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, 1994
-----------------
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 ]
<PAGE>
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. The Registrant has since disposed of ten of these properties,
including the Pinebrook Apartments which was sold in February 1995 and the
property in which the Registrant had a minority joint venture interest. As of
December 31, 1994, the Registrant owned the fifteen 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 1994, institutionally owned and managed multi-family residential
properties in many markets continued to experience favorable operating
conditions combined with relatively low levels of new construction. These
favorable operating conditions were supported by the strong pattern of national
economic growth which contributed to job growth and rising income levels in
most local economies. However, some rental markets continue to remain extremely
competitive; therefore, the General Partner's goals are to maintain high
occupancy levels, while increasing rents where possible, and to monitor and
control operating expenses and capital improvement requirements at the
properties. As discussed in Item 7. Liquidity and Capital Resources, of the
Registrant's fifteen remaining properties, during 1994, nine generated positive
cash flow while six generated marginal cash flow deficits.
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 in conjunction with the Registrant's long
term dissolution strategy when determining the optimal time to sell each of the
Registrant's properties.
During 1994, the Registrant completed refinancings or modifications of three
mortgage notes payable. See Item 7. Liquidity and Capital Resources for
additional information.
The Registrant sold two properties during 1994. See Item 7. Liquidity and
Capital Resources for additional information.
The Registrant, by virtue of its ownership of real estate, is subject to
federal and state laws and regulations covering various environmental issues.
Management of the Registrant utilizes the services of
environmental consultants to assess a wide range of environmental issues and to
conduct tests for environmental contamination as appropriate. The General
Partner is not aware of any potential liability due to environmental issues or
conditions that would be material to the Registrant.
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 no employees engaged in its operations.
<PAGE>
Other Information
- -----------------
Pinebrook Apartments
- --------------------
In 1984, Pinebrook Apartments was acquired by Pinebrook Investors, a joint
venture consisting of the Registrant and an affiliate. The Registrant and the
affiliate hold participating percentages in the joint venture of 51.57% and
48.43%, respectively. Pinebrook Investors utilized $2,959,230 towards the
purchase of the property, including $1,400,000 from the Registrant. The
remainder of the purchase price was payable in the form of a $5,185,000
purchase money note (the "Note") collateralized by a wrap-around mortgage on
the property. The Note wrapped around four subordinate mortgage loans held by
unaffiliated parties and was collateralized by the property. In 1992,
Pinebrook Limited Partnership, another joint venture consisting of the
Registrant and the affiliate, purchased one of the subordinate loans at a
discount for $220,000, of which $113,454 was the Registrant's share.
In November 1992, Pinebrook Investors suspended debt service payments on the
Note, and subsequently, in December 1992, filed for protection under Chapter 11
of the U.S. Bankruptcy Code. In May 1994, the Pinebrook Investor's plan of
reorganization became effective. Pursuant to the plan of reorganization,
Pinebrook Investors was required to sell the property within two years.
On February 2, 1995, Pinebrook Investors sold the property to TGM Pinebrook
Inc., a Delaware corporation, for a sale price of $6,140,000. From the
proceeds of the sale, Pinebrook Investors paid approximately $5,058,226 to the
third party mortgage holders in full satisfaction of the outstanding amount of
the loans. Additionally, Pinebrook Investors paid approximately $716,729 to
Pinebrook Limited Partnership in full satisfaction of the outstanding amount of
its loan, of which the Registrant's share is $369,617. Pinebrook Investors
paid $184,200 as a brokerage commission to an unaffiliated party and
approximately $25,975 representing closing and other costs. Pinebrook
Investors received the remaining $13,316, of which the Registrant's share is
$6,867. Neither the General Partner nor its affiliates will receive a
commission in connection with the sale of the property.
Item 2. Properties
- ------------------
As of December 31, 1994, the Registrant owned the 15 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.
<PAGE>
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 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.
* This property was owned by the Registrant through a joint venture with an
affiliate and was sold during 1995. See Item 1. Business and Note 12 of Notes
to Financial Statements for additional information.
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
- -------------------------
The Registrant is not subject to any material pending legal proceedings, nor
were any such proceedings terminated during the fourth quarter of 1994.
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
No matters were submitted to a vote of the Limited Partners of the Registrant
during 1994.
<PAGE>
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, 1994, the number of record holders of Limited Partnership
Interests of the Registrant was 13,453.
Item 6. Selected Financial Data
- -------------------------------
Year ended December 31,
----------------------------------------------------------
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
Total income $30,392,509 $30,159,179 $30,525,777 $31,274,909 $32,505,457
Loss before gains
on sale of assets
and extraordinary
items (2,814,657) (3,588,955) (5,092,181) (6,901,927) (7,890,602)
Net income (loss) 5,572,852 2,809,966 (5,092,181) (3,093,431) (7,890,602)
Net income (loss)
per Limited
Partnership
Interest 39.41 19.87 (36.01) (21.88) (55.80)
Total assets 98,385,353 117,468,061 128,763,485 132,982,864 169,019,865
Mortgage notes
payable 114,779,433 136,404,898 149,910,843 150,663,629 182,960,724
Item 7. Management's Discussion and Analysis of Financial Condition and
- -----------------------------------------------------------------------
Results of Operations
- ---------------------
Summary of Operations
- ---------------------
The Ridgepoint Hill and Ridgepoint View apartment complexes were sold in 1994
and certain of the related loans were repaid at a discount. During 1993, the
Ridgetree Phase I first mortgage loan was purchased at a discount and title to
the Highland Glen apartment complex was relinquished through foreclosure. As a
result of these transactions and the timing of their related gains, Balcor
Realty Investors-84 (the "Partnership") generated increased net income during
1994 as compared to 1993 and generated net income during 1993 as compared to a
net loss during 1992. Further discussion of the Partnership's operations is
summarized below.
Operations
- ----------
1994 Compared to 1993
- ---------------------
In August 1994, the Partnership sold the Ridgepoint Hill and Ridgepoint View
apartment complexes and repaid the first mortgage loans to a third party. In
addition, sales proceeds were used to repay the second mortgage loans and
unsecured third mortgage loan from an affiliate of the General Partner at a
<PAGE>
discount. As a result, the Partnership recognized gains on the sales of the
properties and extraordinary gains on forgiveness of debt during 1994. 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. The 1994 property sales and the 1993
foreclosure resulted in decreases in rental and service income, interest
expense on mortgage notes payable, depreciation, property operating expenses,
maintenance and repair expense, real estate taxes and property management fees
during 1994 as compared to 1993. These decreases were partially or, in certain
cases, fully offset by the events described below.
Twelve of the Partnership's remaining properties experienced improved occupancy
and/or higher rental rates in 1994, resulting in increased rental and service
income and property management fees during 1994 as compared to 1993, which
fully offset the decreases from the property sales and foreclosure.
Due to higher average cash balances and higher market interest rates on short-
term interest bearing instruments, interest income on short-term investments
increased during 1994 as compared to 1993.
In accordance with the loan agreements, the interest rates on the Briarwood,
Canyon Sands, Somerset Pointe and Sunnyoak Village mortgage notes decreased in
1993 based on lower market rates and resulted in a decrease in interest expense
on these loans. In addition, during 1994 and 1993, the Chestnut Ridge Phase II
mortgage note and the Ridgetree Phase I and Woodland Hills mortgage notes were
refinanced at lower interest rates and reduced total principal balances. These
decreases in interest expense, as well as the decreases discussed above, were
partially offset during 1994 by interest expense recognized on the Chesapeake
mortgage note, which was obtained during June 1993, and on the Quail Lakes
loan, which had principal-only payments until June 1993 at which time the
payments increased to principal and interest. In addition, the Partnership
recognized extraordinary gains on forgiveness of debt during 1993 in connection
with the refinancings of the Ridgetree Phase I and Chimney Ridge mortgage
loans.
Due to increases in the short-term loan balance payable to an affiliate and
interest rates during 1994, interest expense on short-term loans increased
during 1994 as compared to 1993.
Higher costs for insurance premiums, payroll expenses and contract services at
many of the Partnership's properties resulted in increased property operating
expense during 1994 as compared to 1993. This increase fully offset the
decrease from the property sales and foreclosure.
Due to higher repair and maintenance expenditures, which included roof and
pavement repairs, landscaping and replacement of floor coverings at many of the
Partnership's properties, maintenance and repair expense increased during 1994
as compared to 1993, which fully offset the decrease from the property sales
and foreclosure.
Due primarily to a higher tax assessment for the Ridgetree Phase I apartment
complex, real estate taxes increased during 1994 as compared to 1993, which
fully offset the decrease from the property sales and foreclosure.
Primarily as a result of increased legal fees relating to the Pinebrook
bankruptcy settlement and increased portfolio management and data processing
expenses, administrative expenses increased during 1994 as compared to 1993.
This increase was partially offset by a decrease in accounting fees during 1994
as compared to 1993.
The Pinebrook apartment complex was owned by a joint venture consisting of the
Partnership and an affiliate. The joint venture recognized other income during
1993 in connection with the purchase of a note investment related to the
property. During 1994, default interest expense was recognized on the fourth
mortgage loan in connection with the bankruptcy plan of reorganization. These
transactions, as well as higher property operating and repairs and maintenance
<PAGE>
expenditures at the property which had been deferred due to the bankruptcy,
resulted in an increase in affiliate's participation in loss from joint venture
during 1994 as compared to 1993.
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. This caused
decreases in rental and service income, interest expense on 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 previous Creekwood Phase I mortgage note adjusted
monthly based on a market rate while the interest rates on the Briarwood,
Canyon Sands, Somerset Pointe and Sunnyoak Village mortgage notes were 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 mortgage note 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 Woodland
Hills first mortgage note 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
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 mortgage note, 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 mortgage loans.
<PAGE>
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership increased as of December 31, 1994 as
compared to December 31, 1993. The Partnership received cash from its operating
activities which consisted primarily of cash flow generated from property
operations which were partially offset by the payment of administrative
expenses and short-term interest expense. The Partnership also received cash
from its investing activities relating to the sale of the Ridgepoint Hill and
Ridgepoint View apartment complexes, all of which was used in its financing
activities to repay the related mortgage notes. The Partnership also used cash
to fund its other financing activities which consisted primarily of a net
repayment to the General Partner and the refinancing of the Chestnut Ridge
Phase II and Creekwood Phase I mortgage notes, as well as principal payments on
mortgage notes payable.
The Partnership has loans from the General Partner and owes approximately
$12,153,000 to the General Partner at December 31, 1994 in connection with the
funding of operating deficits and borrowings needed for loan refinancings.
These loans are expected to be repaid from available cash flow from future
property operations, and from proceeds received from the disposition or
refinancing of the Partnership's real estate investments, prior to any
distributions to Limited Partners.
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 also 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.
In instances where the General Partner concludes that the Partnership's
investment objectives cannot be met by continuing to own a particular property
and fund operating deficits, the Partnership 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 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 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.
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. The Partnership defines cash flow
generated from its properties as an amount equal to the property's revenue
receipts less property related expenditures, which include debt service
payments. For 1994, nine of the fifteen remaining properties owned by the
Partnership generated positive cash flow and six generated marginal cash flow
deficits. For 1993, of these fifteen properties, ten generated positive cash
flow and five generated marginal cash flow deficits.
The Canyon Sands apartment complex, which had generated marginal deficits
<PAGE>
during 1993, generated positive cash flow during 1994 due to higher rental
income and slightly lower debt service payments. The following two properties
that had generated positive cash flow during 1993 generated marginal cash flow
deficits during 1994. The Pinebrook apartment complex experienced higher
insurance premiums and increased repairs and maintenance expense which had been
deferred during the bankruptcy proceedings while the Drayton Quarter apartment
complex experienced slightly higher real estate taxes and slightly lower rental
income during 1994.
