SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 2-85270
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BALCOR EQUITY PENSION INVESTORS-I
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(Exact name of registrant as specified in its charter)
Illinois 36-3240345
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Balcor Plaza
4849 Golf Road, Skokie, Illinois 60077-9894
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
ASSETS
1995 1994
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Cash and cash equivalents $ 7,847,834 $ 7,207,000
Accounts and accrued interest receivable 251,867 164,885
Prepaid expenses 126,339 70,119
Deferred expenses, net of accumulated
amortization of $494,318 in 1995 and
and $467,624 in 1994 328,602 355,296
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8,554,642 7,797,300
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Investment in real estate
Land 10,753,713 10,753,713
Buildings and improvements 93,671,997 93,613,603
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104,425,710 104,367,316
Less accumulated depreciation 38,371,471 37,467,239
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Investment in real estate, net
of accumulated depreciation 66,054,239 66,900,077
Investment in loan receivable 4,092,122 4,135,341
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70,146,361 71,035,418
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$ 78,701,003 $ 78,832,718
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 214,459 $ 211,676
Due to affiliates 147,467 102,217
Accrued real estate taxes 275,777 203,187
Escrow liabilities 30,573 16,088
Security deposits 507,156 512,606
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Total liabilities 1,175,432 1,045,774
Affiliate's participation in joint venture 1,515,309 1,482,721
Partners' capital (359,229 Limited
Partnership Interests issued and
outstanding) 76,010,262 76,304,223
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$ 78,701,003 $ 78,832,718
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental $ 3,625,995 $ 3,599,922
Service 411,444 539,917
Interest on short-term investments 112,072 71,159
Interest on loan receivable 51,494 53,693
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Total income 4,201,005 4,264,691
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Expenses:
Depreciation 904,232 891,417
Amortization of deferred expenses 26,694 26,376
Property operating 1,604,282 2,081,891
Real estate taxes 331,425 354,704
Property management fees 170,047 175,357
Administrative 139,767 217,028
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Total expenses 3,176,447 3,746,773
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Income before participation in
joint venture 1,024,558 517,918
Affiliate's participation in (income) loss
from joint venture (32,588) 21,330
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Net income $ 991,970 $ 539,248
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Net income allocated to General Partner $ 181,688 $ 135,255
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Net income allocated to Limited Partners $ 810,282 $ 403,993
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Net income per Limited Partnership
Interest (359,229 issued and outstanding) $ 2.26 $ 1.12
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Distribution to General Partner $ 128,593 $ 128,593
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Distribution to Limited Partners $ 1,157,338 $ 1,157,338
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Distribution per Limited Partnership
Interest:
Taxable $ 2.50 $ 2.50
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Tax-exempt $ 3.33 $ 3.33
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
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Operating activities:
Net income $ 991,970 $ 539,248
Adjustments to reconcile net income
to net cash provided by operating
activities:
Affiliate's participation in income
(loss) from joint venture 32,588 (21,330)
Depreciation of properties 904,232 891,417
Amortization of deferred expenses 26,694 26,376
Net change in:
Accounts and accrued interest
receivable (86,982) 42,492
Prepaid expenses (56,220) (32,114)
Accounts payable 2,783 (585,833)
Due to affiliates 45,250 118,741
Accrued real estate taxes 72,590 44,646
Escrow liabilities 14,485 18,576
Security deposits (5,450) 7,991
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Net cash provided by operating activities 1,941,940 1,050,210
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Investing activities:
Collection of principal payments on loan
receivable 43,219 41,020
Improvements to properties (58,394) (350,996)
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Net cash used in investing
activities (15,175) (309,976)
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Financing activities:
Distribution to Limited Partners (1,157,338) (1,157,338)
Distribution to General Partner (128,593) (128,593)
Capital contributions from joint venture
partner - affiliate 39,600
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Net cash used in financing activities (1,285,931) (1,246,331)
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Net change in cash and cash equivalents 640,834 (506,097)
Cash and cash equivalents at beginning
of period 7,207,000 8,252,048
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Cash and cash equivalents at end of period $ 7,847,834 $ 7,745,951
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1995, and all such adjustments are of a normal and recurring nature.
2. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
three months ended March 31, 1995 are:
Paid Payable
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Mortgage servicing fees $2,406 $ 802
Reimbursement of expenses to
the General Partner, at cost None 146,665
3. Subsequent Event:
In April 1995, the Partnership paid $1,157,338 ($2.50 per Taxable Interest and
$3.33 per Tax-exempt Interest) to the holders of Limited Partnership Interests
representing the quarterly distribution for the first quarter of 1995.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Equity Pension Investors-I (the "Partnership") is a limited partnership
formed in 1983 to make first mortgage loans and to invest in and operate
income-producing real property. The Partnership raised $179,614,500 from sales
of Limited Partnership Interests and utilized these proceeds to fund six loans
and acquire three real property investments. The Partnership accepted deeds in
lieu of foreclosure on two of the loans, acquired one of its collateral
properties at a foreclosure sale, and accepted prepayments on two additional
loans. As of March 31, 1995, the Partnership has one loan and operates six
properties.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1994 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Net Income
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Reduced tenant expenditures at several of the Partnership's properties during
the first three months of 1995 resulted in decreased property operating
expenses. This is the primary reason net income increased during the quarter
ended March 31, 1995 as compared to the same period in 1994.
