UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission file number 0-13349
BALCOR REALTY INVESTORS-84
(Exact name of registrant as specified in its charter)
Illinois 36-3215399
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Balcor Plaza
4849 Golf Road Skokie, Illinois 60077-9894
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
(Title of class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X . No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. X .
PART I
Item 1. Business
Balcor Realty Investors-84 (the "Registrant") is a limited partnership formed
in 1982 under the laws of the State of Illinois. The Registrant raised
$140,000,000 from sales of Limited Partnership Interests. The Registrant's
operations consist exclusively of investment in and operation of real property,
and all information included in this report relates to this industry segment.
The Registrant utilized the net offering proceeds to acquire twenty-three real
property investments and a minority joint venture interest in one additional
property. Two properties have been sold and titles to five properties,
including the property in which the Registrant had a minority joint venture
interest, have been relinquished through foreclosure. As of December 31, 1993,
the Registrant owned the seventeen properties described under "Properties"
(Item 2). The Partnership Agreement provides that the proceeds of any sale or
refinancing of the Registrant's properties will not be reinvested in new
acquisitions.
During 1993, the multi-family residential real estate industry in certain
cities and regions of the country experienced improvements in occupancy levels
and rental rates. These improvements are due in part to recoveries in local
economies along with low levels of new construction of rental units in recent
years, which has led to higher occupancies and increased rental revenues for
existing properties. Of the Registrant's seventeen properties, during 1993, ten
generated positive cash flow while seven generated marginal cash flow deficits.
Many rental markets continue to remain extremely competitive; therefore, the
General Partner's goals are to maintain high occupancy levels, while increasing
rents where possible, and to monitor and control operating expenses and capital
improvement requirements at the properties.
Historically, real estate investments have experienced the same cyclical
characteristics affecting most other types of long-term investments. While real
estate values have generally risen over time, the cyclical character of real
estate investments, together with local, regional and national market
conditions, has resulted in periodic devaluations of real estate in particular
markets, as has been experienced in the last few years. As a result of these
factors, it has become necessary for the Registrant to retain ownership of many
of its properties for longer than the holding period for the assets originally
described in the prospectus. The General Partner examines the operations of
each property and each local market individually when determining the optimal
time to sell each of the Registrant's properties.
Although investors have received certain tax benefits, the Registrant has not
commenced distributions. Future distributions will depend on improved cash flow
from the Registrant's remaining properties and proceeds from future property
sales, as to which there can be no assurances. In light of results to date and
the current market conditions, the General Partner does not anticipate that
investors will recover a substantial portion of their original investment.
The Registrant is largely dependent on loans from the General Partner and owed
approximately $11,166,000 to the General Partner at December 31, 1993, in
connection with funds advanced for working capital purposes. These loans are
expected to be repaid from available cash flow from future property operations,
or from proceeds received from the disposition of the Registrant's real estate
investments prior to any distributions to the Limited Partners from these
sources.
Although an affiliate of the General Partner has, in certain circumstances,
provided mortgage loans for certain properties of the Registrant, there can be
no assurance that loans of this type will be available from either an affiliate
or the General Partner in the future. The General Partner may continue to
provide additional short-term loans to the Registrant or to fund working
capital needs or property operating deficits, although there is no assurance
that such loans will be available. Should such short-term loans not be
available, the General Partner will seek alternative third party sources of
financing working capital. However, the current economic environment and its
impact on the real estate industry make it unlikely that the Registrant would
be able to secure financing from third parties to fund working capital needs or
operating deficits. Should additional borrowings be needed and not be available
either through the General Partner or third parties, the Registrant may be
required to dispose of some of its properties to satisfy these obligations.
In instances where the General Partner concludes that the Registrant's
investment objectives cannot be met by continuing to own a particular property
and fund operating deficits, the Registrant has suspended and may in the future
suspend debt service payments or sell the property at a price less than its
original cost. Suspension of debt service payments may lead to a renegotiation
of terms with lenders which would permit the Registrant to continue to own
properties or may lead to foreclosure or other action by lenders which would
result in the relinquishment of title to properties in satisfaction of the
outstanding mortgage loan balances. In the case of each property, the General
Partner will pursue modification of underlying debt, consider suspending debt
service payments and/or deferring non-critical repair and maintenance costs and
analyze present and projected market conditions and projections for operations
prior to determining the disposition of a property.
In April 1992, the terms of the modification of the mortgage loan payable
collateralized by the Highland Glen apartment complex expired and the loan
returned to its original terms, signficantly increasing the monthly debt
service requirements. The Registrant suspended debt service payments while
attempting to negotiate a further modification of the loan terms. In July 1992,
the lender filed foreclosure proceedings against the property. A receiver was
appointed and took possession of the property in September 1992. The Registrant
relinquished title to the property through foreclosure during May 1993. See
Note 13 of Notes to Financial Statements for additional information.
The Pinebrook apartment complex is owned by a joint venture consisting of the
Registrant and an affiliated partnership. The $5,185,000 wrap-around mortgage
payable collateralized by the property matured in July 1993. The joint venture
reviewed its options, among which were a sale of the property and a refinancing
or modification of the purchase money wrap-around mortgage. However, the loan
amount expected to be available on a refinancing was less than the current debt
outstanding, and the joint venture partners did not have the cash reserves
needed to fund the difference. Accordingly, the joint venture suspended debt
service payments and began negotiations with the lender for a discounted
buy-out of the $5,185,000 purchase money wrap-around mortgage note. In
response, the lender filed foreclosure proceedings and in December 1992, the
joint venture filed for protection under the U.S. Bankruptcy Code. In January
1994, a plan of reorganization was approved by the Bankruptcy Court. See Item
3. Legal Proceedings and Note 12 of Notes to Financial Statements for
additional information.
During April 1993, the Registrant completed a refinancing of the first mortgage
loan collateralized by the Ridgetree - Phase I apartment complex. The
refinancing resulted in new first and second mortgage loans from an
unaffiliated lender. The Registrant recognized an extraordinary gain from debt
forgiveness in connection with the refinancing. See Note 4 of Notes to
Financial Statements for additional information.
During May 1993, the Registrant completed a refinancing of the first mortgage
loan collateralized by the Woodland Hills apartment complex. The refinancing
resulted in a new first mortgage loan from an unaffiliated lender and a
reduction of the second mortgage loan payable to an affiliate of the General
Partner, as a requirement of the first mortgage loan. See Note 4 of Notes to
Financial Statements for additional information.
During June 1993, the Registrant obtained a first mortgage loan collateralized
by the Chesapeake apartment complex. This first mortgage loan replaces the
bonds collateralized by the property, which the Registrant had purchased in
1991. See Note 4 of Notes to Financial Statements for additional information.
During July 1993 and March 1994, the Registrant completed modifications of the
mortgage notes payable collateralized by the Antlers and Quail Lakes apartment
complexes, respectively. The modifications extended the maturity dates and
adjusted the interest rates. See Note 4 of Notes to Financial Statements for
additional information.
During October 1993, the Registrant completed a refinancing of the first
mortgage loan collateralized by the Chimney Ridge apartment complex. The
refinancing resulted in a new first mortgage loan from an unaffiliated lender.
The Registrant recognized an extraordinary gain from debt forgiveness in
connection with the refinancing. See Note 4 of Notes to Financial Statements
for additional information.
The officers and employees of Balcor Partners-XV, the General Partner of the
Registrant, and its affiliates perform services for the Registrant. The
Registrant currently has 103 full-time and 64 part-time employees engaged in
its operations.
Item 2. Properties
As of December 31, 1993, the Registrant owns the 17 properties described below:
Location Description of Property
Jacksonville, Florida Antlers Apartments: a 400-unit apartment complex
located on approximately 43 acres.
Chandler, Arizona Briarwood Place Apartments: a 268-unit apartment
complex located on approximately 15 acres.
Phoenix, Arizona Canyon Sands Village Apartments: a 412-unit
apartment complex located on approximately 20
acres.
Harris County, Texas Chesapeake Apartments: a 320-unit apartment
complex located on approximately 11 acres.
Fort Worth, Texas Chestnut Ridge Apartments (Phase II): a 160-unit
apartment complex located on approximately 6
acres.
Colorado Springs, Colorado Chimney Ridge Apartments: a 280-unit apartment
complex located on approximately 9 acres.
Dade County, Florida Courtyards of Kendall Apartments: a 300-unit
apartment complex located on approximately 20
acres.
Tulsa, Oklahoma Creekwood Apartments (Phase I): a 276-unit
apartment complex located on approximately 13
acres.
Charleston County,
South Carolina Drayton Quarter Apartments: a 206-unit apartment
complex located on approximately 17 acres.
Lexington, Kentucky * Pinebrook Apartments: a 208-unit apartment
complex located on approximately 11 acres.
Oklahoma City, Oklahoma Quail Lakes Apartments: a 384-unit apartment
complex located on approximately 19 acres.
Dallas, Texas Ridgepoint Hill Apartments: a 309-unit apartment
complex located on approximately 11 acres.
Dallas, Texas Ridgepoint View Apartments: a 314-unit apartment
complex located on approximately 11 acres.
Dallas, Texas Ridgetree Apartments (Phase I): a 444-unit
apartment complex located on approximately 11
acres.
Las Vegas, Nevada Somerset Pointe Apartments: a 452-unit apartment
complex located on approximately 26 acres.
Overland Park, Kansas Sunnyoak Village Apartments: a 548-unit apartment
complex located on approximately 33 acres.
Irving, Texas Woodland Hills Apartments: a 250-unit apartment
complex located on approximately 10 acres.
* Owned by Registrant through a joint venture with an affiliated
partnership.
Each of the above properties is held subject to various forms of financing.
In the opinion of the General Partner, the Registrant has provided for adequate
insurance coverage for its real estate investment properties.
See Notes to Financial Statements for other information regarding real property
investments.
Item 3. Legal Proceedings
(a & b) Pinebrook Apartments
Pinebrook Apartments was originally acquired by a joint venture (the "Joint
Venture") consisting of the Registrant and an affiliate (the "Affiliate"). The
property is encumbered by a purchase money note and wrap-around mortgage note
payable to Lexington Associates ("Lexington"). The Lexington Note wrapped
around two mortgage notes payable to First Equities Corporation ("First
Equities"), a mortgage note payable to Tates Creek Place ("Tates Creek"), and a
first mortgage note payable to Travelers Insurance Company ("Travelers"). In
January 1992, Pinebrook Limited Partnership, another joint venture consisting
of the Registrant and the Affiliate purchased both of First Equities' notes.
In November 1992, the Joint Venture suspended debt service payments on the
Lexington Note and subsequently filed for protection under Chapter 11 of the
U.S. Bankruptcy Code, In re Pinebrook Investors, U.S. Bankruptcy Court, Eastern
District of Kentucky, Case #92-52183.
In January 1994, a plan of reorganization (the "Plan") was approved which is
expected to be effective during the second quarter of 1994. Under the Plan,
the wrap-around feature of each of the notes will be terminated and the notes
will become first, second, third and fourth mortgage notes. Travelers' allowed
claim is expected to be equal to the outstanding principal amount under its
loan, plus accrued interest, and each of Tates Creek, Pinebrook and Lexington
are expected to be allowed claims equal to the equity balance in their
respective notes, plus accrued interest, including the debt service payments
that have been withheld since November 1992.
Under the Plan, the Joint Venture will make monthly payments as follows: first,
to Travelers of principal and interest, with interest at a rate of 9.75% per
annum and based upon a 30 year amortization schedule, and next to Tates Creek,
interest only, with interest at a rate of 8.875% per annum. Thereafter, any
excess net cash flow from the property will be paid monthly as follows: (1)
first, to Pinebrook, interest only at a rate of 10% per annum; (2) next to
Lexington, interest only at an interest rate of 10% per annum; (3)and finally
to holders of unsecured claims against the Joint Venture. Any deficiency in
the payments to Pinebrook and Lexington will accrue and be paid in future
months as net cash flow from property operations are available or from the
proceeds of a sale of the property.