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. As of December 31, 1994, the occupancy rates of
all of the Partnership's properties ranged from 92% to 97% except for Ridgetree
Apartments Phase I which had an occupancy rate of 89%. Despite improvements
during 1993 and 1994 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
1995 and 1996, the Partnership has only one loan maturing, a mortgage loan of
approximately $4,765,000 collateralized by the Drayton Quarter apartment
complex. The General Partner has decided to sell the property and negotiations
are currently in progress to accomplish this prior to the maturity of the loan.
The Pinebrook apartment complex was owned by Pinebrook Investors, a joint
venture consisting of the Partnership and an affiliate, and was financed with a
$5,185,000 wrap-around mortgage payable, which matured in July 1993. In
December 1992, Pinebrook Investors filed for protection under the U.S.
Bankruptcy Code and in 1994, a plan of reorganization was approved by the
Bankruptcy Court. Pursuant to the plan, Pinebrook Investors was required to
sell the property within two years. Consequently, in February 1995, Pinebrook
Investors sold the property in an all cash sale for $6,140,000. From the
proceeds, Pinebrook Investors paid $5,058,226 to the third party mortgage
holders in full satisfaction of the first, second and fourth mortgage loans.
Additionally, Pinebrook Investors paid approximately $716,729 in full
satisfaction of the third mortgage note payable to Pinebrook Limited
Partnership, a separate joint venture consisting of the Partnership and the
affiliate. See Notes 3, 10 and 12 of Notes to Financial Statements for
additional information.
During 1994, the Chestnut Ridge Phase II mortgage loans, the Creekwood Phase I
first mortgage loan, and the Quail Lakes first mortgage loan were refinanced or
modified. See Note 3 of Notes to Financial Statements for additional
information.
During 1994, the Partnership sold the Ridgepoint Hill and Ridgepoint View
apartment complexes in an all cash sale for $18,659,285. From the proceeds, the
Partnership paid $12,658,037 in full satisfaction of the first mortgage loans
and $5,381,539 to an affiliate of the General Partner in full satisfaction of
the second mortgage loans and an unsecured third mortgage loan which
represented a discount of $2,791,215. The Partnership did not receive any
proceeds from the sale of the properties. See Notes 8 and 11 of Notes to
Financial Statements for additional information.
Woodland Hills Apartments is located near the Dallas/Ft. Worth Airport. A
proposed expansion plan provides for the construction of two additional runways
on airport property. A plan proposed by the Dallas/Fort Worth International
<PAGE>
Airport Board provides for varying levels of compensation to single family
homeowners; however, no similar compensation is planned for the majority of
apartment complex owners, including the property. In July 1993, the
Partnership and other affected multi-family property owners filed a lawsuit
seeking to obtain compensation. As a result of the court's decisions, the
Partnership is not entitled to receive any compensation due to the airport
expansion. The plaintiffs have decided not to appeal the decision due to the
costs of continuing the litigation, but intend to continue to monitor the
situation. Woodland Hills Apartments, however, may be entitled to be reimbursed
for the costs of sound proofing under the Final Environmental Impact Statement
approved by the Federal Aviation Administration. However, a final determination
will not be made until the runways are completed and actual noise studies are
analyzed. The General Partner does not anticipate that the proposed expansion
plan will have a significant impact to the value of the property.
The Briarwood apartment complex is located in the path of a planned expansion
of Price Road, which is adjacent to the property. Discussions for this
expansion 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.
The General Partner has recently completed the outsourcing of the financial
reporting and accounting services, transfer agent and investor records
services, and computer operations and systems development functions that
provided services to the Partnership. All of these functions are now being
provided by independent third parties. Additionally, Allegiance Realty Group,
Inc., which has provided property management services to all of the
Partnership's properties, was sold to a third party. Each of these transactions
occurred after extensive due diligence and competitive bidding processes. The
General Partner does not believe that the cost of providing these services to
the Partnership, in the aggregate, will be materially different to the
Partnership during 1995 when compared to 1994.
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, 1994 December 31, 1993
------------------------- -------------------------
<PAGE>
Financial Tax Financial Tax
Statements Returns Statements Returns
---------- --------- ---------- ---------
Total assets $98,385,353 $67,625,335 $117,468,061 $86,235,405
Partners' capital
accounts (deficit):
General Partner (1,545,395)(11,230,881) (1,601,123) (18,854,592)
Limited Partners (29,002,420)(49,329,122) (34,519,544) (50,849,212)
Net income (loss):
General Partner 55,728 7,623,711 28,100 (3,584,849)
Limited Partners 5,517,124 1,520,090 2,781,866 6,627,854
Per Limited Part-
nership Interest 39.41 10.86 19.87 47.34
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.
<PAGE>
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:
TITLE OFFICERS
----- --------
Chairman, President and Chief Thomas E. Meador
Executive Officer
Executive Vice President, Allan Wood
Chief Financial Officer and
Chief Accounting Officer
Senior Vice President Alexander J. Darragh
First Vice President Daniel A. Duhig
First Vice President Josette V. Goldberg
First Vice President Alan G. Lieberman
First Vice President Brian D. Parker
and Assistant Secretary
First Vice President John K. Powell, Jr.
First Vice President Reid A. Reynolds
First Vice President Thomas G. Selby
Thomas E. Meador (July 1947) joined Balcor in July 1979. He is Chairman,
President and Chief Executive 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 the
financial and administrative functions. 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 and real estate advisory services in support of asset
management, institutional advisory and capital markets functions. Mr. Darragh
has supervisory responsibility of Balcor's Investor Services, Investment
Administration, Fund Management and Land Management departments. Mr. Darragh
received masters' degrees in Urban Geography from Queens's University and in
Urban Planning from Northwestern University.
Daniel A. Duhig (October 1956) joined Balcor in November 1986 and is
responsible for the Asset Management Department relating to real estate
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.
Josette V. Goldberg (April 1957) joined Balcor in January 1985 and has primary
responsibility for all human resources matters. In addition, she has
supervisory responsibility for Balcor's administrative and MIS departments.
Ms. Goldberg has been designated as a Senior Human Resources Professional
<PAGE>
(SHRP).
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.
Brian D. Parker (June 1951) joined Balcor in March 1986 and is responsible for
Balcor's corporate and property accounting, treasury and budget activities.
Mr. Parker is a Certified Public Accountant and holds an M.S. degree in
Accountancy from DePaul University.
John K. Powell, Jr. (June 1950) joined Balcor in September 1985 and is
responsible for the administration of the investment portfolios of Balcor's
partnerships and for Balcor's risk management functions. Mr. Powell received a
Master of Planning degree from the University of Virginia. He has been
designated a Certified Real Estate Financier by the National Society for Real
Estate Finance and is a full member of the Urban Land Institute.
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.
Thomas G. Selby (July 1955) joined Balcor in February 1984 and has
responsibility for various Asset Management functions, including oversight of
the residential portfolio. From January 1986 through September 1994, Mr. Selby
was Regional Vice President and then Senior Vice President of Allegiance Realty
Group, Inc., an affiliate of Balcor providing property management services.
Mr. Selby was responsible for supervising the management of residential
properties in the western United States.
(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 1994.
Item 11. Executive Compensation
- -------------------------------
The Registrant has not paid and does not propose to pay any remuneration to the
executive officers and directors of the General Partner. Certain of these
officers receive compensation from The Balcor Company (but not from the
Registrant) for services performed for various affiliated entities,
which may include services performed for the Registrant. However, the General
Partner believes that any such compensation attributable to services performed
for the Registrant is immaterial to the Registrant. See Note 7 of Notes to
Financial Statements for the information relating to transactions with
affiliates.
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%
<PAGE>
Relatives and affiliates of the officers and partners of the General Partner
own an additional 80 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 7 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.
<PAGE>
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.
(27) Financial Data Schedule of the Registrant for 1994 is attached hereto.
(99) Agreement of Sale relating to the sale of Pinebrook Apartments, Lexington,
Kentucky is attached hereto.
(b) Reports on Form 8-K: No Reports on Form 8-K were filed during the quarter
ended December 31, 1994.
(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.
<PAGE>
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 27, 1995
------------------
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 27, 1995
- ---------------------- --------------
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 27, 1995
- ---------------------- --------------
Allan Wood
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
Report of Independent Accountants
Financial Statements:
Balance Sheets, December 31, 1994 and 1993
Statements of Partners' Deficit, for the years ended December 31, 1994, 1993
and 1992
Statements of Income and Expenses, for the years ended December 31, 1994, 1993
and 1992
Statements of Cash Flows, for the years ended December 31, 1994, 1993 and 1992
Notes to Financial Statements
Financial Statement Schedule:
III - Real Estate and Accumulated Depreciation, as of December 31, 1994
Financial Statement Schedules, other than that listed, are omitted for the
reason that they are inapplicable or equivalent information has been included
elsewhere herein.
<PAGE>
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, 1994 and 1993, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1994, 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.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
March 10, 1995
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
BALANCE SHEETS
December 31, 1994 and 1993
ASSETS
1994 1993
------------- -------------
Cash and cash equivalents $ 1,311,019 $ 736,429
Certificate of deposit - restricted 700,000 700,000
Net investment in note receivable 914,040
Escrow deposits 2,501,015 3,052,027
Accounts and accrued interest receivable 914,727 1,615,965
Deferred expenses, net of accumulated
amortization of $1,061,641 in 1994 and
$1,128,672 in 1993 1,353,111 1,570,886
------------- -------------
6,779,872 8,589,347
------------- -------------
Investment in real estate:
Land 18,397,507 22,657,624
Buildings and improvements 130,982,523 145,783,613
------------- -------------
149,380,030 168,441,237
Less accumulated depreciation 57,774,549 59,562,523
------------- -------------
Investment in real estate, net
of accumulated depreciation 91,605,481 108,878,714
------------- -------------
$ 98,385,353 $117,468,061
============= =============
LIABILITIES AND PARTNERS' DEFICIT
Loans payable - affiliate $ 12,153,202 $ 11,166,206
Accounts payable 328,647 1,040,208
Due to affiliates 197,822 207,444
Accrued liabilities, principally interest
and real estate taxes 1,201,714 4,229,868
Security deposits 582,347 599,835
Mortgage notes payable 112,812,222 126,356,211
Mortgage notes payable - affiliate 1,967,211 10,048,687
------------- -------------
Total liabilities 129,243,165 153,648,459
Affiliate's participation in joint venture (309,997) (59,731)
Partners' deficit (140,000 Limited
Partnership Interests issued and
outstanding) (30,547,815) (36,120,667)
------------- -------------
$ 98,385,353 $117,468,061
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
STATEMENTS OF PARTNERS' DEFICIT
for the years ended December 31, 1994, 1993 and 1992
Partners' Deficit Accounts
--------------------------------------------
General Limited
Total Partner Partners(A)
-------------- ------------- -------------
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 income 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)
Net income for the year
ended December 31, 1994 5,572,852 55,728 5,517,124
-------------- ------------- -------------
Balance at
December 31, 1994 $ (30,547,815) $ (1,545,395) $(29,002,420)
============== ============= =============
(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.
