SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1996
--------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the transition period from to
------------ ------------
Commission file number 0-13349
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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.)
2355 Waukegan Road
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
--------------
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
----- -----
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1996 and December 31, 1995
(Unaudited)
ASSETS
1996 1995
-------------- --------------
Cash and cash equivalents $ 833,803 $ 394,701
Escrow deposits 1,638,633 1,928,712
Accounts and accrued interest receivable 662,435 663,602
Prepaid expenses 96,890 316,982
Deferred expenses, net of accumulated
amortization of $1,165,227 in 1996
and $1,167,664 in 1995 811,113 1,070,357
-------------- --------------
4,042,874 4,374,354
-------------- --------------
Investment in real estate:
Land 16,927,229 17,612,218
Buildings and improvements 111,472,482 118,352,136
-------------- --------------
128,399,711 135,964,354
Less accumulated depreciation 53,658,554 55,896,633
-------------- --------------
Investment in real estate, net of
accumulated depreciation 74,741,157 80,067,721
-------------- --------------
$ 78,784,031 $ 84,442,075
============== ==============
LIABILITIES AND PARTNERS' DEFICIT
Loans payable - affiliate $ 6,623,202
Accounts payable $ 201,960 255,150
Due to affiliates 80,101 122,609
Accrued liabilities, principally
real estate taxes 822,510 1,133,571
Security deposits 509,496 557,128
Mortgage notes payable 93,842,055 101,440,696
Mortgage notes payable - affiliate 1,852,611 1,852,611
-------------- --------------
Total liabilities 97,308,733 111,984,967
-------------- --------------
Limited Partners' deficit
(140,000 Interests issued
and outstanding) (17,099,538) (26,027,546)
General Partner's deficit (1,425,164) (1,515,346)
-------------- --------------
Total partners' deficit (18,524,702) (27,542,892)
-------------- --------------
$ 78,784,031 $ 84,442,075
============== ==============
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 quarters ended March 31, 1996 and 1995
(Unaudited)
1996 1995
-------------- --------------
Income:
Rental and service $ 6,632,625 $ 7,017,397
Interest on short-term investments 20,579 57,039
-------------- --------------
Total income 6,653,204 7,074,436
-------------- --------------
Expenses:
Interest on mortgage notes payable 1,989,743 2,298,177
Interest on short-term loans from
an affiliate 49,045 182,300
Depreciation 899,222 993,624
Amortization of deferred expenses 57,094 90,805
Property operating 2,332,906 2,284,103
Real estate taxes 505,616 522,504
Property management fees 337,029 347,474
Administrative 148,225 220,327
-------------- --------------
Total expenses 6,318,880 6,939,314
-------------- --------------
Income before gain on sales of properties,
affiliate's participation in joint venture
and extraordinary items 334,324 135,122
Gain on sales of properties 8,886,016 1,814,970
Affiliate's participation in income
from joint venture (755,586)
-------------- --------------
Income before extraordinary items 9,220,340 1,194,506
-------------- --------------
Extraordinary items:
Gain on forgiveness of debt 90,359
Debt extinguishment expense (202,150)
-------------- --------------
Total extraordinary items (202,150) 90,359
-------------- --------------
Net income $ 9,018,190 $ 1,284,865
============== ==============
Income before extraordinary items
allocated to General Partner $ 92,203 $ 11,945
============== ==============
Income before extraordinary items
allocated to Limited Partners $ 9,128,137 $ 1,182,561
============== ==============
Income before extraordinary items
per Limited Partnership Interest
(140,000 issued and outstanding) $ 65.20 $ 8.45
============== ==============
Extraordinary items allocated
to General Partner $ (2,021) $ 904
============== ==============
Extraordinary items allocated
to Limited Partners $ (200,129) $ 89,455
============== ==============
Extraordinary items per Limited
Partnership Interest (140,000
issued and outstanding) $ (1.43) $ 0.64
============== ==============
Net income allocated to General Partner $ 90,182 $ 12,849
============== ==============
Net income allocated to Limited Partners $ 8,928,008 $ 1,272,016
============== ==============
Net income per Limited Partnership Interest
(140,000 issued and outstanding) $ 63.77 $ 9.09
============== ==============
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 quarters ended March 31, 1996 and 1995
(Unaudited)
1996 1995
-------------- --------------
Operating activities:
Net income $ 9,018,190 $ 1,284,865
Adjustments to reconcile net income to net
cash provided by operating activities:
Extraordinary items:
Gain on forgiveness of debt (90,359)
Debt extinguishment expense 202,150
Gain on sales of properties (8,886,016) (1,814,970)
Affiliate's participation in income
from joint venture 755,586
Depreciation of properties 899,222 993,624
Amortization of deferred expenses 57,094 90,805
Net change in:
Escrow deposits 284,758 170,869
Accounts and accrued interest
receivable 1,167 83,441
Prepaid expenses 220,092