If the Joint Venture is in default of any of its obligations under the Plan to
Travelers or Tates Creek, the Bankruptcy Court may conduct an auction of the
property upon Travelers or Tates Creek's request no later than 90 days after
such request.
Under the Plan, the Joint Venture must attempt to sell the property within two
years after the effective date of the plan. In the event that the property is
not sold by such date, the property will be put up for auction no later than 90
days thereafter.
The debt service payments withheld by the Joint Venture since November 1992
have been placed in a segregated account; the Joint Venture will be required to
use these funds for property operations. To the extent any of these funds
remain upon the sale of the property, the funds will be distributed along with
the sale proceeds in order of priority as described below.
Net proceeds from a disposition of the property will be payable as follows: (1)
first, to pay tax claims against the Joint Venture, if any; (2) next, to pay
amounts outstanding under Travelers' note (3) next, to pay amounts outstanding
under Tates Creek's note; (4) next, to pay amounts outstanding under
Pinebrook's notes; (5) next, to pay amounts outstanding under Lexington's note;
(6) next, to pay any unsecured claims; and (7) any remaining amount will be
paid to the Joint Venture.
Item 4. Submission of Matters to a Vote of Security Holders
(a, b,
c & d) No matters were submitted to a vote of the Limited Partners of
the Registrant during 1993.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
There has not been an established public market for Limited Partnership
Interests and it is not anticipated that one will develop; therefore, the
market value of the Limited Partnership Interests cannot reasonably be
determined. For information regarding distributions, see Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources.
As of December 31, 1993 the number of record holders of Limited Partnership
Interests of the Registrant was 13,453.
Item 6. Selected Financial Data
Year ended December 31,
1993 1992 1991 1990 1989
Rental and
service income $29,915,125 $30,010,121 $30,620,213 $31,472,015 $30,942,328
Interest income on
short-term
investments 76,829 81,558 579,883 874,380 492,051
Administrative
expenses 923,660 1,021,753 1,086,288 1,023,013 1,015,964
Recognized gain on
sale of property None None 1,333,480 None None
Extraordinary items:
Gain on forgive-
ness of debt 2,058,078 None None None None
Gain on foreclosure
of property 4,340,843 None 2,475,016 None 991,870
Net income (loss) 2,809,966 (5,092,181) (7,075,094) (7,890,602) (5,940,757)
Net income (loss)
per Limited
Partnership
Interest 19.87 (36.01) (21.88) (55.80) (53.13)
Tax income (loss) 2,718,751 (9,912,861)(10,461,294)(13,134,612)(12,867,313)
Tax income (loss)
per Limited
Partnership
Interest 43.98 (28.95) (62.63) (70.07) (91.12)
Cash and cash
equivalents 736,429 656,104 546,994 911,807 1,514,685
Short-term invest-
ments-restricted 700,000 800,000 1,410,000 11,953,700 700,000
Total investment
properties, net
of accumulated
depreciation 108,878,714 124,061,309 128,911,606 153,863,038 159,573,880
Total assets 117,468,061 128,763,485 132,982,864 169,019,865 164,287,383
Purchase price,
promissory and
mortgage notes
payable 136,404,898 149,910,843 150,663,629 182,960,724 181,747,563
Properties owned
on December 31 17 18 18 20 20
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Balcor Realty Investors-84 (the "Partnership") was formed in 1982 to invest in
and operate income-producing real property. The Partnership raised $140,000,000
from sales of Limited Partnership Interests and utilized these proceeds to
acquire twenty-three real property investments and a minority joint venture
interest in one additional property. To date, two properties have been sold and
titles to five properties, including the property in which the Partnership held
a minority joint venture interest, have been relinquished through foreclosure.
The Partnership continues to operate the seventeen remaining properties.
Operations
Summary of Operations
As discussed below, operations of the Highland Glen apartment complex, which
had generated a net loss during 1992, were recognized only through September
1992, the date the property was placed in receivership. Title to this property
was subsequently relinquished through foreclosure in May 1993 and the
Partnership recognized an extraordinary gain in connection with the
transaction. In addition, the Ridgetree Phase I first mortgage loan was repaid
at a discount in April 1993 which resulted in an extraordinary gain on
forgiveness of debt. As a result of these transactions, the Partnership
generated net income during 1993 as compared to a net loss during 1992.
In 1991, title to the Canyon Creek apartment complex was relinquished through
foreclosure and the Partnership sold the Sunrise Village apartment complex. For
financial statement purposes, the gains recognized by the Partnership as a
result of these dispositions resulted in an increase in the net loss of the
Partnership during 1992 as compared to 1991. Further discussion of the
Partnership's operations is summarized below.
1993 Compared to 1992
After the Partnership suspended debt service payments on the Highland Glen
apartment complex and the lender filed foreclosure proceedings, a receiver was
appointed and took possession of the property in September 1992. In accordance
with the Partnership's accounting policies, the financial statements do not
reflect the operations of the property subsequent to the date the receiver was
appointed. This caused decreases in rental and service income, interest expense
on purchase price, promissory and mortgage notes payable, depreciation expense,
property operating expenses, maintenance and repair expenses, real estate taxes
and property management fees during 1993 as compared to 1992. These decreases
were partially or, in certain cases, fully offset by the events described
below. During May 1993, title to the Highland Glen apartment complex was
relinquished to the mortgage holder through foreclosure. As a result, the
Partnership recognized an extraordinary gain on foreclosure during 1993.
Fourteen of the Partnership's remaining properties experienced improved
occupancy levels and/or higher rental rates in 1993, partially offsetting the
previously discussed decreases in rental and service income and property
management fees during 1993 as compared to 1992.
The Partnership reached a settlement with the seller of the Ridgetree Phase I
apartment complex in June 1992. Prorations due from the seller pursuant to the
terms of the original management and guarantee agreement on this property were
previously written off due to uncertain collectibility. Pursuant to the
settlement agreement, the parties have released all claims and causes of action
against one another, and the Partnership received cash of $208,000 and was
relieved of certain other liabilities by the seller. Other income of $259,174
was recognized in connection with this transaction and resulted in a decrease
in other income during 1993 as compared to 1992.
The interest rate on the Creekwood Phase I apartment complex mortgage note
payable adjusts monthly based on a market rate while the interest rates on the
Briarwood, Canyon Sands, Somerset Pointe and Sunnyoak Village apartment complex
mortgage notes payable adjusted in 1993 based on market rates. Lower interest
rates during 1993 resulted in a decrease in interest expense on these loans. In
April 1993, the Ridgetree Phase I apartment complex mortgage note payable was
refinanced and the original loan was repaid at a discount. As a result of a
lower principal balance and interest rate on the new loan, interest expense
decreased for this property. In May 1993, the first mortgage note payable on
the Woodland Hills apartment complex was refinanced and the second mortgage was
partially repaid. As a result of the reduced total principal balances and a
lower interest rate on the new first mortgage loan, interest expense decreased
for this property. These items contributed to the decrease in interest expense
on purchase price, promissory and mortgage notes payable during 1993 as
compared to 1992. The decreases in interest expense discussed above were
partially offset during 1993 by interest expense recognized on the Chesapeake
apartment complex mortgage note payable, which was obtained during June 1993,
and on the Quail Lakes apartment complex loan, which had principal-only
payments until June 1993.
As a result of the full amortization of the deferred expenses related to prior
mortgages on the Highland Glen apartment complex, which was foreclosed in 1993,
and the Woodland Hills, Chesapeake and Chimney Ridge apartment complexes, which
were refinanced in 1993, amortization of deferred expenses increased during
1993 as compared to 1992.
Slightly higher property operating expenses at most of the remaining properties
resulted in an increase in property operating expenses during 1993 as compared
to 1992.
During 1993, the Partnership recognized extraordinary gains on forgiveness of
debt in connection with the refinancings of the Ridgetree - Phase I and Chimney
Ridge apartment complex mortgage loans.
1992 Compared to 1991
As noted above, a receiver took possession of the Highland Glen apartment
complex during September 1992 and the financial statements do not reflect the
operations of the property subsequent to the date the receiver was appointed.
In addition, the Partnership sold the Sunrise Village apartment complex in
August 1991, and relinquished title to the Canyon Creek apartment complex to
the first mortgage lender through foreclosure in October 1991 and recognized
gains related to these property dispositions during 1991. These transactions
caused decreases in rental and service income, interest expense on purchase
price, promissory and mortgage notes payable, depreciation expense,
amortization expense, property operating expenses, maintenance and repair
expenses, real estate taxes and property management fees during 1992 as
compared to 1991. These decreases were partially or, in certain cases, fully
offset by the increases described below.
All seventeen of the Partnership's remaining properties, excluding the Highland
Glen apartment complex, experienced improved occupancy and/or higher rental
rates, which partially offset the previously discussed decreases in rental and
service income and property management fees during 1992 as compared to 1991.
In August 1991, the Partnership secured the release of restricted investments
totaling $8,530,000, which had been pledged as collateral for the Chesapeake
apartment complex loan, and used these proceeds to purchase the underlying
revenue bonds which finance the property. This decrease in short-term
investments, along with lower interest rates during 1992, caused interest
income on short-term investments to decrease during 1992 as compared to 1991.
In addition, this transaction contributed to the decrease in interest expense
on purchase price, promissory and mortgage notes payable during 1992 as
compared to 1991.
As previously discussed, the Partnership reached a settlement with the seller
of the Ridgetree Phase I apartment complex in June 1992, and recognized other
income of $259,174 in connection with this. The Partnership also recognized
other income in 1992 in the amount of $120,513 in connection with the purchase
of a note investment relating to the Pinebrook apartment complex. As a result,
other income increased in 1992 as compared to 1991.
Interest rates decreased significantly during 1991 and 1992. This caused
interest expense on short-term loans to decrease during 1992 as compared to
1991.
The interest rate on the Creekwood apartment complex mortgage note payable
adjusts monthly based on a market rate. A lower market rate during 1992
resulted in a decrease in interest expense on this loan. This also contributed
to the decrease in interest expense on purchase price, promissory and mortgage
notes payable during 1992 as compared to 1991.
Deferred expenses related to the mortgage note payable collateralized by the
Courtyards of Kendall apartment complex became fully amortized upon maturity of
the loan in 1991. This caused amortization expense to decrease, in addition to
the previously discussed decreases, during 1992 as compared to 1991.
During 1992, the Partnership incurred expenses for painting the exteriors of
the Chestnut Ridge, Pinebrook, Quail Lakes, Ridgepoint View, Sunnyoak Village
and Woodland Hills apartment complexes, and also incurred expenses for
upgrading selected unit interiors at the Ridgepoint Hill apartment complex.
During 1991, the Partnership incurred expenses for painting the exterior of the
Antlers and Ridgetree apartment complexes. The timing of these transactions
caused maintenance and repair expenses to increase overall, fully offsetting
the decreases previously discussed, during 1992 as compared to 1991.
The Pinebrook apartment complex is owned by a joint venture consisting of the
Partnership and an affiliated partnership. During 1992, the exterior of the
property was painted, causing an increase in total expenses and the overall
loss generated by the property. This increased the affiliate's participation in
loss from joint venture during 1992 as compared to 1991.
Liquidity and Capital Resources
The cash or near cash position of the Partnership was relatively unchanged
during the year ended December 31, 1993. During 1993, the Partnership's
financing activities included the receipt of net proceeds of approximately
$2,550,000 from loan refinancings and modifications, net of costs and escrows,
and a net loan repayment of approximately $1,246,000 to the General Partner, as
well as principal payments on mortgage notes payable. Operating activities
consist primarily of cash flow generated from property operations and the
payment of administrative expenses and short-term interest expense. The
operating cash flow includes expenditures of approximately $1,160,000 for
hurricane damage at the Courtyards of Kendall apartment complex, located in
Dade County, Florida, for which the Partnership expects to be reimbursed
through insurance proceeds during 1994.