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the years ended December 31, 1994, 1993 and 1992
1994 1993 1992
------------- ------------- -------------
Income:
Rental and service $ 30,283,700 $ 29,915,125 $ 30,010,121
Interest on short-term
investments 108,809 76,829 81,558
Other income 167,225 434,098
------------- ------------- -------------
Total income 30,392,509 30,159,179 30,525,777
------------- ------------- -------------
Expenses:
Interest on mortgage
notes payable 10,764,902 12,047,956 13,816,050
Interest on short-term loans 635,617 484,932 494,403
Depreciation 4,461,058 4,617,794 4,884,047
Amortization of deferred
expenses 455,911 471,567 229,473
Property operating 8,770,470 8,085,076 7,892,370
Maintenance and repairs 3,264,328 3,207,875 3,353,405
Real estate taxes 2,535,394 2,492,324 2,502,189
Property management fees 1,502,309 1,481,954 1,493,809
Administrative 1,049,594 923,660 1,021,753
------------- ------------- -------------
Total expenses 33,439,583 33,813,138 35,687,499
------------- ------------- -------------
Loss before gains on sales
of properties, affiliate's
participation in loss
from joint venture and
extraordinary items (3,047,074) (3,653,959) (5,161,722)
Gains on sales of
properties 5,596,294
Affiliate's participation in
loss from joint venture 232,417 65,004 69,541
------------- ------------- -------------
Income (loss) before
extraordinary items 2,781,637 (3,588,955) (5,092,181)
------------- ------------- -------------
Extraordinary items:
Gains on forgiveness of
debt 2,791,215 2,058,078
Gain on foreclosure of
property 4,340,843
------------- -------------
Total extraordinary
items 2,791,215 6,398,921
------------- ------------- -------------
Net income (loss) $ 5,572,852 $ 2,809,966 $ (5,092,181)
============= ============= =============
Income (loss) before
extraordinary items
allocated to
General Partner $ 27,816 $ (35,890) $ (50,922)
============= ============= =============
Income (loss) before
extraordinary items
<PAGE>
allocated to
Limited Partners $ 2,753,821 $ (3,553,065) $ (5,041,259)
============= ============= =============
Income (loss) before
extraordinary items per
Limited Partnership
Interest (140,000
issued and outstanding) $ 19.67 $ (25.38) $ (36.01)
============= ============= =============
Extraordinary items
allocated to
General Partner $ 27,912 $ 63,989 None
============= ============= =============
Extraordinary items
allocated to
Limited Partners $ 2,763,303 $ 6,334,932 None
============= ============= =============
Extraordinary items per
Limited Partnership
Interest (140,000 issued
and outstanding) $ 19.74 $ 45.25 None
============= ============= =============
Net income (loss) allocated
to General Partner $ 55,728 $ 28,100 $ (50,922)
============= ============= =============
Net income (loss) allocated
to Limited Partners $ 5,517,124 $ 2,781,866 $ (5,041,259)
============= ============= =============
Net income (loss) per
Limited Partnership
Interest (140,000
issued and outstanding) $ 39.41 $ 19.87 $ (36.01)
============= ============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1994, 1993 and 1992
(Continued)
1994 1993 1992
------------- ------------- -------------
Operating activities:
Net income (loss) $ 5,572,852 $ 2,809,966 $ (5,092,181)
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Extraordinary items:
Gains on forgiveness
of debt (2,791,215) (2,058,078)
Gain on foreclosure
of property (4,340,843)
Gains on sales of
properties (5,596,294)
Affiliate's participation
in loss from joint
venture (232,417) (65,004) (69,541)
Depreciation of
properties 4,461,058 4,617,794 4,884,047
Amortization of deferred
expenses 455,911 471,567 229,473
Amortization of discount
on note receivable (112,816) (117,185)
Deferred interest on note
receivable (131,475) (424,168) (39,871)
Deferred interest expense 806,802
Net change in:
Escrow deposits 295,653 (1,083,694) (426,432)
Accounts and accrued
interest receivable 701,238 (926,249) (243,519)
Accounts payable (711,561) 72,914 355,743
Due to affiliates (9,622) (10,263) 4,383
Accrued liabilities (241,377) 1,365,981 607,755
Security deposits (17,488) (13,309) 2,631
------------- ------------- -------------
Net cash provided by
operating activities 1,755,263 303,798 902,105
------------- ------------- -------------
Investing activities:
Proceeds from redemption of
restricted investments 100,000 610,000
Purchase of investment in
note (220,000)
Additions to properties (48,774) (33,750)
Proceeds from sales of
properties 18,659,285
Payment of selling costs (250,816)
------------- ------------- -------------
Net cash provided by
investing activities 18,408,469 51,226 356,250
------------- ------------- -------------
Financing activities:
Capital contributions by
joint venture partner -
affiliate 4,953 133,342
Distributions to joint
venture partner -
<PAGE>
affiliate (22,802) (23,780) (7,537)
Proceeds from loan payable -
affiliate 764,128 5,918,837 1,478,387
Repayment of loan payable -
affiliate (1,218,432) (7,164,610) (302,178)
Proceeds from issuance of
mortgage notes payable 8,828,700 27,532,897 2,863,800
Repayment of mortgage notes
payable (20,626,168) (21,205,963)
Repayment of mortgage notes
payable - affiliate (5,668,638) (1,912,948) (2,863,800)
Principal payments on
mortgage notes payable (1,574,407) (1,579,971) (2,093,148)
Principal payments on
mortgage notes payable -
affiliate (133,699) (7,675) (43,837)
Payment of deferred expenses (198,136) (967,631) (203,029)
Payment of financing escrows (113,250) (896,083) (111,245)
Release of financing escrows 368,609 32,228
------------- ------------- -------------
Net cash used in financing
activities (19,589,142) (274,699) (1,149,245)
------------- ------------- -------------
Net change in cash and cash
equivalents 574,590 80,325 109,110
Cash and cash equivalents at
beginning of year 736,429 656,104 546,994
------------- ------------- -------------
Cash and cash equivalents at
end of year $ 1,311,019 $ 736,429 $ 656,104
============= ============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
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.
The Partnership records its investments in real estate at cost, and
periodically assesses possible impairment to the value of its properties. In
the event that the General Partner determines that a permanent impairment in
value has occurred, the carrying basis of the property is reduced to its
estimated fair value.
(b) Deferred expenses consist of financing fees which are amortized over the
terms of the respective agreements.
(c) Cash equivalents include all unrestricted highly liquid investments with an
original maturity of three months or less.
(d) 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.
(e) Reclassifications have been made to the previously reported 1993 and 1992
statements in order to provide comparability with the 1994 statements. These
reclassifications have not changed the 1993 or 1992 results.
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 generally will be
allocated 1% of the profits and losses. 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
<PAGE>
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. Mortgage Notes Payable:
Mortgage notes payable at December 31, 1994 and 1993 consisted of the
following:
Carrying Carrying Current Final
Property Amount of Amount of Inter- Matur- Current Estimated
Pledged as Notes at Notes at est ity Monthly Balloon
Collateral 12/31/94 12/31/93 Rate Date Payment Payment
- --------------- ---------- ---------- ------ ------ -------- ----------
Mortgage Notes Payable - Nonaffiliates:
Apartment Complexes:
Antlers (A) $10,309,549 $10,446,268 8.25% 1998 $82,787 $9,731,000
Briarwood Place 6,137,179 6,261,495 6.498% 1998 43,961 5,606,000
Canyon Sands
Village 9,265,525 9,447,725 6.498% 1998 66,130 8,460,000
Chesapeake (B) 5,140,624 5,170,785 7.875% 2028 36,357 None
Chimney Ridge (C) 7,321,840 7,389,254 7.625% 2003 52,377 6,452,000
Chestnut Ridge
(Phase II) (D) 3,112,914 2,843,547 9.02% 2001 25,219 2,934,000
Courtyards of
Kendall (E) 9,137,019 9,461,431 9.50% 1997 83,906 9,014,000
Creekwood (F) 5,677,152 5,335,504 8.88% 1999 45,372 5,465,000
Drayton Quarter 4,796,013 4,833,492 11.00% 1995 47,276 4,765,000
Pinebrook (G) 5,068,603 5,185,000
Quail Lakes (H) 6,801,164 6,847,000 8.25% 2001 51,295 6,350,000
Ridgepoint Hill (I) 6,186,000
Ridgepoint View (I) 6,352,000
Ridgetree (Phase I)
(J) 9,569,351 9,626,164 10.05% 2000 85,139 9,157,000
Somerset Pointe 11,473,744 11,690,016 6.498% 1998 80,531 10,501,000
Sunnyoak Village 14,008,532 14,247,685 7.33% 2015 106,091 None
Woodland Hills (K) 4,993,013 5,032,845 8.54% 1998 39,009 4,828,000
----------- -----------
Subtotal 112,812,222 126,356,211
----------- -----------
Mortgage Notes Payable - Affiliates:
Apartment Complexes:
Chestnut Ridge (L) 1,515,739 2,829,241 10.50% 2002 (L) 1,516,000
Ridgepoint Hill (I) 3,288,870
Ridgepoint View (I) 3,345,405
Woodland Hills (M) 451,472 585,171 10.50% 1999 (M) 451,000
----------- -----------
Subtotal 1,967,211 10,048,687
----------- -----------
Total $114,779,433$136,404,898
============ ===========
(A) In July 1993, this loan was modified. The loan balance was increased by
$232,334 to $10,500,000, the interest rate decreased from 9% to 8.25%, the
maturity date was extended from January 1994 to August 1998 and the monthly
payments decreased from $87,745 to $82,787.
<PAGE>
(B) In June 1993, the Partnership obtained this first mortgage loan. It
replaced the bonds collateralized by the property, which the Partnership had
purchased in 1991.
(C) In October 1993, this loan was refinanced. The interest rate decreased from
10.00% to 7.625%, the maturity date was extended from July 2002 to November
2003 and the monthly payments decreased from $53,285 to $52,377. Proceeds from
the new $7,400,000 first mortgage loan were used to repay the existing first
mortgage loan of $6,023,757, which represented a discount to the Partnership of
$180,599.
(D) In March 1994, this loan was refinanced. The interest rate decreased from
9.75% to 9.02%, the maturity date was changed from January 2002 to April 2001
and the monthly payments increased from $24,073 to $25,219. Proceeds from the
new $3,128,700 first mortgage loan were used to repay the existing $2,841,601
first mortgage loan as well as $287,099 of the Balcor Real Estate Holdings,
Inc. ("BREHI") loan.
(E) 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 a rate of 15%
per annum.
(F) In May 1994, this loan was refinanced. The interest rate changed from a
floating rate to a fixed rate of 8.88%, the maturity date was extended from
September 1994 to June 1999, and the monthly payments decreased from $49,953 to
$45,372. Proceeds from the new $5,700,000 first mortgage loan were used to
repay the existing first mortgage loan of $5,246,568.
(G) In December 1992, Pinebrook Investors, the joint venture which owns the
property filed for protection under the U.S. Bankruptcy Code. In 1994, a plan
of reorganization was approved by the Bankruptcy Court. Under the plan, the
wrap-around features of the various mortgage notes were eliminated and the
notes became first, second, third and fourth mortgage notes upon which the
joint venture made monthly payments totaling $40,761, a portion of which might
have been deferred based on availability of cash flow, at interest rates
ranging from 8.875% to 10%. Under the plan of reorganization, the new first,
second and fourth mortgage loan balances were $2,294,722, $1,712,135 and
$1,006,029, respectively. The third mortgage note payable was eliminated, along
with its monthly payments, through consolidation of the financial statements.
In February 1995, Pinebrook Investors sold the property. The mortgage maturity
amount is included in the 1995 maturity schedule amount below. See Notes 10 and
12 of Notes to Financial Statements for additional information.
(H) In March 1994, this loan was modified. Effective February 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 payments increased from $44,612
to $51,295.
(I) In August 1994, the Partnership sold this property. See Note 8 of Notes to
Financial Statements for additional information.
(J) In April 1993, this loan was refinanced. The interest rate decreased from
11.00% to 10.05%, the maturity date was extended from September 1996 to May
2000 and the monthly payments decreased from $102,889 to $85,139. Proceeds from
the $9,467,780 first mortgage loan and the $193,220 second mortgage loan, along
with a principal payment of $760,190, were used to repay the existing
$12,298,669 first mortgage loan which represents a discount of $1,877,479.
(K) In May 1993, this loan was refinanced. The interest rate decreased from
10.00% to 8.54%, the maturity date was extended from September 1993 to June
1998 and the monthly payments decreased from $44,405 to $39,009. Proceeds from
the new $5,054,563 first mortgage loan were used to repay the existing first
<PAGE>
mortgage loan of $4,941,615 as well as $112,948 of the BREHI loan.
