SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
(Amendment No. 1)
BALCOR EQUITY PENSION INVESTORS-I
(Name of Subject Company)
BALCOR EQUITY PENSION INVESTORS-I
(Name of Person(s) Filing Statement)
Limited Partnership Interests
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Thomas E. Meador
Chairman
The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
(847) 267-1600
(Name, Address and Telephone Number of Persons Authorized to Receive Notice
and Communications on Behalf of the Person(s) Filing Statement)
Copy To:
Herbert S. Wander
Lawrence D. Levin
Katten Muchin & Zavis
Suite 1600
525 West Monroe Street
Chicago, Illinois 60661-3693
(312) 902-5200
<PAGE>
This Amendment No. 1 to Schedule 14D-9 amends the Schedule 14D-9 (the
"Schedule 14D-9") filed by Balcor Equity Pension Investors-I, an Illinois
limited partnership (the "Partnership"), filed with the Securities and Exchange
Commission on May 28, 1996. All capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to such terms in the
Schedule 14D-9.
Item 9. Material to be Filed as Exhibits
Item 9 hereby is amended by removing "5. (c)(4) The Darby Valuation
Report [to be filed by amendment]" and substituting in its place "5. (c)(4)
The Darby Valuation Report"
Signature. After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: June 4, 1996 BALCOR EQUITY PENSION
INVESTORS-I
By: Balcor Equity Partners-I, its
general partner
By: The Balcor Company, a
general partner
By: /s/Thomas E. Meador
---------------------------
Thomas E. Meador, Chairman
<PAGE>
APPRAISAL OF
A TAX-EXEMPT LIMITED PARTNERSHIP INTEREST
AND
A TAXABLE LIMITED PARTNERSHIP INTEREST
IN
BALCOR EQUITY PENSION INVESTORS - I
(BEPI - I)
SKOKIE, ILLINOIS
AS OF MARCH 31, 1996
Valuation Counselors
<PAGE>
May 8, 1996
Balcor Equity Partners - I
The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road, Suite A200
Bannockburn, Illinois 60015
Attn: Mr. John K. Powell, Jr. - First Vice President
Gentlemen:
In accordance with your request, we are pleased to submit our opinion of the
Value of a Tax-Exempt Limited Partnership Interest and a Taxable Limited
Partnership Interest in:
Balcor Equity Pension Investors - I
(An Illinois Limited Partnership)
as of March 31, 1996.
The term "Value" is defined as follows:
The amount, in dollars, which a Limited Partnership Interest in Balcor
Equity Pension Investors - I is worth to an investor who owns the Interest
with the intention of holding it to maturity, who fully understands the
complexities of the investment, and has an interest in the potential
interest income and capital appreciation of the Limited Partnership
Interest. The valuation does not represent the amount that would be
received by a holder of a Limited Partnership Interest should he/she
decide to liquidate the Interest prior to the maturity of the Partnership.
The value is subject to the terms and conditions set forth in this report.
The Partnership is forecasted to close at the end of the year 2004.
Based on our analyses and conclusions set forth in this report, the estimated
Value of the Limited Partnership Interests in Balcor Equity Pension Investors -
I, as of March 31, 1996, was in the rounded amount of:
Adjusted
Original
Capital
3/31/96
1. Tax-Exempt Limited Partnership
Interest $326.00 $464.01
2. Taxable Limited Partnership
Interest $170.00 $487.01
As of March 31, 1996, the Tax-Exempt Limited Partners have received $35.99 as a
return of capital and the Taxable Limited Partners, $12.99.
<PAGE>
For the quarter ended March 31, 1996, the value of a Tax-Exempt Limited
Partnership Interest increased $4.00 based on an increase in cash and the value
of a Taxable Limited Partnership Interest increased $1.00.
For the quarter ended December 31, 1995, the value of a Tax-Exempt Limited
Partnership Interest increased $1.00 whereas a Taxable Limited Partnership
Interest decreased $8.00. The disparity between the Tax-Exempt Limited
Partnership Interest and Taxable Limited Partnership Interest is the result of
the preferential allocation of the proceeds from the payoff of the Fairview III
mortgage loan. There are no remaining mortgage loans in this Partnership.
For the quarter ended September 30, 1995, the value of a Tax-Exempt Limited
Partnership Interest increased $4.00 and a Taxable Limited Partnership Interest
$2.00.
For the quarter ended June 30, 1995, the value of a Tax-Exempt Limited
Partnership Interest increased $5.00 and a Taxable Limited Partnership Interest
increased $2.00.
For the quarter ended December 31, 1992, the value of a Tax-Exempt Limited
Partnership Interest decreased $28.82, whereas the value of a Taxable Limited
Partnership Interest decreased $54.88. The reduction in value mainly was the
result of a reduction of $8,837,000 in the Real Estate Investments and more
particularly, a major drop in the value of the GSB Building. The increased
differential in value between the Tax-Exempt and Taxable Limited Partnership
Interests was the result of a reallocation of excess proceeds to return capital
to the Tax-Exempt Limited Partnership Interests prior to the Taxable Limited
Partnership Interests.
The Hickory Creek Apartments mortgage loan was paid off in the amount of
$12,565,810.50 on August 16, 1989, and the Fairview Plaza III Office Building
mortgage loan was modified for the quarter ended June 30, 1989. Fairview
subsequently was modified in the quarter ended March 31, 1992, which included a
$2.4 million cash paydown and forgiveness of $3.75 million of the outstanding
principal balance.
In June 1987, an additional $7,000,000 was lent on the Tyson's Corner Office
Building bringing the total outstanding to $35,500,000. The overall rate on the
mortgage loan was reduced to 12%, 10% cash and 2% accrued. This was a reduced
yield from the previous loan and was the main cause of the valuation
reduction for the quarter ended June 30, 1987. The value of the Tyson's Corner
Office Building was reduced by $2.2 million to $40.0 million in the quarter
ended December 31, 1989. On December 10, 1990, Balcor acquired title to the
property and it is valued, as of March 31, 1996, at $25,845,724 based on its
cash flow. Park Center Office Building is included at its cash flow value of
$8,300,472.
<PAGE>
The quarter ending June 30, 1987, valuation included adjustments of the cash
flow for a vacancy problem at the Pacific Center Office Buildings located in
Dallas, and the conversion of the Oxford Square Apartments loan and Park Center
Office Building loan to equity ownerships through receiving deeds in lieu of
foreclosure. In addition it included the results derived from the partial
prepayment on April 1, 1987 of $13,775,000 of the Butterfield Centre Office
Building mortgage loan, including a continuing interest in the loan of
$1,225,000. On November 15, 1988 the balance of the Butterfield Centre Office
Building mortgage loan was prepaid in the amount of $2,702,246, consisting of
funds advanced of $1,225,000, accrued and unpaid interest of $877,246 and a
prepayment premium of $600,000.
On December 22, 1995, the Partnership received $3,869,690 for payment in full
of the Fairview III mortgage loan. There no longer are any mortgage loans in
the Partnership.
In valuations of Balcor Equity Pension Investors - I prior to the quarter
ending March 31, 1986, all components of income and expense which had tax
consequences from an investment in the Partnership were adjusted for an
estimated 40% tax rate. Commencing with the valuation, as of March 31, 1986,
the revised valuation method included only the net tax benefit from the
depreciation of the equity investments since this is a unique advantage of
investing in real estate.
Because of the many potential permutations and combinations of tax benefits
available and/or not available to the taxable investor under current tax
legislation, any tax benefits have been excluded from the calculation of the
value per interest. The Partnership will provide the tax benefit data to the
taxable investor in order for the owner of the Partnership Interest to apply it
to his or her individual tax situation.
A copy of this report is retained in our files, together with the information
from which the report was compiled.
Respectfully submitted,
/s/Raymond Ghelardi /s/Clement H. Darby
Valuation Counselors Group, Inc. Darby & Associates
Raymond Ghelardi Clement H. Darby
Managing Director President
REG/CHD/ded
cc: Mr. David P. Bennett
Ms. Mary J. Mojica
Ms. Jayne Kosik
Ms. Jane Cody
<PAGE>
TABLE OF CONTENTS
Statement of Facts and Limiting Conditions
Introduction
Distributions to Limited Partners
Description of the Assets
Valuation of a Limited Partnership Interest
Discussion of Risk Rates
Valuation of the Equity Investments In Real Estate
and Real Estate Owned Investments
Valuation of the Offering Expenses and Loan Fees
Conclusion of Value
Schedule
A-1 Balance Sheet - March 31, 1996
A-2 Statements of Income and Expenses for the quarters
ended March 31, 1996 and 1995
A-3 Statements of Cash Flows for the quarters ended
March 31, 1996 and 1995
B-1 Cash Flow From Operations
B-2 Calculation of Excess Net Cash Proceeds and
Excess Net Cash Receipts
B-3 Discounted Cash Flow Analysis
C Valuation Summary
<PAGE>
STATEMENT OF FACTS AND LIMITING CONDITIONS
Valuation Counselors Group, Inc./Darby & Associates Joint Venture strives to
clearly and accurately disclose the assumptions and limiting conditions that
directly affect an appraisal analysis, opinion or conclusion. In order to
assist the reader in interpreting this report, such assumptions are set forth
as follows:
Valuation Counselors Group, Inc./Darby & Associates Joint Venture reserves the
right to make adjustments to the analysis, opinion and conclusions set forth in
the report as deemed necessary by consideration of additional or more reliable
data that subsequently may become available.
No opinion is rendered as to legal fee, property title or mortgage notes
related to the appraised assets, which are assumed to be good and marketable.
It is assumed that no opinion is intended in matters that require legal,
engineering or other professional advice which has been or will be obtained
from professional sources; the valuation report will not be used for guidance
in professional matters exclusive of the appraisal and valuation discipline.
Information furnished by others is presumed to be reliable, and where so
specified in the report, has been verified; however, no responsibility, whether
legal or otherwise, is assumed for its accuracy and cannot be guaranteed as
being certain. All facts and data set forth in the report are true and accurate
to the best of the Appraiser's knowledge and belief. No single item of
information was completely relied upon to the exclusion of other information.
All financial data, operating histories, forecasts, allocations to Tax-Exempt
and Taxable Limited Partnership Interests and other data relating to income and
expenses attributed to the assets and the Partnerships have been provided by
Management or its representatives and have been accepted without further
verification except as specifically stated in the report.
It should be specifically noted that the valuation assumes the appraised assets
will be competently managed and maintained by financially sound owners over the
expected period of ownership except where noted, specifically in assets during
the period of foreclosure where Balcor may not have control. This appraisal
engagement does not entail an evaluation of management's effectiveness, nor are
we responsible for future marketing efforts and other management or ownership
actions upon which actual results will depend.
Neither the report nor any portions thereof, especially any conclusions as to
value, the identity of the appraiser or Valuation Counselors Group, Inc./Darby
& Associates Joint Venture shall be disseminated to the public through public
relations media, news media, sales media, prospectus or any other public means
of communications without the prior written consent and approval of Valuation
Counselors Group, Inc./Darby & Associates Joint Venture. The date of the
valuation to which the value estimate conclusion applies is set forth in the
report.
The preponderance of working paper support for this valuation is maintained in
the offices of management, Balcor Mortgage Advisors.
Neither the fees nor any of the terms and conditions of the appraisal
assignments given to Valuation Counselors Group, Inc./Darby & Associates Joint
Venture by Balcor Mortgage Advisors are contingent upon the values reported.
<PAGE>
No independent investigation of the fair market value of the underlying real
estate assets has been made by Valuation Counselors Group, Inc./Darby &
Associates Joint Venture. We have reviewed the real estate appraisals for
reasonableness, but have assumed the real estate appraisals obtained by Balcor
Mortgage Advisors are independent and accurate. Valuation Counselors Group,
Inc. assumes responsibility for real estate appraisals prepared by their own
staff.
No independent investigation of the terms and conditions of the mortgage loans
made by Balcor Equity Pension Investors - I has been made. We have relied on
data furnished to us by Balcor Mortgage Advisors and the validity of the
information was assumed to be correct.
