(c) First Assignments of Leases and Rents dated October 28, 1992
between New Shelter Properties V and Joseph Philip Forte
(Trustee) and First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing the following properties: Tar
River and The Lexington.**
(d) Second Assignments of Leases and Rents dated October 28, 1992
between New Shelter Properties V and Joseph Philip Forte
(Trustee) and First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing the following properties: Tar
River and The Lexington.**
(e) First Deeds of Trust Notes dated October 28, 1992 between New
Shelter Properties V and First Commonwealth Realty Credit
Corporation, relating to the following properties: Tar River
and The Lexington.**
(f) Second Deeds of Trust Notes dated October 28, 1992 between New
Shelter Properties V and First Commonwealth Realty Credit
Corporation, relating to the following properties: Tar River
and The Lexington.**
**Filed as Exhibits 10 (iii) a through f, respectively, to
Form 10-KSB - Annual or Transitional Report filed February
26, 1993 and incorporated herein by reference.
(g) Modification to Security Instruments dated January 31, 1994,
between Foxfire V Limited Partnership and John Hancock Mutual
Life Insurance Company, relating to Foxfire Apartments.***
(h) Deposit and Security Agreement dated January 31, 1994,
between Foxfire V Limited Partnership and John Hancock Real
Estate Finance, Inc., relating to Foxfire Apartments.***
***Filed as Exhibits 10 (iii) g and h, respectively, to
Form 10-KSB - Annual or Transitional Report filed February
28, 1994 and incorporated herein by reference.
(i) Multifamily Note secured by a Mortgage or Deed of Trust
dated November 1, 1996, between Shelter Properties V and
Lehman Brothers Holdings, Inc., d/b/a Lehman Capital, a
Division of Lehman Brothers Holdings Inc., relating to
Woodland Village Apartments.
(j) Multifamily Note secured by a Mortgage or Deed of Trust
dated November 1, 1996, between Shelter Properties V and
Lehman Brothers Holdings, Inc., d/b/a Lehman Capital, a
Division of Lehman Brothers Holdings Inc., relating to Lake
Johnson Mews Apartments.
(k) Multifamily Note secured by a Mortgage or Deed of Trust
dated November 1, 1996, between Shelter Properties V and
Lehman Brothers Holdings, Inc., d/b/a Lehman Capital, a
Division of Lehman Brothers Holdings Inc., relating to
Millhopper Village Apartments.
(l) Multifamily Note secured by a Mortgage or Deed of Trust dated
October 25, 1999, between Foxfire Apartments V Limited
Partnership and GMAC Commercial Mortgage Corporation relating
to Foxfire Apartments. (Filed as Exhibit 10(1) to Form 10-KSB
of Registrant for period ended November 30, 1999).
(m) Multifamily Note secured by a Mortgage or Deed of Trust dated
November 10, 1999, between Shelter Properties V Limited
Partnership and GMAC Commercial Mortgage Corporation relating
to Old Salem Apartments. (Filed as Exhibit 10(1) to Form
10-KSB of Registrant for period ended November 30, 1999).
18 Independent Accountants' Preferability Letter for Change in
Accounting Principle.
27 Financial Data Schedule.
99.1 Current Report on Form 8-K dated October 1, 1998 filed on
October 16, 1998 disclosing change in control of Registrant
from Insignia Financial Group, Inc. to AIMCO.
99.2 Irrevocable Limited Proxy, dated October 1, 1998, among
AIMCO, Andrew L. Farkas, James A. Aston and Frank M.
Garrison (incorporated by reference to Current Report on
Form 8-K, dated October 1, 1998).
99.3 Shareholder's Agreement, dated October 1, 1998, among
AIMCO, Andrew L. Farkas, James A. Aston and Frank M.
Garrison (incorporated by reference Current Report on Form
8-K, dated October 1, 1998).
<PAGE>
Exhibit 18
February X, 2000
Mr. Patrick J. Foye
Executive Vice President
Shelter Realty V Corporation
Corporate General Partner of Shelter Properties V
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602
Dear Mr. Foye:
Note J of Notes to the Financial Statements of Shelter Properties V included in
its Form 10-KSB for the year ended November 30, 1999 describes a change in the
method of accounting to capitalize exterior painting and major landscaping,
which would have been expensed under the old policy. You have advised us that
you believe that the change is to a preferable method in your circumstances
because it provides a better matching of expenses with the related benefit of
the expenditures and is consistent with policies currently being used by your
industry and conforms to the policies of the Corporate General Partner.
There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting for exterior painting and major landscaping is to an acceptable
alternative method which, based on your business judgment to make this change
for the reasons cited above, is preferable in your circumstances.
Very truly yours,
/s/ Ernst & Young LLP
<PAGE>
FHLMC Loan No. 002682753
MULTIFAMILY NOTE
(MULTISTATE)
US $10,157,000.00 As of November 10, 1999
FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally (if
more than one) promises to pay to the order of GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation, the principal sum of Ten Million One
Hundred Fifty-Seven Thousand and 00/100 Dollars (US $10,157,000.00), with
interest on the unpaid principal balance at the annual rate of Eight and Twenty
Thousandths percent (8.020%).