(L) This note represents a subordinate non-recourse loan of $1,315,739 payable
to BREHI and a preferred limited partnership interest of $200,000 in the
subsidiary partnership which holds title to the property. During 1994, $287,099
of the proceeds from the new first mortgage loan were used to repay a portion
of the $414,897 deferred interest on the previous junior loans from affiliates.
In addition, as a requirement of the first mortgage loan, of the remaining
balances of the junior loans and deferred interest, $1,441,300 was retired and
replaced with a General Partner loan and the remainder was retired and replaced
with the current notes and preferred limited partnership interest. The contract
rate on the BREHI loan remains unchanged at 10.5%, which is the rate of return
earned on the preferred limited partnership interest as well. The interest pay
rate on the BREHI loan is the lower of the contract rate or the net cash flow
from the property. Any deferred interest on the BREHI loan will be payable at
maturity. The Limited Partners' position is unaffected by this conversion of a
portion of the junior loans to an equity position as Limited Partners' equity
is subordinate to the preferred interest just as it was subordinate to the
junior loans prior to the recharacterization.
(M) 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. 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.
The Partnership's mortgage loans to non-affiliates described above require
current monthly payments of principal and interest. During the years ended
December 31, 1994, 1993 and 1992, the Partnership incurred interest expense on
mortgage notes payable to non-affiliates of $10,132,223, $10,882,258 and
$12,561,221, respectively. The Partnership paid interest expense of $10,140,419
in 1994, $10,655,057 in 1993 and $11,830,225 in 1992. See Note 8 of Notes to
Financial Statements for interest paid and incurred on loans payable to
affiliates.
Maturities of the mortgage notes payable - nonaffiliates and mortgage note
payable - affiliates in each of the next five years are approximately as
follows:
1995 $12,031,000
1996 1,564,000
1997 10,339,000
1998 40,443,000
1999 6,644,000
4. Management Agreements:
As of December 31, 1994, all of the properties owned by the Partnership are
under management agreements with a third-party management company. These
management agreements provide for annual fees of 5% of gross operating
receipts.
5. Affiliate's Participation in Joint Venture:
The Pinebrook apartment complex was purchased by Pinebrook Investors, a joint
venture between the Partnership and an affiliate. 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.
<PAGE>
6. 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 1994 in the financial statements is
$3,570,949 less than the tax income of the Partnership for the same period.
7. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/94 12/31/93 12/31/92
------------------ ------------------ ------------------
Paid Payable Paid Payable Paid Payable
-------- ------- -------- ------- -------- -------
Property manage-
ment fees $1,401,854 None $1,477,069 $135,884 $1,483,559 $130,999
Reimbursement
of expenses to
General Partner
at cost:
Accounting 119,390 $39,870 64,346 5,325 24,802 1,840
Data processing 102,770 20,814 57,699 10,401 63,566 5,255
Investor
communications 12,677 4,234 10,210 845 10,201 757
Legal 35,233 11,767 27,006 2,235 40,765 3,025
Other 43,319 14,467 32,012 2,649 35,905 2,664
Portfolio mgmt. 127,397 38,107 118,754 9,356 78,260 5,377
Allegiance Realty Group, Inc., an affiliate of the General Partner, managed all
of the Partnership's properties until the affiliate was sold to a third-party
in November 1994.
During 1994, $1,441,300 of an unsecured affiliate loan relating to the Chestnut
Ridge Phase II Apartments was retired and replaced with a General Partner loan
as a result of the March 1994 refinancing of that property. In addition, the
Partnership borrowed an additional $764,128 to meet working capital
requirements. The Partnership repaid $1,218,432 of these loans from the General
Partner during 1994. As of December 31, 1994, the Partnership had outstanding
short-term loans totaling $12,153,202 from the General Partner with accrued
interest payable on these loans totaling $68,563. During 1994, 1993 and 1992,
the Partnership incurred interest expense of $635,617, $484,932 and $494,403
and paid interest expense of $607,803, $511,973 and $480,680 on these loans,
respectively. Interest expense is computed at the American Express Company cost
of funds rate plus a spread to cover administrative costs. As of December 31,
1994, this rate was 6.56%.
In March 1994, the Partnership refinanced the Chestnut Ridge Phase II mortgage
loans payable, including a second mortgage loan previously outstanding to
BREHI, an affiliate of the General Partner, and the unsecured loan described
above. See Note 3 of Notes to Financial Statements for additional information.
In August 1994, the Partnership repaid the Ridgepoint Hill and Ridgepoint View
BREHI loans at a discount in connection with the sale of these properties. See
Note 8 of Notes to Financial Statements for additional information.
As of December 31, 1994, the Partnership had junior loans outstanding from
BREHI relating to the Chestnut Ridge Phase II and Woodland Hills apartment
complexes in the aggregate amount of $1,967,211 with accrued interest payable
on these loans totaling $29,623. See Note 3 of Notes to Financial Statements
<PAGE>
for additional information. During 1994, 1993 and 1992, the Partnership
incurred interest expense of $632,679, $1,165,698 and $1,254,829 and paid
interest expense of $913,199, $770,479 and $974,726 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.
The Partnership participates in an insurance deductible program with other
affiliated partnerships in which the program pays claims up to the amount of
the deductible under the master insurance policies for its properties. The
program is administered by an affiliate of the General Partner who receives no
fee for administering the program. The Partnership's premiums to the
deductible insurance program were $310,984, $208,938 and $207,395 for 1994,
1993 and 1992, respectively. The Partnership had receivables from the insurance
deductible program totaling $159,351 at December 31, 1994.
8. Property Sales:
In August 1994, the Partnership sold the Ridgepoint Hill and Ridgepoint View
apartment complexes in an all cash sale for $18,659,285. From the proceeds of
the sale, the Partnership paid $12,658,037, which included accrued interest, in
full satisfaction of the first mortgage loans, as well as brokerage commissions
and other closing costs. The bases of these properties were $12,812,175, net of
accumulated depreciation of $6,249,032. For financial statement purposes, the
Partnership recognized a gain of $5,596,294 from the sale of these properties.
The remaining $5,381,539 of sales proceeds were paid to an affiliate of the
General Partner in full satisfaction of the second mortgage loans and an
unsecured third mortgage loan. This represents a discount of $2,791,215 from
the outstanding balance of the affiliate loans and accrued interest. The
Partnership did not receive any proceeds from the sale of the properties.
9. Restricted Investments:
As of December 31, 1992, the Partnership had pledged cash of $800,000 as
additional collateral related to the Woodland Hills and Canyon Sands mortgage
loans. In connection with the May 1993 Woodland Hills refinancing, cash
collateral of $100,000 was released. As of December 31, 1994, $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.
In addition, an affiliate of the General Partner had been 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. During 1994, the letter of credit was cashed and applied to
the principal balance of the underlying mortgage loan.
10. Net Investment in Note Receivable:
The Pinebrook apartment complex was owned by Pinebrook Investors, a joint
venture consisting of the Partnership and an affiliate, and was financed with a
$5,185,000 wrap-around mortgage note payable to Lexington Associates, the
seller of the property ("Lexington"), which wrapped two underlying mortgage
notes payable to Pinebrook Limited Partnership, a separate joint venture
consisting of the Partnership and the affiliate. These notes in turn wrapped a
<PAGE>
mortgage note payable to Tates Creek Place ("Tates Creek"). As of December 31,
1993, the Partnership's net investment in the notes was $914,040, consisting of
the wrap-around notes receivable from Lexington of $4,885,918, offset by the
mortgage note payable to Tates Creek of $3,971,878. In December 1992, Pinebrook
Investors filed for protection under the U.S. Bankruptcy Code and a plan of
reorganization was approved by the Bankruptcy Court and made effective in May
1994. Under the plan of reorganization, the wrap-around features of the various
mortgage notes were eliminated and the mortgage notes payable by Pinebrook
Investors to third parties became first, second and fourth mortgage notes. The
net investment of $914,040 described above was recharacterized as a third
mortgage note payable by Pinebrook Investors to Pinebrook Limited Partnership.
The operations of these joint ventures have been consolidated within the
Partnership's financial statements, and the related intercompany mortgage notes
transactions have been eliminated. In February 1995, the Partnership sold the
Pinebrook apartment complex. See Notes 3 and 12 of Notes to Financial
Statements for additional information.
11. Extraordinary Items:
(a) During 1994, the Ridgepoint Hill and Ridgepoint View apartment complexes
were sold. In connection with the sale, the Partnership repaid the second
mortgage loans and an unsecured third mortgage loan due to an affiliate of the
General Partner at a discount. This transaction resulted in an extraordinary
gain on forgiveness of debt of $2,791,215 during 1994 for financial statement
purposes. See Note 8 of Notes to Financial Statements for additional
information.
(b) During 1993, the Ridgetree Phase I and the Chimney Ridge mortgage notes
were refinanced. The mortgage notes which had outstanding balances totaling
$18,322,426, including accrued interest, were repaid for $16,264,348. These
transactions resulted in extraordinary gains on forgiveness of debt totaling
$2,058,078 during 1993 for financial statement purposes.
(c) During 1993, title to the Highland Glen Apartments 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 on foreclosure of property of $4,340,843
during 1993 for financial statement purposes.
12. Contingency:
The Briarwood apartment complex is located in the path of a planned expansion
of Price Road, which is adjacent to the property. Discussions for this
expansion 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.
13. Subsequent Event:
In February 1995, the Partnership sold the Pinebrook Apartments in an all cash
sale for $6,140,000. From the proceeds of the sale, the Partnership paid
$5,058,226 to the third party mortgage holders in full satisfaction of the
first, second and fourth mortgage loans, as well as a brokerage commission and
other closing costs. The basis of the property was $4,114,855, net of
accumulated depreciation of $3,364,699. The Partnership will recognize a gain
of $1,814,970 in its 1995 financial statements.
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1994
<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)
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 (196,687)
Woodland Hills Apts.,
250 units in
Irving, TX (a) 1,745,000 5,795,000 None 1,030,017 (2,041,325)(d)
----------- ----------- -------- ----------- ------------
Total $19,713,253 $124,980,727 $460,786 $13,563,150 $ (9,337,886)
=========== ============ ======== =========== ============
</TABLE>
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1994
<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 $ 4,659,668 1985 12/83 (g)
Briarwood Place
Apts.,268 units
in Chandler, AZ 1,101,549 6,546,398 7,647,947 2,872,046 1983 3/83 (g)
Canyon Sands Village
Apts., 412 units
in Phoenix, AZ 1,111,675 10,056,295 11,167,970 4,477,249 1983 11/82 (g)
Chesapeake Apts.,
320 units in
Harris Cty., TX 1,188,811 7,522,245 8,711,056 3,359,542 1983 1/83 (g)
Chestnut Ridge
Apts. II, 160
units in Fort
Worth, TX 1,032,620 4,650,287 5,682,907 1,916,517 1984 8/83 (g)
Chimney Ridge Apts.,
280 units in Colo-
rado Springs, CO 684,989 6,879,655 7,564,644 2,910,774 1984 6/83 (g)
Courtyards of
Kendall Apts.,
300 units in
Dade County, FL 902,287 9,360,061 10,262,348 5,637,424 1970 3/84 (g)
Creekwood Apts.,
276 units in
Tulsa, OK 1,335,226 5,707,465 7,042,691 2,468,228 1984 5/83 (g)
Drayton Quarter
Apts., 206 units
in Charleston
County, SC 444,378 5,491,744 5,936,122 2,254,605 1984 8/83 (g)
Pinebrook Apts.,
208 units in
Lexington, KY 340,911 7,138,643 7,479,554 3,342,639 1979 8/84 (g)
Quail Lakes Apts.,
384 units in
Oklahoma City, OK 955,116 9,919,792 10,874,908 4,220,764 1984 3/83 (g)
Ridgetree Apts. I,
444 units in
Dallas, TX 1,779,031 12,225,680 14,004,711 4,980,314 1984 2/83 (g)
Somerset Pointe
Apts., 452 units
in Las Vegas, NV 1,986,250 12,728,789 14,715,039 5,313,138 1984 7/83 (g)
Sunnyoak Village
Apts., 548 units
in Overland Park,
KS 1,847,432 16,400,314 18,247,746 6,933,154 1984 7/83 (g)
Woodland Hills Apts.,
250 units in
Irving, TX 1,301,897 5,226,795 6,528,692 2,428,487 1984 1/83 (g)
----------- ----------- ----------- -----------
Total $18,397,507 $130,982,523 $149,380,030 $57,774,549
=========== ============ ============ ===========
</TABLE>
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
NOTES TO SCHEDULE III
(a) See description of 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 $19,534,465
and the aggregate cost of buildings and improvements for Federal income tax
purposes is $124,960,899. The total of these is $144,495,364.