In the event that this appraisal is used as basis to set a market price for a
Limited Partnership Interest in Balcor Equity Pension Investors - I, no
responsibility is assumed for the seller's inability to obtain a purchaser at
the value reported herein.
The reader of this valuation report should be fully conversant with the terms
and conditions of Balcor Equity Pension Investors - I Limited Partnership as
set forth in the Prospectus, other related documents, and the prior appraisals
of a Limited Partnership Interest in Balcor Equity Pension Investors - I.
We have discussed the current status and condition of the mortgage loans and
real estate owned with the management of Balcor Mortgage Advisors and have
accepted their comments as being factual.
<PAGE>
INTRODUCTION
The Partnership, Balcor Equity Pension Investors - I, was organized on July 7,
1983. The Partnership Agreement provides for Balcor Equity Partners - I to be
the General Partner and for the admission of Limited Partners through the sale
of Limited Partnership Interests at $500 per Interest. The Partnership
commenced the offering of Limited Partnership Interests to the public on
October 5, 1983; closing of its minimum offering was held on January 6, 1984,
after certain minimum sales of Limited Partnership Interests had been achieved,
as provided for in the Partnership Agreement. Prior to October 5, 1983, the
Partnership was in a pre-operating status. The Partnership issued 359,229
Limited Partnership Interests on or prior to February 24, 1984, the termination
date of the offering. The total number of units sold was segregated into
312,384 tax-exempt units and 46,845 taxable units.
The Partnership serves as an investment vehicle for qualified profit sharing,
pension and other retirement trusts; bank commingled trust funds for such
trusts; HR-10 (Keogh) Plans and Individual Retirement Accounts (IRA);
government pension and retirement trusts; other entities intended to be exempt
from Federal income taxation such as certain religious, charitable, scientific,
literary and educational corporations, funds and foundations; and also
individuals and entities not exempt from Federal income tax.
The Partnership's operations consisted of (1) investing in commercial and
residential real properties which the Partnership will acquire with no
permanent mortgage indebtedness and (2) placing equity participating first
mortgages on income-producing real property.
The Partnership Agreement provides that the General Partner, or affiliates,
will receive selling commissions on the sale of Limited Partnership Interests;
real estate acquisition fees, usually paid by the sellers when the Partnership
acquires real properties; and loan application, commitment and brokerage fees
paid by borrowers and prospective borrowers when the Partnership funds first
mortgage loans or issues commitments to fund loans, subject to certain
limitations as set forth in the Partnership Agreement.
The Partnership Agreement also provides that an affiliate of the General
Partner will service the mortgage loans made by the Partnership and will
receive a mortgage servicing fee at an annual rate equal to 1/4 of 1% of the
amounts advanced by the Partnership and outstanding from time to time; also, an
affiliate of the General Partner will perform property management services and
earn property management fees on properties acquired by the Partnership at
rates and on terms no less favorable to the Partnership than those customary
for similar property management and leasing services in the relevant
geographical area of the property managed, subject to certain limitations.
<PAGE>
"Operating Income" of the Partnership will be allocated 10% to the General
Partner and 90% to the Limited Partners, however, certain components are
specially allocated as described in the Partnership Agreement. "Operating
losses": and other certain components will be allocated 1% to the General
Partner and 99% to the Limited Partners pursuant to terms set forth in the
Partnership Agreement. "Net Cash Receipts" available for distribution will be
distributed as follows: 90% to all Limited Partners, 7 1/2% to the General
Partner as its distributive share from Partnership operations. An additional 2
1/2% of such "Net Cash Receipts" will be paid to the General Partner for
allocation to the Repurchase Fund which may be utilized to repurchase Interests
from Limited Partners pursuant to terms set forth in the Partnership Agreement.
Amounts allocated to the Repurchase Fund will be returned to the Partnership at
liquidation if necessary to permit payment to the Limited Partners of their
"Original Capital" and their "Liquidation Preference"; thereafter, the
remaining "Net Cash Proceeds" will be distributed 90% to the Limited Partners
and 10% to the General Partner. This is described in more detail on the
following page.
It was intended that the proceeds of the offering available for investment
would be invested approximately one-half in real properties with no permanent
mortgage indebtedness and one-half in equity participating first mortgage
loans. The actual mix of investments between real properties and mortgage loans
will be determined by the General Partner and will depend upon financial and
real estate market conditions.
Originally, the Partnership expected to sell or otherwise dispose of its real
property investments between the fifth and tenth years after acquisition and
expected to sell or obtain repayment of its mortgage loans between the twelfth
and fifteenth years after such loans are made. Since the time the original real
estate investments and mortgage loans were made at the inception of the
Partnership, material adverse changes occurred in the real estate market. This
resulted in a number of mortgage loans going in to default and eventually
becoming Real Estate Owned. As a result of the payoff of the Fairview III
mortgage loan on December 22, 1995, the Partnership now has only Real Estate
Owned and original Investments in Real Estate. The management of the
Partnership has determined that it may be in the best interests of the Limited
Partners to retain title to a substantial portion of the real estate for
approximately ten years from December 31, 1992. As of March 31, 1996, the
forecasted closing of the Partnership is the year 2004.
<PAGE>
DISTRIBUTIONS TO LIMITED PARTNERS
Net Cash Receipts available for distribution commenced distribution to Limited
Partners on a quarterly basis commencing in the third full calendar quarter
after the termination of the offering. 90% of all Net Cash Receipts available
for distribution are distributed to Limited Partners. In order to equalize the
benefits to the Limited Partners, such Net Cash Receipts are allocated among
the Limited Partners so that on a pro rata basis an Interest originally
purchased by a Tax exempt Limited Partner receives 133% of Net Cash Receipts
that are distributed with respect to an Interest originally purchased by a
Taxable Limited Partner. 7 1/2% of such Net Cash Receipts are paid to the
General Partner as its distributive share from Partnership operations, and an
additional 2 1/2% of such Net cash Receipts are paid to the General Partner for
allocation to the Repurchase Fund. Amounts allocated to the Repurchase Fund are
commingled with other assets of the General Partner and may be utilized to
repurchase Interests from Limited Partners. Amounts allocated to the Repurchase
Fund will be returned to the Partnership at the liquidation of the Partnership
if necessary to permit payment to the Limited Partners of their Original
Capital plus any deficiency in their Liquidation Preference.
In general, the Partnership had expected to sell its real properties between
the fifth and tenth years after acquisition and expects to sell or obtain
repayment of its mortgage loans between the twelfth and fifteenth years after
such loans are made. For reasons previously explained, these time horizons have
been extended beyond the Year 2000. Net Cash Proceeds which are available for
distribution will be distributed only to holders of Interests until such time
as holders of Interests have received a return of their Original Capital and
their Liquidation Preference. 90% of the remaining Net Cash Proceeds available
for distribution will be distributed to holders of Interests. The General
Partner will receive 10% of such remaining Net Cash Proceeds. Prior to the
liquidation of the Partnership, to the extent necessary to permit the
Partnership to pay to the Limited Partners any deficiency in the return of
their Original Capital and their Preferential Cumulative Distribution on
Adjusted Original Capital in the following amount: 16% per annum for Interests
purchased by Tax-exempt Limited Partners prior to January 1, 1984; 14% per
annum for Interests purchased by Tax-exempt Limited Partners on or after
January 1, 1984; 12% per annum for Interests purchased by Taxable Limited
Partners prior to January 1, 1984; and 10% per annum for Interests purchased by
Taxable Limited Partners on or after January 1, 1984; the General Partner
shall return to the Partnership all or a portion of its 10% share of such Net
Cash Proceeds. For purposes of determining distributable Net Cash Proceeds, an
amount equal to the Adjusted Mortgage Investment for each year shall be deemed
an amount available for distribution and shall also be deemed the initial
amount distributed for such year. For purposes of determining the amount of
Preferential Cumulative Distribution to which the holder of a particular
Interest is entitled, the purchase date shall be the date the investor's funds
are received by the General Partner, notwithstanding the fact that such funds
are initially deposited in escrow accounts. Any amounts of Preferential
Cumulative Distribution that are distributed to early investors in excess of
amounts distributed to later investors will come from the General Partner's
distributive share and not from funds otherwise distributable to Limited
Partners. In the event distributed Net Cash Receipts and Net Cash Proceeds
available for distribution exceed 10% per annum on Adjusted Original Capital
but are not sufficient to compensate all investors as described above, then
additional Net Cash Proceeds shall be distributed from the General Partner's
10% share equally to all Limited Partners who are entitled to more than 10% per
annum until they shall have received Preferential Cumulative Distribution in
<PAGE>
the amount of 12% per annum on their Adjusted Original Capital. Any additional
Net Cash Proceeds available for distribution shall be distributed equally to
all Limited Partners who are entitled to more than 12% per annum, and so on,
until all of the Net Cash Proceeds available for distribution shall have been
distributed.
Cash available for distribution will be determined by the General Partner after
it creates any reserves or makes expenditures reasonably necessary or
appropriate for the operation of the Partnership.
There is no assurance that the Partnership will generate Net Cash Receipts or
Net Cash Proceeds, or that, if generated, they will be available for
distribution or be sufficient to provide the full amount of the Preferential
Cumulative Distribution.
All Partnership distributions are made quarterly to those recognized as the
holders of Interests as of the last day of each fiscal quarter. Distributions
are expected to commence the third full calendar quarter after termination of
the offering.
Payments were made to Limited Partners during the period of the public offering
of Interests.
As set forth in the Partnership Agreement, the Partnership was obligated to pay
to the purchasers of Interests an amount equivalent to interest at an initial
rate of 8% per annum on the total purchase price of an Interest. The amounts so
payable under this provision ceased to accumulate on February 24, 1984, the
termination date of the offering. Payments made to the Limited Partners during
the offering period totaled $1,712,417.
<PAGE>
Distributions to the Limited Partnership
Tax-Exempt Interest Taxable Interest
Effective Amount Amount
Date Per Interest Annual Rate Per Interest Annual Rate
9/30/84 $8.31 6.65% $6.25 5.00%
12/31/84 9.98 7.98% 7.50 6.00%
3/31/85 10.64 8.51% 8.00 6.40%
6/30/85 10.64 8.51% 8.00 6.40%
Tax-Exempt Interest Taxable Interest
Effective Amount Amount
Date Per Interest Annual Rate Per Interest Annual Rate
9/30/85 $10.64 8.51% $8.00 6.40%
12/31/85 10.64 8.51% 8.00 6.40%
3/31/86 10.64 8.51% 8.00 6.40%
6/30/86 10.64 8.51% 8.00 6.40%
9/30/86 10.64 8.51% 8.00 6.40%
12/31/86 10.64 8.51% 8.00 6.40%
3/31/87 10.64 8.51% 8.00 6.40%
6/30/87 8.54 6.83% 6.42 5.14%
7/87 1.44 - 1.08 -
(Return of Capital)
9/30/87 7.56 6.07% 5.69 4.56%
10/87 0.42 - 0.31 -
(Return of Capital)
12/31/87 4.99 4.01 3.75 3.01%
3/31/88 4.99 4.01% 3.75 3.01%
6/30/88 6.31 5.07% 4.75 3.81%
9/30/88 6.31 5.07% 4.75 3.81%
12/31/88 7.32 5.88% 5.50 4.41%
11.13 11.13 -
(Return of Capital)
3/31/89 7.32 6.01% 5.50 4.51%
6/30/89 7.32 6.01% 5.50 4.51%
9/30/89 6.65 5.46% 5.00 4.10%
12/31/89 6.65 5.46% 5.00 4.10%
3/31/90 5.99 4.92% 4.50 3.69%
6/30/90 5.99 4.92% 4.50 3.69%
9/30/90 5.99 4.92% 4.50 3.69%
10/90 23.00 - 0.47 -
(Return of Capital)
12/31/90 5.99 5.16% 4.50 3.70%
3/31/91 5.32 4.59% 4.00 3.29%
6/30/91 5.32 4.59% 4.00 3.29%
9/30/91 5.32 4.59% 4.00 3.29%
12/31/91 5.32 4.59% 4.00 3.29%
3/31/92 4.32 3.72% 3.25 2.67%
6/30/92 4.32 3.72% 3.25 2.67%
9/30/92 4.32 3.72% 3.25 2.67%
12/31/92 4.32 3.72% 3.25 2.67%
3/31/93 3.33 2.87% 2.50 2.05%
<PAGE>
Tax-Exempt Interest Taxable Interest
Effective Amount Amount
Date Per Interest Annual Rate Per Interest Annual Rate
6/30/93 $3.33 2.87% $2.50 2.05%
9/30/93 3.33 2.87% 2.50 2.05%
12/31/93 3.33 2.87% 2.50 2.05%
3/31/94 3.33 2.87% 2.50 2.05%
6/30/94 3.33 2.87% 2.50 2.05%
9/30/94 3.33 2.87% 2.50 2.05%
12/31/94 3.33 2.87% 2.50 2.05%
3/31/95 3.33 2.87% 2.50 2.05%
6/30/95 2.33 2.01% 1.75 1.44%
9/30/95 2.33 2.01% 1.75 1.44%
12/31/95 2.33 2.01% 1.75 1.44%
3/31/96 2.33 2.01% 1.75 1.44%
<PAGE>
DESCRIPTION OF THE ASSETS
Equity Investments in Real Estate
1. Oxford Hills Apartments, St. Louis County, Missouri
On June 19, 1984, the Partnership acquired the 480 unit Oxford Hills
Apartment complex located in St. Louis County, Missouri. The purchase
price of the property was $19,407,934, including $1,924,463 for the land.