Defined Terms. As used in this Note, (i) the term "Lender" means the
holder of this Note, and (ii) the term "Indebtedness" means the principal of,
interest on, or any other amounts due at any time under, this Note, the Security
Instrument or any other Loan Document, including prepayment premiums, late
charges, default interest, and advances to protect the security of the Security
Instrument under Section 12 of the Security Instrument. "Event of Default" and
other capitalized terms used but not defined in this Note shall have the
meanings given to such terms in the Security Instrument.
Address for Payment. All payments due under this Note shall be payable at
650 Dresher Road, P.O. Box 1015, Horsham, Pennsylvania 19044-8015, Attn:
Servicing - Account Manager, or such other place as may be designated by written
notice to Borrower from or on behalf of Lender.
Payment of Principal and Interest. Principal and interest shall be
paid as follows:
Unless disbursement of principal is made by Lender to Borrower on the
first day of the month, interest for the period beginning on the date of
disbursement and ending on and including the last day of the month in which such
disbursement is made shall be payable simultaneously with the execution of this
Note. Interest under this Note shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
Consecutive monthly installments of principal and interest, each in the
amount of Eighty Five Thousand Eighty Three and 69/100 Dollars (US $85,083.69),
shall be payable on the first day of each month beginning on January 1, 2000,
until the entire unpaid principal balance evidenced by this Note is fully paid.
Any accrued interest remaining past due for 30 days or more shall be added to
and become part of the unpaid principal balance and shall bear interest at the
rate or rates specified in this Note, and any reference below to "accrued
interest" shall refer to accrued interest which has not become part of the
unpaid principal balance. Any remaining principal and interest shall be due and
payable on December 1, 2019 or on any earlier date on which the unpaid principal
balance of this Note becomes due and payable, by acceleration or otherwise (the
"Maturity Date"). The unpaid principal balance shall continue to bear interest
after the Maturity Date at the Default Rate set forth in this Note until and
including the date on which it is paid in full.
Any regularly scheduled monthly installment of principal and interest that
is received by Lender before the date it is due shall be deemed to have been
received on the due date solely for the purpose of calculating interest due.
Application of Payments. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness which is less than all
amounts due and payable at such time, Lender may apply that payment to amounts
then due and payable in any manner and in any order determined by Lender, in
Lender's discretion. Borrower agrees that neither Lender's acceptance of a
payment from Borrower in an amount that is less than all amounts then due and
payable nor Lender's application of such payment shall constitute or be deemed
to constitute either a waiver of the unpaid amounts or an accord and
satisfaction.
Security. The Indebtedness is secured, among other things, by a
multifamily mortgage, deed to secure debt or deed of trust dated as of the date
of this Note (the "Security Instrument"), and reference is made to the Security
Instrument for other rights of Lender as to collateral for the Indebtedness.
Acceleration. If an Event of Default has occurred and is continuing, the
entire unpaid principal balance, any accrued interest, the prepayment premium
payable under Paragraph 10, if any, and all other amounts payable under this
Note and any other Loan Document shall at once become due and payable, at the
option of Lender, without any prior notice to Borrower. Lender may exercise this
option to accelerate regardless of any prior forbearance.
Late Charge. If any monthly amount payable under this Note or under the
Security Instrument or any other Loan Document is not received by Lender within
ten (10) days after the amount is due, Borrower shall pay to Lender, immediately
and without demand by Lender, a late charge equal to five percent (5%) of such
amount. Borrower acknowledges that its failure to make timely payments will
cause Lender to incur additional expenses in servicing and processing the loan
evidenced by this Note (the "Loan"), and that it is extremely difficult and
impractical to determine those additional expenses. Borrower agrees that the
late charge payable pursuant to this Paragraph represents a fair and reasonable
estimate, taking into account all circumstances existing on the date of this
Note, of the additional expenses Lender will incur by reason of such late
payment. The late charge is payable in addition to, and not in lieu of, any
interest payable at the Default Rate pursuant to Paragraph 8.
Default Rate. So long as (a) any monthly installment under this Note
remains past due for 30 days or more, or (b) any other Event of Default has
occurred and is continuing, interest under this Note shall accrue on the unpaid
principal balance from the earlier of the due date of the first unpaid monthly
installment or the occurrence of such other Event of Default, as applicable, at
a rate (the "Default Rate") equal to the lesser of 4 percentage points above the
rate stated in the first paragraph of this Note or the maximum interest rate
which may be collected from Borrower under applicable law. If the unpaid
principal balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal balance and all accrued interest shall bear interest
from the Maturity Date at the Default Rate. Borrower also acknowledges that its
failure to make timely payments will cause Lender to incur additional expenses
in servicing and processing the Loan, that, during the time that any monthly
installment under this Note is delinquent for more than 30 days, Lender will
incur additional costs and expenses arising from its loss of the use of the
money due and from the adverse impact on Lender's ability to meet its other
obligations and to take advantage of other investment opportunities, and that it
is extremely difficult and impractical to determine those additional costs and
expenses. Borrower also acknowledges that, during the time that any monthly
installment under this Note is delinquent for more than 30 days or any other
Event of Default has occurred and is continuing, Lender's risk of nonpayment of
this Note will be materially increased and Lender is entitled to be compensated
for such increased risk. Borrower agrees that the increase in the rate of
interest payable under this Note to the Default Rate represents a fair and
reasonable estimate, taking into account all circumstances existing on the date
of this Note, of the additional costs and expenses Lender will incur by reason
of the Borrower's delinquent payment and the additional compensation Lender is
entitled to receive for the increased risks of nonpayment associated with a
delinquent loan.