(f) Reconciliation of Real Estate
-----------------------------
1994 1993 1992
---------- ---------- ----------
Balance at beginning of year $168,441,237 $183,258,347 $183,224,597
Additions during year:
Improvements 48,774 33,750
Deductions during year
Foreclosure of investment
properties None (14,865,884) None
Cost of real estate sold (19,061,207) None None
------------ ------------ ------------
Balance at close of year $149,380,030 $168,441,237 $183,258,347
============ ============ ============
Reconciliation of Accumulated Depreciation
------------------------------------------
1994 1993 1992
---------- ---------- ----------
Balance at beginning of year $ 59,562,523 $ 59,197,038 $ 54,312,991
Depreciation expense for
the year 4,461,058 4,617,794 4,884,047
Accumulated depreciation
of foreclosed investment
properties None (4,252,309) None
Accumulated depreciation
of real estate sold (6,249,032) None None
------------ ------------ ------------
Balance at close of year $ 57,774,549 $ 59,562,523 $ 59,197,038
============ ============ ============
(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
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 1311
<SECURITIES> 700
<RECEIVABLES> 915
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5427
<PP&E> 149380
<DEPRECIATION> 57775
<TOTAL-ASSETS> 98385
<CURRENT-LIABILITIES> 14464
<BONDS> 114779
<COMMON> 0
0
0
<OTHER-SE> 30548
<TOTAL-LIABILITY-AND-EQUITY> 98385
<SALES> 0
<TOTAL-REVENUES> 35989
<CGS> 0
<TOTAL-COSTS> 15840
<OTHER-EXPENSES> 5967
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11401
<INCOME-PRETAX> 2781
<INCOME-TAX> 0
<INCOME-CONTINUING> 2781
<DISCONTINUED> 0
<EXTRAORDINARY> 2791
<CHANGES> 0
<NET-INCOME> 5573
<EPS-PRIMARY> 39.41
<EPS-DILUTED> 39.41
</TABLE>
EXHIBIT 99
AGREEMENT OF SALE
THIS AGREEMENT, entered into as of the 4th day of January, 1995, by and
between TGM REALTY CORP. #4 ("Purchaser") and PINEBROOK INVESTORS, an Illinois
Joint Venture ("Seller").
WITNESSETH:
1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to sell
at the price (the "Purchase Price") of Six Million One Hundred Forty Thousand
and No/100 Dollars ($6,140,000.00), all of the following property
(collectively, the "Property"):
a. That certain parcel of real property having a street address of 3650
Tates Creek Road, Lexington, Kentucky, more particularly described on Exhibit A
attached hereto (the "Land");
b. The personal property set forth on Exhibit B, which shall be
transferred to Purchaser at Closing (as hereinafter defined) by a Bill of Sale
in the form of Exhibit F attached hereto;
c. All rights and appurtenances pertaining to the Land, including,
without limitation, any and all rights of Seller in and to all air and
development rights, roads, alleys, easements, streets and ways adjacent to the
Land, rights of ingress and egress thereto, any strips and gores within or
bounding the Land and in profits or rights or appurtenances pertaining to the
Land;
d. The buildings and all other improvements, structures and fixtures
placed, constructed or installed on the Land (collectively, the
"Improvements");
e. All leases, licenses and other occupancy agreements (collectively,
the "Leases") covering space situate at or within the Land and Improvements and
any claim or right to claim as a tenant or occupant (collectively, the
"Tenants") under any existing Lease and all security deposits paid or deposited
by Tenants in respect of the Leases;
f. All of Seller's rights in and to contractual rights and intangibles
with respect to the operation, maintenance, repair and improvement of the Land
and the Improvements, including service and maintenance agreements,
construction, material and labor contracts, utility agreements and other
contractual arrangements, all to the extent designated by the provisions of
this Agreement (collectively, the "Contracts"); assignable governmental
permits, licenses, certificates and approvals in connection with the ownership
of the Property (collectively, the "Licenses") and warranties of any
contractor, manufacturer or materialman;
g. Seller's right, if any, to the use of the trade name "Pinebrook
Apartments" (the "Trade Name") in connection with the Property;
h. The right, if assignable, to the use of all telephone numbers used by
Seller at the Property; and
i. All rights to any award made or to be made or settlement in lieu
thereof for damage to the Land or Improvements by reason of condemnation,
eminent domain, exercise of police power or change of grade of any street.
2. PURCHASE PRICE. The Purchase Price shall be paid as follows:
a. Upon the execution of this Agreement, the sum of $300,000.00 (said
sum, together with all interest accrued thereon, is herein called the "Earnest
Money") payable to the "Escrow Agent" (as defined in the Escrow Agreement) to
be held in escrow by the Escrow Agent, by and in accordance with the provisions
of the Escrow Agreement ("Escrow Agreement") attached hereto as Exhibit C;
<PAGE>
b. On the Closing Date (as hereinafter defined), $6,140,000.00 (less a
credit for all Earnest Money) adjusted in accordance with the prorations by
federally wired "immediately available" funds delivered to the Escrow Agent's
account as set forth in the Escrow Agreement no later than 12:00 Noon Eastern
Time on the Closing Date.
3. TITLE COMMITMENT AND SURVEY.
a. Attached hereto as Exhibit D is a title commitment dated November 28,
1994 and updated December 7, 1994 ("Title Commitment") for an owner's standard
coverage title insurance policy ("Title Policy") issued by Chicago Title
Insurance Company ("Title Insurer"). The owner's Title Policy issued at
Closing will be in the amount of the Purchase Price subject only to real estate
taxes not yet due and payable and the title exceptions set forth in the Title
Commitment as marked thereon, and shall contain the endorsements attached to
the Title Commitment, if any. The exception with reference to the tenants will
be modified to read "Rights of parties in possession as shown on the attached
rent roll, as tenants only." All of the above are herein referred to as the
"Permitted Exceptions". The Title Commitment shall be conclusive evidence of
good title as therein shown as to all matters insured by the policy, subject
only to the exceptions therein stated. On the Closing Date, Seller shall cause
the Title Insurer to issue the Title Policy or a "marked up" commitment in
conformity with the Title Commitment. Purchaser and Seller shall equally share
the costs of the Title Policy; however, (i) Purchaser shall pay the costs of
any special endorsements which Purchaser requires, and (ii) Seller shall pay
the cost of any Title Indemnity (as hereinafter defined).
b. Purchaser acknowledges receipt of a survey ("Survey") of the Land and
the Improvements prepared by C.J. Fuller Consulting Engineers, Inc. dated July
2, 1984. Seller has ordered an update of the Survey ("Updated Survey") which
will be certified to the Purchaser or its designee and the Title Insurer. The
cost of the Updated Survey will be equally shared by Purchaser and Seller. If
Purchaser elects to terminate this Agreement pursuant to Paragraph 16b hereof,
then the Earnest Money plus all accrued interest shall be delivered to
Purchaser, and thereupon, neither party shall have any further liability
hereunder.
4. CONDITION OF TITLE/CONVEYANCE. Seller agrees to convey fee simple title
to the Property by the Deed ("Deed") in the form of Exhibit E attached hereto
and in recordable form subject only to the Permitted Exceptions. If Seller is
unable to convey title to the Property subject only to the Permitted Exceptions
because of the existence of an additional title exception ("Unpermitted
Exception"), then Purchaser can elect to take title to the Property subject to
the Unpermitted Exception or terminate this Agreement. Notwithstanding the
foregoing, if there shall be any Unpermitted Exceptions which (i) were caused
by, resulted from or arose out of (a) a default by Seller of any of its
obligations under this Agreement, including but not limited to Seller's failure
to pay real estate taxes, or (b) Seller creating or suffering to exist any
lien, charge or encumbrance on the Property, including, but not limited to the
grant by Seller to any person or entity of a mortgage, deed of trust or other
security interest affecting the Property, judgments which are a lien against
the Property, or any other affirmative act of Seller, including, without being
limited to, the performance of work on behalf of Seller upon all or any portion
of the Property, then Seller shall take all such actions as may be necessary
(including, without limitation, the commencement of and the diligent
prosecution of legal proceedings and the payment of money) to remove such
Unpermitted Exceptions, or cause the Title Insurer to issue a Title Indemnity
to Purchaser in form and substance reasonably satisfactory to Purchaser,
insuring against loss or damage or (ii) are not of the type described in clause
(i) of this sentence, but are removable by the payment of a definite or
ascertainable sum not to exceed, in the aggregate $25,000.00 (hereinafter
referred to as the "Maximum Amount"), then Seller shall cause such Unpermitted
Exceptions to be removed from the Owner's Policy, or cause the Title Insurer to
issue a Title Indemnity to Purchaser in form and substance reasonably
satisfactory to Purchaser, insuring against loss or damage. If Seller fails to
remove any Unpermitted Exceptions in accordance with the provisions of the
<PAGE>
immediately preceding sentence or if there exists any Unpermitted Exception
which Seller is not obligated to remove pursuant to clause (ii) of the
immediately preceding sentence because the payment of funds or the costs of the
Title Indemnity in excess of the Maximum Amount would be required to cure the
same, Purchaser, nevertheless, may elect (at or prior to the Closing) to
consummate the transaction provided for herein subject to any such Unpermitted
Exception as may exist as of the Closing with a credit against the Purchase
Price equal to (a) the sum necessary to remove such Unpermitted Exceptions
which can be satisfied by a liquidated amount, and (b) the reasonably estimated
reduction in the fair market value of the Property resulting from any
Unpermitted Exceptions which cannot be satisfied by the payment of a liquidated
amount, not to exceed the Maximum Amount (in the event of an Unpermitted
Exception of the type described in clause (ii) of the immediately preceding
sentence); provided, however, if Purchaser makes such election, Purchaser shall
not be entitled to any other credit, nor shall Seller bear any further
liability, with respect to any Unpermitted Exceptions of the type described in
clause (ii) of the immediately preceding sentence. If Purchaser elects to
terminate this Agreement, then the Earnest Money plus all accrued interest
shall be delivered to the Purchaser, and thereupon, neither party shall have
any further liability hereunder. Notwithstanding anything contained herein to
the contrary, the Property shall be sold and transferred to Purchaser free and
clear of all liens, encumbrances, security interests, assignments and all other
adverse interests, including without limitation, all claims (as such term is
defined in Section 101(5) of the "Bankruptcy Code" [as such term is defined in
Paragraph 29 hereof], except for Permitted Exceptions. If Seller is unable to
transfer and sell the Property to the Purchaser free and clear of all such
liens, encumbrances, security interests, assignments and other adverse
interests, except for the Permitted Exceptions, then at Purchaser's election,
this Agreement may be terminated, in which event, the Earnest Money shall be
promptly returned to Purchaser, and thereupon the parties shall have no further
rights or obligations hereunder.