The Partnership paid $19,380,177 (including closing costs of $17,242) to
the seller at closing. Its value based on March 1993 cash flow projections
is $21,079,701. As of March 31, 1996, the occupancy rate was 92%.
2. GSB Office Building, Bala Cynwyd, Pennsylvania
On July 19, 1984, the Partnership acquired all of the Partnership
interests in the limited partnership which owns the twelve-story GSB
Office Building located in Bala Cynwyd, Pennsylvania. The carrying cost of
the property was $22,712,057, including $1,420,694 for the land. The
Partnership paid $21,512,869 (including closing cost of $16,914) to the
seller at closing. The building lost Comcast as a major tenant in the
quarter ended June 30, 1989, however, subsequently there was significant
progress in releasing the space. In 1992, the building's major tenant,
Germantown Savings Bank, renewed its lease on a long-term basis, but
subject to substantial capital improvements. Because of the increased
capital costs and restatement of the operating costs, there was a
substantial reduction in value as of December 31, 1992. In the latter part
of 1994 Germantown Savings Bank was acquired by CoreStates. It is probable
that a significant amount of space will be vacated on or before the
expiration of the lease. Its value based on March 1993 cash flow
projections is $23,237,574. As of March 31, 1996, the occupancy rate was
94%.
3. Pacific Center Office Buildings, Dallas, Texas
On November 29, 1984, the Partnership acquired a 77.09% joint venture
interest in Phase I and Phase II of Pacific Center Office Buildings. The
project consists of two nine-story office buildings located on North
Dallas Parkway, 12 miles north of Dallas central business district and 15
miles east of the Dallas/Fort Worth Regional Airport. The purchase price
of the joint venture interest in the property was $28,936,415, with an
allocation of $3,904,424 to the land and $330,385 to personal property.
Balcor Equity Pension Investors - II is the joint venture partner. Its
value based on March 1993 cash flow projections is $7,672,810. As of March
31, 1996, the occupancy rate was 95%.
<PAGE>
Real Estate Owned Investments
1. Park Center Office Building, Maitland, Florida
On August 1, 1984, the Partnership funded an equity participating
$11,000,000 first mortgage loan on Park Center Office Building, a 109,815
square foot office building on a 6.5 acre site in Maitland, Florida
(Orlando). The facility is a four-story steel and reflective glass
structure with an atrium and parking for 440 cars. On December 30, 1986,
the Partnership accepted a deed in lieu of foreclosure and took title to
the property. The property was appraised at $8 million as of December 31,
1990. It is valued on the basis of March 1993 cash flow projections at
$8,300,472 as of March 31, 1996. As of March 31, 1996, the occupancy rate
was 98%.
2. Oxford Square Apartments, (Casselberry), Orlando, FL
On August 26, 1986, the Partnership funded a $12,000,000 equity and
revenue participating mortgage on Oxford Square Apartments, a 283 unit
garden apartment complex consisting of 15 two story buildings, located on
a 22 acre site in Casselberry, Florida. On December 30, 1986, the
Partnership accepted a deed in lieu of foreclosure and took title. The
property was appraised at $10.5 million as of July 29, 1991. It is valued
on the basis of its projected 1996 cash flow at $11,055,159 as of March
31, 1996. As of March 31, 1996, the occupancy rate was 99%.
3. 8280 Greensboro Drive, Tyson's Corner, VA
On October 7, 1985, the Partnership funded $27,000,000 of an equity and
revenue participating $28,500,000 first mortgage on Tyson's Corner Office
Building, a 197,439 square foot nine story office structure located on
5.71 acres of land in an established sub-market of Washington, D.C. The
property includes a three story enclosed parking garage.
On February 25, 1986, the Partnership funded an additional $1,000,000 on
the mortgage loan.
On January 23, 1987, the Partnership funded an additional $500,000 on the
loan secured by the Tyson's Corner Office Building. On June 30, 1987, the
mortgage loan was increased $7,000,000 to $35,500,000 and certain terms
and conditions of the mortgage loan were changed which resulted in a lower
return to the Partnership.
As a result of the borrower's failure to make certain payments, as
required by the terms of the loan, in November 1990, the Partnership
initiated non-judicial foreclosure proceedings. Subsequently, on December
10, 1990, the Partnership acquired the property at a foreclosure sale. As
of July 23, 1991, the property was appraised at $30.0 million. It is
valued on the basis of March 1993 cash flow projections at $25,845,724 as
of March 31, 1996. As of March 31, 1996, the occupancy rate was 96%.
<PAGE>
Investments in Loan Receivables
1. Butterfield Centre Office Building, Lombard, Illinois - (Paid Off)
On November 13, 1984, the Partnership funded an equity participating
$15,000,000 first mortgage loan on Butterfield Centre Office Building, a
145,961 square foot office building on an 8 acre site in Lombard,
Illinois, 22 miles west of downtown Chicago. The property consist of a
four-story office building with parking for 590 cars. On April 1, 1987, a
partial prepayment of $13,775,000 was made and the remaining $1,225,000
was converted to a second mortgage due April 1, 1992. It bore interest of
11% for 3 years and 13% for 2 years. Participations equal to 50% of
property cash flow as well as 50% of property appreciation in excess of
$16 million were to be paid. In addition $875,000 representing accrued
interest due through April 1, 1987 on the original note was due April
1992. A payoff letter had been issued for $2,700,000 and the loan was paid
off on November 16, 1988. This included a cash paydown as well as a
writedown.
2. Fairview Plaza III Office Building, Charlotte, North Carolina - (Paid
Off)
On May 14, 1985, the Partnership funded an equity and revenue
participating $10,000,000 first mortgage loan on Fairview Plaza III Office
Building, a 117,441 square foot eight story office building on a 2 acre
site in Charlotte, North Carolina. Adjacent to the subject building are
two office buildings and one bank building totaling 155,000 square feet. A
one million square foot regional shopping mall is located one block from
the property. The mortgage loan was modified in the quarter ended June 30,
1989. As of September 30, 1990, the value of the loan was reduced to the
amount of the funds advanced and on March 31, 1991, the value was reduced
to $5.5 million vs. funds advanced of $10.0 million. Discussions were
underway to restructure the Fairview Plaza I & II mortgage loan in
conjunction with the Fairview Plaza III mortgage loan. As a result, the
loan was modified in March 1992, which included a paydown of $2.4 million
and forgiveness of an additional $3.75 million of the outstanding
principal balance. On December 22, 1995, the Partnership received
$3,869,690 for payment in full.
3. Hickory Creek Apartments, Henrico County, VA - (Paid Off)
On December 5, 1985, the Partnership funded an equity and revenue
participating $11,050,000 first mortgage on a 294 unit apartment project
on a 20.2 acre site in Richmond, VA. The project consists of 19 two and
three story buildings with brick and wood exteriors, with parking
available for 448 cars. The loan was paid off on August 16, 1989 in the
amount of $12,565,810.50.
<PAGE>
VALUATION OF A LIMITED PARTNERSHIP INTEREST
Valuation Counselors Group, Inc./Darby & Associates Joint Venture has been
retained by Balcor Equity Partners - I to estimate the Value of a Limited
Partnership Interest in Balcor Equity Pension Investors - I on a quarterly
basis.
The methodology used in estimating the Value of a Limited Partnership Interest
in Balcor Equity Pension Investors - I is based upon substituting the estimated
(1) present value of the Equity Cash Flows and Return of Capital in place of
the Investments in Real Estate and Real Estate Owned, (2) appraised value of
certain Real Estate Owned assets acquired in foreclosure and scheduled for
disposition in the near-term (if applicable to this Partnership), and (3) the
present value of the Debt Cash Flows in place of Investment in Loan Receivable,
First Mortgage as shown on March 31, 1996 Balance Sheet of Balcor Equity
Pension Investors - I (Schedule A-1) (if applicable to this Partnership). As of
December 31, 1995, there are no longer any loans in this fund. In addition, the
unamortized portions of the Offering Expenses and Loan Fees as well as the
present value of the Repurchase Fund are added to the Assets on the same
Balance Sheet. The amortization is calculated by reducing the total Offering
Expenses, as set forth in the financial statements, on a straight line basis,
quarterly, to the expiration date of the loan portfolio. For financial
reporting purposes, Balcor Equity Partners - I initially deducted the total
Offering Expenses from the proceeds of the Limited Partnership Interest.
Current Assets and Current Liabilities remained as stated and subsequently are
called "Net Current Assets."
Cash, the present value of the Equity Cash Flows, Return of Capital and
Repurchase Fund, appraised Real Estate Owned (where applicable) and the present
value of the Debt Cash Flows (if any) were segregated into the interests of the
Tax-exempt Limited Partnership Interests, Taxable Limited Partnership Interests
and General Partner Interest Shares in accordance with the terms of the Limited
Partnership Agreement and the proportionate share of the Partnership Interests.
As of December 31, 1992, the holding period for the Investments in Real Estate
and Real Estate Owned not scheduled for near-term sale were extended, on the
average, to ten years for the purpose of attempting to realize a greater return
to the Limited Partners. In addition the cash flows were refined in order to
calculate excess cash proceeds and excess net cash receipts since certain of
those proceeds are applied to assets where the acquisition costs have not been
achieved.
Historically, the valuation process has allocated certain proceeds to the
Tax-Exempt and Taxable Limited Partnership Interests on the basis of certain
procedures set forth in the Partnership Agreement. Based on additional formulae
in the Partnership Agreement, as the Fund has "matured" it has become necessary
to reallocate certain proceeds between the Tax-Exempt and Taxable Limited
Partnership Interests so that the Tax-Exempt Limited Partnership Interests will
be made whole prior to returning capital to the Taxable Limited Partnership
Interest.
With the extension of the holding period and redefining the Real Estate Owned,
the Repurchase Fund has become material and is included separately as an Asset.
For Balcor Equity Pension Investors - I, the General Partner has assigned the
total value of the Repurchase Fund to the Taxable Limited Partnership Interest
to partially compensate for the priority allocation of the proceeds from sale
of assets and repayment of loans to the Tax-Exempt Limited Partnership
Interest.
<PAGE>
DISCUSSION OF RISK RATES
The discount rate applied to the cash flow mathematically expresses risk. Risk
represents the uncertainty related to achievement of the prospective cash
flows. The primary components of risk exposure in fixed income securities are
interest rate risk, inflation risk, market risk, liquidity risk and risk of
default. As previously discussed, the valuation of the assets in question have
been predicated upon the present valuing of the components of the loan
portfolio. Therefore, determination of an appropriate risk rate is essential in
the valuation of the net investment in loans receivable.