The Partnership is largely dependent on loans from the General Partner and owes
approximately $11,166,000 to the General Partner at December 31, 1993 in
connection with the funding of operating deficits, the 1991 purchase of the
bonds on the Chesapeake apartment complex, which borrowings were partially
repaid from the proceeds of the new first mortgage loan on the property, and
additional borrowings needed for the 1993 refinancings. These loans are
expected to be repaid from available cash flow from future property operations,
or from proceeds received from the disposition or refinancing of the
Partnership's real estate investments, prior to any distributions to Limited
Partners from these sources.
Although an affiliate of the General Partner has, in certain circumstances,
provided mortgage loans for certain properties to the Partnership, there can be
no assurance that loans of this type will be available from either an affiliate
or the General Partner in the future. The General Partner may continue to
provide additional short-term loans to the Partnership or to fund working
capital needs or property operating deficits, although there is no assurance
that such loans will be available. Should such short-term loans not be
available, the General Partner will seek alternative third party sources of
financing working capital. However, the current economic environment and its
impact on the real estate industry make it unlikely that the Partnership would
be able to secure financing from third parties to fund working capital needs or
operating deficits. Should additional borrowings be needed and not be available
either through the General Partner or third parties, the Partnership may be
required to dispose of some of its properties to satisfy these obligations.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered to be significant if it exceeds $250,000 annually or 20% of the
property's rental and service income. For each of the years ended December 31,
1993 and 1992, ten of the remaining seventeen properties owned by the
Partnership generated positive cash flow and seven generated marginal cash flow
deficits.
The Highland Glen apartment complex would have operated at a significant cash
flow deficit during 1992 had the Partnership paid all contractual obligations
due under the terms of the mortgage note payable. The modification of the note
expired in April 1992, and the note returned to its original terms,
significantly increasing the monthly debt service requirements. The Partnership
suspended debt service payments in an effort to obtain additional debt service
relief. After unsuccessful negotiations, the lender filed foreclosure
proceedings and a receiver was appointed to manage the property. In May 1993,
title to this property was relinquished through foreclosure. See Note 13 of
Notes to Financial Statements for additional information.
The terms of the loans on the Chestnut Ridge Phase II, Ridgepoint Hill and
Ridgepoint View apartment complexes provide for deferral of certain portions of
the respective interest payments. Had the Partnership been obligated to pay the
deferred amounts for the current period, the properties would have generated
significant cash flow deficits during 1993 and 1992. At December 31, 1993, the
cumulative interest deferred and outstanding on these loans totaled
approximately $1,848,622. The deferred interest amounts are payable from
proceeds received upon the sale or refinancing of the properties or, in certain
cases, from current property cash flow if available.
While the cash flow of certain of the Partnership's properties has improved,
the General Partner continues to pursue a number of actions aimed at improving
the cash flow of the Partnership's properties including refinancing of mortgage
loans, improving property operating performance, and seeking rent increases
where market conditions allow. Despite improvements during 1993 in the local
economies and rental markets where certain of the Partnership's properties are
located, the General Partner believes that continued ownership of many of the
properties is in the best interests of the Partnership in order to maximize
potential returns to Limited Partners. As a result, the Partnership will
continue to own these properties for longer than the holding period for the
assets originally described in the prospectus.
Each of the Partnership's properties is owned through the use of third-party
mortgage loan financing and, therefore, the Partnership is subject to the
financial obligations required by such loans. See Note 3 of Notes to Financial
Statements for information concerning outstanding balances, maturity dates,
interest rates, and other terms related to each of these mortgage loans. During
1994 and 1995, approximately $24,362,000 and $11,529,000, respectively, of
mortgage loans collateralized by the Creekwood Phase I, Ridgepoint Hill,
Ridgepoint View, Drayton Quarter and Quail Lakes apartment complexes mature. Of
the 1994 amount, approximately $6,634,000 represents mortgage loan financing
from an affiliate of the General Partner which the Partnership expects to be
able to extend if not paid prior to maturity. As a result of the downturn
experienced by the real estate industry over the last few years, many banks,
savings and loans and other lending institutions have tightened mortgage
lending criteria and are generally willing to advance less funds with respect
to a property than many lenders were willing to advance during the 1980's. As a
result, in certain instances it may be difficult for the Partnership to
refinance a property in an amount sufficient to retire in full the current
mortgage financing with respect to the property. In the event negotiations with
the existing lender for a loan modification or with new lenders for a
refinancing are unsuccessful, the Partnership may sell the collateral property
or other properties to satisfy an obligation or may relinquish title to the
collateral property in satisfaction of the outstanding mortgage loan balance.
Suspension of debt service payments may lead to a renegotiation of terms with
lenders which would permit the Partnership to continue to own properties or may
lead to foreclosure or other action by lenders which would result in the
relinquishment of title to the properties in satisfaction of the outstanding
mortgage loan balances.
The Pinebrook apartment complex is owned by a joint venture consisting of the
Partnership and an affiliated partnership, and is financed with a $5,185,000
wrap-around mortgage payable collateralized by the property, which matured in
July 1993. The joint venture reviewed its options, among which were a sale of
the property and a refinancing or modification of the purchase money
wrap-around mortgage. However, the loan amount available on a refinancing was
less than the current debt outstanding, and the joint venture partners did not
have the cash reserves needed to fund the difference. Accordingly, the joint
venture suspended debt service payments and began negotiations with the lender
for a discounted buy-out of the $5,185,000 purchase money wrap-around mortgage
note. In response, the lender filed foreclosure proceedings, and in December
1992, the joint venture filed for protection under the U.S. Bankruptcy Code. In
January 1994, a plan of reorganization was approved by the Bankruptcy Court.
See Item 3. Legal Proceedings for additional information. All cash flow
generated by the property had been used to pay debt service on the underlying
first and second mortgage loans.
In May 1993, the interest rate on the mortgage note payable collateralized by
the Sunnyoak Village apartment complex adjusted to 7.33% from 9.75%, through
May 1998. In October 1993, the interest rates on the mortgage notes payable
collateralized by the Briarwood, Canyon Sands and Somerset Pointe apartment
complexes adjusted to 6.498% from 9.75%, through maturity in October 1998.
In April 1993, the first mortgage loan collateralized by Ridgetree Phase I
Apartments was refinanced with new first and second mortgage loans.
Simultaneously, other first mortgage loans collateralized by properties owned
by partnerships affiliated with the General Partner were also refinanced. All
of these loans had been held directly or indirectly by the Resolution Trust
Corporation and have been purchased by Lexington Mortgage Company, an
independent third party. While the mortgage loan collateralized by Ridgetree
Phase I Apartments was current, many of the other mortgage loans were in
default either with respect to monthly debt service requirements or the loan
had matured and the properties were unable to repay the balloon payments that
were due. The new loans were deposited into a trust, the beneficial interests
of which were sold to unaffiliated investors. Lehman Brothers, an affiliate of
the General Partner, acted as firm underwriter for the sale of the beneficial
interests in the trust and received underwriting compensation in accordance
with market practices. A subordinated portion of the beneficial interests in
the trust continues to be owned by Lehman Brothers.
The new loans include, among other things, principal balance or mortgage rate
reductions, or maturity extensions, or a combination thereof. The terms of the
new loans on Ridgetree Phase I Apartments decreased the interest rate from 11%
to 10.05%, extended the maturity date from September 1, 1996 to May 1, 2000,
and required a principal reduction which was partially funded by a principal
payment by the Partnership and partially due to forgiveness of debt by the
lender or a voluntary contribution from an affiliate of the General Partner.
See Note 4 of Notes to Financial Statements for additional information.
In May 1993, the first mortgage loan collateralized by the Woodland Hills
Apartments was refinanced. The proceeds of the new loan of $5,054,563 were used
to repay the existing first mortgage loan of $4,941,615 as well as $112,948 of
the BREHI second mortgage loan. The Partnership also funded capital and
operating reserves as well as related closing costs. The balance of the BREHI
second mortgage loan of $2,498,119, including accrued interest of $390,396, was
reduced to $585,171 as a requirement of the first mortgage loan. The General
Partner provided short-term loans to the Partnership to fund the closing costs
and the BREHI paydown. See Note 4 of Notes to Financial Statements for
additional information.
In June 1993, the Partnership obtained a first mortgage loan in the amount of
$5,185,000 collateralized by the Chesapeake Apartments. This first mortgage
loan replaces the bonds collateralized by the property, which the Partnership
had purchased in 1991. The Partnership also funded capital and operating
reserves as well as related closing costs. The Partnership used $4,000,000 of
proceeds available from the financing to partially repay funds borrowed from
the General Partner to purchase the bonds. See Note 4 of Notes to Financial
Statements for additional information.
In July 1993, the first mortgage loan collateralized by the Antlers Apartments
was modified. In connection with the modification, the loan balance was
increased by $232,334 to $10,500,000, the interest rate was reduced and the
maturity date was extended. The Partnership paid fees and closing costs in
connection with the modification. See Note 4 of Notes to Financial Statements
for additional information.
In October 1993, the first mortgage loan collateralized by the Chimney Ridge
Apartments was refinanced. The proceeds of the new loan of $7,400,000 were used
to repay the existing first mortgage loan of $6,023,757 at a $180,599 discount.
The Partnership also funded capital and operating reserves as well as related
closing costs. Proceeds of approximately $1,000,000 available from the
refinancing were used to partially repay General Partner loans. See Note 4 of
Notes to Financial Statements for additional information.
In March 1994, the first mortgage loan collateralized by the Quail Lakes
Apartments was modified. In connection with the modification, the interest rate
was adjusted and the maturity date was extended. See Note 4 of Notes to
Financial Statements for additional information.
In connection with the May 1993 Woodland Hills refinancing, $100,000 of cash
pledged as additional collateral related to the Partnership's obligation under
the terms of the prior mortgage loan was released. An affiliate of the General
Partner is providing a guarantee against a letter of credit in the amount of
$250,000 posted as additional collateral for the funding of capital
improvements on the Courtyards of Kendall apartment complex. In addition, a
certificate of deposit of $700,000 is pledged as additional collateral for the
mortgage loan relating to the Canyon Sands apartment complex.
Woodland Hills Apartments is located near the Dallas/Ft. Worth Airport. As
previously reported, the airport board is pursuing an expansion plan with the
Federal Aviation Authority to build two additional runways on airport property.
A proposed plan provides for varying levels of compensation to single family
homeowners for the expected loss in value to their homes as a result of
increased air traffic and heightened noise levels. However, no similar
compensation is planned for the majority of apartment complex owners in the
area, including the Partnership. In July 1993, the Partnership, certain
affiliates of the General Partner which also own affected properties and other
unaffiliated property owners jointly filed a lawsuit to obtain equitable
compensation. The plaintiffs expect to file a motion for summary judgement with
a hearing expected to be held during the first half of 1994.
The Briarwood apartment complex is located in the path of the planned expansion
of Price Road which is adjacent to the property. Discussions for this project
have been ongoing, and the General Partner has been attending the public
hearings due to its opposition to this expansion. If the current plans are
approved, approximately 68 of the complex's 268 units would be condemned, which
would have a significant impact on the property's value. Currently it is
unclear whether the future approvals and funding for the project will be
obtained and, if obtained, what compensation the Partnership would receive for
the units or when the work would begin.
Although investors have received certain tax benefits, the Partnership has not
commenced distributions. Future distributions to investors will depend on
improved cash flow from the Partnership's remaining properties and proceeds
from future property sales, as to both of which there can be no assurances. In
light of results to date and current market conditions, the General Partner
does not anticipate that investors will recover a substantial portion of their
original investment.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents depending on general
or local economic conditions. In the long-term, inflation will increase
operating costs and replacement costs and may lead to increased rental revenues
and real estate values.
Item 8. Financial Statements and Supplementary Data
See Index to Financial Statements and Financial Statement Schedule in this
Form 10-K.
The supplemental financial information specified by Item 302 of Regulation S-K
is not applicable.