5. PAYMENT OF CLOSING COSTS. Purchaser and Seller shall equally share the
costs of the Updated Survey, Title Policy, title company escrow fees (not to
exceed $550.00), transfer taxes, recording charges for the Deed and the UCC
Search (as hereinafter defined). However, Purchaser shall pay for all costs in
connection with any mortgage loan Purchaser obtains and the title costs for any
special endorsements which Purchaser requires. Each party shall pay its own
attorneys' fees. The amount of transfer taxes will be deposited with the Title
Insurer to be used to pay for the transfer taxes in the event the recorder
refuses to accept the Deed for recording without payment of those taxes.
6. DAMAGE, CASUALTY AND CONDEMNATION.
a. If the Property suffers damage as a result of any casualty prior to
the Closing Date and can be repaired or restored for $75,000 or less, then
Purchaser shall accept the Property in its damaged condition together with a
credit at Closing in the amount of the damaged Property. If the Property
suffers damage as a result of any casualty prior to the Closing Date and cannot
be repaired or restored for $75,000 or less, then, at Purchaser's election, to
be exercised within ten (10) days after Purchaser is notified of such casualty,
this Agreement shall be terminated.
b. If the Property suffers damage from a casualty prior to the Closing
Date, but is discovered by Purchaser within 90 days after the Closing Date,
then Seller shall promptly file a claim with its insurance carrier and will
assign the proceeds (if any) of that claim to the Purchaser and pay Purchaser
the amount of the deductible on its policy.
c. If condemnation proceedings ("Proceedings") have been instituted
against the Property or any governmental authority shall take any steps
preliminary thereto (by the giving of a written notice of intent to institute
such proceedings), then Purchaser can elect to either take the Property subject
to the Proceedings and an assignment of Seller's interest in the Proceedings or
terminate this Agreement. If Purchaser elects to terminate this Agreement, it
shall be by notice to the Seller within ten (10) days after Seller notifies
<PAGE>
Purchaser of the Proceedings.
d. If this Agreement is terminated pursuant to this Paragraph 6, then
the Earnest Money plus all accrued interest shall be delivered to the
Purchaser, and thereupon, neither party shall have any further liability
hereunder.
7. AS-IS CONDITION.
a. Purchaser acknowledges and agrees that it will be purchasing the
Property based solely upon its inspection and investigations of the Property
and that Purchaser will be purchasing the Property "AS IS" and "WITH ALL
FAULTS" based upon the condition of the Property as of the date of this
Agreement, subject to reasonable wear and tear and loss by fire or other
casualty or condemnation from the date of this Agreement until the Closing
Date. Without limiting the foregoing, Purchaser acknowledges that, except as
may otherwise be specifically set forth elsewhere in this Agreement, neither
Seller nor its consultants, brokers or agents have made any other
representations or warranties of any kind upon which Purchaser is relying as to
any matters concerning the Property, including, but not limited to, the
condition of the Land or any Improvements, the existence or nonexistence of
asbestos, lead in water, lead in paint, radon, underground or above ground
storage tanks, petroleum, toxic waste or any Hazardous Materials or Hazardous
Substances (as such terms are defined below), the Tenants of the Property or
the Leases affecting the Property, economic projections or market studies
concerning the Property, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Property, water or water rights,
topography, drainage, soil, subsoil of the Property, the utilities serving the
Property or any zoning, environmental or building laws, rules or regulations
affecting the Property. Seller makes no representation that the Property
complies with Title III of the Americans With Disabilities Act or any fire
codes or building codes. Purchaser hereby releases Seller from any and all
liability in connection with any claims which Purchaser may have against
Seller, and Purchaser hereby agrees not to assert any claims, for damage, loss,
compensation, contribution, cost recovery or otherwise, against Seller, whether
in tort, contract, or otherwise, relating directly or indirectly to the
existence of asbestos or Hazardous Materials or Hazardous Substances on, or
environmental conditions of, the Property, or arising under the Environmental
Laws (as such term is hereinafter defined), or relating in any way to the
quality of the indoor or outdoor environment at the Property. This release
shall survive the Closing. As used herein, the term "Hazardous Materials" or
"Hazardous Substances" means (i) hazardous wastes, hazardous materials,
hazardous substances, hazardous constituents, toxic substances or related
materials, whether solids, liquids or gases, including but not limited to
substances defined as "hazardous wastes," "hazardous materials," "hazardous
substances," "toxic substances," "pollutants," "contaminants," "radioactive
materials," or other similar designations in, or otherwise subject to
regulation under, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. Section 9601 et seq.;
the Toxic Substance Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 9601, et seq.; the
Clean Water Act ("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C.
Section 7401 et seq.; and in any permits, licenses, approvals, plans, rules,
regulations or ordinances adopted, or other criteria and guidelines promulgated
pursuant to the preceding laws or other similar federal, state or local laws,
regulations, rules or ordinance now or hereafter in effect relating to
environmental matters (collectively the "Environmental Laws"); and (ii) any
other substances, constituents or wastes subject to any applicable federal,
state or local law, regulation or ordinance, including any Environmental Law,
now or hereafter in effect, including but not limited to (A) petroleum,
(B) refined petroleum products, (C) waste oil, (D) waste aviation or motor
vehicle fuel, (E) asbestos, (F) lead in water, paint or elsewhere, (G) radon,
(H) Polychlorinated Biphenyls (PCB's) and (I) ureaformaldehyde.
<PAGE>
b. Seller has provided to Purchaser certain unaudited historical
financial information regarding the Property relating to certain periods of
time in which Seller owned the Property. Seller and Purchaser hereby
acknowledge that such information has been provided to Purchaser at Purchaser's
request solely as illustrative material. Seller makes no representation or
warranty that such material is complete or accurate or that Purchaser will
achieve similar financial or other results with respect to the operations of
the Property, it being acknowledged by Purchaser that Seller's operation of the
Property and allocations of revenues or expenses may be vastly different than
Purchaser may be able to attain. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and further that
Purchaser has relied upon its own investigation and inquiry with respect to the
operation of the Property and releases Seller from any liability with respect
to such historical information.
8. CLOSING. The closing ("Closing") of this transaction shall be on the
tenth (10th) day after the expiration of the Approval Period (as hereinafter
defined) ("Closing Date"), at the office of the Purchaser's attorneys, Bachner,
Tally, Polevoy & Misher, 380 Madison Ave., New York, New York, at which time
Seller shall deliver possession of the Property to Purchaser in accordance with
this Agreement.
9. CLOSING DOCUMENTS.
a. On the Closing Date, Purchaser shall deliver to Seller an executed
closing statement prepared by the Seller and approved by Purchaser, the balance
of the Purchase Price, and such other documents as may be reasonably required
by the Title Insurer in order to consummate the transaction as set forth in
this Agreement.
b. On the Closing Date, Seller shall deliver to Purchaser possession of
the Property in accordance with this Agreement; the Deed (in the form of
Exhibit E attached hereto) subject only to the Permitted Exceptions and those
Unpermitted Exceptions waived by Purchaser, if any, which Deed shall contain
the legal description shown on the Updated Survey; an inventory of the Personal
Property which shall include all the Personal Property set forth on Exhibit B
and a Bill of Sale for the same (in the form of Exhibit F attached hereto); an
executed closing statement prepared by Seller and approved by Purchaser; an
executed assignment and assumption of all Contracts (in the form of Exhibit G
attached hereto) together with originals (or copies if originals are not in
Seller's possession) of all instruments evidencing the rights assigned; an
executed assignment and assumption of all Leases and security deposits (in the
form of Exhibit H attached hereto) together with originals of all Leases
assigned (which Leases will be at the managing agent's office at the Property);
an updated rent roll certified by Seller to be correct; a notice to the Tenants
of the transfer of title (in the form of Exhibit I attached hereto); a
non-foreign affidavit (in the form of Exhibit J attached hereto); the Post-
Closing Adjustment Letter dated as of the Closing Date in the form of Exhibit M
annexed hereto; an assignment of intangibles in the form of Exhibit N annexed
hereto; an assignment of the Licenses in the form of Exhibit O annexed hereto,
together with originals or copies of originals which are not in Seller's
possession, of all instruments evidencing the rights assigned; an assignment of
all existing assignable warranties and guarantees (the "Assignment of
Warranties and Guarantees") relating to the Property dated as of the Closing
Date in the form of Exhibit P annexed hereto, together with available originals
or copies if originals are not in Seller's possession, of all instruments
evidencing the rights assigned; the Information for Real Estate 1099-S Report
Filing by the Title Insurer in the form of Exhibit Q attached hereto; an
acknowledgement of receipt of the Information for Real Estate 1099-S Report
Filing by the Title Insurer in the form of Exhibit R attached hereto; evidence
acceptable to the Title Insurer, authorizing the consummation by Seller of the
transaction which is the subject of this Agreement and the execution and
delivery of documents on behalf of Seller; all keys and combinations to all
locks on the Improvements which will be at the Property; all plans,
specifications, mechanical, electrical and plumbing layouts, operating manuals,
in Seller's possession, Tenant lease files, and other files and records in the
<PAGE>
possession of Seller at the leasing office at the Property and Seller's
managing agent and utilized in connection with the operation and maintenance of
the Land and Improvements; current tax bills and, if available, to the extent
in Seller's possession, tax bills for each of the years of Seller's ownership
of the Property; either (i) an instrument assigning to Purchaser any proceeding
for the reduction of real or personal property taxes assessed against any
portion of the Property for the calendar year in which the Closing takes place;
any refund for such year shall be prorated when received, or (ii) a certificate
from Seller that no proceeding for the reduction of real or personal property
taxes is on-going as of the Closing Date; affidavits and certificates as to
facts within the knowledge of Seller as required by the Title Company as to the
condition of title; UCC searches conducted by a UCC search company reasonably
acceptable to Purchaser at the County and State level, searching Seller's name
and the Trade Name, dated to a date not more than thirty (30) days prior to the
Closing evidencing that no portion of the Personal Property is subject to any
UCC filing (the "UCC Search") unless a termination statement for same has been
provided for at the Closing; telephone transfer form; and such other documents
as may be reasonably required by the Title Insurer in order to consummate the
transaction as set forth in this Agreement.
10. DEFAULT BY PURCHASER. ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT. IN THE EVENT THE CLOSING DOES NOT OCCUR AS A RESULT OF
ANY DEFAULT OF THE PURCHASER UNDER THE PROVISIONS OF THIS AGREEMENT, SELLER
SHALL RETAIN ALL OF THE EARNEST MONEY AND THE INTEREST THEREON AS SELLER'S SOLE
RIGHT TO DAMAGES OR ANY OTHER REMEDY. THE PARTIES HAVE AGREED THAT SELLER'S
ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICAL TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS
BELOW, THE PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
11. SELLER'S DEFAULT. IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER'S
DEFAULT, PURCHASER'S SOLE REMEDY SHALL BE THE RETURN OF ALL EARNEST MONEY
TOGETHER WITH ANY INTEREST ACCRUED THEREON, PLUS ACTUAL DAMAGES NOT TO EXCEED
$100,000.00, AND THIS AGREEMENT SHALL TERMINATE AND THE PARTIES SHALL HAVE NO
FURTHER LIABILITY TO EACH OTHER AT LAW OR IN EQUITY. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, IF SELLER'S DEFAULT IS ITS REFUSAL TO DELIVER
THE DEED OR ANY OF THE DOCUMENTS ENUMERATED IN PARAGRAPH 9b OF THIS AGREEMENT,
THEN PURCHASER WILL BE ENTITLED TO SUE FOR SPECIFIC PERFORMANCE.