Financial theory dictates the necessity of incremental return resulting from
incremental risk. Accordingly, the typical risk/return tradeoff indicates that
investors should demand greater rates of return as the perceived riskiness of
the asset or security increases. In examining an investment situation, a
hypothetical investor would weigh the perceived level of risk against the
return expected from the subject investment. In determining the required rate
of return or discount rate on a particular asset or investment, the
hypothetical investor would also consider returns available from alternative
investment opportunities such as government securities, corporate bonds,
mortgages, real estate and common stock, if applicable.
The subject assets consist of a self-liquidating real estate investment fund
with investments in both real estate loans with varying maturities and real
estate assets. Accordingly, in determining an appropriate risk rate associated
with the subject assets, we have considered alternative and comparable rates of
return in the lending and real estate marketplace as indicated by such sources
as the Wall Street Journal, Real Estate Research Corporation Real Estate
Report, Investment Dealers Digest, Corporate Financing Week, American Council
of Life Insurance Investment Bulletin and the National Association of Real
Estate Investment Trusts.
The following table presents yield rates associated with various types of
government and corporate securities as indicated by the March 29,1996 and
January 3, 1996 Wall Street Journals.
Yield Rates as Indicated by the Wall Street Journal
Security First Quarter 1996 Fourth Quarter 1995
Three Month U.S. Treasury Bills 4.99% 5.04%
Six Month U.S. Treasury Bills 4.97% 5.03%
Prime Rate 8.25% 8.50%
Ten Year U.S. Treasury Bonds 6.60% 5.64%
Twenty Year U.S. Treasury Bonds 6.90% 6.02%
Corporate Bonds
Aaa, Aa 6.72% to 7.60% 6.02% to 6.96%
A, Baa 6.95% to 7.91% 6.23% to 7.31%
Ba, C 9.8% 9.7%
Collateralized Mortgage
Obligations
10 Year 7.90% 6.94%
20 year 8.05% 7.17%
<PAGE>
Additionally, information from Moody's Corporate Bond Survey and the Investment
Dealer's Digest indicates the corporate original issue Real Estate Mortgage
Investment Conduit (REMIC) yields from 1988 to 1995 ranged from 7% to 11.3% for
obligations with terms in excess of ten years. A yield difference of one to
three points was exhibited within multiple class REMIC issues where accrued
interest payments did not commence on the (higher yielding) security until
senior class notes were paid in full. A short term issuance collateralized by
elderly living properties exhibited a four point yield differential between
classes.
According to information from the Mortgage-Based Securities Letter, REMIC
issuances in 1994 have decreased substantially from the levels exhibited during
1992 and 1993. Reportedly, many REMIC underwriters and investors incurred
losses due to price corrections in the derivative mortgage securities market.
The price decline was believed to be attributable to several factors including
rising interest rates, increased volatility, average-life extension and lack of
liquidity. According to the Wall Street Journal, new issues of mortgage-backed
securities were down 57% in 1994 as compared to the prior year.
In addition to the previously noted yields on various market securities, we
have also considered mortgage rates associated with various types of commercial
real estate properties. This data is relevant in that it provides an indication
of rates of return associated with similar types of investments. These
statistics have been extracted from the December 29, 1995 and October 1, 1995
editions of the Investment Bulletin published by the American Council of Life
Insurance, is as follows:
Averages
Contract Interest
Rate
Type of Loan
Property Type Third Quarter Second Quarter
1995 1995
FIXED RATE-FIXED TERM 7.83% 8.23%
Apartment 7.64% 8.13%
Office Building 7.98% 8.23%
Retail 7.79% 8.17%
Industrial 7.84% 8.21%
Other Commercial 7.73% 8.47%
Yield With
Fees
Type of Loan
Property Type Third Quarter Second Quarter
1995 1995
FIXED RATE-FIXED TERM 7.85% 8.24%
Apartment 7.67% 8.15%
Office Building 8.00% 8.24%
Retail 7.81% 8.18%
Industrial 7.85% 8.22%
Other Commercial 7.74% 8.51%
<PAGE>
Maturity
(Years/Months)
Type of Loan
Property Type Third Quarter Second Quarter
1995 1995
FIXED RATE-FIXED TERM 11/06 11/02
Apartment 10/11 10/09
Office Building 10/0 09/07
Retail 13/05 13/06
Industrial 10/08 10/00
Other Commercial 11/04 12/02
Additionally, we have considered expected capitalization rates and internal
rates of return extracted from "Korpacz Real Estate Investor Surveys, First
Quarter 1996". For comparative purposes, we have also presented similar data
extracted from "Korpacz Real Estate Investor Surveys, Fourth Quarter 1995".
National Market Indicators: First Quarter 1996
Retail Office
(National Regional (Central Business
Malls) District)
Range Average Range Average
Free and Clear Equity IRR 10.00%-14.00% 11.50% 10.00%-15.00% 12.10%
Free and Clear Equity Cap
Rate 6.25%-11.00% 8.11% 8.00%-12.50% 9.58%
Terminal Cap Rate 7.00%-11.00% 8.56% 8.25%-12.00% 9.62%
Office National
(National Suburban) Industrial
Range Average Range Average
Free and Clear Equity IRR 10.00%-14.00% 11.90% 9.00%-14.00% 11.27%
Free and Clear Equity Cap
Rate 8.00%-11.00% 9.47% 7.25%-13.00% 9.29%
Terminal Cap Rate 8.50%-12.00% 9.68% 8.00%-11.00% 9.51%
National
Apartment
Range Average
Free and Clear Equity IRR 10.50%-13.00% 11.38%
Free and Clear Equity Cap
Rate 7.50%-10.50% 8.97%
Terminal Cap Rate 8.00%-11.00% 9.29%
<PAGE>
National Market Indicators: Fourth Quarter 1995
Retail Office
(National Regional (Central Business
Malls) District)
Range Average Range Average
Free and Clear Equity IRR 10.00%-14.00% 11.55% 10.00%-15.00% 12.15%
Free and Clear Equity Cap
Rate 6.25%-11.00% 7.86% 7.50%-12.50% 9.52%
Terminal Cap Rate 7.00%-11.00% 8.45% 8.25%-12.00% 9.63%
Office National
(National Suburban) Industrial
Range Average Range Average
Free and Clear Equity IRR 10.00%-15.00% 12.04% 9.00%-14.00% 11.31%
Free and Clear Equity Cap
Rate 8.00%-11.50% 9.57% 7.25%-13.00% 9.36%
Terminal Cap Rate 8.50%-12.00% 9.75% 8.00%-11.00% 9.58%
National
Apartment
Range Average
Free and Clear Equity IRR 10.00%-13.00% 11.50%
Free and Clear Equity Cap
Rate 7.50%-10.50% 8.99%
Terminal Cap Rate 8.00%-11.00% 9.31%
Our discount rates have been selected based upon the returns exhibited on
alternative securities and real estate properties as previously presented, in
conjunction with the attributes of the subject assets.
Risk Measurement in Real Estate
As previously discussed, the primary components of risk exposure for fixed
income securities include interest rate risk, inflation risk, market risk,
liquidity risk and default risk. For real estate, these risks are similar and
can be segmented into two categories. The first is systematic risk which
includes all risks external to the property. The remaining risks can be
categorized as nonsystematic risk and includes all risks directly related to
the property. Generally, systematic risk affects the overall market as a whole
and is often referred to as market risk. However, nonsystematic risk is
generally more attributable to the property specifics. Nonsystematic risk can
be further broken down into risk relative to the immediate neighborhood or
local market with the residual risks being unique to the property.
<PAGE>
When viewing an investment in a single property, the systematic overall market
risk, the nonsystematic local market risk and the nonsystematic unique property
risks must be weighed in the derivation of an appropriate risk rate (discount
rate) to be applied to anticipated cash flows. The overall market risks would
include such factors which effect the market as a whole. Among these factors
would be the level of interest rates, the economic condition of the nation,
federal tax incentives related to real estate and the expected inflation rate.
Each of these factors can have a direct effect on real estate throughout the
nation.
Nonsystematic local market risks are those that effect a regional area or
neighborhood and are not part of the overall market risk. There are many types
of possible local market risks. Some examples of local market risk include
fluctuations in the local economy, changes in transportation systems, local
crime rates and overbuilding. These local market risks may be severe enough to
override the effects of the overall market risk.
Property unique risks are those which effect the subject property in a manner
more specific than the local market risks. Many of the property unique risks
are similar to the local market risks but are more significant for the subject
property. Some examples of property specific risks would include dependence on
single industries or tenants, crime frequency on the property, changes in
immediate traffic patterns, changes in adjacent zoning or adjacent property
conditions and unanticipated capital improvement requirements. These property
specific risks may have a material impact on the property but may not be
reflected in the local market risks.
Investments in individual property would reflect three groups of risks
including the systematic overall market risks, the nonsystematic local market
risks and the nonsystematic property unique risks. However, modern portfolio
theory recognizes that through investment diversification, the nonsystematic
risks associated with the local market and the unique attributes of the
property can be reduced. Furthermore, with sufficient diversification, a
portfolio can virtually eliminate nonsystematic risk.
The benefits of portfolio diversification are reflected in the improvement of
the portfolio's return-risk ratio. The return-risk ratio measures the return of
the investment relative to the volatility of the return. Generally, the
volatility of return is measured by the standard deviation of the return over a
period of time. Therefore, the return-risk ratio is simply the return of the
investment divided by the standard deviation of the return.
As an example of the application of this ratio, assume that portfolio A invests
in only one type of property in one local market and experiences an average
annual return of 13% over fifteen years with a standard deviation of return of
17%. The return-risk ratio is computed to be 0.76 (13% divided by 17%).
Portfolio A's risk-return ratio can then be compared to the ratio of other
portfolios to evaluate the level of return relative to the risk taken.
To illustrate, assume portfolio B invests in a wide variety of property types
in a numerous geographical regions and only generated an annual return of 12%
over fifteen years. However, the standard deviation of return was only 13%.
The return-risk ratio is computed to be 0.86 (12% divided by 13%). Even though
portfolio A's return exceeded portfolio B's return, the superior return was not
enough to offset the increase in risk. Therefore, an investor would likely
prefer an investment in Portfolio B.
<PAGE>
It should be noted, however, that with the reduction in the volatility of
returns, modern portfolio theory also recognizes that there is a reduction in
the level of potential return. This is because that volatility generally
provides the opportunity for added returns. This is the basis for the axiom
that greater risk equals greater reward. However, an investor generally
requires that the increase in risk is offset by an increase in potential
return. Conversely, if an investor is looking for a lower risk, the investor
would expect lower returns.
In the instant case, the discount rates selected for the appraisal of
individual properties which are expected to be sold in the near future reflect
all the systematic and nonsystematic risks associated with each individual
property. The discount rates are derived considering overall market factors,
local market factors and property unique factors. However, for those properties
which are valued as real estate investments on the basis of their cash flows,
the discount rate applied reflects the benefits of reduced nonsystematic risks
through portfolio diversification. These benefits include the offsetting of
local market risks and property unique risks of each property with the local
market risks and property unique risks of the other properties in the
portfolio. As a result, the volatility of returns for each property is offset
by the volatility of returns of the other properties in the portfolio. The
discount rates applied to the latter category of properties are derived from
market data on portfolio returns, which reflect the dichotomies described
above.