Accounts payable (53,190) (52,513)
Due to affiliates (42,508) 53,376
Accrued liabilities (311,061) (108,314)
Security deposits (47,632) (42,376)
-------------- --------------
Net cash provided by operating activities 1,342,266 1,324,034
-------------- --------------
Investing activities:
Proceeds from redemption of
restricted investment 700,000
Proceeds from sales of properties 6,407,212 6,140,000
Payment of selling costs (336,642) (210,175)
-------------- --------------
Net cash provided by investing activities 6,070,570 6,629,825
-------------- --------------
Financing activities:
Distributions to joint venture
partner - affiliate (31,713)
Repayment of loans payable - affiliate (6,623,202) (2,800,000)
Repayment of mortgage notes payable (5,058,226)
Principal payments on mortgage
notes payable (355,853) (365,472)
Release of financing escrows 5,321 66,121
-------------- --------------
Net cash used in financing activities (6,973,734) (8,189,290)
-------------- --------------
Net change in cash and cash equivalents 439,102 (235,431)
Cash and cash equivalents at beginning
of year 394,701 1,311,019
-------------- --------------
Cash and cash equivalents at end of period $ 833,803 $ 1,075,588
============== ==============
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 Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1996, and all such adjustments are of a normal and recurring nature.
2. Interest Expense:
During the quarters ended March 31, 1996 and 1995, the Partnership incurred
interest expense on mortgage notes payable to non-affiliates of $1,945,880 and
$2,247,670 and paid interest expense of $1,866,355 and $2,247,670,
respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1996 are:
Paid Payable
------------ ---------
Reimbursement of expenses to
the General Partner, at cost: $37,133 $80,101
During the quarter ended March 31, 1996, the Partnership repaid the General
Partner loan which had an outstanding balance of $6,623,202 at December 31,
1995 primarily with proceeds from the sale of Chimney Ridge Apartments. (See
Note 4 of Notes to Financial Statements for additional information.) During the
quarters ended March 31, 1996 and 1995, the Partnership incurred interest
expense of $49,045 and $182,300 and paid interest expense of $119,165 and
$198,560 on these loans, respectively. Interest expense was computed at the
American Express Company cost of funds rate plus a spread to cover
administrative costs. The interest rate was 5.85% at the date of the loan
repayment.
As of March 31, 1996, the Partnership had junior loans outstanding from The
Balcor Company ("TBC"), an affiliate of the General Partner, relating to the
Chestnut Ridge - Phase II and Woodland Hills apartment complexes in the
aggregate amount of $1,852,611 with accrued interest payable on these loans
totaling $60,738. During the quarter ended March 31, 1996 and 1995, the
Partnership incurred interest expense on these affiliate loans of $43,863 and
$50,507 and paid interest expense of $21,392 and $23,468, respectively.
<PAGE>
4. Property Sale:
In February 1996, the Partnership sold the Chimney Ridge Apartments in an all
cash sale for $13,650,000. The purchaser took title subject to the existing
first mortgage loan which had a balance of $7,242,788. From the proceeds of the
sale, the Partnership paid $336,642 in closing costs, and received $6,070,570
of net sale proceeds. The basis of the property was $4,427,342, net of
accumulated depreciation of $3,137,301. For financial statement purposes, the
Partnership recognized a gain of $8,886,016 from the sale of this property.
5. Extraordinary Item:
In connection with the sale of Chimney Ridge Apartments in February 1996, the
remaining unamortized deferred expenses in the amount of $202,150 were
recognized as an extraordinary item and classified as debt extinguishment
expense.
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Realty Investors-84 (the "Partnership") was formed in 1982 to invest in
and operate income-producing real property. The Partnership raised $140,000,000
from sales of Limited Partnership Interests and utilized these proceeds to
acquire twenty-three real property investments and a minority joint venture
interest in one additional property. To date, seven properties have been sold,
and titles to five properties, including the property in which the Partnership
held a minority joint venture interest, have been relinquished through
foreclosure. The Partnership continues to operate the twelve remaining
properties.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1995 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
Summary of Operations
- ---------------------
The Partnership sold the Pinebrook and Drayton Quarter apartment complexes in
1995 and the Chimney Ridge apartment complex in 1996. The Partnership used the
proceeds from the 1996 sale and cash reserves to fully repay the short-term
loan from an affiliate. The combined effect of these events, especially the
recognition of the gain on the sale of the Chimney Ridge apartment complex,
resulted in an increase in net income during the quarter ended March 31, 1996
as compared to the same period in 1995. Further discussion of the Partnership's
operations is summarized below.