Limits on Personal Liability.
Except as otherwise provided in this Paragraph 9, Borrower shall have no
personal liability under this Note, the Security Instrument or any other Loan
Document for the repayment of the Indebtedness or for the performance of any
other obligations of Borrower under the Loan Documents, and Lender's only
recourse for the satisfaction of the Indebtedness and the performance of such
obligations shall be Lender's exercise of its rights and remedies with respect
to the Mortgaged Property and any other collateral held by Lender as security
for the Indebtedness. This limitation on Borrower's liability shall not limit or
impair Lender's enforcement of its rights against any guarantor of the
Indebtedness or any guarantor of any obligations of Borrower.
Borrower shall be personally liable to Lender for the repayment of a
portion of the Indebtedness equal to zero percent (0%) of the original principal
balance of this Note, plus any other amounts for which Borrower has personal
liability under this Paragraph 9.
In addition to Borrower's personal liability under Paragraph 9(b),
Borrower shall be personally liable to Lender for the repayment of a further
portion of the Indebtedness equal to any loss or damage suffered by Lender as a
result of (1) failure of Borrower to pay to Lender upon demand after an Event of
Default all Rents to which Lender is entitled under Section 3(a) of the Security
Instrument and the amount of all security deposits collected by Borrower from
tenants then in residence; (2) failure of Borrower to apply all insurance
proceeds and condemnation proceeds as required by the Security Instrument; or
(3) failure of Borrower to comply with Section 14(d) or (e) of the Security
Instrument relating to the delivery of books and records, statements, schedules
and reports.
For purposes of determining Borrower's personal liability under Paragraph
9(b) and Paragraph 9(c), all payments made by Borrower or any guarantor of this
Note with respect to the Indebtedness and all amounts received by Lender from
the enforcement of its rights under the Security Instrument shall be applied
first to the portion of the Indebtedness for which Borrower has no personal
liability.
Borrower shall become personally liable to Lender for the repayment of all
of the Indebtedness upon the occurrence of any of the following Events of
Default: (1) Borrower's acquisition of any property or operation of any business
not permitted by Section 33 of the Security Instrument; (2) a Transfer
(including, but not limited to, a lien or encumbrance) that is an Event of
Default under Section 21 of the Security Instrument, other than a Transfer
consisting solely of the involuntary removal or involuntary withdrawal of a
general partner in a limited partnership or a manager in a limited liability
company; or (3) fraud or written material misrepresentation by Borrower or any
officer, director, partner, member or employee of Borrower in connection with
the application for or creation of the Indebtedness or any request for any
action or consent by Lender.
In addition to any personal liability for the Indebtedness, Borrower shall
be personally liable to Lender for (1) the performance of all of Borrower's
obligations under Section 18 of the Security Instrument (relating to
environmental matters); (2) the costs of any audit under Section 14(d) of the
Security Instrument; and (3) any costs and expenses incurred by Lender in
connection with the collection of any amount for which Borrower is personally
liable under this Paragraph 9, including fees and out of pocket expenses of
attorneys and expert witnesses and the costs of conducting any independent audit
of Borrower's books and records to determine the amount for which Borrower has
personal liability.
To the extent that Borrower has personal liability under this Paragraph 9,
Lender may exercise its rights against Borrower personally without regard to
whether Lender has exercised any rights against the Mortgaged Property or any
other security, or pursued any rights against any guarantor, or pursued any
other rights available to Lender under this Note, the Security Instrument, any
other Loan Document or applicable law. For purposes of this Paragraph 9, the
term "Mortgaged Property" shall not include any funds that (1) have been applied
by Borrower as required or permitted by the Security Instrument prior to the
occurrence of an Event of Default or (2) Borrower was unable to apply as
required or permitted by the Security Instrument because of a bankruptcy,
receivership, or similar judicial proceeding.
Voluntary and Involuntary Prepayments.
A prepayment premium shall be payable in connection with any prepayment
made under this Note as provided below: Borrower may voluntarily prepay all of
the unpaid principal balance of this Note on the last Business Day of a calendar
month if Borrower has given Lender at least 30 days prior notice of its
intention to make such prepayment. Such prepayment shall be made by paying (A)
the amount of principal being prepaid, (B) all accrued interest, (C) all other
sums due Lender at the time of such prepayment, and (D) the prepayment premium
calculated pursuant to Schedule A. For all purposes including the accrual of
interest, any prepayment received by Lender on any day other than the last
calendar day of the month shall be deemed to have been received on the last
calendar day of such month. For purposes of this Note, a "Business Day" means
any day other than a Saturday, Sunday or any other day on which Lender is not
open for business. Borrower shall not have the option to voluntarily prepay less
than all of the unpaid principal balance.