1995 Compared to 1994
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A decrease in common area maintenance reimbursements from tenants at the 8280
Greensboro Drive Office Building resulted in lower service income for the
quarter ended March 31, 1995 as compared to the same period in 1994.
The Fairview Plaza III Office Building loan is on non-accrual status, whereby
income is recorded only as cash payments are received from the borrower.
Pursuant to the terms of the January 1992 modification of the loan, the
Partnership received payments totaling approximately $97,000 during each of the
quarters ended March 31, 1995 and 1994. Of the amounts received, approximately
$54,000 was recorded as interest income and $43,000 as a principal reduction in
1995, and approximately $56,000 as interest income and $41,000 as a principal
reduction in 1994. Interest income is presented net of mortgage servicing fees
in the financial statements.
Due to higher interest rates earned on short-term investments during 1995,
interest income on short-term investments increased during the quarter ended
March 31, 1995 as compared to the same period in 1994.
<PAGE>
Decreased tenant expenditures and utility expenses at the Pacific Center, GSB
and 8280 Greensboro Drive office buildings as well as decreased snow removal
and janitorial expenses at the GSB Office Building resulted in a decrease in
property operating expenses during the quarter ended March 31, 1995 as compared
to the same period in 1994. The Pacific Center Office Buildings generated
income as a result of lower property operating expenses which resulted in
affiliate's participation in income from joint venture for the quarter ended
March 31, 1995 as compared to a loss during the same period in 1994.
Due to decreases in portfolio management and other professional fees,
administrative expenses decreased during the quarter ended March 31, 1995 as
compared to the same period in 1994.
Liquidity and Capital Resources
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The cash position of the Partnership increased at March 31, 1995 when compared
to December 31, 1994. The Partnership's cash flow provided by operating
activities during 1995 was generated from the operation of the Partnership's
properties and from interest income received on the Fairview Plaza III loan and
short-term investments, which were partially offset by the payment of
administrative expenses. The Partnership used the cash flow provided by
operating activities to fund investing activities, which consisted of
improvements to the Park Center Office Building, which was partially offset by
the collection of principal payments received on the Fairview Plaza III loan,
and to fund financing activities which consisted of distributions to Limited
Partners and the General Partner.
The Partnership defines cash flow generated from its properties as an amount
equal to the property's revenue receipts less property related expenditures.
During the first quarter of 1995, all six of the Partnership's properties
generated positive cash flow. During the quarter ended March 31, 1994, five of
the Partnership's six properties generated positive cash flow while the Pacific
Center Office Building generated a marginal cash flow deficit. The improvement
in cash flow at the Pacific Center Office Building was primarily due to
decreased tenant and utility costs. Many rental markets continue to remain
extremely competitive; therefore, the General Partner's goals are to maintain
high occupancy levels while increasing rents where possible and to monitor and
control operating expenses and capital improvement requirements at the
properties. As of March 31, 1995, the occupancy rates of the Partnership's
residential properties ranged from 88% to 93% and the commercial properties
ranged from 89% to 100%.
In April 1995, the Partnership paid $1,157,338 ($2.50 per Taxable Interest and
$3.33 per Tax-exempt Interest) to Limited Partners, representing the quarterly
distribution for the first quarter of 1995. The level of this distribution was
consistent with the amount distributed for the fourth quarter of 1994. To date,
Limited Partners have received distributions aggregating approximately $224 per
$500 Taxable Interest and $316 per $500 Tax-exempt Interest, including the
April 1995 distribution. The General Partner expects that the cash flow from
property operations and debt service payments on the mortgage loan should
enable the Partnership to continue making quarterly distributions to Limited
Partners. Due to capital improvement programs planned for several of the
Partnership's properties and significant leasing costs expected to be incurred
at two of the Partnership's office buildings, the General Partner anticipates
temporarily decreasing the regular quarterly distribution level later this year
in order to meet the capital requirements of the Partnership's assets.
<PAGE>
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-I
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
(4) Certificate of Limited Partnership set forth as Exhibit 4.1 to Amendment
No. 2 to the Registrant's Registration Statement on Form S-11 dated October 4,
1983 (Registration No. 2-85270) and Form of Confirmation regarding Interests in
the Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q
for the quarter ended June 30, 1992 (Commission File No. 2-85270) are
incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the three month period
ending March 31, 1995 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended March 31, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR EQUITY PENSION INVESTORS-I
By: /s/Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Equity Partners-I, the General Partner
By: /s/Brian Parker
------------------------------
Brian Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Equity Partners-I, the
General Partner
Date: May 15, 1995
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<PAGE>
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