The net effect of the differences between the financial statements and the tax
returns is summarized as follows:
December 31, 1993 December 31, 1992
Financial Tax Financial Tax
Statements Returns Statements Returns
Total assets $117,468,061 $86,235,405 $128,763,485 $96,829,331
Partners' capital
accounts (deficit):
General Partner (1,601,123) (18,854,592) (1,629,223) (15,269,743)
Limited Partners (34,519,544) (50,849,212) (37,301,410) (57,477,066)
Net income (loss):
General Partner 28,100 (3,584,849) (50,922) (6,097,699)
Limited Partners 2,781,866 6,627,854 (5,041,259) (3,234,358)
Per Limited Part-
nership Interest 19.87 47.34 (36.01) (23.10)
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There have been no changes in or disagreements with accountants on any matter
of accounting principles, practices or financial statement disclosure.
PART III
Item 10. Directors and Executive Officers of the Registrant
(a) Neither the Registrant nor Balcor Partners-XV, its General Partner, has a
Board of Directors.
(b, c
& e) The names, ages and business experience of the executive officers and
significant employees of the General Partner of the Registrant are as follows:
Name Title
Marvin H. Chudnoff Chairman
Thomas E. Meador President and Chief Operating Officer
Allan Wood Executive Vice President, Chief Financial
Officer and Chief Accounting Officer
Alexander J. Darragh Senior Vice President
Robert H. Lutz, Jr. Senior Vice President
Michael J. O'Hanlon Senior Vice President
Gino A. Barra First Vice President
Daniel A. Duhig First Vice President
David S. Glasner First Vice President
Josette V. Goldberg First Vice President
G. Dennis Hartsough First Vice President
Lawrence B. Klowden First Vice President
Alan G. Lieberman First Vice President
Lloyd E. O'Brien First Vice President
Brian D. Parker First Vice President
John K. Powell, Jr. First Vice President
Jeffrey D. Rahn First Vice President
Reid A. Reynolds First Vice President
Marvin H. Chudnoff (April 1941) joined Balcor in March 1990 as Chairman. He
has responsibility for all strategic planning and implementation for Balcor,
including management of all real estate projects in place and financing and
sales for a varied national portfolio valued in excess of $6.5 billion. Mr.
Chudnoff also holds the position of Vice Chairman of Edward S. Gordon Company
Incorporated, New York, a major national commercial real estate firm, which he
joined in 1983. He has also served on the Board of Directors of Skippers, Inc.
and Acorn Inc., both publicly held companies, and of Waxman Laboratories of Mt.
Sinai Hospital, New York. Mr. Chudnoff has been a guest lecturer at the
Association of the New York Bar and at Yale and Columbia Universities.
Thomas E. Meador (July 1947) joined Balcor in July 1979. He is President and
Chief Operating Officer and has responsibility for all ongoing day-to-day
activities at Balcor. He is a Director of The Balcor Company. Prior to
joining Balcor, Mr. Meador was employed at the Harris Trust and Savings Bank in
the commercial real estate division where he was involved in various lending
activities. Mr. Meador received his M.B.A. degree from the Indiana University
Graduate School of Business.
Allan Wood (January 1949) joined Balcor in August 1983 and, as Balcor's Chief
Financial Officer and Chief Accounting Officer, is responsible for all
financial and administrative functions. He is directly responsible for all
accounting, treasury, data processing, legal, risk management, tax and
financial reporting activities. He is also a Director of The Balcor Company.
Mr. Wood is a Certified Public Accountant. Prior to joining Balcor, he was
employed by Price Waterhouse where he was involved in auditing public and
private companies.
Alexander J. Darragh (February 1955) joined Balcor in September 1988 and has
primary responsibility for the Portfolio Advisory Group. He is responsible for
due diligence analysis in support of asset management, institutional advisory
and capital markets functions as well as for Balcor Consulting Group, Inc.,
which provides real estate advisory services to Balcor affiliated entities and
third party clients. In addition, Mr. Darragh has supervisory responsibility
of Balcor's Investor Services Department. Mr. Darragh received masters degrees
in Urban Geography from Queens University and in Urban Planning from
Northwestern University.
Robert H. Lutz, Jr. (September 1949) joined Balcor in October 1991. He is
President of Allegiance Realty Group, Inc., formerly known as Balcor Property
Management, Inc. and, as such, has primary responsibility for all its
management and operations. He is also a Director of The Balcor Company. From
March 1991 until he joined Balcor, Mr. Lutz was Executive Vice President of
Cousins Properties Incorporated. From March 1986 until January 1991, he was
President and Chief Operating Officer of The Landmarks Group, a real estate
development and management firm. Mr. Lutz received his M.B.A. from Georgia
State University.
Michael J. O'Hanlon (April 1951) joined Balcor in February 1992 as Senior Vice
President in charge of Asset Management, Investment/Portfolio Management,
Transaction Management and the Capital Markets Group which includes sales and
refinances. From January 1989 until joining Balcor, Mr. O'Hanlon held
executive positions at Citicorp in New York and Dallas, including Senior Credit
Officer and Regional Director. He holds a B.S. degree in Accounting from
Fordham University, and an M.B.A. in Finance from Columbia University. He is a
full member of the Urban Land Institute.
Gino A. Barra (December 1954) joined Balcor's Property Sales Group in September
1983. He is First Vice President of Balcor and assists with the supervision of
Balcor's Asset Management Group, Transaction Management, Quality Control and
Special Projects.
Daniel A. Duhig (October 1956) joined Balcor in November 1986 and is
responsible for various asset management matters relating to investments made
by Balcor and its affiliated partnerships, including negotiations for
modifications or refinancings of real estate mortgage investments and the
disposition of real estate investments.
David S. Glasner (December 1955) joined Balcor in September 1986 and has
primary responsibility for special projects relating to investments made by
Balcor and its affiliated partnerships and risk management functions. Mr.
Glasner received his J.D. degree from DePaul University College of Law in June
1984.
Josette V. Goldberg (April 1957) joined Balcor in January 1985 and has primary
responsibility for all human resources matters relating to Balcor personnel,
including training and development, employment, salary and benefit
administration, corporate communications and the development, implementation
and interpretation of personnel policy and procedures. Ms. Goldberg also
supervises Balcor's payroll operations and Human Resources Information Systems
(HRIS). In addition, she has supervisory responsibility for Balcor's
Facilities, Corporate and Field Services and Telecommunications Departments.
Ms. Goldberg has been designated as a Senior Human Resources Professional
(SHRP).
G. Dennis Hartsough (October 1942) joined Balcor in July 1991 and is
responsible for asset management matters relating to all investments made by
Balcor and its affiliated partnerships in office and industrial properties.
From July 1989 until joining Balcor, Mr. Hartsough was Senior Vice President of
First Office Management (Equity Group) where he directed the firm's property
management operations in eastern and central United States. From June 1985 to
July 1989, he was Vice President of the Angeles Corp., a real estate management
firm, where his primary responsibility was that of overseeing the company's
property management operations in eastern and central United States.
Lawrence B. Klowden (March 1952) joined Balcor in November 1981 and is
responsible for supervising the administration of the investment portfolios of
Balcor and its loan and equity partnerships. Mr. Klowden is a Certified Public
Accountant and received his M.B.A. degree from DePaul University's Graduate
School of Business.
Alan G. Lieberman (June 1959) joined Balcor in May 1983 and is responsible for
the Property Sales and Capital Markets Groups. Mr. Lieberman is a Certified
Public Accountant.
Lloyd E. O'Brien (December 1945) joined Balcor in April 1987 and has
responsibility for the operations and development of Balcor's Information and
Communication systems. Mr. O'Brien received his M.B.A. degree from the
University of Chicago in 1984.
Brian D. Parker (June 1951) joined Balcor in March 1986 and is responsible for
Balcor's corporate and property accounting, treasury, budget activities and
corporate purchasing. Mr. Parker is a Certified Public Accountant and holds an
M.S. degree in Accountancy from DePaul University and an M.A. degree in Social
Service Administration from the University of Illinois.
John K. Powell, Jr. (June 1950) joined Balcor in September 1985 and is
responsible for Balcor Consulting Group, Inc. which provides real estate
advisory services to Balcor affiliated entities and third party clients. Mr.
Powell received a Master of Planning degree from the University of Virginia.
Jeffrey D. Rahn (June 1954) joined Balcor in February 1983 and has primary
responsibility for Balcor's Asset Management Department. He is responsible for
the supervision of asset management matters relating to equity and loan
investments held by Balcor and its affiliated partnerships. Mr. Rahn received
his M.B.A. degree from DePaul University's Graduate School of Business.
Reid A. Reynolds (April 1950) joined Balcor in March 1981 and is involved with
the asset management of residential properties for Balcor. Mr. Reynolds is a
licensed Real Estate Broker in the State of Illinois.
(d) There is no family relationship between any of the foregoing officers.
(f) None of the foregoing officers or employees are currently involved in any
material legal proceedings nor were any such proceedings terminated during the
fourth quarter of 1993.
Item 11. Executive Compensation
(a, b, c,
d & e) The Registrant has not paid and does not propose to pay any
compensation, retirement or other termination of employment benefits to any of
the five most highly compensated executive officers of the General Partner.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) No person owns of record or is known by the Registrant to own beneficially
more than 5% of the outstanding Limited Partnership Interests of the
Registrant.
(b) Balcor Partners-XV and its officers and partners own as a group the
following Limited Partnership Interests of the Registrant:
Amount
Beneficially
Title of Class Owned Percent of Class
Limited Partnership
Interests 116 Interests Less than 1%
Relatives and affiliates of the officers and partners of the General Partner
own an additional 5 Interests.
(c) The Registrant is not aware of any arrangements, the operation of which may
result in a change of control of the Registrant.
Item 13. Certain Relationships and Related Transactions
(a & b) See Note 2 of Notes to Financial Statements for information relating to
the Partnership Agreement and the allocation of distributions and profits and
losses.
See Note 8 of Notes to Financial Statements for information relating to
transactions with affiliates.
(c) No management person is indebted to the Registrant.
(d) The Registrant has no outstanding agreements with any promoters.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)
(1 & 2) See Index to Financial Statements and Financial Statement Schedule in
this Form 10-K.
(3) Exhibits:
(3) The Amended and Restated Agreement of Limited Partnership and Amended and
Restated Certificate of Limited Partnership, previously filed as Exhibits 3 and
4.1 to Amendment No. 1 to the Registrant's Registration Statement on Form S-11
dated December 16, 1983 (Registration No. 2-86317) are incorporated herein by
reference.
(4) Form of Confirmation regarding Interests in the Registrant set forth as
Exhibit 4.2 to the Registrant's Report on Form 10-Q for the quarter ended
June 30, 1992 (Commission File No. 0-13349) are incorporated herein by
reference.
(b) Reports on Form 8-K: No Reports on Form 8-K were filed during the quarter
ended December 31, 1993.
(c) Exhibits: See Item 14(a)(3) above.
(d) Financial Statement Schedules: See Index to Financial Statements and
Financial Statement Schedule in this Form 10-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of l934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BALCOR REALTY INVESTORS-84
By: /s/ Allan Wood
Allan Wood
Executive Vice President, and Chief
Accounting and Financial Officer
(Principal Accounting and Financial
Officer) of Balcor Partners-XV, the
General Partner
Date: March 28, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
President and Chief Executive
Officer (Principal Executive
Officer) of Balcor Partners-XV,
/s/ Thomas E. Meador the General Partner March 28, 1994
Thomas E. Meador
Executive Vice President, and Chief
Accounting and Financial Officer
(Principal Accounting and Financial
Officer) of Balcor Partners-XV,
/s/ Allan Wood the General Partner March 28, 1994
Allan Wood
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Report of Independent Accountants
Financial Statements:
Balance Sheets, December 31, 1993 and 1992
Statements of Partners' Capital, for the years ended December 31, 1993, 1992
and 1991
Statements of Income and Expenses, for the years ended December 31, 1993, 1992
and 1991
Statements of Cash Flows, for the years ended December 31, 1993, 1992 and 1991
Notes to Financial Statements
Financial Statement Schedule:
XI - Real Estate and Accumulated Depreciation, as of December 31, 1993
Financial Statement Schedules, other than that listed, are omitted for the
reason that they are inapplicable or equivalent information has been included
elsewhere herein.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Balcor Realty Investors-84:
We have audited the financial statements and the financial statement schedule
of Balcor Realty Investors-84 (An Illinois Limited Partnership) as listed in
the index of this Form 10-K. These financial statements and financial statement
schedule are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Balcor Realty Investors-84 at
December 31, 1993 and 1992, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1993, in
conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly,
in all material respects, the information required to be included therein.