Upon Lender's exercise of any right of acceleration under this Note, Borrower
shall pay to Lender, in addition to the entire unpaid principal balance of this
Note outstanding at the time of the acceleration, (A) all accrued interest and
all other sums due Lender, and (B) the prepayment premium calculated pursuant to
Schedule A.
Any application by Lender of any collateral or other security to the repayment
of any portion of the unpaid principal balance of this Note prior to the
Maturity Date and in the absence of acceleration shall be deemed to be a partial
prepayment by Borrower, requiring the payment to Lender by Borrower of a
prepayment premium. The amount of any such partial prepayment shall be computed
so as to provide to Lender a prepayment premium computed pursuant to Schedule A
without Borrower having to pay out-of-pocket any additional amounts.
Notwithstanding the provisions of Paragraph 10(a), no prepayment premium
shall be payable with respect to (A) any prepayment made no more than 180 days
before the Maturity Date, or (B) any prepayment occurring as a result of the
application of any insurance proceeds or condemnation award under the Security
Instrument.
Schedule A is hereby incorporated by reference into this Note. Any permitted or
required prepayment of less than the unpaid principal balance of this Note shall
not extend or postpone the due date of any subsequent monthly installments or
change the amount of such installments, unless Lender agrees otherwise in
writing.
Borrower recognizes that any prepayment of the unpaid principal balance of
this Note, whether voluntary or involuntary or resulting from a default by
Borrower, will result in Lender's incurring loss, including reinvestment loss,
additional expense and frustration or impairment of Lender's ability to meet its
commitments to third parties. Borrower agrees to pay to Lender upon demand
damages for the detriment caused by any prepayment, and agrees that it is
extremely difficult and impractical to ascertain the extent of such damages.
Borrower therefore acknowledges and agrees that the formula for calculating
prepayment premiums set forth on Schedule A represents a reasonable estimate of
the damages Lender will incur because of a prepayment.
Borrower further acknowledges that the prepayment premium provisions of
this Note are a material part of the consideration for the Loan, and
acknowledges that the terms of this Note are in other respects more favorable to
Borrower as a result of the Borrower's voluntary agreement to the prepayment
premium provisions.
Costs and Expenses. Borrower shall pay all expenses and costs, including
fees and out-of-pocket expenses of attorneys and expert witnesses and costs of
investigation, incurred by Lender as a result of any default under this Note or
in connection with efforts to collect any amount due under this Note, or to
enforce the provisions of any of the other Loan Documents, including those
incurred in post-judgment collection efforts and in any bankruptcy proceeding
(including any action for relief from the automatic stay of any bankruptcy
proceeding) or judicial or non-judicial foreclosure proceeding.
Forbearance. Any forbearance by Lender in exercising any right or remedy
under this Note, the Security Instrument, or any other Loan Document or
otherwise afforded by applicable law, shall not be a waiver of or preclude the
exercise of that or any other right or remedy. The acceptance by Lender of any
payment after the due date of such payment, or in an amount which is less than
the required payment, shall not be a waiver of Lender's right to require prompt
payment when due of all other payments or to exercise any right or remedy with
respect to any failure to make prompt payment. Enforcement by Lender of any
security for Borrower's obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.
Waivers. Presentment, demand, notice of dishonor, protest, notice of
acceleration, notice of intent to demand or accelerate payment or maturity,
presentment for payment, notice of nonpayment, grace, and diligence in
collecting the Indebtedness are waived by Borrower and all endorsers and
guarantors of this Note and all other third party obligors.
Loan Charges. If any applicable law limiting the amount of interest or
other charges permitted to be collected from Borrower in connection with the
Loan is interpreted so that any interest or other charge provided for in any
Loan Document, whether considered separately or together with other charges
provided for in any other Loan Document, violates that law, and Borrower is
entitled to the benefit of that law, that interest or charge is hereby reduced
to the extent necessary to eliminate that violation. The amounts, if any,
previously paid to Lender in excess of the permitted amounts shall be applied by
Lender to reduce the unpaid principal balance of this Note. For the purpose of
determining whether any applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower has been violated, all
Indebtedness that constitutes interest, as well as all other charges made in
connection with the Indebtedness that constitute interest, shall be deemed to be
allocated and spread ratably over the stated term of the Note. Unless otherwise
required by applicable law, such allocation and spreading shall be effected in
such a manner that the rate of interest so computed is uniform throughout the
stated term of the Note.
Commercial Purpose. Borrower represents that the Indebtedness is being
incurred by Borrower solely for the purpose of carrying on a business or
commercial enterprise, and not for personal, family or household purposes.
Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not Business
Days.
Governing Law. This Note shall be governed by the law of the
jurisdiction in which the Land is located.
Captions. The captions of the paragraphs of this Note are for
convenience only and shall be disregarded in construing this Note.
