FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-13083
CONSOLIDATED CAPITAL PROPERTIES V
(Exact name of small business issuer as specified in its charter)
California 94-2918560
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 562
Restricted - tenant security deposits 87
Investments 107
Accounts receivable 45
Escrows for taxes and insurance 55
Restricted escrows 783
Other assets 301
Investment properties:
Land $ 1,969
Buildings and related personal property 18,508
20,477
Less accumulated depreciation (13,339) 7,138
$ 9,078
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 79
Tenant security deposits 87
Accrued taxes 384
Other liabilities 127
Mortgage notes payable 11,247
Partners' Deficit
General partner $ (20)
Special limited partners (53)
Limited partners (179,617 units
issued and outstanding) (2,773) (2,846)
$ 9,078
See Accompanying Notes to Consolidated Financial Statements
b) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1997 1996
Revenues:
Rental income $1,084 $ 978
Other income 65 31
Total revenues 1,149 1,009
Expenses:
Operating 402 367
General and administrative 41 56
Maintenance 205 99
Depreciation 268 282
Interest 206 249
Property taxes 110 114
Total expenses 1,232 1,167
Net loss $ (83) $ (158)
Net loss allocated to general partner (.2%) $ -- $ --
Net loss allocated to limited partners (99.8%) (83) (158)
$ (83) $ (158)
Net loss per limited partnership unit: $ (.46) $ (.88)
See Accompanying Notes to Consolidated Financial Statements
c) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
For the Three Months Ended March 31, 1997
(in thousands, except unit data)
Limited Special
Partnership General Limited Limited
Units Partner Partners Partners Total
Original capital
contributions 180,037 $ 1 $ -- $45,009 $45,010
Partners' deficit at
December 31, 1996 179,617 $ (20) $ (54) $(2,689) $(2,763)
Amortization of
timing difference (Note D) -- -- 1 (1) --
Net loss for the
three months ended
March 31, 1997 -- -- -- (83) (83)
Partners' deficit at
March 31, 1997 179,617 $ (20) $ (53) $(2,773) $(2,846)
See Accompanying Notes to Consolidated Financial Statements
d) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1997 1996
Cash flows from operating activities:
Net loss $ (83) $ (158)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 268 282
Amortization of lease commissions, discounts,
and loan costs 17 42
Interest added to mortgage notes payable -- 3
Change in accounts:
Restricted cash 6 1
Accounts receivable (15) --
Escrows for taxes and insurance 181 (59)
Other assets 1 51
Accounts payable (3) (111)
Tenant security deposit liabilities (8) (8)
Accrued taxes (21) 67
Other liabilities (20) (76)
Net cash provided by
operating activities 323 34
Cash flows from investing activities:
Property improvements and replacements (115) (44)
Deposits to restricted escrows (39) (16)
Receipts from restricted escrows 160 --
Net cash provided by (used in)
investing activities 6 (60)
Cash flows from financing activities:
Payments on mortgage notes payable (47) (52)
Repayment of mortgage note payable -- (700)
Loan costs paid (10) --
Net cash used in financing activities (57) (752)
Net increase (decrease) in cash and cash 272 (778)
equivalents
Cash and cash equivalents at beginning of period 290 1,078
Cash and cash equivalents at end of period $ 562 $ 300
Supplemental disclosure of cash flow information:
Cash paid for interest $ 206 $ 244
See Accompanying Notes to Consolidated Financial Statements
e) CONSOLIDATED CAPITAL PROPERTIES V
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Consolidated Capital
Properties V ("the Partnership") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of ConCap Equities, Inc. (the "General Partner"), all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 1997, are
not necessarily indicative of the results that may be expected for the fiscal
year ending December 31, 1997. For further information, refer to the financial
statements and footnotes thereto included in the Partnership's annual report on
Form 10-KSB for the fiscal year ended December 31, 1996.
Investments
Investments consisting primarily of U.S. Treasury Notes with original maturities
of more than ninety days, are considered to be held-to-maturity securities.
NOTE B - TRANSACTIONS WITH RELATED PARTIES
The Partnership has no employees and is dependent on the General Partner and
affiliates of Insignia for the management and administration of all of the
Partnership activities, as provided for in the Partnership agreement.
The Partnership has paid property management fees based upon collected gross
rental revenues for property management services in each of the three months
ended March 31, 1997 and 1996. Property management fees of approximately
$53,000 and $50,000 were paid to affiliates of the General Partner for each of
the three months ended March 31, 1997 and 1996, respectively. These fees are
included in operating expenses.