/s/ Coopers & Lybrand
COOPERS & LYBRAND
Chicago, Illinois
March 24, 1994
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
BALANCE SHEETS
December 31, 1993 and 1992
ASSETS
1993 1992
--------------- --------------
Cash and cash equivalents $ 736,429 $ 656,104
Certificate of deposit - restricted 700,000 700,000
Restricted investments 100,000
Net investment in note receivable 914,040 377,056
Escrow deposits 3,052,027 1,104,478
Accounts and accrued interest receivable 1,583,118 656,890
Prepaid expenses 32,847 32,826
Deferred expenses, net of accumulated
amortization of $1,128,672 in 1993 and
$1,068,977 in 1992 1,570,886 1,074,822
--------------- --------------
8,589,347 4,702,176
--------------- --------------
Investment in real estate:
Land 22,657,624 22,657,624
Buildings and improvements 145,783,613 145,734,839
--------------- --------------
168,441,237 168,392,463
Less accumulated depreciation 59,562,523 54,944,729
--------------- --------------
108,878,714 113,447,734
Real estate in substantive foreclosure,
net of accumulated depreciation of
$4,252,309 10,613,575
--------------- -------------
Investment in real estate, net
of accumulated depreciation 108,878,714 124,061,309
--------------- --------------
$ 117,468,061 $ 128,763,485
=============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Loans payable - affiliate $ 11,166,206 $ 12,411,979
Accounts payable 1,040,208 967,294
Due to affiliates 207,444 217,707
Accrued liabilities, principally interest
and real estate taxes 4,229,868 3,544,098
Security deposits 599,835 613,144
Purchase price, promissory and mortgage
notes payable 126,356,211 138,331,929
Mortgage notes payable - affiliate 10,048,687 11,578,914
--------------- --------------
Total liabilities 153,648,459 167,665,065
Affiliate's participation in joint venture (59,731) 29,053
Partners' capital (140,000 Limited
Partnership Interests issued and
outstanding) (36,120,667) (38,930,633)
--------------- --------------
$ 117,468,061 $ 128,763,485
=============== ==============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
for the years ended December 31, 1993, 1992 and 1991
Partners' Capital Accounts
----------------------------------------------
General Limited
Total Partner Partners(A)
------------- --------------- --------------
Balance at
December 31, 1990 $(30,745,021) $ (1,547,367) $ (29,197,654)
Net loss for the year
ended December 31, 1991 (3,093,431) (30,934) (3,062,497)
------------- --------------- --------------
Balance at
December 31, 1991 (33,838,452) (1,578,301) (32,260,151)
Net loss for the year
ended December 31, 1992 (5,092,181) (50,922) (5,041,259)
------------- --------------- --------------
Balance at
December 31, 1992 (38,930,633) (1,629,223) (37,301,410)
Net loss for the year
ended December 31, 1993 2,809,966 28,100 2,781,866
------------- --------------- --------------
Balance at
December 31, 1993 $(36,120,667) $ (1,601,123) $ (34,519,544)
============= =============== ==============
(A) Includes a $110,000 investment by the General Partner, which is
treated on the same basis as the other Limited Partnership Interests.
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the years ended December 31, 1993, 1992 and 1991
1993 1992 1991
------------- --------------- --------------
Income:
Rental and service $ 29,915,125 $ 30,010,121 $ 30,620,213
Interest on short-term
investments 76,829 81,558 579,883
Other income 167,225 434,098 74,813
------------- --------------- --------------
Total income 30,159,179 30,525,777 31,274,909
------------- --------------- --------------
Expenses:
Interest on purchase
price, promissory and
mortgage notes payable 12,047,956 13,816,050 15,117,484
Interest on short-term
loans 484,932 494,403 816,387
Depreciation 4,617,794 4,884,047 5,371,409
Amortization of deferred
expenses 471,567 229,473 396,741
Property operating 8,085,076 7,892,370 8,128,327
Maintenance and repairs 3,207,875 3,353,405 3,196,582
Real estate taxes 2,492,324 2,502,189 2,637,431
Property management fees 1,481,954 1,493,809 1,534,923
Administrative 923,660 1,021,753 1,086,288
------------- --------------- --------------
Total expenses 33,813,138 35,687,499 38,285,572
------------- --------------- --------------
Loss before recognized
gain on sale of property
and affiliate's
participation in loss
from joint venture (3,653,959) (5,161,722) (7,010,663)
Recognized gain on sale
of property 1,333,480
Affiliate's participation
in loss from joint
venture 65,004 69,541 108,736
------------- --------------- --------------
Loss before extraordinary
items (3,588,955) (5,092,181) (5,568,447)
------------- --------------- --------------
Extraordinary items:
Gain on forgiveness of
debt 2,058,078
Gain on foreclosure of
property 4,340,843 2,475,016
------------- --------------
Total extraordinary
items 6,398,921 2,475,016
------------- --------------- --------------
Net income (loss) $ 2,809,966 $ (5,092,181) $ (3,093,431)
============= =============== ==============
Loss before extraordinary
items allocated to
General Partner $ (35,890) $ (50,922) $ (55,684)
============= =============== ==============
Loss before extraordinary
items allocated to
Limited Partners $ (3,553,065) $ (5,041,259) $ (5,512,763)
============= =============== ==============
Loss before extraordinary
item per Limited
Partnership Interest
(140,000 issued
and outstanding) $ (25.38) $ (36.01) $ (39.38)
============= =============== ==============
Extraordinary items
allocated to General
Partner $ 63,989 None $ 24,750
============= =============== ==============
Extraordinary items
allocated to Limited
Partners $ 6,334,932 None $ 2,450,266
============= =============== ==============
Extraordinary items per
Limited Partnership
Interest (140,000 issued
and outstanding) $ 45.25 None $ 17.50
============= =============== ==============
Net income (loss) allocated
to General Partner $ 28,100 $ (50,922) $ (30,934)
============= =============== ==============
Net income (loss) allocated
to Limited Partners $ 2,781,866 $ (5,041,259) $ (3,062,497)
============= =============== ==============
Net income (loss) per
Limited Partnership
Interest (140,000 issued
and outstanding) $ 19.87 $ (36.01) $ (21.88)
============= =============== ==============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1993, 1992 and 1991
(Continued)
1993 1992 1991
------------- --------------- --------------
Operating activities:
Net income (loss) $ 2,809,966 $ (5,092,181) $ (3,093,431)
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Recognized gain on
sale of property (1,333,480)
Affiliate's
participation in
in loss from joint
venture (65,004) (69,541) (108,736)
Extraordinary items:
Gain on forgiveness
of debt (2,058,078)
Gain on foreclosure
of property (4,340,843) (2,475,016)
Depreciation of
properties 4,617,794 4,884,047 5,371,409
Amortization of
deferred expenses 471,567 229,473 396,741
Amortization of
discount on note
receivable (112,816) (117,185)
Deferred interest on
note receivable (424,168) (39,871)
Deferred interest
expense 806,802 649,669
Net change in:
Escrow deposits (1,051,466) (426,432) (81,131)
Accounts and
accrued interest
receivable (926,228) (243,135) (137,720)
Prepaid expenses (21) (384) (834)
Accounts payable 72,914 355,743 (20,542)
Due to affiliates (10,263) 4,383 (39,772)
Accrued liabilities 1,365,981 607,755 1,342,137
Security deposits (13,309) 2,631 (125,173)
------------- --------------- --------------
Net cash provided by
operating activities 336,026 902,105 344,121
------------- --------------- --------------
Investing activities:
Proceeds from redemption
of restricted
investments 100,000 610,000 10,543,700
Purchase of investment in
note (220,000)
Additions to properties (48,774) (33,750) (60,197)
Proceeds from sale of
property 67,832
------------- --------------- --------------
Net cash provided by
investing activities 51,226 356,250 10,551,335
------------- --------------- --------------
Financing activities:
Capital contributions by
joint venture partner -
affiliate 133,342
Distributions to joint
venture partner -
affiliate (23,780) (7,537) (13,417)
Proceeds from loan
payable - affiliate 5,918,837 1,478,387 2,412,592
Repayment of loan
payable - affiliate (7,164,610) (302,178) (3,692,517)
Proceeds from issuance
of mortgage notes
payable 27,532,897 2,863,800
Proceeds from issuance
of mortgage notes
payable - affiliate 35,234
Repayment of mortgage
notes payable (21,205,963)
Repayment of mortgage
notes payable -
affiliate (1,912,948) (2,863,800)
Principal payments on
purchase price,
promissory and
mortgage notes payable (1,579,971) (2,093,148) (1,429,725)
Principal payments on
mortgage notes payable
- affiliate (7,675) (43,837) (42,436)
Purchase of revenue
bonds (8,530,000)
Payment of deferred
expenses (967,631) (203,029)
Payment of financing
escrows (896,083) (111,245)
------------- --------------- --------------
Net cash used in
financing activities (306,927) (1,149,245) (11,260,269)
------------- --------------- --------------
Net change in cash and cash
equivalents 80,325 109,110 (364,813)
Cash and cash equivalents
at beginning of year 656,104 546,994 911,807
------------- --------------- --------------
Cash and cash equivalents
at end of year $ 736,429 $ 656,104 $ 546,994
============= =============== ==============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies:
(a) Depreciation expense is computed using straight-line and accelerated
methods. Rates used in the determination of depreciation are based upon the
following estimated useful lives:
Years
Buildings and improvements 20 to 30
Furniture and fixtures 5 to 7
Maintenance and repairs are charged to expense when incurred. Expenditures for
improvements are charged to the related asset account.
Interest incurred while properties were under construction was capitalized.
(b) Deferred expenses consist of financing fees which are amortized over the
terms of the respective agreements.
(c) When debt service payments are suspended on a mortgage loan which is
collateralized by one of the Partnership's properties, the lender may commence
foreclosure proceedings and a receiver may be appointed for the property by the
bankruptcy court while the proceedings are in progress. In such a case, the
Partnership will not reflect the operations of a property in the financial
statements while in receivership.
(d) Properties are classified in substantive foreclosure when the lender has
taken actions that result in the Partnership relinquishing control of the
operations of the property, and/or the General Partner anticipates the property
may be lost through foreclosure. When a property has been classified in
substantive foreclosure, expenses which are not general obligations of the
Partnership, but rather are liabilities collateralized by an interest in the
property (such as mortgage interest expense and real estate taxes), are
recorded only to the extent such items are paid.
(e) Cash equivalents include all unrestricted highly liquid investments with a
maturity of three months or less.
(f) The Partnership is not liable for Federal income taxes and each partner
recognizes his proportionate share of the Partnership income or loss in his tax
return; therefore, no provision for income taxes is made in the financial
statements of the Partnership.
2. Partnership Agreement:
The Partnership was organized in September 1982. The Partnership Agreement
provides for Balcor Partners-XV to be the General Partner and for the admission
of Limited Partners through the sale of up to 150,000 Limited Partnership
Interests at $1,000 per Interest, 140,000 of which were sold on or prior to
June 27, 1984, the termination date of the offering.