Notices. All notices, demands and other communications required or
permitted to be given by Lender to Borrower pursuant to this Note shall be given
in accordance with Section 31 of the Security Instrument.
Consent to Jurisdiction and Venue. Borrower agrees that any controversy
arising under or in relation to this Note shall be litigated exclusively in the
jurisdiction in which the Land is located (the "Property Jurisdiction"). The
state and federal courts and authorities with jurisdiction in the Property
Jurisdiction shall have exclusive jurisdiction over all controversies which
shall arise under or in relation to this Note. Borrower irrevocably consents to
service, jurisdiction, and venue of such courts for any such litigation and
waives any other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise.
WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO ELECT
A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE
RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT
BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE
TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
ATTACHED SCHEDULES. The following Schedules are attached to this Note:
-----
X Schedule A Prepayment Premium (required)
-----
-----
X Schedule B Modifications to Multifamily Note
-----
IN WITNESS WHEREOF, Borrower has signed and delivered this Note or has
caused this Note to be signed and delivered by its duly authorized
representative.
SHELTER PROPERTIES V LIMITED PARTNERSHIP,
a South Carolina limited partnership
By: Shelter Realty V Corporation, a South Carolina corporation, its general
partner
By:
Patti K. Fielding
Vice President
57-0721855
Borrower's Social Security/Employer ID
Number
PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION, WITHOUT RECOURSE, AS
OF THIS ____ DAY OF NOVEMBER, 1999.
GMAC COMMERCIAL MORTGAGE
CORPORATION, a California
corporation
By:_________________________________
Donald W. Marshall
Vice President
<PAGE>
FHLMC Loan No. 002682494
MULTIFAMILY NOTE
(MULTISTATE)
US $7,200,000.00 As of October ____, 1999
FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally (if
more than one) promises to pay to the order of GMAC COMMERCIAL MORTGAGE
CORPORATION, a California corporation, the principal sum of Seven Million Two
Hundred Thousand and 00/100 Dollars (US $7,200,000.00), with interest on the
unpaid principal balance at the annual rate of _________________ percent
(-----------------%).
1. Defined Terms. As used in this Note, (i) the term "Lender" means the
holder of this Note, and (ii) the term "Indebtedness" means the
principal of, interest on, or any other amounts due at any time under,
this Note, the Security Instrument or any other Loan Document,
including prepayment premiums, late charges, default interest, and
advances to protect the security of the Security Instrument under
Section 12 of the Security Instrument. "Event of Default" and other
capitalized terms used but not defined in this Note shall have the
meanings given to such terms in the Security Instrument.
2. Address for Payment. All payments due under this Note shall be payable at 650
Dresher Road, P.O. Box 1015, Horsham, Pennsylvania 19044-8015, Attn: Servicing -
Account Manager, or such other place as may be designated by written notice to
Borrower from or on behalf of Lender. 3. Payment of Principal and Interest.
Principal and interest shall be paid as follows: 4. Unless disbursement of
principal is made by Lender to Borrower on the first day of the month, interest
for the period beginning on the date of disbursement and ending on and including
the last day of the month in which such disbursement is made shall be payable
simultaneously with the execution of this Note. Interest under this Note shall
be computed on the basis of a 360-day year consisting of twelve 30-day months.
5. Consecutive monthly installments of principal and interest, each in the
amount of _________________ (US $_________________), shall be payable
on the first day of each month beginning on December 1, 1999, until the
entire unpaid principal balance evidenced by this Note is fully paid.
Any accrued interest remaining past due for 30 days or more shall be
added to and become part of the unpaid principal balance and shall bear
interest at the rate or rates specified in this Note, and any reference
below to "accrued interest" shall refer to accrued interest which has
not become part of the unpaid principal balance. Any remaining
principal and interest shall be due and payable on November 1, 2019 or
on any earlier date on which the unpaid principal balance of this Note
becomes due and payable, by acceleration or otherwise (the "Maturity
Date"). The unpaid principal balance shall continue to bear interest
after the Maturity Date at the Default Rate set forth in this Note
until and including the date on which it is paid in full.
6. Any regularly scheduled monthly installment of principal and interest that
is received by Lender before the date it is due shall be deemed to have
been received on the due date solely for the purpose of calculating
interest due.
7. Application of Payments. If at any time Lender receives, from Borrower
or otherwise, any amount applicable to the Indebtedness which is less
than all amounts due and payable at such time, Lender may apply that
payment to amounts then due and payable in any manner and in any order
determined by Lender, in Lender's discretion. Borrower agrees that
neither Lender's acceptance of a payment from Borrower in an amount
that is less than all amounts then due and payable nor Lender's
application of such payment shall constitute or be deemed to constitute
either a waiver of the unpaid amounts or an accord and satisfaction.
8. Security. The Indebtedness is secured, among other things, by a
multifamily mortgage, deed to secure debt or deed of trust dated as of the
date of this Note (the "Security Instrument"), and reference is made to
the Security Instrument for other rights of Lender as to collateral for
the Indebtedness.