<PAGE>
SCHEDULE A-1
BALCOR EQUITY PENSION INVESTORS - I
(AN ILLINOIS LIMITED PARTNERSHIP)
BALANCE SHEET
MARCH 31, 1996
(AUDITED)
Assets
Current Assets
Cash and cash equivalents $12,462,621
Accounts and Accrued Interest Receivable 283,784
Prepaid Expenses 131,025
-----------
Total Current Assets $12,877,430
===========
Deferred Expenses, Net of accumulated
amortization 419,512
Investments
Investment in Loans Receivable,
first mortgages 0
-----------
Investment in Real Estate, at Cost:
Land 10,753,713
Buildings and Improvements 94,459,569
-----------
105,213,282
Less accumulated depreciation 42,069,419
-----------
Total Investment Properties, Net
of Accumulated Depreciation 63,143,863
-----------
Total Assets $76,440,805
===========
Liabilities and Partners' Capital
Escrow Liabilities $ 0
Accrued liabilities, principally
real estate taxes 229,805
Accounts Payable 241,750
Due to Affiliates 43,432
Security Deposits 485,463
-----------
Total Liabilities $1,000,450
Affiliate's Minority Interest
Participation in joint venture 1,414,978
Partners' Capital (Limited Partnership
Interests Issued and Outstanding: 359,229) 74,025,377
-----------
Total Liabilities and Partners' Capital $76,440,805
===========
<PAGE>
SCHEDULE A-2
BALCOR EQUITY PENSION INVESTORS-I
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1996 and 1995
(UNAUDITED)
1996 1995
-------------- --------------
Income:
Rental and service $ 4,104,082 $ 4,037,439
Interest on short-term investments 158,684 112,072
Interest on loan receivable 51,494
-------------- --------------
Total income 4,262,766 4,201,005
-------------- --------------
Expenses:
Depreciation 925,556 904,232
Amortization of deferred expense 28,477 26,694
Property operating 1,949,695 1,604,282
Real estate taxes 287,429 331,425
Property management fees 178,665 170,047
Administrative 103,964 139,767
-------------- --------------
Total expenses 3,473,786 3,176,447
-------------- --------------
Income before participation in joint
venture 788,980 1,024,558
Affiliate's minority interest in
income from joint venture (32,567) (32,588)
-------------- --------------
Net income $ 756,413 $ 991,970
============== ==============
Net income allocated to General Partner $ 160,143 $ 181,688
============== ==============
Net income allocated to Limited Partners $ 596,270 $ 810,282
============== ==============
Net income per Limited
Partnership Interest (359,229 issued
and outstanding) $ 1.66 $ 2.26
============== ==============
Distribution to General Partner $ 89,980 $ 128,593
============== ==============
Distribution to Limited Partners $ 809,824 $ 1,157,338
============== ==============
Distribution per Limited Partnership
Interest:
Taxable $ 1.75 $ 2.50
============== ==============
Tax-exempt $ 2.33 $ 3.33
============== ==============
<PAGE>
SCHEDULE A-3
BALCOR EQUITY PENSION INVESTORS-I
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1996 and 1995
(UNAUDITED)
1996 1995
-------------- --------------
Operating activities:
Net income $ 756,413 $ 991,970
Adjustments to reconcile net income
to net cash provided by operating
activities:
Affiliate's minority interest in
income from joint venture 32,567 32,588
Depreciation of properties 925,556 904,232
Amortization of deferred expenses 28,477 26,694
Net change in:
Accounts and accrued interest
receivable 152,449 (86,982)
Prepaid expenses 77,215 (56,220)
Accounts payable 3,373 2,783
Due to affiliates 16,034 45,250
Accrued real estate taxes 25,729 72,590
Escrow liabilities 14,485
Security deposits (6,492) (5,450)
-------------- --------------
Net cash provided by
operating activities 2,011,321 1,941,940
-------------- --------------
Investing activities:
Collection of principal payments
on loan receivable 43,219
Improvements to properties (58,394)
--------------
Net cash used in investing
activities (15,175)
--------------
Financing activities:
Distribution to Limited Partners (809,824) (1,157,338)
Distribution to General Partner (89,980) (128,593)
Contributions from joint venture
partner - affiliate 45,552
-------------- --------------
Net cash used in financing activities (854,252) (1,285,931)
-------------- --------------
Net change in cash and cash
equivalents 1,157,069 640,834
Cash and cash equivalents at
beginning of year 11,305,552 7,207,000
-------------- --------------
Cash and cash equivalents at
end of period $ 12,462,621 $ 7,847,834
============== ==============
<PAGE>
VALUATION OF THE EQUITY INVESTMENTS IN REAL ESTATE
AND REAL ESTATE OWNED INVESTMENTS
The value of the Equity Investments in Real Estate and the Real Estate Owned
Investments is equal to the sum of the present values of the Operating Cash
Flows and the Sales Proceeds. As of March 31, 1996, the Partnership owned six
equities: Oxford Hills Apartments, GSB Office Building, Pacific Center Office
Buildings, Park Center, Oxford Square Apartments and Tyson's Corner Office
Building (8280 Greensboro Drive). Park Center Office Building and Oxford Square
Apartments were acquired on December 30, 1986 and Tyson's Corner Office
Building on December 10, 1990 through deed in lieu of foreclosure.
The General Partner, Balcor Equity Partners - I, has prepared individual cash
flows for each property. The projected annual Operating Cash Flows from the
properties have been discounted at an annual rate of 10.00% to a net present
value quarterly, imputed by the straight-line method. The Agreement calls for
the General Partner to receive 10.0% of the Operating Cash Flows, and the
remaining 90% is allocated to the Tax-exempt and Taxable Limited Partnership
Interests on the basis of 10.1360% to the Taxable Limited Partnership Interests
and 89.8640% to the Tax-exempt Limited Partnership Interests.
Sales Proceeds on residential properties are calculated on the basis of the net
operating cash flow less taxes and insurance, capped at 9%, less stabilized
capital improvements and 2.5% sales commission. The sales proceeds for
commercial properties are calculated on the basis of net operating cash flow
(already net of taxes and insurance) capped at 9%, less stabilized capital
improvements, tenant improvements and leasing commissions and 2.5% sales
commission. The net proceeds from the sale have been discounted at an annual
rate of 10.50% to a net present value. A higher risk rate of 10.50% is used for
Sales Proceeds vs. a 10.00% rate for Operating Cash Flows to reflect the higher
risk rate of projecting a capitalization rate deferred for several years.
As of the quarter ended December 31, 1992, all of the Equities were valued on
the basis of their cash flows. Prior to that quarter, Real Estate Owned Assets
were valued on the basis of an independent appraisal since it was the intent to
sell those assets in the near-term. As described elsewhere in this report,
these assets, unless indicated otherwise, will be held to maturity.
A summary of the Cash Flows from Operations is in the following Exhibit B-1.
Exhibit B-2 summarizes the calculations used to determine Excess Net Cash
Proceeds where they may exist. Exhibit B-3 (2 schedules) is the Discounted Cash
Flow Analysis.
As of March 31, 1996, the total Asset Value of the six Real Estate Investments
is $97,191,440, an increase of $585,349 over the previous quarter's value.
<PAGE>
SCHEDULE B-1
as of: 31-Mar-96 BEPI I Cash Flow From Operations
Quarter Factor (for formula reference) 1 Actual Budget Pro-ject
1994 1995 1996
Net Cash Receipts --------------------------------
Equity Investments
GSB Building
NOI B4 TI/LC/Capital 1,851,819 1,726,246 1,664,777
TI/LC/Capital 1,701,438 1,285,577 179,148
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 150,381 440,669 1,485,629
Pacific Center
NOI B4 TI/LC/Capital 736,493 834,861 731,586
TI/LC/Capital 637,846 329,259 66,074
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 98,647 505,602 665,512
Oxford Hills
NOI B4 TI/LC/Capital 1,742,598 1,988,621 2,058,348
TI/LC/Capital 788,834 84,454 744,000
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 953,764 1,904,167 1,314,348
Total NCR-Equity Investments 1,202,792 2,850,438 3,465,489
================================
REO Investments
Park Center
NOI B4 TI/LC/Capital 606,856 554,838 663,137
TI/LC/Capital 294,133 223,397 65,189
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 312,723 331,441 597,948
Oxford Square
NOI B4 TI/LC/Capital 893,020 939,524 927,943
TI/LC/Capital 84,597 155,650 152,824
Internal CF projection --------------------------------
Net Cash Receipts 808,423 783,874 775,119
Tysons Corner
NOI B4 TI/LC/Capital 2,491,428 2,334,800 2,712,342
TI/LC/Capital 441,330 639,609 136,611
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 2,050,098 1,695,191 2,575,731
Total NCR-REO Investments 3,171,244 2,810,506 3,948,798
================================
<PAGE>
Loan Investments
- ----------------------
Fairview III Paid-off 12/22/95 362,988 360,458
Total NCR-Loan Investments 362,988 360,458 0
================================
TOTAL NCR FROM INVESTMENTS 4,737,024 6,021,402 7,414,287
LESS: GP 7.5% Share 355,277 451,605 556,072
Repurchase Fund @ 2.5% 118,426 150,535 185,357
--------------------------------
Net to Limited Partners @ 90% 4,263,321 5,419,262 6,672,858
================================
----> Shaded Cash Flow numbers used
for capping purpose only.
Pro-ject Pro-ject Pro-ject
1997 1998 1999
--------------------------------
GSB Building
NOI B4 TI/LC/Capital 1,738,110 1,770,044 1,815,570
TI/LC/Capital 96,426 220,631 293,635
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 1,641,684 1,549,413 1,521,935
Pacific Center
NOI B4 TI/LC/Capital 738,962 652,765 722,608
TI/LC/Capital 118,049 255,684 233,743
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 620,912 397,081 488,865
Oxford Hills
NOI B4 TI/LC/Capital 2,130,391 2,204,954 2,282,128
TI/LC/Capital 744,000 756,000 756,000
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 1,386,391 1,448,954 1,526,128
Total NCR-Equity Investments 3,648,987 3,395,448 3,536,928
================================
REO Investments
Park Center
NOI B4 TI/LC/Capital 722,439 788,572 661,343
TI/LC/Capital 116,862 21,742 421,736
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 605,577 766,830 239,607
Oxford Square
NOI B4 TI/LC/Capital 968,945 1,011,912 1,056,745
TI/LC/Capital 113,200 127,350 127,350
Internal CF projection --------------------------------
Net Cash Receipts 855,745 884,562 929,395
<PAGE>
Tysons Corner
NOI B4 TI/LC/Capital 2,772,475 2,580,714 2,702,603
TI/LC/Capital 101,964 773,640 465,263
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 2,670,511 1,807,074 2,237,340
Total NCR-REO Investments 4,131,833 3,458,466 3,406,342
================================
Loan Investments
- ----------------------
Fairview III Paid-off 12/22/95
Total NCR-Loan Investments 0 0 0
================================