The Partnership Agreement provides that the General Partner will be allocated
99% of the profits and losses for the period prior to January 1, 1984, and 1%
of the profits and losses thereafter. One hundred percent of "Net Cash
Receipts" available for distribution shall be distributed to the holders of
Interests in proportion to their participating percentages as of the record
date for such distributions. In addition, there shall be accrued for the
benefit of the General Partner as its distributive share from operations an
amount equivalent to approximately 1% of the total Net Cash Receipts being
distributed, which will be paid only out of Net Cash Proceeds.
Under certain circumstances, the General Partner may also participate in the
Net Cash Proceeds of the sale or refinancing of Partnership properties. When
and as the Partnership sells or refinances its properties, the Net Cash
Proceeds resulting therefrom, which are available for distribution, will be
distributed only to holders of Interests until such time as holders of
Interests have received an amount equal to their Original Capital plus certain
levels of return as specified by the Partnership Agreement. Only after such
returns are made to the Limited Partners will the General Partner receive 15%
of further distributed Net Cash Proceeds, which will include the accrued
distributive share of Net Cash Receipts, subject to increase by an amount equal
to certain acquisition fees the General Partner would otherwise have been
entitled to pursuant to the Partnership Agreement.
3. Purchase Price, Promissory and Mortgage Notes Payable:
Purchase price, promissory and mortgage notes payable at December 31, 1993 and
1992 consisted of the following:
Property Carrying Carrying Final
Pledged as Amount of Amount of Inter- Matur- Periodic Estimated
Collateral Notes at Notes at est ity Payment Balloon
(Cost) 12/31/93 12/31/92 Rate Date Terms(B) Payment(C)
Purchase Price, Promissory and Mortgage Notes Payable - Nonaffiliates:
Antlers
apt. complex
($13,513,695)(A)$10,446,268 $10,330,433 8.25% 1998 $82,787 $9,731,000
Briarwood Place
apt. complex
($7,647,947) 6,261,495 6,332,257 6.498% 1998 43,961 5,606,000
Canyon Sands
Village apt.
complex
($11,167,970)
(D,E) 9,447,725 9,559,432 6.498% 1998 66,130 8,460,000
Chesapeake apt.
complex
($8,711,056)(A) 5,170,785 None 7.875% 2028 36,357 None
Chimney Ridge
apt. complex
($7,564,644)(A) 7,389,254 6,039,978 7.625% 2003 52,377 6,452,000
Chestnut Ridge
apt. complex
($5,682,907)(F) 2,843,547 2,854,583 9.75% 2002 24,073 2,725,000
Courtyards of
Kendall apt.
complex
($10,262,348)(D) 9,461,431 9,565,796 9.50% 1997 83,906(G) 9,014,000
Creekwood
apt. complex
($7,042,691) 5,335,504 5,528,289 (H) 1994 (H) (H)
Drayton Quarter
apt. complex
($5,936,122) 4,833,492 4,886,722 11.00% 1995 47,276 4,765,000
Highland Glen
apt. complex (I) 14,918,362 (I) (I) (I) (I)
Pinebrook
apt. complex
($7,479,554)(J) 5,185,000 5,185,000 9.00% (J) 38,888(K) 5,185,000
Quail Lakes
apt. complex
($10,874,908)(D) 6,847,000 7,220,481 (L) (L) (L) 6,764,000
Ridgepoint Hill
apt. complex
($9,516,771) 6,186,000 6,186,000 9.025% 1994 46,524(K) 6,186,000
Ridgepoint View
apt. complex
($9,544,434) 6,352,000 6,352,000 9.025% 1994 47,772(K) 6,352,000
Ridgetree
apt. complex
($14,004,711)(A) 9,626,164 12,141,441 10.05% 2000 85,139 9,157,000
Somerset Pointe
apt. complex
($14,715,039)(D) 11,690,016 11,817,991 6.498% 1998 80,531 10,501,000
Sunnyoak Village
apt. complex
($18,247,747)(D) 14,247,685 14,458,912 7.33%(M) 2015 106,091 None
Woodland Hills
apt. complex
(Carrying value
$6,528,693)(A) 5,032,845 4,954,252 8.54% 1998 39,009 4,828,000
----------- -----------
Subtotal 126,356,211 138,331,929
----------- -----------
Mortgage Notes Payable - Affiliates:
Chestnut Ridge
apt. complex
($5,682,907)(N) 2,829,241 2,829,241 10.50% 2002 (N) 2,829,000
Ridgepoint Hill
apt. complex
($9,516,771)(O) 3,288,870 3,296,545 10.25% 1994 (O) 3,289,000
Ridgepoint View
apt. complex
($9,544,434)(P) 3,345,405 3,345,405 10.25% 1994 (P) 3,345,000
Woodland Hills
apt. complex
(carrying value
$6,528,693)(Q) 585,171 2,107,723 10.50% 1999 (Q) 585,000
------------ ------------
Subtotal 10,048,687 11,578,914
------------ ------------
Total $136,404,898 $149,910,843
============ ============
(A) This note was modified or refinanced in 1993. The interest rate, periodic
payment terms, estimated balloon payment and final maturity date reflect the
terms of the new modified loan. See Note 4 of Notes to Financial Statements for
additional information.
(B) Represents monthly principal and interest payments through maturity, unless
otherwise indicated.
(C) The balloon payment will require the sale or refinancing of the property,
unless otherwise indicated.
(D) The difference between the balloon payments on previously outstanding
interim financing and the assumed balance on the permanent loan is payable in
accordance with a non-interest bearing promissory note. These amounts on an
individual basis do not exceed $49,000, and are reflected in the "Carrying
Amount of Notes" at December 31, 1993 and 1992.
(E) At December 31, 1993, a $700,000 certificate of deposit was posted by the
Partnership as additional collateral required under the mortgage note
collateralized by the Canyon Sands apartment complex.
(F) An affiliate of the General Partner ("Affiliate") provided a $10,000,000
letter of credit as additional collateral related to a pool of loans in the
aggregate amount of $32,336,100 collateralized by the Chestnut Ridge apartment
complex and eight other properties owned by partnerships affiliated with the
General Partner. A guaranty of the letter of credit by the Affiliate was
required under the terms of the refinancing. Such Affiliate's guaranty shall
not affect the obligations or actual liabilities of the Partnership under the
mortgage note payable or the related letter of credit.
(G) The Partnership is obligated to pay the lender (upon the earlier of
maturity or the sale or refinancing of the property) additional interest equal
to the lesser of: (i) 25% of the amount by which the agreed upon value of the
property at maturity or upon sale or refinancing exceeds $10,100,000, or (ii)
interest which would have accrued on the loan from June 1, 1992 through the
earlier of maturity or the sale or refinancing of the property at 15% per
annum.
(H) The contract interest rate floats at 2.5% over the Federal Home Loan Bank
System 11th District Cost of Funds. At December 31, 1993, the contract interest
rate was 6.44%, and the average rate for 1993 was 6.77%. The pay rate is 10%
per annum on outstanding principal with the difference between the contract and
pay rates applied monthly to principal.
(I) The Partnership relinquished title to the property through foreclosure on
May 7, 1993. See Note 13 of Notes to Financial Statements for additional
information.
(J) In December 1992, the joint venture which owns the property filed for
protection under the U.S. Bankruptcy Code. See Note 12 of Notes to Financial
Statements for additional information. In January 1994, a plan of
reorganization was approved by the Bankruptcy Court which is expected to be
effective during the second quarter of 1994. Under the plan, the wrap-around
feature of each of the notes collateralized by the property will be terminated
and will become first, second, third and fourth mortgage notes, and the joint
venture is to make payments as follows: first, monthly payments of principal
and interest, with interest at a rate of 9.75% per annum to the first mortgage
holder, next as interest-only payments, with interest at a rate of 8.875% per
annum to the second mortgage holder, next as interest-only payments at a rate
of 10% per annum to the third mortgage holder and then interest-only payments
at an interest rate of 10% per annum to the fourth mortgage holder. Any
deficiency in the payments to the third and fourth mortgage holders will accrue
and be paid in future months as net cash flow from property operations are
available or from the proceeds of a sale of the property.
(K) Represents monthly interest-only payments through maturity.
(L) During March 1994, this loan was modified. Effective February 1, 1994, the
interest rate increased from 6.745% to 8.25%, the maturity date was extended
from March 1995 to March 2001 and the monthly payment of principal and interest
increased from $44,612 to $51,295.
(M) The interest rate is subject to adjustment in May 1998 and every 5 years
thereafter based on a market index fixed at 3.0% above the Federal Home Loan
Bank Board Eleventh District cost of funds rate.
(N) The balance at December 31, 1993 is comprised of a second mortgage loan in
the amount of $393,025 payable to National Express Company and an unsecured
loan in the amount of $2,436,216, payable to Balcor Real Estate Holdings, Inc.
("BREHI"), both of which are affiliates of the General Partner. Both loans have
a contract interest rate of 10.5%. The interest pay rate on the second mortgage
loan is the lower of the contract rate or the net cash flow from the property
after payment of interest on the first mortgage loan. The interest pay rate on
the unsecured loan is the lower of the contract rate or the net cash flow from
the property limited to a maximum annual deficit of $40,000. To the extent that
cash flow remains or the maximum annual deficit has not been incurred after
payment of all current interest on both loans, such excess will be applied as a
principal reduction on the unsecured loan. Deferred interest on the second
mortgage loan is accumulated on a non-interest bearing basis while deferred
interest on the unsecured loan is added to the principal balance outstanding
and interest is accumulated thereon at the contract rate.
(O) This balance is comprised of a second mortgage loan in the amount of
$3,000,000 and an unsecured loan in the amount of $288,870, both of which are
payable to BREHI. Both loans have a contract interest rate of 10.25%. The
interest pay rate on the second mortgage loan is the lower of the contract rate
or the net cash flow from the property after payment of interest on the first
mortgage loan. The interest pay rate on the unsecured loan is the lower of the
contract rate or the net cash flow from the property limited to a maximum
annual deficit of $77,238. To the extent that cash flow remains or the maximum
annual deficit has not been incurred, after payment of all current interest on
both loans, such excess will be applied as a principal reduction on the
unsecured loan. During 1993 and 1992, $7,675 and $43,837, respectively, of cash
flow was applied as a principal reduction on the unsecured loan. Deferred
interest on the second mortgage loan is accumulated on a non-interest bearing
basis while deferred interest on the unsecured loan is added to the principal
balance outstanding and interest is accumulated thereon at the contract rate.
This loan matures during 1994 and the General Partner expects to extend the
maturity date of the loan if it is not repaid prior to maturity.
(P) This loan represents a second mortgage loan payable to BREHI. The loan has
a contract interest rate of 10.25% with a pay rate equal to the lower of the
contract rate or the net cash flow from the property, limited to a maximum
annual deficit of $78,487. Deferred interest on the second mortgage loan is
accumulated on a non-interest bearing basis. This loan matures during 1994 and
the General Partner expects to extend the maturity date of the loan if it is
not repaid prior to maturity.
(Q) This note represents a second mortgage loan payable to BREHI. During 1993,
the balance of the BREHI loan of $2,498,119, including accrued interest, was
reduced to $585,171 as a requirement of the first mortgage loan. The partial
repayment was conditioned upon BREHI agreeing to subordinate repayment of the
remaining portion of the BREHI loan to a payment to the Partnership from sale
or refinancing proceeds from this property of $1,800,000. See Note 4 of the
Notes to Financial Statements for additional information. The interest pay rate
is the lower of the contract rate or the net cash flow from the property, after
payment of interest on the first mortgage loan, limited to a maximum annual
deficit of $62,500. Deferred interest on the second mortgage loan is
accumulated and bears interest at the contract rate.
During the years ended December 31, 1993, 1992 and 1991, the Partnership
incurred interest expense on mortgage notes payable to non-affiliates of
$10,882,258, $12,561,221 and $13,588,013, respectively. The Partnership paid
interest expense of $10,655,057 in 1993, $11,830,225 in 1992 and $12,893,968 in
1991. See Note 8 of Notes to Financial Statements for interest paid and
incurred on loans payable to affiliates.