9. Acceleration. If an Event of Default has occurred and is continuing, the
entire unpaid principal balance, any accrued interest, the prepayment
premium payable under Paragraph 10, if any, and all other amounts payable
under this Note and any other Loan Document shall at once become due and
payable, at the option of Lender, without any prior notice to Borrower.
Lender may exercise this option to accelerate regardless of any prior
forbearance.
10. Late Charge. If any monthly amount payable under this Note or under
the Security Instrument or any other Loan Document is not received by
Lender within ten (10) days after the amount is due, Borrower shall pay
to Lender, immediately and without demand by Lender, a late charge
equal to five percent (5%) of such amount. Borrower acknowledges that
its failure to make timely payments will cause Lender to incur
additional expenses in servicing and processing the loan evidenced by
this Note (the "Loan"), and that it is extremely difficult and
impractical to determine those additional expenses. Borrower agrees
that the late charge payable pursuant to this Paragraph represents a
fair and reasonable estimate, taking into account all circumstances
existing on the date of this Note, of the additional expenses Lender
will incur by reason of such late payment. The late charge is payable
in addition to, and not in lieu of, any interest payable at the Default
Rate pursuant to Paragraph 8.
11. Default Rate. So long as (a) any monthly installment under this Note
remains past due for 30 days or more, or (b) any other Event of Default
has occurred and is continuing, interest under this Note shall accrue
on the unpaid principal balance from the earlier of the due date of the
first unpaid monthly installment or the occurrence of such other Event
of Default, as applicable, at a rate (the "Default Rate") equal to the
lesser of 4 percentage points above the rate stated in the first
paragraph of this Note or the maximum interest rate which may be
collected from Borrower under applicable law. If the unpaid principal
balance and all accrued interest are not paid in full on the Maturity
Date, the unpaid principal balance and all accrued interest shall bear
interest from the Maturity Date at the Default Rate. Borrower also
acknowledges that its failure to make timely payments will cause Lender
to incur additional expenses in servicing and processing the Loan,
that, during the time that any monthly installment under this Note is
delinquent for more than 30 days, Lender will incur additional costs
and expenses arising from its loss of the use of the money due and from
the adverse impact on Lender's ability to meet its other obligations
and to take advantage of other investment opportunities, and that it is
extremely difficult and impractical to determine those additional costs
and expenses. Borrower also acknowledges that, during the time that
any monthly installment under this Note is delinquent for more than 30
days or any other Event of Default has occurred and is continuing,
Lender's risk of nonpayment of this Note will be materially increased
and Lender is entitled to be compensated for such increased risk.
Borrower agrees that the increase in the rate of interest payable under
this Note to the Default Rate represents a fair and reasonable
estimate, taking into account all circumstances existing on the date of
this Note, of the additional costs and expenses Lender will incur by
reason of the Borrower's delinquent payment and the additional
compensation Lender is entitled to receive for the increased risks of
nonpayment associated with a delinquent loan.
12. Limits on Personal Liability.
13. Except as otherwise provided in this Paragraph 9, Borrower shall have
no personal liability under this Note, the Security Instrument or any
other Loan Document for the repayment of the Indebtedness or for the
performance of any other obligations of Borrower under the Loan
Documents, and Lender's only recourse for the satisfaction of the
Indebtedness and the performance of such obligations shall be Lender's
exercise of its rights and remedies with respect to the Mortgaged
Property and any other collateral held by Lender as security for the
Indebtedness. This limitation on Borrower's liability shall not limit
or impair Lender's enforcement of its rights against any guarantor of
the Indebtedness or any guarantor of any obligations of Borrower.
14. Borrower shall be personally liable to Lender for the repayment of a
portion of the Indebtedness equal to zero percent (0%) of the original
principal balance of this Note, plus any other amounts for which Borrower
has personal liability under this Paragraph 9.
15. In addition to Borrower's personal liability under Paragraph 9(b),
Borrower shall be personally liable to Lender for the repayment of a
further portion of the Indebtedness equal to any loss or damage
suffered by Lender as a result of (1) failure of Borrower to pay to
Lender upon demand after an Event of Default all Rents to which Lender
is entitled under Section 3(a) of the Security Instrument and the
amount of all security deposits collected by Borrower from tenants then
in residence; (2) failure of Borrower to apply all insurance proceeds
and condemnation proceeds as required by the Security Instrument; or
(3) failure of Borrower to comply with Section 14(d) or (e) of the
Security Instrument relating to the delivery of books and records,
statements, schedules and reports.
16. For purposes of determining Borrower's personal liability under Paragraph
9(b) and Paragraph 9(c), all payments made by Borrower or any guarantor of
this Note with respect to the Indebtedness and all amounts received by
Lender from the enforcement of its rights under the Security Instrument
shall be applied first to the portion of the Indebtedness for which
Borrower has no personal liability.