1996 Compared to 1995
- ---------------------
Discussions of fluctuations between 1996 and 1995 refer to the quarters ended
March 31, 1996 and 1995.
The Partnership sold the Pinebrook and Drayton Quarter apartment complexes in
February and July 1995, respectively, and the Chimney Ridge apartment complex
in February 1996. As a result, the Partnership recognized gains of $1,814,970
and $8,886,016 on the sales of Pinebrook and Chimney Ridge apartment complexes
during the quarters ended March 31, 1995 and 1996, respectively. These sales
also resulted in decreases in rental and service income, interest expense on
mortgage notes payable, depreciation, amortization, property operating
expenses, real estate taxes and property management fees during 1996 as
compared to 1995. These decreases were partially or, in certain cases, fully
offset by the events described below.
<PAGE>
Nine of the Partnership's twelve remaining properties experienced higher rental
rates in 1996 which resulted in increased rental and service income and
property management fees and partially offset the decreases from the three
property sales.
Primarily due to lower average cash balances, interest income on short-term
investments decreased during 1996 as compared to 1995.
Due to decreases in the short-term loan balance during 1995 and its repayment
in March 1996, interest expense on short-term loans from an affiliate decreased
during 1996 as compared to 1995.
Costs incurred for the deductible for insurance claims at the Quail Lakes
apartment complex and for repair and maintenance expenditures, which included
clubhouse, lighting and plumbing repairs, painting and the replacement of floor
coverings and wallpaper at many of the Partnership's properties, resulted in
increased property operating expense during 1996 as compared to 1995. This
increase offset the decrease from the three property sales.
Due to lower accounting fees and legal fees, administrative expenses decreased
during 1996 as compared to 1995.
The Pinebrook apartment complex was owned by a joint venture consisting of the
Partnership and an affiliate. As a result of the property's sale in 1995,
affiliate's participation in income from joint venture ceased.
As a result of the Chimney Ridge apartment complex sale, the remaining
unamortized deferred expenses in the amount of $202,150 were recognized as an
extraordinary item and classified as debt extinguishment expense during 1996.
During 1995, the Partnership recognized an extraordinary gain on forgiveness of
debt of $90,359 in connection with the settlement reached with the seller of
certain of the Partnership's properties.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership increased as of March 31, 1996 when
compared to December 31, 1995. The Partnership received cash totaling
approximately $1,342,000 from its operating activities which consisted
primarily of cash flow generated from property operations which was partially
offset by the payment of administrative expenses and short-term interest
expense. The Partnership also received cash of approximately $6,071,000 from
its investing activities relating to the sale of the Chimney Ridge apartment
complex. The Partnership used cash to fund its financing activities which
consisted primarily of the repayment of the $6,623,202 loan from the General
Partner and principal payments on mortgage notes payable of approximately
$356,000.
<PAGE>
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. During 1996, each of the twelve remaining properties owned by the
Partnership generated positive cash flow. During 1995, of these twelve
properties, eleven generated positive cash flow and one generated a marginal
cash flow deficit. The Ridgetree - Phase I Apartments improved from a marginal
deficit during 1995 to positive cash flow during 1996 due to slight decreases
in real estate tax and property operating expenses. In addition, the Chimney
Ridge apartment complex, which was sold in February 1996, generated positive
cash flow during 1995 and prior to its sale in 1996. The Pinebrook apartment
complex, which was sold in February 1995, generated a marginal deficit prior to
its sale in 1995 and the Drayton Quarter apartment complex, which was sold in
July 1995, generated positive cash flow during the quarter ended March 31,
1995. As of March 31, 1996, the occupancy rates of the Partnership's properties
ranged from 92% to 98%.
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 the refinancing of
mortgage loans, improving operating performance, and seeking rent increases
where market conditions allow.
The General Partner believes that the market for multifamily housing properties
has become increasingly favorable to sellers of these properties. During
February 1996, the Partnership sold the Chimney Ridge apartment complex.
Currently, the Partnership has entered into contracts to sell the Antlers,
Briarwood Place, Canyon Sands Village, Ridgetree - Phase I, and Sunnyoak
Village apartment complexes for sales prices of $15,000,000, $10,200,000,
$14,650,000, $11,100,000 and $22,200,000, respectively. The Partnership has
also entered into negotiations for a contract to sell the Courtyards of Kendall
apartment complex. Additionally, the Partnership is preparing to market two
properties for sale and is actively marketing four additional properties. If
current market conditions remain favorable and the General Partner can obtain
appropriate sales prices, the Partnership's liquidation strategy may be
accelerated. The General Partner, however, does not anticipate that investors
will recover a substantial portion of their original investment.