TOTAL NCR FROM INVESTMENTS 7,780,820 6,853,914 6,943,270
LESS: GP 7.5% Share 583,562 514,044 520,745
Repurchase Fund @ 2.5% 194,521 171,348 173,582
--------------------------------
Net to Limited Partners @ 90% 7,002,738 6,168,523 6,248,943
================================
Pro-ject Pro-ject Pro-ject
2000 2001 2002
--------------------------------
GSB Building
NOI B4 TI/LC/Capital 1,918,260 2,134,095 2,239,129
TI/LC/Capital 403,546 167,844 178,839
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 1,514,714 1,966,251 2,060,290
Pacific Center
NOI B4 TI/LC/Capital 767,452 797,942 839,256
TI/LC/Capital 91,171 203,295 104,524
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 676,281 594,647 734,732
Oxford Hills
NOI B4 TI/LC/Capital 2,362,002 2,444,672 2,530,236
TI/LC/Capital 795,823 823,676 852,505
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 1,566,179 1,620,996 1,677,731
Total NCR-Equity Investments 3,757,174 4,181,894 4,472,753
================================
<PAGE>
REO Investments
Park Center
NOI B4 TI/LC/Capital 825,961 844,356 944,497
TI/LC/Capital 98,319 136,712 25,436
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 727,642 707,644
Oxford Square
NOI B4 TI/LC/Capital 1,103,524 1,152,332 1,192,663
TI/LC/Capital 144,705 149,769 155,011
Internal CF projection --------------------------------
Net Cash Receipts 958,819 1,002,562 1,037,652
Tysons Corner
NOI B4 TI/LC/Capital 2,592,241 2,716,258 2,759,530
TI/LC/Capital 869,661 166,208 288,028
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 1,722,580 2,550,050 2,471,502
Total NCR-REO Investments 3,409,041 4,260,256 3,509,154
================================
Loan Investments
- ----------------------
Fairview III Paid-off 12/22/95
Total NCR-Loan Investments 0 0 0
================================
TOTAL NCR FROM INVESTMENTS 7,166,215 8,442,150 7,981,907
LESS: GP 7.5% Share 537,466 633,161 598,643
Repurchase Fund @ 2.5% 179,155 211,054 199,548
--------------------------------
Net to Limited Partners @ 90% 6,449,593 7,597,935 7,183,716
================================
Pro-ject Pro-ject Pro-ject
2003 2004 2005
--------------------------------
GSB Building
NOI B4 TI/LC/Capital 1,999,266 3,000,722 3,097,437
TI/LC/Capital 834,510 344,343 514,250
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 1,164,756
Pacific Center
NOI B4 TI/LC/Capital 806,008 849,913 981,616
TI/LC/Capital 223,834 370,063 104,368
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 582,174 479,850
<PAGE>
Oxford Hills
NOI B4 TI/LC/Capital 2,618,794
TI/LC/Capital 882,343
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts
Total NCR-Equity Investments 1,746,930 479,850 0
================================
REO Investments
Park Center
NOI B4 TI/LC/Capital 788,640 934,667 978,392
TI/LC/Capital 424,429 183,962 159,931
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts
Oxford Square
NOI B4 TI/LC/Capital 1,234,407
TI/LC/Capital 160,437
Internal CF projection --------------------------------
Net Cash Receipts
Tysons Corner
NOI B4 TI/LC/Capital 2,692,291 2,881,131
TI/LC/Capital 942,598 535,066
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts 1,749,693
Total NCR-REO Investments 1,749,693 0 0
================================
Loan Investments
- ----------------------
Fairview III Paid-off 12/22/95
Total NCR-Loan Investments 0 0 0
================================
TOTAL NCR FROM INVESTMENTS 3,496,623 479,850 0
LESS: GP 7.5% Share 262,247 35,989 0
Repurchase Fund @ 2.5% 87,416 11,996 0
--------------------------------
Net to Limited Partners @ 90% 3,146,961 431,865 0
================================
<PAGE>
Pro-ject Pro-ject Pro-ject
2006 2007 2008
--------------------------------
GSB Building
NOI B4 TI/LC/Capital 3,443,175
TI/LC/Capital 212,515
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts
Pacific Center
NOI B4 TI/LC/Capital
TI/LC/Capital
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts
Oxford Hills
NOI B4 TI/LC/Capital
TI/LC/Capital
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts
Total NCR-Equity Investments 0 0 0
================================
REO Investments
Park Center
NOI B4 TI/LC/Capital 1,091,716 938,682
TI/LC/Capital 30,100 464,632
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts
Oxford Square
NOI B4 TI/LC/Capital
TI/LC/Capital
Internal CF projection --------------------------------
Net Cash Receipts
Tysons Corner
NOI B4 TI/LC/Capital
TI/LC/Capital
Appraisal CF's at 3/93 --------------------------------
Net Cash Receipts
<PAGE>
Total NCR-REO Investments 0 0 0
================================
Loan Investments
- ----------------------
Fairview III Paid-off 12/22/95
Total NCR-Loan Investments 0 0 0
================================
TOTAL NCR FROM INVESTMENTS 0 0 0
LESS: GP 7.5% Share 0 0 0
Repurchase Fund @ 2.5% 0 0 0
--------------------------------
Net to Limited Partners @ 90% 0 0 0
================================
Asset PV as of
31-Mar-96
-----------
GSB Building
NOI B4 TI/LC/Capital 8,415,592 NCR PV
TI/LC/Capital 14,821,981 Residual PV
Appraisal CF's at 3/93 -----------
Net Cash Receipts 23,237,574 Asset Value
Pacific Center NOI B4 TI/LC/Capital 3,281,426 NCR PV
TI/LC/Capital 4,391,384 Residual PV
Appraisal CF's at 3/93 -----------
Net Cash Receipts 7,672,810 Asset Value
Oxford Hills
NOI B4 TI/LC/Capital 7,082,297 NCR PV
TI/LC/Capital 13,997,404 Residual PV
Appraisal CF's at 3/93 -----------
Net Cash Receipts 21,079,701 Asset Value
Total NCR-Equity Investments
REO Investments
Park Center
NOI B4 TI/LC/Capital 2,557,330 NCR PV
TI/LC/Capital 5,743,142 Residual PV
Appraisal CF's at 3/93 -----------
Net Cash Receipts 8,300,472 Asset Value
Oxford Square
NOI B4 TI/LC/Capital 4,327,187 NCR PV
TI/LC/Capital 6,727,971 Residual PV
Internal CF projection -----------
Net Cash Receipts 11,055,159 Asset Value
<PAGE>
Tysons Corner
NOI B4 TI/LC/Capital11,708,675 NCR PV
TI/LC/Capital 14,137,049 Residual PV
Appraisal CF's at 3/93 -----------
Net Cash Receipts 25,845,724 Asset Value
Total NCR-REO Investments
-----------
Loan Investments
- ----------------------
Fairview III Paid-off 12/22/95 0 NCR PV
0 Principal PV
-----------
Total NCR-Loan Investments 0 Loan Value
===========
<PAGE>
SCHEDULE B-2
CAP RATE @ 9.00%
Sale Commission: 2.5%
Sale Activity 1994 1995 1996 1997
GSB Building Sales Price
26,356,200 Orig Cap Invest
--------------------------------------------
Excess NCP 0 0 0 0
Pacific Cntr Sales Price
29,838,155 Orig Cap Invest
--------------------------------------------
Excess NCP 0 0 0 0
Oxford Hills Sales Price
19,407,934 Orig Cap Invest
--------------------------------------------
Excess NCP 0 0 0 0
Total Capital Invested
Capital invested 0 0 0 0
Sale Proceeds 0 0 0 0
--------------------------------------------
75,602,289 Return of Cap 0 0 0 0
Excess NCP 0 0 0 0
Deficiency NCP 0 0 0 0
Sale Activity - REO
Park Center Sales Price
11,907,993 Cap Invest
--------------------------------------------
Excess NCR 0 0 0 0
Oxford Square Sales Price
11,806,631 Cap Invest
--------------------------------------------
Excess NCR 0 0 0 0
Tysons Corner Sales Price
37,488,368 Cap Invest
--------------------------------------------
Excess NCR 0 0 0 0
Total Capital Invested
Capital invested 0 0 0 0
Sale Proceeds 0 0 0 0
--------------------------------------------
61,202,992 Return of Cap 0 0 0 0
Excess NCR 0 0 0 0
Deficiency NCP 0 0 0 0
<PAGE>
Loan Repayments
Fairview III-paid-off 12/22/95
(payout 1996) Balloon 3,830,374
Amortized Principal 25,487 28,016
Capital returned
from Loan Investments 25,487 28,016 3,830,374 0
Total Return of Capital 0 0 0 0
Total Excess NCP 0 0 0 0
Total Excess NCR 0 0 0 0
1998 1999 2000 2001
GSB Building Sales Price
26,356,200 Orig Cap Invest
--------------------------------------------
Excess NCP 0 0 0 0
Pacific Cntr Sales Price
29,838,155 Orig Cap Invest
--------------------------------------------
Excess NCP 0 0 0 0
Oxford Hills Sales Price
19,407,934 Orig Cap Invest
--------------------------------------------
Excess NCP 0 0 0 0
Total Capital Invested
Capital invested 0 0 0 0
Sale Proceeds 0 0 0 0
--------------------------------------------
75,602,289 Return of Cap 0 0 0 0
Excess NCP 0 0 0 0
Deficiency NCP 0 0 0 0
Sale Activity - REO
Park Center Sales Price 10,206,615
11,907,993 Cap Invest 11,907,993
--------------------------------------------
Excess NCR 0 0 0 (1,701,378)
Oxford Square Sales Price
11,806,631 Cap Invest
--------------------------------------------
Excess NCR 0 0 0 0
Tysons Corner Sales Price
37,488,368 Cap Invest
--------------------------------------------
Excess NCR 0 0 0 0
<PAGE>
Total Capital Invested
Capital invested 0 0 11,907,993
Sale Proceeds 0 0 0 10,206,615
--------------------------------------------
61,202,992 Return of Cap 0 0 0 10,206,615
Excess NCR 0 0 0 0
Deficiency NCP 0 0 0 (1,701,378)
Loan Repayments
Fairview III-paid-off 12/22/95
(payout 1996) Balloon
Amortized Principal
Capital returned
from Loan Investments 0 0 0
Total Return of Capital 0 0 0 10,206,615
Total Excess NCP 0 0 0 0
Total Excess NCR 0 0 0 0
0
2002 2003 2004 2005
GSB Building Sales Price 32,163,479
26,356,200 Orig Cap Invest 26,356,200
--------------------------------------------
Excess NCP 0 5,807,279 0 0
Pacific Cntr Sales Price 10,529,809
29,838,155 Orig Cap Invest 29,838,155
--------------------------------------------
Excess NCP 0 0 (19308346) 0
Oxford Hills Sales Price 27,487,925
19,407,934 Orig Cap Invest 19,407,934
--------------------------------------------
Excess NCP 8,079,991 0 0 0
Total Capital Invested
Capital invested19,407,934 26,356,200 29,838,155 0
Sale Proceeds 27,487,925 32,163,479 10,529,809 0
--------------------------------------------
75,602,289 Return of Cap 19,407,934 26,356,200 10,529,809 0
Excess NCP 8,079,991 5,807,279 0 0
Deficiency NCP 0 0(19,308,346) 0
Sale Activity - REO
Park Center Sales Price
11,907,993 Cap Invest
--------------------------------------------
Excess NCR 0 0 0 0
Oxford Square Sales Price 13,212,306
11,806,631 Cap Invest 11,806,631
--------------------------------------------
Excess NCR 1,405,675 0 0 0
<PAGE>
Tysons Corner Sales Price 30,677,187
37,488,368 Cap Invest 37,488,368
--------------------------------------------
Excess NCR 0 (6,811,182) 0 0
Total Capital Invested
Capital invested11,806,631 37,488,368
Sale Proceeds 13,212,306 30,677,187 0 0
--------------------------------------------
61,202,992 Return of Cap 11,806,631 30,677,187 0 0
Excess NCR 1,405,675 0 0 0
Deficiency NCP 0 (6,811,182) 0 0
Loan Repayments
Fairview III-paid-off 12/22/95
(payout 1996) Balloon
Amortized Principal
Capital returned
from Loan Investments 0 0 0 0
Total Return of Capital 31,214,565 62,840,665 10,529,809 0
Total Excess NCP 8,079,991 0 0 0
Total Excess NCR 1,405,675 0 0 0
2006 2007
GSB Building Sales Price
26,356,200 Orig Cap Invest
Excess NCP 0 0
Pacific Cntr Sales Price