17. Borrower shall become personally liable to Lender for the repayment of
all of the Indebtedness upon the occurrence of any of the following
Events of Default: (1) Borrower's acquisition of any property or
operation of any business not permitted by Section 33 of the Security
Instrument; (2) a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under Section 21 of the
Security Instrument, other than a Transfer consisting solely of the
involuntary removal or involuntary withdrawal of a general partner in a
limited partnership or a manager in a limited liability company; or (3)
fraud or written material misrepresentation by Borrower or any officer,
director, partner, member or employee of Borrower in connection with
the application for or creation of the Indebtedness or any request for
any action or consent by Lender.
18. In addition to any personal liability for the Indebtedness, Borrower
shall be personally liable to Lender for (1) the performance of all of
Borrower's obligations under Section 18 of the Security Instrument
(relating to environmental matters); (2) the costs of any audit under
Section 14(d) of the Security Instrument; and (3) any costs and
expenses incurred by Lender in connection with the collection of any
amount for which Borrower is personally liable under this Paragraph 9,
including fees and out of pocket expenses of attorneys and expert
witnesses and the costs of conducting any independent audit of
Borrower's books and records to determine the amount for which Borrower
has personal liability.
19. To the extent that Borrower has personal liability under this Paragraph
9, Lender may exercise its rights against Borrower personally without
regard to whether Lender has exercised any rights against the Mortgaged
Property or any other security, or pursued any rights against any
guarantor, or pursued any other rights available to Lender under this
Note, the Security Instrument, any other Loan Document or applicable
law. For purposes of this Paragraph 9, the term "Mortgaged Property"
shall not include any funds that (1) have been applied by Borrower as
required or permitted by the Security Instrument prior to the
occurrence of an Event of Default or (2) Borrower was unable to apply
as required or permitted by the Security Instrument because of a
bankruptcy, receivership, or similar judicial proceeding.
20. Voluntary and Involuntary Prepayments.
21. A prepayment premium shall be payable in connection with any prepayment
made under this Note as provided below:
22. Borrower may voluntarily prepay all of the unpaid principal balance of
this Note on the last Business Day of a calendar month if Borrower has
given Lender at least 30 days prior notice of its intention to make
such prepayment. Such prepayment shall be made by paying (A) the
amount of principal being prepaid, (B) all accrued interest, (C) all
other sums due Lender at the time of such prepayment, and (D) the
prepayment premium calculated pursuant to Schedule A. For all purposes
including the accrual of interest, any prepayment received by Lender on
any day other than the last calendar day of the month shall be deemed
to have been received on the last calendar day of such month. For
purposes of this Note, a "Business Day" means any day other than a
Saturday, Sunday or any other day on which Lender is not open for
business. Borrower shall not have the option to voluntarily prepay
less than all of the unpaid principal balance.
23. Upon Lender's exercise of any right of acceleration under this Note,
Borrower shall pay to Lender, in addition to the entire unpaid principal
balance of this Note outstanding at the time of the acceleration, (A) all
accrued interest and all other sums due Lender, and (B) the prepayment
premium calculated pursuant to Schedule A.
24. Any application by Lender of any collateral or other security to the
repayment of any portion of the unpaid principal balance of this Note
prior to the Maturity Date and in the absence of acceleration shall be
deemed to be a partial prepayment by Borrower, requiring the payment to
Lender by Borrower of a prepayment premium. The amount of any such
partial prepayment shall be computed so as to provide to Lender a
prepayment premium computed pursuant to Schedule A without Borrower
having to pay out-of-pocket any additional amounts.
25. Notwithstanding the provisions of Paragraph 10(a), no prepayment premium
shall be payable with respect to (A) any prepayment made no more than 180
days before the Maturity Date, or (B) any prepayment occurring as a result
of the application of any insurance proceeds or condemnation award under
the Security Instrument.
26. Schedule A is hereby incorporated by reference into this Note.
27. Any permitted or required prepayment of less than the unpaid principal
balance of this Note shall not extend or postpone the due date of any
subsequent monthly installments or change the amount of such installments,
unless Lender agrees otherwise in writing.
28. Borrower recognizes that any prepayment of the unpaid principal balance
of this Note, whether voluntary or involuntary or resulting from a
default by Borrower, will result in Lender's incurring loss, including
reinvestment loss, additional expense and frustration or impairment of
Lender's ability to meet its commitments to third parties. Borrower
agrees to pay to Lender upon demand damages for the detriment caused by
any prepayment, and agrees that it is extremely difficult and
impractical to ascertain the extent of such damages. Borrower
therefore acknowledges and agrees that the formula for calculating
prepayment premiums set forth on Schedule A represents a reasonable
estimate of the damages Lender will incur because of a prepayment.
29. Borrower further acknowledges that the prepayment premium provisions of
this Note are a material part of the consideration for the Loan, and
acknowledges that the terms of this Note are in other respects more
favorable to Borrower as a result of the Borrower's voluntary agreement to
the prepayment premium provisions.
30. Costs and Expenses. Borrower shall pay all expenses and costs,
including fees and out-of-pocket expenses of attorneys and expert
witnesses and costs of investigation, incurred by Lender as a result of
any default under this Note or in connection with efforts to collect
any amount due under this Note, or to enforce the provisions of any of
the other Loan Documents, including those incurred in post-judgment
collection efforts and in any bankruptcy proceeding (including any
action for relief from the automatic stay of any bankruptcy proceeding)
or judicial or non-judicial foreclosure proceeding.