12. PRORATIONS. The following are to be prorated or adjusted (as
appropriate), as of 11:59 P.M. on the day preceding the Closing Date (the
"Proration Date"):
i. Rents, as and when collected. If as of the Proration Date there are
rents owed by Tenants for the month in which the Closing occurs, then the
first monies received from said Tenant or Tenants shall be received on
account of or in payment of such past due rents and (i) if Purchaser
receives said past due rents, Seller's aforesaid share thereof shall be
remitted by Purchaser to Seller within three (3) business days, and (ii)
if Seller receives such past due rents, Purchaser's aforesaid share
thereof shall be remitted by Seller to Purchaser within three (3) business
days. With respect to any arrears for periods prior to the month in which
the Closing occurs, Purchaser shall pay such arrears to Seller as and when
collected from the monies received from such Tenant provided such Tenant
is otherwise current in its rent. With respect to rents for any period
subsequent to the month in which the Closing occurs that may be received
by Seller, Seller shall promptly remit such rents to Purchaser.
ii. Real estate and personal property taxes, if any, on the basis of the
calendar year for which assessed. If the Closing shall occur before the
tax rate or assessment is fixed for the calendar year in which the Closing
occurs, then the apportionment of such real estate and personal property
taxes at the Closing shall be upon the basis of 110% of the most recent
available tax bill.
<PAGE>
iii. Water, sewer charges, electricity and gas on the basis of the most
recent bills available, but if there are meters on the Property, Seller,
to the extent the same is obtainable, shall obtain a reading effective as
of the Proration Date.
iv. Purchaser shall receive a credit against the cash due at Closing in
an amount equal to all refundable Tenant security deposits and accrued
interest to which Tenants may be entitled pursuant to the Leases which are
to be assigned to Purchaser at the time of Closing.
v. Tax and utility company deposits, if any, and if assignable and
assigned.
vi. Fuel, if any, based on a fuel company letter showing measurement no
more than two (2) days prior to Closing and valued at current prices.
vii. Contracts.
viii. If, at Closing, the Property or any part thereof shall be or
shall have been affected by an assessment or assessments which are or may
become payable in installments, then for purposes of this Agreement, all
unpaid installments of any such assessment, including those which are to
become due and payable and to be liens upon the Property, shall be paid
and discharged by Purchaser.
ix. If such prorations result in a payment due Purchaser, then the
portion of the Purchase Price payable at Closing shall be reduced by such
sum. If such prorations result in a payment due Seller, then the same
shall be paid to Seller in addition to the portion of the Purchase Price
payable at Closing. The parties hereto shall endeavor to prepare a
schedule of prorations no less than one (1) business day prior to Closing.
The parties hereto shall correct any arithmetic errors in prorations as
soon after the Closing as amounts are finally determined. The parties
hereto shall enter into the Post-Closing Adjustment Letter at the Closing
in the form of Exhibit M annexed hereto. If the amount of any of the
items to be prorated is not then ascertainable, the adjustment thereof
shall be on the basis of the most recent ascertainable data. Except with
reference to arithmetic errors, all prorations will be final.
x. The provisions of this Paragraph 12 shall survive the Closing.
13. RECORDING. This Agreement shall not be recorded and the act of recording
by Purchaser shall be an act of default hereunder by Purchaser and shall be
subject to the provisions of Paragraph 10.
14. ASSIGNMENT. The Purchaser shall have the right to assign its interest in
this Agreement to an affiliated entity, provided such assignment is effected at
least five (5) days prior to the Closing Date. In the event of any such
assignment, Seller agrees to deliver any documents referred to in this
Agreement to Purchaser's designee and agrees that all surviving representations
and warranties of Seller hereunder shall be deemed to run in favor of, and be
enforceable by said designee as if it were the Purchaser hereunder. Upon any
assignment, Purchaser agrees that it shall continue to be bound by all of
Purchaser's indemnities under this Agreement. The provisions of this Paragraph
shall survive the Closing.
15. BROKER. The parties hereto acknowledge that CB Commercial Real Estate
Group, Inc. ("Broker") is the only real estate broker involved in this
transaction. Purchaser has not paid and will not pay at any time before, at or
after the Closing, any fee, commission or compensation whatsoever to any person
whomsoever directly or indirectly on account of this Agreement, its
negotiation, or the sale hereby contemplated. Seller agrees to pay Broker a
commission or fee ("Fee") pursuant to a listing agreement between Seller and
Broker. However, this Fee is due and payable only from the proceeds of the
Purchase Price received by Seller. The foregoing does not apply to any fee
which may be paid by Seller to any affiliate of Seller as a result of this
<PAGE>
transaction. Except with respect to the Fee due Broker which shall be paid by
Seller, Purchaser agrees to indemnify, defend and hold harmless the Seller and
any partner, affiliate, parent of Seller, and all shareholders, employees,
officers and directors of Seller or Seller's partner, parent or affiliate (each
of the above is individually referred to as a "Seller Indemnitee") from all
claims, including attorneys' fees and costs incurred by a Seller Indemnitee as
a result of anyone's claiming by or through Purchaser any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated. Purchaser does now and shall at all times consent to a Seller
Indemnitee's selection of defense counsel. Seller agrees to indemnify, defend
and hold harmless the Purchaser and all shareholders, employees, officers and
directors of Purchaser or Purchaser's parent or affiliate (each of the above is
individually referred to as a "Purchaser Indemnitee") from all claims,
including attorneys' fees and costs incurred by a Purchaser Indemnitee as a
result of anyone's claiming by or through Seller any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated. Seller does now and shall at all times consent to a Purchaser
Indemnitee's selection of defense counsel.
16. DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD.
a. Seller has delivered to Purchaser copies of the most recent available
tax bills, rent rolls, insurance premiums, and service contracts (collectively
the "Documents") and Purchaser approves the Documents.
b. Only the following shall be subject to further approval by the
Purchaser: the Updated Survey, engineering review of the Property, title
matters, environmental audit, and compliance with zoning (collectively referred
to as the "Due Diligence Matters"). During the period from the date of this
Agreement until the 21st day after the entry of a final and non-appealable Sale
Order (as hereinafter defined) of the Bankruptcy Court (as hereinafter defined)
authorizing the sale of the Property to the Purchaser ("Approval Period"),
Purchaser shall complete its investigation and review of the Due Diligence
Matters. During the Approval Period, upon reasonable notice to the Seller, the
Purchaser shall have the right to perform soil boring samplings and other tests
and engineering inspections as Purchaser deems necessary to determine the
physical condition of the Property, including, but not limited to whether any
Hazardous Materials exist at the Property, and if so, to determine the
appropriate manner and cost of removal or other corrective measures with
respect to the same. During the Approval Period, Seller shall cooperate with
Purchaser in its inspection of the Property, including but not limited to,
furnishing to Purchaser such information, materials and documents as Purchaser
may reasonably request. Purchaser, its engineers, architects, employees,
contractors and agents shall maintain public liability insurance policies
insuring against claims arising as a result of the inspections of the Property
being conducted by Purchaser. Purchaser agrees to indemnify, defend, protect
and hold Seller harmless from any and all loss, costs, including attorneys'
fees, liability or damages which Seller may incur or suffer as a result of
Purchaser's conducting its inspection and investigation of the Property
including the entry of Purchaser, its employees or agents and its lender onto
the Property, including without limitation, liability for mechanics' lien
claims; provided, however, the indemnity which is the subject of this sentence
shall not include claims for damages which Seller may incur or suffer as a
result of the environmental condition of the Property. Purchaser further
agrees to restore any damage to the Property which may arise as a result of
Purchaser's inspection of the Property. The provisions of this subparagraph b
shall survive the termination of this Agreement or the Closing and delivery and
recording of the Deed.
c. If Purchaser (in Purchaser's sole judgment) disapproves any of the
Due Diligence Matters, it must be by a notice ("Notice of Disapproval"),
accompanied by a statement setting forth which Due Diligence Matters are not
approved and the reasons for such disapproval, delivered to Seller and the
Escrow Agent prior to the expiration of the Approval Period. Upon receipt of
the Notice of Disapproval and the aforesaid statement(s), the Earnest Money
plus the interest accrued thereon shall be returned to the Purchaser and
<PAGE>
thereupon the parties shall have no further liability hereunder. If Purchaser
does not deliver a Notice of Disapproval and the aforesaid statement(s) to
Seller, then Purchaser shall have waived its right to terminate this Agreement
pursuant to this Paragraph 16.
17. SURVIVAL OF INDEMNITY. Notwithstanding anything in this Agreement to the
contrary, Purchaser's and Seller's obligations to indemnify, defend and hold
each other harmless under Paragraph 16 of this Agreement shall forever survive
the termination of this Agreement or the Closing and delivery and recording of
the Deed.
18. SELLER'S REPRESENTATIONS AND WARRANTIES.
a. Any reference herein to Seller's knowledge, representation, warranty
or notice of any matter or thing, shall only mean such knowledge or notice that
has actually been received by Will Kralovec, and any representation or warranty
of the Seller is based upon those matters of which Will Kralovec has actual
knowledge. Any knowledge or notice given, had or received by any of Seller's
agents, servants or employees shall not be imputed to Seller or the individual
partners or the general partner of Seller.
b. Subject to the limitations set forth in subparagraph a above, Seller
hereby makes the following representations and warranties, all of which are
made to the best of Seller's knowledge, each of which shall survive the Closing
and delivery of the Deed for ninety (90) days except for subparagraphs (vi) and
(vii) which shall survive for the statutory period:
i. The present use and occupancy of the Property conform with applicable
building and zoning laws and Seller has received no written notice that
any such laws, rules or regulations are being violated.
ii. The rent rolls which Seller has submitted to the Purchaser and
updated as of the Closing Date are true and accurate.
iii. Seller has no knowledge of any pending or threatened litigation,
claim, cause of action or administrative proceeding concerning the
Property.
iv. There are no real estate tax protests or proceedings affecting the
Property.
v. Seller has received no written notice of any pending or threatened
condemnation or similar proceeding or pending public improvements in or
adjoining the Land which will in any manner affect the Property.
vi. Each person executing and delivering this Agreement and all documents
to be executed and delivered in regard to the consummation of the
transaction which is the subject of this Agreement on behalf of Seller
represents to Purchaser that he has due and proper authority to execute
and deliver same. Seller has the full right, power and authority to sell
and convey the Property to Purchaser as provided herein and to carry out
its obligations hereunder. The consummation by Seller of the transaction
which is the subject of this Agreement will not conflict with or result in
a breach of any of the terms of any agreement or instrument to which
Seller is a party or by which Seller is bound or constitute a default
thereunder. No other party has any right to purchase the Property or any
part thereof.
vii. Seller's sole joint venture partners are Brookpine Investors and
Balcor Realty Investors, Ltd.-84, neither of which is the subject of any
existing, pending, threatened or contemplated bankruptcy, solvency or
other debtor's relief proceeding.
viii. Seller does not have any employees at the Property.
c. As a condition precedent to Purchaser's obligations at Closing, (i)
<PAGE>
all representations and warranties provided in this Agreement to be made by
Seller as of the Closing shall be true as of the Closing, and (ii) the existing
management agreement will be terminated as of the Closing, and (iii) the only
service contracts to be assumed by Purchaser, including any laundry contract,
will be on a month to month basis terminable without penalty or premium.
19. ENVIRONMENTAL REPORT. Attached to this Agreement as Exhibit K is a Phase
I Environmental Site Assessment dated July 21, 1994 prepared by Law Engineering
and Environmental Services ("Report") of the Property, which Seller is
delivering to Purchaser at Purchaser's request. Seller makes no representation
or warranty that the Report is accurate or complete. Purchaser hereby releases
Seller from any liability whatsoever with respect to the Report, including,
without limitation, the matters set forth in the Report or the accuracy and/or
completeness of the Report.