Maturities of the purchase price, promissory and mortgage notes payable and
mortgage note payable - affiliates in each of the next five years are
approximately as follows:
1994 $31,032,000
1995 12,886,000
1996 1,423,000
1997 10,463,000
1998 40,298,000
4. Loan Modifications and Refinancings:
The General Partner completed the refinancing or modification of loans on five
properties during 1993 and on three properties during 1992.
(a) In April 1993, the first mortgage loan collateralized by the Ridgetree
Phase I Apartments was refinanced. The original loan, which had an outstanding
balance of $12,298,669, including accrued interest of $253,759, was repaid for
$10,421,190 which represents a discount to the Partnership of $1,877,479. The
Partnership used proceeds from the new loans of $9,661,000, and made a
principal payment of $760,190 to repay the loan. Lehman Brothers, an affiliate
of the General Partner, acted as firm underwriter for the sale of the
securities representing ownership of the new loans, and earned underwriting
compensation in accordance with market practices. The Partnership funded
capital and operating reserves of $238,000 and paid related closing costs of
$168,516.
(b) In May 1993, the first mortgage loan collateralized by the Woodland Hills
Apartments was refinanced with a new loan of $5,054,563. The Partnership used
these proceeds to repay the existing first mortgage loan of $4,941,615 as well
as $112,948 of the BREHI loan. The Partnership also funded capital reserves of
$123,900 and paid related closing costs of $168,801. The balance of the BREHI
second mortgage loan of $2,498,119, including accrued interest of $390,396, was
reduced to $585,171 as a requirement of the first mortgage loan.
(c) In June 1993, the Partnership obtained a first mortgage loan of $5,185,000
collateralized by the Chesapeake Apartments. This first mortgage loan replaces
the bonds collateralized by the property, which the Partnership had purchased
in 1991. The Partnership also funded capital and operating reserves of $393,983
and paid related closing costs of $171,923.
(d) In July 1993, the first mortgage loan collateralized by the Antlers
Apartments was modified. In connection with the modification, the loan balance
was increased by $232,334 to $10,500,000, and the Partnership paid fees and
closing costs of $265,830.
(e) In March 1994, the first mortgage loan collateralized by the Quail Lakes
Apartments was modified.
(f) In October 1993, the first mortgage loan collateralized by the Chimney
Ridge Apartments was refinanced with a new first mortgage loan of $7,400,000.
The Partnership used these proceeds to repay the existing first mortgage loan
of $6,023,757 which represents a discount to the Partnership of $180,599. The
Partnership also funded capital and operating reserves of $140,200 and paid
related closing costs of $261,682.
(g) The mortgage note payable collateralized by the Courtyards of Kendall
apartment complex, in the approximate amount of $10,121,000, matured on October
1, 1991. The Partnership did not make the balloon payment but continued to pay
monthly net cash flow from the property to the lender in lieu of debt service
while negotiating an extension and modification of the loan terms. In January
1992, the lender drew upon the $313,000 certificate of deposit previously
pledged as additional collateral and applied it against unpaid debt service,
and filed foreclosure proceedings against the property. In May 1992, a
settlement agreement and modification of the loan were executed, and the
foreclosure proceedings were subsequently dismissed. Under the terms of the
agreement, the Partnership paid $1,000,000 representing a principal payment of
$440,344 and delinquent real estate taxes of $559,656, which had remained
unpaid during the term of the negotiations. In addition, the Partnership agreed
to make improvements to the property totaling $250,000, and the Partnership
posted a letter of credit collateralizing payment of this amount. In connection
with this modification, the Partnership incurred financing fees totaling
$87,932. The Partnership is also obligated to pay the lender (upon the earlier
of maturity or the sale or refinancing of the property) additional interest
equal to the lesser of: (i) 25% of the amount by which the agreed upon value of
the property at maturity or upon sale or refinancing exceeds $10,100,000, or
(ii) interest which would have accrued on the loan from June 1, 1992 through
the earlier of maturity or the sale or refinancing of the property at 15% per
annum.
(h) In January 1992, the Partnership completed a refinancing of the $5,115,644
BREHI mortgage loan and deferred interest totaling $577,397 collateralized by
the Chestnut Ridge apartment complex. The refinancing resulted in a $2,863,800
new first mortgage loan from an unaffiliated lender which was used to repay a
portion of the BREHI loans. The remaining portion of the BREHI loans, along
with deferred interest payable thereon in the amount of $577,397, were
recharacterized as a $393,025 second mortgage loan, and a $2,436,216 unsecured
loan.
5. Management Agreements:
As of December 31, 1993, all the properties owned by the Partnership are under
management agreements with Allegiance Realty Group, Inc. (formerly Balcor
Property Management, Inc.), an affiliate of the General Partner. These
management agreements provide for annual fees of 5% of gross operating
receipts.
The Brookhollow apartment complex was sold in 1988. In September 1990, a
settlement was reached with the party from which the Partnership purchased the
property in 1984 relating to outstanding proration and guaranteed payments due
from the seller. Under the terms of the settlement, the Partnership received a
note for $340,061 pursuant to which it receives cash payments in installments
of principal and interest at an annual rate of 10%, over a four year period,
with the final installment due May 1, 1994. Principal collections of these
amounts are recognized when received as other income for financial statement
purposes. During 1993, 1992 and 1991, the Partnership recognized other income
totaling $54,409, $54,411 and $74,813, respectively.
In June 1992, the Partnership reached a settlement with the seller of the
Ridgetree apartment complex. Under the terms of the settlement, the Partnership
received cash of $208,000 and was relieved of certain liabilities by the
seller. The Partnership and seller have released all claims and causes of
action against one another. Other income of $259,174 was recognized during 1992
in connection with this transaction.
6. Affiliate's Participation in Joint Venture:
The Pinebrook apartment complex was purchased by a joint venture between the
Partnership and an affiliated partnership. All assets, liabilities, income and
expenses of the joint venture are included in the financial statements of the
Partnership with the appropriate deduction from income or loss for the
affiliate's participation in the joint venture. Profits and losses are
allocated 51.57% to the Partnership and 48.43% to the affiliate.
7. Tax Accounting:
The Partnership keeps its books in accordance with the Internal Revenue Code,
rules and regulations promulgated thereunder and existing interpretations
thereof. The accompanying financial statements which are prepared in accordance
with generally accepted accounting principles will differ from the tax basis
method of accounting due to the different treatment of various items as
specified in the Internal Revenue Code. The net effect of these accounting
differences is that the net income for 1993 in the financial statements is
$91,215 more than the tax income of the Partnership for the same period.
8. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/93 12/31/92 12/31/91
Paid Payable Paid Payable Paid Payable
Property
mgmt. fees $1,477,069 $135,884 $1,483,559 $130,999 $1,546,891 $120,749
Reimbursement
of expenses to
General Partner
at cost:
Accounting 64,346 5,325 24,802 1,840 20,722 5,371
Data processing 57,699 10,401 63,566 5,255 79,815 5,800
Investor
communications 10,210 845 10,201 757 7,193 1,864
Legal 27,006 2,235 40,765 3,025 27,385 7,098
Other 32,012 2,649 35,905 2,664 10,929 2,833
Portfolio mgmt. 118,754 9,356 78,260 5,377 59,968 15,542
During 1993, the Partnership borrowed $3,482,525 from the General Partner in
connection with the Woodland Hills and Ridgetree Phase I loan refinancings and
repaid $5,020,426 from proceeds available from the Chesapeake and Chimmney
Ridge refinancings. In connection with the Woodland Hills refinancing, $100,000
of cash pledged as additional collateral related to the prior mortgage loan was
released and used to repay General Partner loans. In addition, the Partnership
borrowed a net of $392,128 from the General Partner to fund operating deficits,
financing escrows and administrative expenses. As of December 31, 1993, the
Partnership had outstanding short-term loans totaling $11,166,206 from the
General Partner with accrued interest payable on these loans totaling $40,749.
During 1993, 1992 and 1991, the Partnership incurred interest expense of
$484,932, $494,403 and $816,387 and paid interest expense of $511,973, $480,680
and $852,729 on these loans, respectively. Interest expense subsequent to June
30, 1991, was computed at the American Express Company cost of funds rate plus
a spread to cover administrative costs. As of December 31, 1993, this rate was
3.93%. This rate is similar to the Shearson Lehman Brothers Holdings Inc. cost
of funds rate used to compute interest expense on these loans through June 30,
1991.
As of December 31, 1993, the Partnership had mortgage loans outstanding from
affiliates of the General Partner in the aggregate amount of $10,048,687 with
accrued interest payable on these loans totaling $1,848,622. The Ridgepoint
Hill, Ridgepoint View and Woodland Hills apartment complexes have mortgage
loans financed through Balcor Real Estate Holdings, Inc. ("BREHI"), an
affiliate of the General Partner. The Chestnut Ridge Phase II apartment
complex has loans financed through BREHI and another affiliate of the General
Partner. See Note 3 of Notes to Financial Statements for additional
information. During 1993, 1992 and 1991, the Partnership incurred interest
expense of $1,165,698, $1,254,829 and $1,529,471 and paid interest expense of
$770,479, $974,726 and $1,092,841 on these affiliated mortgage loans,
respectively.
The General Partner may continue to provide additional short-term loans to the
Partnership to fund future working capital needs or operating deficits,
although there is no assurance that such loans will be available. Should such
short-term loans not be available, the General Partner will seek alternative
third party sources of financing working capital. However, the current economic
environment and its impact on the real estate industry make it unlikely that
the Partnership would be able to secure financing from third parties to fund
working capital needs or operating deficits. Should additional borrowings be
needed and not be available either through the General Partner or third
parties, the Partnership may be required to dispose of some of its properties
to satisfy these obligations.
9. Property Sale:
In August 1991, the Partnership sold the Sunrise Village apartment complex to
an affiliate of the entity which originally sold the property to the
Partnership, subject to the existing first mortgage loan held by a third party,
for a gross sale price of $11,064,881. After adjustment for proration items of
$124,822 and the existing first mortgage loan of $10,851,559, the Partnership
received sales proceeds of $88,500. The basis of the property sold was
$9,585,911, net of accumulated depreciation of $3,797,354, and the Partnership
incurred selling costs of $20,668. The General Partner did not receive a real
estate commission in connection with the sale of the property. For financial
statement purposes, the Partnership recognized a gain of $1,333,480 from the
sale of the property.
10. Rentals Under Operating Leases:
The Partnership receives rental income from the leasing of apartment complexes
under operating leases. Minimum rentals under operating leases with lease terms
of one year or less expected to be received in 1994 from its apartment
complexes based on December 31, 1993 rental and occupancy rates, are
approximately as follows:
Occupancy Minimum
Property Rate Rentals
Antlers Apartments 91% $ 2,201,000
Briarwood Place Apartments 99% 1,399,000
Canyon Sands Village
Apartments 98% 2,035,000
Chesapeake Apartments 94% 1,576,000
Chestnut Ridge Apartments
(Phase II) 95% 848,000
Chimney Ridge Apartments 94% 1,637,000
Courtyards of Kendall
Apartments 94% 2,130,000
Creekwood Apartments
(Phase I) 87% 1,271,000
Drayton Quarter Apartments 88% 1,144,000
Pinebrook Apartments 95% 1,044,000
Quail Lakes Apartments 98% 1,704,000
Ridgepoint Hill Apartments 94% 1,692,000
Ridgepoint View Apartments 93% 1,689,000
Ridgetree Apartments
(Phase I) 92% 2,288,000
Somerset Pointe Apartments 97% 2,777,000
Sunnyoak Village Apartments 93% 3,119,000
Woodland Hills Apartments 94% 1,410,000
------------
$ 29,964,000
============
The Partnership is subject to the usual business risks regarding the collection
of these rentals.
11. Restricted Investments:
As of December 31, 1991, the Partnership had pledged cash of $1,410,000 as
additional collateral relating to the mortgage loans on the Canyon Sands,
Woodland Hills and Courtyards of Kendall apartment complexes. The amounts
pledged as collateral were invested in short-term instruments pursuant to the
terms of the pledge agreements with the respective lending institutions.