31. Forbearance. Any forbearance by Lender in exercising any right or
remedy under this Note, the Security Instrument, or any other Loan
Document or otherwise afforded by applicable law, shall not be a waiver
of or preclude the exercise of that or any other right or remedy. The
acceptance by Lender of any payment after the due date of such payment,
or in an amount which is less than the required payment, shall not be a
waiver of Lender's right to require prompt payment when due of all
other payments or to exercise any right or remedy with respect to any
failure to make prompt payment. Enforcement by Lender of any security
for Borrower's obligations under this Note shall not constitute an
election by Lender of remedies so as to preclude the exercise of any
other right or remedy available to Lender.
32. Waivers. Presentment, demand, notice of dishonor, protest, notice of
acceleration, notice of intent to demand or accelerate payment or
maturity, presentment for payment, notice of nonpayment, grace, and
diligence in collecting the Indebtedness are waived by Borrower and all
endorsers and guarantors of this Note and all other third party obligors.
33. Loan Charges. If any applicable law limiting the amount of interest or
other charges permitted to be collected from Borrower in connection
with the Loan is interpreted so that any interest or other charge
provided for in any Loan Document, whether considered separately or
together with other charges provided for in any other Loan Document,
violates that law, and Borrower is entitled to the benefit of that law,
that interest or charge is hereby reduced to the extent necessary to
eliminate that violation. The amounts, if any, previously paid to
Lender in excess of the permitted amounts shall be applied by Lender to
reduce the unpaid principal balance of this Note. For the purpose of
determining whether any applicable law limiting the amount of interest
or other charges permitted to be collected from Borrower has been
violated, all Indebtedness that constitutes interest, as well as all
other charges made in connection with the Indebtedness that constitute
interest, shall be deemed to be allocated and spread ratably over the
stated term of the Note. Unless otherwise required by applicable law,
such allocation and spreading shall be effected in such a manner that
the rate of interest so computed is uniform throughout the stated term
of the Note.
34. Commercial Purpose. Borrower represents that the Indebtedness is being
incurred by Borrower solely for the purpose of carrying on a business
or commercial enterprise, and not for personal, family or household
purposes.
35. Counting of Days. Except where otherwise specifically provided, any
reference in this Note to a period of "days" means calendar days, not
Business Days.
36. Governing Law. This Note shall be governed by the law of the
jurisdiction in which the Land is located.
37. Captions. The captions of the paragraphs of this Note are for
convenience only and shall be disregarded in construing this Note.
38. Notices. All notices, demands and other communications required or
permitted to be given by Lender to Borrower pursuant to this Note shall
be given in accordance with Section 31 of the Security Instrument.
39. Consent to Jurisdiction and Venue. Borrower agrees that any
controversy arising under or in relation to this Note shall be
litigated exclusively in the jurisdiction in which the Land is located
(the "Property Jurisdiction"). The state and federal courts and
authorities with jurisdiction in the Property Jurisdiction shall have
exclusive jurisdiction over all controversies which shall arise under
or in relation to this Note. Borrower irrevocably consents to service,
jurisdiction, and venue of such courts for any such litigation and
waives any other venue to which it might be entitled by virtue of
domicile, habitual residence or otherwise.
40. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (A) AGREES NOT TO
ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS
NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER
THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY
JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT
EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE
BENEFIT OF COMPETENT LEGAL COUNSEL.
ATTACHED SCHEDULES. The following Schedules are attached to this Note:
-----
X Schedule A Prepayment Premium (required)
-----
-----
X Schedule B Modifications to Multifamily Note
-----
IN WITNESS WHEREOF, Borrower has signed and delivered this Note or has
caused this Note to be signed and delivered by its duly authorized
representative.
FOXFIRE APARTMENTS V LIMITED PARTNERSHIP,
a South Carolina limited partnership
By: Shelter V GP-SC Limited Partnership,
a South Carolina limited partnership,
its general partner
By: Shelter Realty V Corporation,
a South Carolina corporation,
its general partner
By: ___________________________
Name:
Title:
57-0961710
Borrower's Social Security/Employer ID
Number
PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION, WITHOUT RECOURSE,
THIS ____ DAY OF OCTOBER, 1999.
GMAC COMMERCIAL MORTGAGE
CORPORATION, a California
corporation
By:_________________________________
Donald W. Marshall
Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Shelter
Properties V 1999 Fourth Quarter 10-KSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000712753
<NAME> Shelter Properties V
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 7795
<SECURITIES> 0
<RECEIVABLES> 3457
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 941 <F1>
<PP&E> 75,961
<DEPRECIATION> 44,076
<TOTAL-ASSETS> 45,036
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 37,222
0
0
<COMMON> (4261)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 45,036
<SALES> 0
<TOTAL-REVENUES> 14,649
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,718
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (150)
<CHANGES> 0
<NET-INCOME> 1,965
<EPS-BASIC> 37.02 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