20. LIMITATION OF SELLER'S LIABILITY. No general or limited partner of
Seller, nor any of its respective beneficiaries, shareholders, partners,
officers, agents, employees, heirs, successors or assigns shall have any
personal liability of any kind or nature for or by reason of any matter or
thing whatsoever under, in connection with, arising out of or in any way
related to this Agreement and the transactions contemplated herein, and
Purchaser hereby waives for itself and anyone who may claim by, through or
under Purchaser any and all rights to sue or recover on account of any such
alleged personal liability. However, this provision shall not preclude
Purchaser from instituting and maintaining any legal action against the Seller.
Seller shall not make any distributions from the net proceeds of the Purchase
Price to its partners until ninety (90) days after the Closing Date.
21. PURCHASER'S ORGANIZATIONAL DOCUMENTS. Prior to the Closing, Purchaser
will provide Title Insurer with copies of its organizational documents,
including, to the extent required by the Title Insurer, a certified copy of its
recorded certificate of limited partnership and a true copy of its Partnership
Agreement or a certified copy of its Articles of Incorporation, corporate
resolutions authorizing the transaction, and an incumbency certificate,
whichever is applicable.
22. TIME OF ESSENCE. Time is of the essence of this Agreement.
23. NOTICES. Any notice or demand which either party hereto is required or
may desire to give or deliver to or make upon the other party shall be in
writing signed by the party giving the same or by its attorneys and shall be
personally delivered or given or made by overnight courier such as Federal
Express or by facsimile or made by United States registered or certified mail
addressed as follows:
TO SELLER: c/o The Balcor Company
4849 West Golf Road
Skokie, Illinois 60077
Attn: Ilona Adams
with copies to: The Balcor Company
4849 West Golf Road
Skokie, Illinois 60077
Attn: Al Lieberman
708/677-2900
708/982-4027 (FAX)
and
Morton M. Poznak
Schwartz & Freeman
Suite 1900
401 North Michigan Avenue
Chicago, Illinois 60611
312/222-0800
312/222-0818 (FAX)
<PAGE>
TO PURCHASER: Mr. Thomas Gochberg
c/o TGM Associates L.P.
650 Fifth Avenue
28th Floor
New York, New York 10019-6108
212/830-9300
212/399-6310 (FAX)
with a copy to: Alan E. Linder
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017
212/503-2090
212/682-5729 (FAX)
subject to the right of either party to designate a different address for
itself by notice similarly given. Any notice or demand so given shall be
deemed to be delivered or made on the next business day if sent by overnight
courier, or on the same day if sent by facsimile before 7:00 P.M. Eastern Time,
or on the next day if sent by facsimile after 7:00 P.M. Eastern Time, or on the
4th business day after the same is deposited in the United States Mail as
registered or certified matter, addressed as above provided, with postage
thereon fully prepaid. Any such notice, demand or document not given,
delivered or made by registered or certified mail or by overnight courier or by
facsimile as aforesaid shall be deemed to be given, delivered or made upon
receipt of the same by the party to whom the same is to be given, delivered or
made. Copies of all notices shall be served upon the Escrow Agent.
24. EXECUTION OF AGREEMENT AND ESCROW AGREEMENT. Purchaser will execute three
(3) counterparts of this Agreement and three (3) counterparts of the Escrow
Agreement and forward them to Seller for execution. Purchaser shall wire
transfer the Earnest Money to the Escrow Agent on the day Purchaser executes
this Agreement. Seller will forward one (1) counterpart of the fully executed
Agreement to Purchaser's attorneys and will forward the following to the Escrow
Agent:
a. One (1) fully executed counterpart of this Agreement; and
b. Three (3) counterparts of the Escrow Agreement signed by the parties
with a direction to execute two (2) counterparts of the Escrow Agreement and
deliver a fully executed counterpart to the Purchaser and the Seller. If
Purchaser's attorney has not received one fully executed counterpart of this
Agreement and the Escrow Agreement within four (4) business days after
Purchaser delivers the $300,000 Earnest Money to Escrow Agent, then at
Purchaser's election, the Earnest Money shall be returned to Purchaser.
25. GOVERNING LAW. The provisions of this Agreement shall be governed by the
laws of the State of Kentucky.
26. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all other
negotiations, understandings and representations made by and between the
parties and the agents, servants and employees.
27. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
28. CAPTIONS. Paragraph titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.
29. BANKRUPTCY COURT APPROVAL.
a. Seller has advised Purchaser that (i) on December 2, 1992, Seller
<PAGE>
filed a voluntary petition under Chapter 11 of the United States Bankruptcy
Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the
Eastern District of Kentucky (the "Bankruptcy Court"), Case No. 92-52183 (the
"Bankruptcy"), and (ii) the Seller's Second Amended Plan of Reorganization
dated October 22, 1993 (the "Plan") has been confirmed and became effective in
accordance with its terms. The Plan, together with all modifications thereto,
is annexed hereto as Exhibit S.
b. Within seven (7) business days after the date of this Agreement,
Seller shall file and pursue a motion upon notice and a hearing as required
under the Plan (the "Sale Motion") seeking an order from the Bankruptcy Court
authorizing a sale of the Property to Purchaser free and clear of all liens,
encumbrances, security interests, assignments and all other adverse interests
including, without limitation, all claims (as that term is defined in Section
101(5) of the Bankruptcy Code), and any transfer, stamp or similar tax, except
for the Permitted Exceptions, upon the terms and conditions of this Agreement
(the "Bankruptcy Sale"). Seller shall seek in the Sale Motion to have the
Bankruptcy Sale a private sale to Purchaser, not subject to higher and better
offers, unless the Bankruptcy Court so requires.
c. The obligation of Purchaser to purchase the Property under this
Agreement is conditioned expressly on the entry of a final and non-appealable
order of the Bankruptcy Court authorizing the sale of the Property to Purchaser
upon the terms and conditions of this Agreement free and clear of (i) all
liens, encumbrances, security interests, assignments and all claims (as such
term is defined in Section 101(5) of the Bankruptcy Code) except for Permitted
Exceptions and (ii) all transfer, stamp or similar tax (the "Sale Order").
d. Purchaser and Seller agree that:
i. If Seller fails to obtain and deliver to Purchaser's attorneys the
Sale Order for any reason whatsoever by January 30, 1995, then Purchaser
may terminate this Agreement by delivering a written termination notice to
the Title Insurer and Seller. In the event of the termination of this
Agreement pursuant to this Paragraph 29d, all Earnest Money will be
promptly refunded by the Title Insurer to Purchaser, and neither party
will have any further liability or obligation under this Agreement, and
Purchaser will be entitled to no additional rights or remedies.
e. After execution of this Agreement and provided this Agreement is not
terminated, Seller shall not take any action, directly or indirectly, to cause,
promote, authorize or take any other action which would result in the sale or
purchase of the Property by any person other than Purchaser or any other
transaction competing, conflicting or interfering with the completion of the
transaction which is the subject of this Agreement.
f. All "claims" (as such term is defined in Section 101(5) of the
Bankruptcy Code) against Seller in the Bankruptcy shall be paid in full from
the proceeds generated by the sale of the Property pursuant to this Agreement.
30. MODIFICATIONS. This Agreement cannot be changed, modified, discharged or
terminated by any oral agreement or any other agreement and there cannot be any
waiver of the warranties, representations and covenants expressly contained in
this Agreement unless the same is in writing and signed by the party against
whom enforcement of the change, modification, discharge, termination or waiver
is sought.
31. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on, and the
benefits hereof shall inure to the successors and assigns of the parties
hereto.
32. INVALIDITY. If any term or provision of this Agreement, or any part of
such term or provision, or the application thereof to any person or
circumstance shall to any extent be held invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision or
remainder thereof to persons or circumstances other than those as to which it
<PAGE>
is held invalid and unenforceable shall not be affected thereby and each term
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
33. EXHIBITS. All Exhibits which are annexed to this Agreement are part of
this Agreement and are incorporated herein by reference.
34. NO THIRD PARTY BENEFICIARY. The provisions of this Agreement are for the
sole benefit of the parties to this Agreement and their successors and assigns
and shall not give rise to any rights by or on behalf of anyone other than such
parties.
35. ATTORNEYS' FEES. In the event that any litigation arises under this
Agreement, the prevailing party shall be entitled to recover, as a part of its
judgment, reasonable attorneys' fees.
36. CORRECTION DEED. Seller will, whenever reasonably requested so to do by
Purchaser, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, a correction deed as may be reasonably necessary in
order to complete the transaction which is the subject of this Agreement and to
carry out the intent and purposes of this Agreement. Such correction deed
shall be satisfactory to the attorneys for Purchaser. The provisions of this
Paragraph shall survive the Closing.
37. OPERATIONS PRIOR TO CLOSING. Seller agrees that between the date hereof
and the Closing Date, Seller will:
a. Continue to operate the Property as heretofore operated.
b. Afford Purchaser and its representatives full access to the Property
and to Seller's books, records and files relating to and maintained at the
Property, at reasonable times, upon forty-eight (48) hours prior notice and
during normal business hours, including but not limited to the date of the
Closing.
c. Not enter into any new Lease, nor amend, modify or terminate any
existing Lease without having obtained the prior written consent of Purchaser
in each such instance. Notwithstanding the foregoing, Seller may enter into
Leases of not more than one year and for rents not less than those charged for
similar apartments at the Property on the standard form lease currently being
used by Seller.
d. Not apply any Tenant's security deposits to the discharge of such
Tenant's obligations unless such Tenant has vacated or been evicted from such
Tenant's demised premises.
e. Advise Purchaser promptly of any litigation or governmental
proceeding to which Seller becomes a party affecting the Property. It shall be
a condition precedent to Purchaser's obligation to accept title, that there
shall be no such litigation or proceeding pending at Closing having a potential
adverse effect upon the Property or Seller's ability to convey the Property to
Purchaser.
f. Not permit any alteration, structural modification or additions to
the Property.
g. Instruct Seller's Bankruptcy attorney to promptly advise Purchaser in
writing of all developments in the Bankruptcy, including but not limited to,
delivering to Purchaser copies of all applications, motions, adversary
proceedings, disclosure statements, plans and orders filed or entered in
connection with the Bankruptcy.
h. Not enter into any new Contract, nor amend, modify or terminate any
existing Contract without the prior consent of Purchaser.
IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of
the date set forth above.
<PAGE>
Executed by Purchaser on PURCHASER:
January 4, 1995.
TGM REALTY CORP. #4
By: _______________________________________
Executed by Seller on SELLER:
January 4, 1995.
PINEBROOK INVESTORS, an Illinois
joint venture
By: BROOKPINE INVESTORS, an
Illinois limited partnership,
a joint venture partner
By: Balcor Partners-XVI, an
Illinois general partner-
ship, the general partner
of Brookpine Investors
By: RGF-Balcor Associates-II,
an Illinois general partner-
ship, a partner
By: The Balcor Company, a
Delaware corporation, a
partner
By: /s/Al Lieberman
---------------------------------
and
By: BALCOR REALTY INVESTORS
LTD.-84, an Illinois limited partnership,
a joint venture partner
By: Balcor Partners-XV, an
Illinois general partnership,
the general partner of Balcor
Realty Investors Ltd.-84
By: RGF-Balcor Associates-II, an
Illinois general partnership,
a partner
By: The Balcor Company, a
Delaware corporation, a
partner
By: /s/Al Lieberman
---------------------------------
<PAGE>
EXHIBITS
A - Legal
B - Personal Property
C - Escrow Agreement
D - Title Commitment
E - Deed
F - Bill of Sale
G - Assignment of Service Contracts
H - Assignment of Leases and Security Deposits
I - Notice to Tenants
J - Non-Foreign Affidavit
K - Environmental Report
L - Intentionally Deleted
M - Post-Closing Adjustment Letter
N - Assignment of Intangibles
O - Assignment of Licenses and/or Permits
P - Assignment of Warranties and Guarantees
Q - Information for Real Estate 1099-S Report Filing
R - Acknowledgement of Title Insurer with regard to Real Estate 1099-S
Report Filing
S - Second Amended Plan of Reorganization