During 1992, a $313,000 certificate of deposit pledged as collateral was
applied against unpaid debt service and $297,000 was released by the lenders.
In connection with the May 1993 Woodland Hills refinancing, an additional
$100,000 of cash collateral was released. As of December 31, 1993, $700,000
remained pledged related to the Canyon Sands mortgage loan. This amount was
invested in short-term instruments pursuant to the terms of the agreement with
the lending institution. Interest earned on the collateral accumulates to the
benefit of the Partnership.
12. Net Investment in Note Receivable:
The Pinebrook apartment complex is owned by a joint venture consisting of the
Partnership and an affiliate, and is financed with a $5,185,000 wrap-around
mortgage note payable to Lexington Associates, the seller of the property
("Lexington"). Lexington's mortgage note wraps two underlying mortgage notes
payable in the approximate amounts of $4,000,000 and $450,000. At December 31,
1991, these notes were payable to First Equities Corporation ("First
Equities"). The First Equities notes in turn wrap a mortgage note payable to
Tates Creek Place ("Tates Creek"). In January 1992, a joint venture consisting
of the Partnership and the affiliate purchased First Equities' notes receivable
due from Lexington for a cash payment of $220,000, (of which $106,546 was the
affiliate's share), and the assumption of the mortgage note payable to Tates
Creek. This purchase has been recorded by the Partnership net of a $230,000
discount, which was amortized into income over the remaining term of the note.
As of December 31, 1993, the Partnership's net investment in the notes
consisted of the following, including accrued interest:
Balance as Interest Maturity
of 12/31/93 Rate Date
Wrap-around notes receivable
from Lexington Associates $4,885,918 (a) 9.8803% (b)
Mortgage note payable to
Tates Creek (3,971,878) 9.75% (b)
Net Investment in Note ----------
Receivable $ 914,040
==========
(a) Includes a $450,000 secondary note which is non-interest bearing.
(b) This loan matured in September 1993.
The Partnership continues to remain obligated to Lexington under the original
mortgage note payable in the amount of $5,185,000. However, in November 1992,
the Partnership suspended payments and began negotiations with Lexington for a
discounted buy-out of the mortgage note payable. As a result, Lexington
suspended payments on the note receivable to Pinebrook Limited Partnership. See
Note 3 of Notes to Financial Statements for additional information.
13. Extraordinary Items:
(a) In October 1993, the mortgage note collateralized by the Chimney Ridge
Apartments, which had an outstanding balance of $6,023,757, was repaid for
$5,843,158. This transaction resulted in an extraordinary gain on forgiveness
of debt of $180,599 during 1993 for financial statement purposes. See Note 5 of
Notes to Financial Statements for additional information.
(b) In May 1993, title to the Highland Glen apartment complex was relinquished
through foreclosure. The Partnership wrote-off the property basis of
$10,613,575, net of accumulated depreciation of $4,252,309, a mortgage loan
balance of $14,918,362 and accrued real estate taxes of $36,056. The
Partnership recognized an extraordinary gain of $4,340,843 during 1993 for
financial statement purposes.
(c) In April 1993, the mortgage note collateralized by the Ridgetree Phase I
Apartments, which had an outstanding balance of $12,298,669, including accrued
interest, was repaid for $10,421,190. This transaction resulted in an
extraordinary gain on forgiveness of debt of $1,877,479 during 1993 for
financial statement purposes. See Note 5 of Notes to Financial Statements for
additional information.
(d) In May 1991, the General Partner suspended debt service payments on the
mortgage loan collateralized by the Canyon Creek apartment complex. In June
1991, the lender filed foreclosure proceedings and in October 1991, title to
the property was relinquished through a foreclosure sale. The basis of the
property at the date of foreclosure was $10,054,309, net of accumulated
depreciation of $3,972,157. The outstanding mortgage balance at the date of
foreclosure was $12,128,278. In addition, accrued liabilities of $401,047 were
written off in connection with the foreclosure. The Partnership recognized an
extraordinary gain of $2,475,016 during 1991 for financial statement purposes.
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
<TABLE> SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1993
<CAPTION>
Col. A Col. B Col. C Col.D
Initial Cost Cost Adjustments
to Partnership Subsequent to Acquisition
Buildings Carrying Reduction
Encum- and Im- Improve- Costs of Basis
Description brances Land provements ments (b) (c)
<S> <C> <C> <C> <C> <C> <C>
Antlers Apts., 400
units in Jackson-
ville, FL (a) $2,601,798 $9,945,202 None $2,161,742 $(1,195,047)
Briarwood Place
Apts., 268 units
in Chandler, AZ (a) 1,100,000 5,966,000 None 581,947 None
Canyon Sands
Village Apts.,
412 units
in Phoenix, AZ (a) 1,142,000 9,368,000 None 971,625 (313,655)
Chesapeake Apts.,
320 units in
Harris Cty., TX (a) 1,350,000 7,691,000 $48,774 703,107 (1,081,825)
Chestnut Ridge
Apts. II, 160
units in Fort
Worth, TX (a) 1,058,000 4,294,000 None 482,300 (151,393)
Chimney Ridge Apts.,
280 units in Colo-
rado Springs, CO (a) 730,875 6,444,625 None 905,445 (516,301)
Courtyards of
Kendall Apts.,
300 units in
Dade County, FL (a) 1,000,000 10,180,000 175,361 21,775 (1,114,788)
Creekwood Apts.,
276 units in
Tulsa, OK (a) 1,460,000 5,555,000 None 676,095 (648,404)
Drayton Quarter
Apts., 206 units
in Charleston
County, SC (a) 475,000 5,053,000 None 828,911 (420,789)
Pinebrook Apts.,
208 units in
Lexington, KY (a) 371,000 7,773,230 None 11,887 (676,563)
Quail Lakes Apts.,
384 units in
Oklahoma City, OK (a) 1,043,580 9,630,670 220,851 891,563 (911,756)
Ridgepoint Hill
Apts., 309 units
in Dallas, TX (a) 2,330,000 6,942,000 29,864 1,085,670 (870,763)
Ridgepoint View
Apts., 314 units
in Dallas, TX (a) 2,365,000 7,016,000 54,221 1,134,373 (1,025,160)
Ridgetree Apts. I,
444 units in
Dallas, TX (a) 1,778,000 10,712,000 None 1,514,711 None
Somerset Pointe Apts.,
452 units
in Las Vegas, NV (a) 1,992,000 11,695,000 15,800 1,081,592 (69,353)
Sunnyoak Village
Apts., 548 units
in Overland Park,
KS (a) 1,866,000 14,878,000 None 1,700,433 (196,686)
Woodland Hills Apts.,
250 units in
Irving, TX (a) 1,745,000 5,795,000 None 1,030,017 (2,041,324)(d)
----------- ------------ -------- ----------- ------------
Total $24,408,253 $138,938,727 $544,871 $15,783,193 $(11,233,807)
=========== ============ ======== =========== ============
</TABLE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1993
<CAPTION>
Col. A Col. E Col. F Col. G Col. H Col. I
Gross Amounts at Which Life Upon
Carried at Close of Period Which Depre-
ciation in
Buildings Accumulated Date Date Latest Income
and Im- Total Deprecia- of Con- Acq- Statement
Description Land provements (e)(f) tion(f) struction uired is Computed
<S> <C> <C> <C> <C> <C> <C> <C>
Antlers Apts., 400
units in Jackson-
ville, FL $ 2,385,335 $ 11,128,360 $ 13,513,695 $ 4,333,731 1985 12/83 (g)
Briarwood Place
Apts.,268 units
in Chandler, AZ 1,101,549 6,546,398 7,647,947 2,675,705 1983 3/83 (g)
Canyon Sands Village
Apts., 412 units
in Phoenix, AZ 1,111,675 10,056,295 11,167,970 4,174,707 1983 11/82 (g)
Chesapeake Apts.,
320 units in
Harris Cty., TX 1,188,811 7,522,245 8,711,056 3,129,769 1983 1/83 (g)
Chestnut Ridge
Apts. II, 160
units in Fort
Worth, TX 1,032,620 4,650,287 5,682,907 1,775,261 1984 8/83 (g)
Chimney Ridge Apts.,
280 units in Colo-
rado Springs, CO 684,989 6,879,655 7,564,644 2,705,607 1984 6/83 (g)
Courtyards of
Kendall Apts.,
300 units in
Dade County, FL 902,287 9,360,061 10,262,348 5,205,662 1970 3/84 (g)
Creekwood Apts.,
276 units in
Tulsa, OK 1,335,226 5,707,465 7,042,691 2,297,091 1984 5/83 (g)
Drayton Quarter
Apts., 206 units
in Charleston
County, SC 444,378 5,491,744 5,936,122 2,088,073 1984 8/83 (g)
Pinebrook Apts.,
208 units in
Lexington, KY 340,911 7,138,643 7,479,554 3,077,917 1979 8/84 (g)
Quail Lakes Apts.,
384 units in
Oklahoma City, OK 955,116 9,919,792 10,874,908 3,916,657 1984 3/83 (g)
Ridgepoint Hill
Apts., 309 units
in Dallas, TX 2,126,419 7,390,352 9,516,771 2,938,052 1984 1/83 (g)
Ridgepoint View
Apts., 314 units
in Dallas, TX 2,133,696 7,410,738 9,544,434 3,008,300 1984 1/83 (g)
Ridgetree Apts. I,
444 units in
Dallas, TX 1,779,031 12,225,680 14,004,711 4,605,699 1984 2/83 (g)
Somerset Pointe
Apts., 452 units
in Las Vegas, NV 1,986,250 12,728,789 14,715,039 4,923,888 1984 7/83 (g)
Sunnyoak Village
Apts., 548 units
in Overland Park,
KS 1,847,433 16,400,314 18,247,747 6,437,916 1984 7/83 (g)
Woodland Hills Apts.,
250 units in
Irving, TX 1,301,898 5,226,795 6,528,693 2,268,488 1984 1/83 (g)
----------- ------------ ------------ -----------
Total $22,657,624 $145,783,613 $168,441,237 $59,562,523
=========== ============ ============ ===========
</TABLE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
NOTES TO SCHEDULE XI
(a) See description of purchase price, promissory and mortgage notes payable in
Note 3 of Notes to Financial Statements.
(b) Consists of legal fees, appraisal fees, title costs, other related
professional fees and capitalized construction period interest.
(c) Guaranteed income earned on properties under the terms of certain
management and guarantee agreements was recorded by the Partnership as a
reduction of the basis of the property to which the guaranteed income related.
(d) A reduction of basis was made to write down the property to its December
31, 1988 mortgage liability balance.
(e) The aggregate cost of land for Federal income tax purposes is $24,232,863
and the aggregate cost of buildings and improvements for Federal income tax
purposes is $139,013,086. The total of these is $163,245,949.
(f) Reconciliation of Real Estate
1993 1992 1991
Balance at beginning of year $183,258,347 $183,224,597 $210,574,131
Additions during year:
Improvements 48,774 33,750 60,197
Deductions during year
Foreclosure of investment
properties (14,865,884) None (14,026,466)
Cost of real estate sold None None (13,383,265)
------------ ------------ ------------
Balance at close of year $168,441,237 $183,258,347 $183,224,597
============ ============ ============
Reconciliation of Accumulated Depreciation
1993 1992 1991
Balance at beginning of year $ 59,197,038 $ 54,312,991 $ 56,711,093
Depreciation expense for
the year 4,617,794 4,884,047 5,371,409
Accumulated depreciation
of foreclosed investment
properties (4,252,309) None (3,972,157)
Accumulated depreciation
of real estate sold None None (3,797,354)
------------ ------------ ------------
Balance at close of year $ 59,562,523 $ 59,197,038 $ 54,312,991
============ ============ ============
(g) Depreciation expense is computed based upon the following estimated useful
lives:
Years
Buildings and improvements 20 to 30
Furniture and fixtures 5 to 7