29,838,155 Orig Cap Invest
Excess NCP 0 0
Oxford Hills Sales Price
19,407,934 Orig Cap Invest
Excess NCP 0 0
Total Capital Invested
Capital invested 0 0
Sale Proceeds 0 0
75,602,289 Return of Cap 0 0
Excess NCP 0 0
Deficiency NCP 0 0
Sale Activity - REO
Park Center Sales Price
11,907,993 Cap Invest
Excess NCR 0 0
Oxford Square Sales Price
11,806,631 Cap Invest
Excess NCR 0 0
<PAGE>
Tysons Corner Sales Price 0
37,488,368 Cap Invest
Excess NCR 0 0
Capital invested
Total Capital Invested 0 0
Sale Proceeds 0 0
61,202,992 Return of Cap 0 0
Excess NCR 0 0
Deficiency NCP 0 0
Loan Repayments
Fairview III-paid-off 12/22/95
(payout 1996) Balloon
Amortized Principal
Capital returned
from Loan Investments 0 0
Total Return of Capital 0 0
Total Excess NCP 0 0
Total Excess NCR 0 0
<PAGE>
SCHEDULE B-3
NCR ALLOCATION PERCENTAGES NCP ALLOCATION PERCENTAGES
Tax-Exempt 89.8640% 86.9554%
Taxable 10.1360% 13.0446%
--------- -----------
100.00% 100.00%
BEPI I Discounted Cash Flow Analysis
1996 1997 1998
---------------------------------
EQUITY NCR ALLOCATION
Equity Cash Flow after
TI/LC/Capital (NCR) 3,465,489 3,648,987 3,395,448
Tax-Exempt Share of 90% Cash Flow (NCR) 2,802,804 2,951,213 2,746,157
Discounted @ 10.00% 15,188,259 14,225,276 12,696,590
per unit 48.62 45.54 40.65
Taxable Share of 90% Cash Flow (NCR) 316,136 332,875 309,746
Discounted @ 10.00% 1,713,124 1,604,507 1,432,082
per unit 36.56 34.24 30.56
REO NCR ALLOCATION
REO Cash Flow after TI/LC/Capital (NCR) 3,948,798 4,131,833 3,458,466
Tax-Exempt Share of 90% Cash Flow (NCR) 3,193,693 3,341,727 2,797,124
Discounted @ 10.00% 15,037,728 13,770,287 11,805,589
per unit 48.14 44.08 37.79
Taxable Share of 90% Cash Flow (NCR) 360,225 376,922 315,495
Discounted @ 10.00% 1,696,145 1,553,187 1,331,584
per unit 36.20 33.15 28.42
LOAN NCR ALLOCATION
LOAN Cash Flow after TI/LC/Capital (NCR) 0 0 0
Tax-Exempt Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.25% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.25% 0 0 0
per unit 0.00 0.00 0.00
TOTAL NCR ALLOCATION (PER UNIT)
Tax-Exempt Share 96.76 89.62 78.44
Taxable Share 72.75 67.39 58.98
<PAGE>
DISCOUNTED NCP ALLOCATION
Discounted @ 10.25%
NET CAPITAL RETURNED ON LOAN PAYOFFS 3,830,374 0 0
Tax-Exempt Share of NCP 3,830,374 0 0
per unit 12.26 0.00 0.00
NET CAPITAL RETURNED ON LOAN PAYOFFS 0 0 0
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL TO RETURN 10.50% 0 0 0
Tax-Exempt Share of NCP 58,989,517 63,634,942 70,316,611
per unit 188.85 203.72 225.11
NET CAPITAL TO RETURN 0 0 0
Taxable Share of Cash Flow (NCP) 113,616 122,564 135,433
per unit 2.42 2.62 2.89
TOTAL NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 201.11 203.72 225.11
Taxable Share 2.42 2.62 2.89
EXCESS NET CASH PROCEEDS (EQUITY) 0 0 0
Discounted @ 10.50% 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
EXCESS NET CASH RECEIPTS (LOANS/REOS) 0 0 0
Discounted @ 10.50% 715,798 772,167 853,244
Tax-Exempt Share of 90% NCR 578,920 624,510 690,083
per unit 1.85 2.00 2.21
Taxable Share of 90% NCR 65,298 70,440 77,836
per unit 1.39 1.50 1.66
TOTAL NCR & NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 299.72 295.34 305.76
Taxable Share 76.57 71.50 63.53
<PAGE>
1999 2000 2001
---------------------------------
EQUITY NCR ALLOCATION
Equity Cash Flow after
TI/LC/Capital(NCR) 3,536,928 3,757,174 4,181,894
Tax-Exempt Share of 90% Cash Flow (NCR) 2,860,582 3,038,712 3,382,215
Discounted @ 10.00% 11,220,092 9,481,519 7,390,959
per unit 35.92 30.35 23.66
Taxable Share of 90% Cash Flow (NCR) 322,653 342,744 381,489
Discounted @ 10.00% 1,265,544 1,069,446 833,646
per unit 27.01 22.82 17.79
REO NCR ALLOCATION
REO Cash Flow after TI/LC/Capital (NCR) 3,406,342 3,409,041 4,260,256
Tax-Exempt Share of 90% Cash Flow (NCR) 2,754,968 2,757,151 3,445,593
Discounted @ 10.00% 10,189,023 8,452,958 6,541,103
per unit 32.62 27.06 20.94
Taxable Share of 90% Cash Flow (NCR) 310,740 310,986 388,638
Discounted @ 10.00% 1,149,247 953,432 737,788
per unit 24.53 20.35 15.74
LOAN NCR ALLOCATION
LOAN Cash Flow after TI/LC/Capital (NCR) 0 0 0
Tax-Exempt Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.25% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.25% 0 0 0
per unit 0.00 0.00 0.00
TOTAL NCR ALLOCATION (PER UNIT)
Tax-Exempt Share 68.54 57.41 44.60
Taxable Share 51.53 43.17 33.53
DISCOUNTED NCP ALLOCATION
Discounted @ 10.25%
NET CAPITAL RETURNED ON LOAN PAYOFFS 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL RETURNED ON LOAN PAYOFFS 0 0 0
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL TO RETURN 10.50% 0 0 10,206,615
Tax-Exempt Share of NCP 77,699,855 85,858,340 94,873,465
per unit 248.74 274.86 303.72
<PAGE>
NET CAPITAL TO RETURN 0 0 0
Taxable Share of Cash Flow (NCP) 149,653 165,367 182,730
per unit 3.19 3.53 3.90
TOTAL NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 248.74 274.86 303.72
Taxable Share 3.19 3.53 3.90
EXCESS NET CASH PROCEEDS (EQUITY) 0 0 0
Discounted @ 10.50% 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
EXCESS NET CASH RECEIPTS (LOANS/REOS) 0 0 0
Discounted @ 10.50% 942,835 1,041,833 1,151,225
Tax-Exempt Share of 90% NCR 762,542 842,609 931,083
per unit 2.44 2.70 2.98
Taxable Share of 90% NCR 86,009 95,040 105,019
per unit 1.84 2.03 2.24
TOTAL NCR & NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 319.72 334.97 351.30
Taxable Share 56.56 48.73 39.68
2002 2003 2004
---------------------------------
EQUITY NCR ALLOCATION
Equity Cash Flow after
TI/LC/Capital(NCR) 4,472,753 1,746,930 479,850
Tax-Exempt Share of 90% Cash Flow (NCR) 3,617,455 1,412,875 388,091
Discounted @ 10.00% 4,747,840 1,605,169 352,810
per unit 15.20 5.14 1.13
Taxable Share of 90% Cash Flow (NCR) 408,022 159,362 43,774
Discounted @ 10.00% 535,521 181,051 39,794
per unit 11.43 3.86 0.85
REO NCR ALLOCATION
REO Cash Flow after TI/LC/Capital (NCR) 3,509,154 1,749,693 0
Tax-Exempt Share of 90% Cash Flow (NCR) 2,838,120 1,415,110 0
Discounted @ 10.00% 3,749,621 1,286,463 0
per unit 12.00 4.12 0.00
<PAGE>
Taxable Share of 90% Cash Flow (NCR) 320,119 159,614 0
Discounted @ 10.00% 422,930 145,104 0
per unit 9.03 3.10 0.00
LOAN NCR ALLOCATION
LOAN Cash Flow after TI/LC/Capital (NCR) 0 0 0
Tax-Exempt Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.25% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.25% 0 0 0
per unit 0.00 0.00 0.00
TOTAL NCR ALLOCATION (PER UNIT)
Tax-Exempt Share 27.20 9.26 1.13
Taxable Share 20.45 6.96 0.85
DISCOUNTED NCP ALLOCATION
Discounted @ 10.25%
NET CAPITAL RETURNED ON LOAN PAYOFFS 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL RETURNED ON LOAN PAYOFFS 0 0 0
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL TO RETURN 10.50% 39,294,556 62,840,665 10,257,376
Tax-Exempt Share of NCP 94,628,564 65,270,007 9,282,693
per unit 302.94 208.95 29.72
NET CAPITAL TO RETURN 0 0 272,433
Taxable Share of Cash Flow (NCP) 201,917 223,118 246,546
per unit 4.31 4.76 5.26
TOTAL NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 302.94 208.95 29.72
Taxable Share 4.31 4.76 5.26
EXCESS NET CASH PROCEEDS (EQUITY) 0 0 0
Discounted @ 10.50% 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
<PAGE>
EXCESS NET CASH RECEIPTS (LOANS/REOS) 1,405,675 0 0
Discounted @ 10.50% 1,272,104 0 0
Tax-Exempt Share of 90% NCR 1,028,847 0 0
per unit 3.29 0.00 0.00
Taxable Share of 90% NCR 116,046 0 0
per unit 2.48 0.00 0.00
TOTAL NCR & NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 333.44 218.21 30.85
Taxable Share 27.24 11.72 6.11
2005 2006 2007
---------------------------------
EQUITY NCR ALLOCATION
Equity Cash Flow after
TI/LC/Capital(NCR) 0 0 0
Tax-Exempt Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.00% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.00% 0 0 0
per unit 0.00 0.00 0.00
REO NCR ALLOCATION
REO Cash Flow after TI/LC/Capital (NCR) 0 0 0
Tax-Exempt Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.00% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.00% 0 0 0
per unit 0.00 0.00 0.00
LOAN NCR ALLOCATION
LOAN Cash Flow after TI/LC/Capital (NCR) 0 0 0
Tax-Exempt Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.25% 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90% Cash Flow (NCR) 0 0 0
Discounted @ 10.25% 0 0 0
per unit 0.00 0.00 0.00
TOTAL NCR ALLOCATION (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00
<PAGE>
DISCOUNTED NCP ALLOCATION
Discounted @ 10.25%
NET CAPITAL RETURNED ON LOAN PAYOFFS 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL RETURNED ON LOAN PAYOFFS 0 0 0
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL TO RETURN 10.50% 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
NET CAPITAL TO RETURN 0 0 0
Taxable Share of Cash Flow (NCP) 0 0 0
per unit 0.00 0.00 0.00
TOTAL NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00
EXCESS NET CASH PROCEEDS (EQUITY) 0 0 0
Discounted @ 10.50% 0 0 0
Tax-Exempt Share of NCP 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of NCP 0 0 0
per unit 0.00 0.00 0.00
EXCESS NET CASH RECEIPTS (LOANS/REOS) 0 0 0
Discounted @ 10.50% 0 0 0
Tax-Exempt Share of 90% NCR 0 0 0
per unit 0.00 0.00 0.00
Taxable Share of 90% NCR 0 0 0
per unit 0.00 0.00 0.00
TOTAL NCR & NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00
2008
-----------
EQUITY NCR ALLOCATION
Equity Cash Flow after TI/LC/Capital(NCR) 0
<PAGE>
Tax-Exempt Share of 90% Cash Flow (NCR) 0
Discounted @ 10.00% 0
per unit 0.00
Taxable Share of 90% Cash Flow (NCR) 0
Discounted @ 10.00% 0
per unit 0.00
REO NCR ALLOCATION
REO Cash Flow after TI/LC/Capital (NCR) 0
Tax-Exempt Share of 90% Cash Flow (NCR) 0
Discounted @ 10.00% 0
per unit 0.00
Taxable Share of 90% Cash Flow (NCR) 0
Discounted @ 10.00% 0
per unit 0.00
LOAN NCR ALLOCATION
LOAN Cash Flow after TI/LC/Capital (NCR) 0
Tax-Exempt Share of 90% Cash Flow (NCR) 0
Discounted @ 10.25% 0
per unit 0.00
Taxable Share of 90% Cash Flow (NCR) 0
Discounted @ 10.25% 0
per unit 0.00
TOTAL NCR ALLOCATION (PER UNIT)
Tax-Exempt Share 0.00
Taxable Share 0.00
DISCOUNTED NCP ALLOCATION
Discounted @ 10.25%
NET CAPITAL RETURNED ON LOAN PAYOFFS 0
Tax-Exempt Share of NCP 0
per unit 0.00
NET CAPITAL RETURNED ON LOAN PAYOFFS 0
Taxable Share of NCP 0
per unit 0.00
NET CAPITAL TO RETURN 10.50% 0
Tax-Exempt Share of NCP 0
per unit 0.00
NET CAPITAL TO RETURN 0
Taxable Share of Cash Flow (NCP) 0
per unit 0.00
<PAGE>
TOTAL NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 0.00
Taxable Share 0.00
EXCESS NET CASH PROCEEDS (EQUITY) 0
Discounted @ 10.50% 0
Tax-Exempt Share of NCP 0
per unit 0.00
Taxable Share of NCP 0
per unit 0.00
EXCESS NET CASH RECEIPTS (LOANS/REOS) 0
Discounted @ 10.50% 0
Tax-Exempt Share of 90% NCR 0
per unit 0.00
Taxable Share of 90% NCR 0
per unit 0.00
TOTAL NCR & NCP ALLOCATION (PER UNIT)
Tax-Exempt Share 0.00
Taxable Share 0.00
<PAGE>
SCHEDULE B-3 (continued)
BEPI I Discounted Cash Flow Analysis (con't.)