The Partnership Agreement also provides for reimbursement to the General Partner
and its affiliates for costs incurred in connection with the administration of
Partnership activities. Reimbursements for services of affiliates of
approximately $35,000 and $34,000 were paid to the General Partner and its
affiliates during each of the three months ended March 31, 1997 and 1996,
respectively. These reimbursements are included in general and administrative
expenses. Also during the three months ended March 31, 1997 and 1996,
approximately $14,000 and $2,000, respectively, of leasing commissions were paid
to an affiliate of Insignia. Leasing commissions are capitalized and included
in other assets. Approximately $2,000 during the three months ended March 31,
1997, was paid to affiliates for construction oversight costs incurred in
conjunction with improvements made at Aspen Ridge and Sutton Place. These
amounts are included in maintenance expense.
During the three months ended March 31, 1997, the Partnership paid an affiliate
of the General Partner approximately $6,000 for loan costs which were
capitalized and included in other assets in the accompanying Consolidated
Balance Sheet. These loan costs related to the refinancing of the Aspen Ridge
Apartments during the fourth quarter of 1996.
In July 1995, the Partnership began insuring its properties under a master
policy through an agency and insurer unaffiliated with the General Partner. An
affiliate of the General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy. The current agent
assumed the financial obligations to the affiliate of the General Partner who
receives payment on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
General Partner by virtue of the agent's obligations is not significant.
NOTE C - COMMITMENT
The Partnership is required to maintain working capital reserves for normal
repairs, replacements, working capital and contingencies of not less than 5% of
Net Invested Capital as defined in the Partnership Agreement. In the event
expenditures are made from these reserves, operating revenue shall be allocated
to such reserves to the extent necessary to maintain the foregoing level. Cash
and cash equivalents, tenant security deposits and investments totaling
approximately $756,000, are less than the reserve requirement of approximately
$1,761,000 at March 31, 1997. The Partnership intends to replenish the working
capital reserve from cash flow from operations after consideration of any
capital improvement needs of the properties. The Partnership's recent cash
flows from operations, however, have not been sufficient to replenish the
reserve and there is no assurance that future levels of cash flow from
operations will be adequate to accomplish this objective. The working capital
requirement must be met prior to any consideration for distributions to the
partners.
NOTE D - CHANGE IN STATUS OF NON-CORPORATE GENERAL PARTNER
In the year ended December 31, 1991, the Partnership Agreement was amended to
convert the General Partner interests held by the non-corporate General Partner,
Consolidated Capital Group ("CCG"), to that of special limited partners
("Special Limited Partners"). The Special Limited Partners do not have a vote
and do not have any of the other rights of a Limited Partner except the right to
inspect the Partnership's books and records; however, the Special Limited
Partners will retain the economic interest in the Partnership which it
previously owned as general partner. ConCap Equities, Inc. ("CEI") became the
sole general partner of the Partnership effective December 31, 1991. In
connection with CCG's conversion, a special allocation of gross income was made
to the Special Limited Partners in order to eliminate their tax basis negative
capital accounts.
After the conversion, the various owners of interests in the Special Limited
Partner transferred portions of their interests to CEI so that CEI now holds a
.2% interest in all allocable items of income, loss and distribution. The
difference between the Special Limited Partners' capital accounts for financial
statement and tax reporting purposes is being amortized as the components of the
timing differences which created the balance reverse.
NOTE E - DEBT RESTRUCTURING
The Partnership restructured the debt on the 51 North High Building and made a
principal prepayment (without penalty) of $700,000 in January 1996. In addition
to this payment, the lender reduced the note's face amount by an additional
$700,000 and the stated interest rate of the note was reduced from 13.5% to 9%.
The maturity date of June 1, 2004, was unchanged.
The debt restructuring was accounted for as a modification of terms. The total
future cash payments under the restructured loan exceed the carrying value of
the loan as of the date of restructure. Consequently, the carrying amount of
the loan was reduced only by the $700,000 principal prepayment actually paid
with no gain being recognized on the restructuring. Interest on the
restructured debt accrues at an imputed rate of 4%, the rate required to equate
the present value of the total future cash payments under the new terms to the
carrying amount of the loan at the date of restructure.
To facilitate the debt restructuring of the 51 North High Building in 1996, the
property was placed into a lower-tier partnership known as 51 North High Street,
L.P. in which the Partnership is the 99.99% limited partner. The Partnership
retained substantially all economic benefits from the property.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of two apartment complexes and
one commercial property. The following table sets forth the average occupancy
of the properties for the three months ended March 31, 1997 and 1996:
Occupancy for the Three Months Ended
March 31,
1997 1996
Aspen Ridge Apartments
Chicago, Illinois 94% 89%
Sutton Place Apartments
Corpus Christi, Texas 95% 90%
51 North High Street Building
Columbus, Ohio 94% 88%
The increase in occupancy at the Aspen Ridge Apartments is primarily due to
rental concessions offered during 1996 which increased occupancy throughout 1996
and the first quarter of 1997. The increase in occupancy at the Sutton Place
Apartments resulted from additional military troops being relocated to Corpus
Christi as well as improved curb appeal of the property resulting from the
exterior building improvements made at the property from funds received from the
debt refinancing in September 1996. The increase in occupancy at the 51 North
High Street Building is due to existing tenants leasing additional space and the
addition of a new tenant.
The Partnership realized a net loss of approximately $83,000 during the three
months ended March 31, 1997, compared to a net loss of approximately $158,000
during the three months ended March 31, 1996. The decreased loss primarily
resulted from increased rental and other income and decreased interest expense
partially offset by increased maintenance expenses.
The increase in rental income is due to rental rate increases at the
Partnership's properties and due to higher occupancy levels at all of the
Partnership's properties as discussed above. The increase in other income
resulted from interest earned on the capital improvement and replacement reserve
escrows established in the 1996 Sutton Place and Aspen Ridge refinancings,
increased lease cancellation fees at Sutton Place and increased reimbursements
for tenant improvements at the 51 North High Street Building. General and
administrative costs decreased as a result of decreased audit and tax return
fees and a decrease in legal costs. The increase in maintenance expense is
primarily due to the project at Sutton Place for exterior building improvements
and parking lot repairs. The decrease in interest expense is due to a debt
restructure which lowered the imputed interest rate substantially and a
principal payment of $700,000 at 51 North High in January of 1996. Also, the
mortgage notes secured by Sutton Place and Aspen Ridge were refinanced during
the third and fourth quarters of 1996, respectively, at lower interest rates.
Included in maintenance expense is approximately $82,000 of major repairs and
maintenance comprised primarily of gutter repairs, exterior building
improvements and exterior painting at Sutton Place Apartments for the three
months ended March 31, 1997. For the three month ended March 31, 1996,
approximately $4,000 of major repairs and maintenance comprised primarily of
swimming pool repairs are included in maintenance expense.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
At March 31, 1997, the Partnership held cash and cash equivalents of
approximately $562,000 compared to approximately $300,000 at March 31, 1996.
Net cash provided by operating activities increased due to the timing of tax
payments from escrows and due to the increased rental income discussed above.
Net cash provided by investing activities increased as a result of receipts from
the capital improvement escrow for Sutton Place for exterior capital
improvements to the property. A related increase in property improvements and
replacements partially offset the impact of the escrow receipts. Net cash used
in financing activities decreased as a result of the non-recurring nature of the
$700,000 debt reduction at 51 North High during January 1996.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership. Such assets are currently thought
to be sufficient for any near-term needs of the Partnership. The mortgage
indebtedness of approximately $11,247,000, net of discount, matures at various
times with balloon payments due at maturity, at which time the properties will
either be sold or the mortgages refinanced. Future cash distributions will
depend on the levels of net cash generated from operations, capital expenditure
requirements, property sales and the availability of cash reserves. During the
three months ended March 31, 1997, and March 31, 1996, no distributions were
declared or paid.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits.
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report.
(b)Reports on Form 8-K.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Partnership
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSOLIDATED CAPITAL PROPERTIES V
By: CONCAP EQUITIES, INC.
General Partner
By: /s/ William H. Jarrard, Jr.
William H. Jarrard, Jr.
President
By: /s/ Ronald Uretta
Ronald Uretta
Vice President/Treasurer
Date: May 9, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Capital Properties V 1997 First Quarter 10-QSB and is qualified in its entirety
by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000725614
<NAME> CONSOLIDATED CAPITAL PROPERTIES V
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 562
<SECURITIES> 0
<RECEIVABLES> 45
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 20,477
<DEPRECIATION> 13,339
<TOTAL-ASSETS> 9,078
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 11,247
0
0
<COMMON> 0
<OTHER-SE> (2,846)
<TOTAL-LIABILITY-AND-EQUITY> 9,078
<SALES> 0
<TOTAL-REVENUES> 1,149
<CGS> 0
<TOTAL-COSTS> 1,232
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 206
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (83)
<EPS-PRIMARY> (.46)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Partnership has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