1996 1997 1998 1999
----------------------------------------
CASH BALANCES
Working Capital
Contingency Reserves
SUBTOTAL WC & CR
Undistributed NCR
Loan Repayment
SUBTOTAL UNDISTRIBUTED NCR
TOTAL CASH (net of Loan Payoff)
Short-Term Interest @ 4.00% 324,243 324,243 324,243 324,243
Fund Expenses
DISCOUNTED CASH BALANCES
Discount Rate @ 4.00%
NCP (Working Capital & Reserves) 0 0 0 0
0 0 0 0
Tax-Exempt Share of NCP 1,762,400 1,815,272 1,887,883 1,963,398
per unit 5.64 5.81 6.04 6.29
0 0 0 0
Taxable Share of NCP 46,809 48,213 50,142 52,147
per unit 1.00 1.03 1.07 1.11
NCR (Undistributed NCR) 3,941,302 4,059,541 4,221,923 4,390,799
LESS: Fund Expenses 10.00% 0 0 0 0
NCR (Short-Term Interest) 2,355,559 2,183,044 1,946,123 1,699,725
----------------------------------------
TOTAL NCR 6,296,861 6,242,585 6,168,046 6,090,525
Less: GP 10% Share 629,686 624,258 616,805 609,052
----------------------------------------
Net to Limited Partners 5,667,175 5,618,326 5,551,241 5,481,472
Tax-Exempt Share of NCR 5,092,750 5,048,853 4,988,567 4,925,870
per unit 16.30 16.16 15.97 15.77
Taxable Share of NCR 574,425 569,474 562,674 555,602
per unit 12.26 12.15 12.01 11.86
LOAN FEES 25,537 4,941 0 0
(straight-line amortization)
OFFERING EXPENSES 1,637,925 1,091,949 363,981 0
(straight-line amortization)
----------------------------------------
TOTAL 1,663,462 1,096,890 363,981 0
<PAGE>
FEES & OFF EXP (PER UNIT)
Tax-Exempt Share 4.63 3.05 1.01 0.00
Taxable Share 4.63 3.05 1.01 0.00
REPURCHASE FUND
Discounted @ 10.00%3,533,382 3,798,386 4,178,224 4,596,047
Tax-Exempt Share 0 0 0 0
Discounted 0 0 0 0
Taxable Share 0 0 0 0
Discounted 3,533,382 3,798,386 4,178,224 4,596,047
Tax-Exempt per unit 0.00 0.00 0.00 0.00
Taxable per unit 75.40 81.06 89.16 98.08
TOTAL ALLOCATION (PER UNIT)
Tax-Exempt Share @ 326.30 320.37 328.78 341.78
Taxable Share @ 169.86 168.80 166.78 167.61
2000 2001 2002 2003
----------------------------------------
CASH BALANCES
Working Capital
Contingency Reserves
SUBTOTAL WC & CR
Undistributed NCR
Loan Repayment
SUBTOTAL UNDISTRIBUTED NCR
TOTAL CASH (net of Loan Payoff)
Short-Term Interest @ 4.00% 324,243 324,243 324,243 324,243
Fund Expenses
DISCOUNTED CASH BALANCES
Discount Rate @ 4.00%
NCP (Working Capital & Reserves) 0 0 0 0
0 0 0 0
Tax-Exempt Share of NCP 2,041,934 2,123,611 2,208,556 2,296,898
per unit 6.54 6.80 7.07 7.35
0 0 0 0
Taxable Share of NCP 54,233 56,403 58,659 61,005
per unit 1.16 1.20 1.25 1.30
NCR (Undistributed NCR) 4,566,431 4,749,089 4,939,052 5,136,614
LESS: Fund Expenses 10.00% 0 0 0 0
NCR (Short-Term Interest) 1,443,471 1,176,967 899,803 611,553
----------------------------------------
TOTAL NCR 6,009,903 5,926,056 5,838,855 5,748,167
Less: GP 10% Share 600,990 592,606 583,886 574,817
----------------------------------------
<PAGE>
Net to Limited Partners 5,408,912 5,333,450 5,254,970 5,173,350
Tax-Exempt Share of NCR 4,860,665 4,792,852 4,722,326 4,648,979
per unit 15.56 15.34 15.12 14.88
Taxable Share of NCR 548,247 540,599 532,644 524,371
per unit 11.70 11.54 11.37 11.19
LOAN FEES 0 0 0 0
(straight-line amortization)
OFFERING EXPENSES 0 0 0 0
(straight-line amortization)
----------------------------------------
TOTAL 0 0 0 0
FEES & OFF EXP (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00 0.00
REPURCHASE FUND
Discounted @ 10.00%5,055,651 5,561,216 6,117,338 6,729,072
Tax-Exempt Share 0 0 0 0
Discounted 0 0 0 0
Taxable Share 0 0 0 0
Discounted 5,055,651 5,561,216 6,117,338 6,729,072
Tax-Exempt per unit 0.00 0.00 0.00 0.00
Taxable per unit 107.89 118.68 130.54 143.60
TOTAL ALLOCATION (PER UNIT)
Tax-Exempt Share @ 357.07 373.45 355.62 240.44
Taxable Share @ 169.47 171.09 170.40 167.81
2004 2005 2006 2007
----------------------------------------
CASH BALANCES
Working Capital 2,550,308
Contingency Reserves 0
SUBTOTAL WC & CR 2,550,308
----------
Undistributed NCR 5,555,762
Loan Repayment 0
SUBTOTAL UNDISTRIBUTED NCR 5,555,762
----------
TOTAL CASH (net of Loan Payoff) 8,106,070
Short-Term Interest @ 4.00% 324,243 0 0 0
Fund Expenses
<PAGE>
DISCOUNTED CASH BALANCES
Discount Rate @ 4.00%
NCP (Working Capital & Reserves)2,550,308 0 0 0
2,484,325 0 0 0
----------
Tax-Exempt Share of NCP 2,388,774 0 0 0
per unit 7.65 0.00 0.00 0.00
65,983 0 0 0
Taxable Share of NCP 63,445 0 0 0
per unit 1.35 0.00 0.00 0.00
NCR (Undistributed NCR) 5,342,079 0 0 0
LESS: Fund Expenses 10.00% 0 0 0 0
NCR (Short-Term Interest) 311,772 0 0 0
TOTAL NCR 5,653,851 0 0 0
Less: GP 10% Share 565,385 0 0 0
Net to Limited Partners 5,088,466 0 0 0
Tax-Exempt Share of NCR 4,572,699 0 0 0
per unit 14.64 0.00 0.00 0.00
Taxable Share of NCR 515,767 0 0 0
per unit 11.01 0.00 0.00 0.00
LOAN FEES 0 0 0 0
(straight-line amortization)
OFFERING EXPENSES 0 0 0 0
(straight-line amortization)
TOTAL 0 0 0 0
FEES & OFF EXP (PER UNIT)
Tax-Exempt Share 0.00 0.00 0.00 0.00
Taxable Share 0.00 0.00 0.00 0.00
REPURCHASE FUND 8,142,177
Discounted @ 10.00%7,401,979 0 0 0
Tax-Exempt Share 0 0 0 0
Discounted 0 0 0 0
Taxable Share 8,142,177 0 0 0
Discounted 7,401,979 0 0 0
Tax-Exempt per unit 0.00 0.00 0.00 0.00
Taxable per unit 157.96 0.00 0.00 0.00
TOTAL ALLOCATION (PER UNIT)
Tax-Exempt Share @ 53.13 0.00 0.00 0.00
Taxable Share @ 176.43 0.00 0.00 0.00
<PAGE>
2008
----------
CASH BALANCES
Working Capital
Contingency Reserves
SUBTOTAL WC & CR
Undistributed NCR
Loan Repayment
SUBTOTAL UNDISTRIBUTED NCR
TOTAL CASH (net of Loan Payoff)
Short-Term Interest @ 4.00% 0
Fund Expenses
DISCOUNTED CASH BALANCES
Discount Rate @ 4.00%
NCP (Working Capital & Reserves) 0
0
Tax-Exempt Share of NCP 0
per unit 0.00
0
Taxable Share of NCP 0
per unit 0.00
NCR (Undistributed NCR) 0
LESS: Fund Expenses 10.00% 0
NCR (Short-Term Interest) 0
TOTAL NCR 0
Less: GP 10% Share 0
Net to Limited Partners 0
Tax-Exempt Share of NCR 0
per unit 0.00
Taxable Share of NCR 0
per unit 0.00
LOAN FEES 0
(straight-line amortization)
OFFERING EXPENSES 0
(straight-line amortization)
TOTAL 0
FEES & OFF EXP (PER UNIT)
Tax-Exempt Share 0.00
Taxable Share 0.00
<PAGE>
REPURCHASE FUND
Discounted @ 10.00% 0
Tax-Exempt Share 0
Discounted 0
Taxable Share 0
Discounted 0
Tax-Exempt per unit 0.00
Taxable per unit 0.00
TOTAL ALLOCATION (PER UNIT)
Tax-Exempt Share @ 0.00
Taxable Share @ 0.00
<PAGE>
VALUATION OF THE OFFERING EXPENSES AND LOAN FEES
The valuation methodology of the Partnership Interests includes the
capitalization of the Offering Expenses and their amortization over the life of
the equity assets and debt assets. As of March 31, 1996, the total unamortized
portion of the Offering Expenses was $1,637,925. The total amount of the
Offering Expenses is allocated proportionally to the Equity Assets and the Debt
Assets and amortized on the basis of depreciating the Equity on a straight-line
basis over 10 years and the Debt on a straight-line basis to maturity. For
financial reporting purposes, Balcor Equity Partners - I initially deducted the
total offering expenses and loan fees as incurred from the proceeds of the
Limited Partnership Interest.
The loan fees paid to the General Partner are capitalized and amortized over
the life of the loans. They are allocated between Tax-Exempt and Taxable
Interests.
A summary of the Offering Expense and Loan Fees Balances are as follows.
General
Tax-exempt Taxable Partner Total
Offering Expenses$1,424,264 213,661 0 1,637,925
Loan Fees 22,206 3,331 0 25,537
<PAGE>
CONCLUSION OF VALUE
Based on the various analyses of the components of the Partnership's Interests
presented in this report, our conclusions of value are summarized in the
following Schedule C.
SCHEDULE C
BEPI I
VALUATION SUMMARY
as of: 31-Mar-96
GENERAL
TAX-EXEMPT TAXABLE PARTNER TOTAL
===============================================
CASH:
Working Capital &
Contingency Reserves 1,762,400 46,809 0 1,809,209
Current Undistributed NCR 5,092,750 574,425 629,686 6,296,861
-----------------------------------------------
6,855,150 621,234 629,686 8,106,070
EQUITY INVESTMENTS
Net Cash Receipts 15,188,259 1,713,124 1,877,932 18,779,315
LOAN/REO INVESTMENTS
Net Cash Receipts 15,037,728 1,696,145 1,859,319 18,593,192
EXCESS NET CASH
PROCEEDS (EQUITY) 0 0 0 0
EXCESS NET CASH
RECEIPTS (LOANS/REOS) 578,920 65,298 71,580 715,798
RETURN OF CAPITAL
(PROCEEDS) 62,819,891 113,616 0 62,933,508
REPURCHASE FUND 0 3,533,382 0 3,533,382
LOAN FEES 22,206 3,331 0 25,537
OFFERING EXPENSES 1,424,264 213,661 0 1,637,925
-----------------------------------------------
TOTAL VALUE OF ASSETS 101,926,419 7,959,792 4,438,517 114,324,727
===============================================
NUMBER OF UNITS 312,369 46,860
VALUE PER UNIT 326.30 169.86
========================
ADJUSTED CAPITAL PER UNIT 464.01 487.01
4th Qtr 1995 (actual) 321.84 169.13
Change in value 1.39% 0.43%