As mentioned above, in February 1996, the Partnership sold the Chimney Ridge
Apartments in a cash sale for $13,650,000. The purchaser of the property took
title subject to the existing first mortgage loan which had a balance of
$7,242,788, and the Partnership received $6,070,570 of net proceeds from the
sale. See Note 4 of Notes to Financial Statements for additional information.
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. As a result of the General
Partner's efforts to obtain loan refinancings, as well as the repayment of
certain loans with proceeds from property sales and cash reserves, the
Partnership has no third party financing which matures prior to 1997.
<PAGE>
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR REALTY INVESTORS-84
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- --------------------------
As previously reported, on April 2, 1996, the Partnership contracted to sell
the Antlers apartment complex to an unaffiliated party. The closing, which was
scheduled to occur May 7, 1996, was subject to the consent of the first
mortgage holder no later than March 29, 1996 ("Approval Period"). Upon the
mutual agreement of the Partnership and the purchaser, the Approval Period has
been extended to May 16, 1996, while the lender and the purchaser negotiate
certain modifications of the loan. In addition, the closing has been extended
to June 6, 1996.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement, previously filed as Exhibit 4.1 to
Amendment No. 1 to the Registrant's Registration Statement on Form S-11 dated
December 16, 1983 (Registration No. 2-86317) and Form of Confirmation regarding
Interests in the Registrant set forth as Exhibit 4.2 to the Registrant's Report
on Form 10-Q for the quarter ended June 30, 1992 (Commission File No. 0-13349)
are incorporated herein by reference.
(10)(i) Agreement of Sale relating to Antlers Apartments, Jacksonville,
Florida, previously filed as Exhibit (2) to the Partnership's Current Report on
Form 8-K dated April 2, 1996, is incorporated by reference.
(ii) Agreement of Sale and attachment thereto relating to the sale of Briarwood
Place Apartments, Chandler, Arizona, previously filed as Exhibit 2(a) to the
Registrant's Current Report on Form 8-K dated April 23, 1996, is incorporated
herein by reference.
(iii) Agreement of Sale and attachment thereto relating to the sale of Canyon
Sands Village Apartments, Phoenix, Arizona, previously filed as Exhibit 2(b) to
the Registrant's Current Report on Form 8-K dated April 23, 1996, is
incorporated herein by reference.
(iv) Agreement of Sale and attachment thereto relating to the sale of Ridgetree
Apartments, Phase I, Dallas, Texas, previously filed as Exhibit 2(c) to the
Registrant's Current Report on Form 8-K dated April 23, 1996, is incorporated
herein by reference.
(v) Agreement of Sale and attachment thereto relating to the sale of Sunnyoak
Village Apartments, Overland Park, Kansas, previously filed as Exhibit 2(d) to
the Registrant's Current Report on Form 8-K dated April 23, 1996, is
incorporated herein by reference.
(vi) Letter Agreements dated March 29, 1996, May 2, 1996 and May 3, 1996,
respectively, amending the Agreement of Sale relating to Antlers Apartments,
Jacksonville, Florida is attached hereto.
<PAGE>
(27) Financial Data Schedule of the Registrant for the quarter ending March 31,
1996 is attached hereto.
(b) Reports on Form 8-K: A Current Report on Form 8-K dated April 2, 1996 was
filed reporting the contract to sell the Antlers Apartments in Jacksonville,
Florida and a Current Report on Form 8-K dated April 23, 1996 was filed
reporting each of the contracts to sell the Briarwood Place, Canyon Sands
Village, Ridgetree - Phase I and Sunnyoak Village apartment complexes in
Chandler, Arizona, Phoenix, Arizona, Dallas, Texas and Overland Park, Kansas,
respectively.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR REALTY INVESTORS-84
By: /s/Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners-XV, the General Partner
By: /s/Brian D. Parker
-----------------------------
Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Partners-XV, the General
Partner
Date: May 15, 1996
----------------------------
<PAGE>
March 29, 1996
Antler Investors
c/o Morton M. Poznak
Schwartz & Freeman
401 North Michigan Avenue
Suite 1900
Chicago, Illinois 60611
Re: Antlers Apartments
Gentlemen:
Reference is made to that certain Agreement of Sale ("Agreement") for the
above-captioned apartment project. Pursuant to the Agreement, the sale is
subject to the parties' receiving a consent from John Hancock Mutual Life
Insurance Company ("Hancock"). If Hancock requires a Consent fee, the
Purchaser shall pay the cost of this fee provided the fee does not exceed 1% of
the then outstanding principal balance of the Hancock loan. If the fee is
greater than 1%, then the Agreement will be terminated unless either party
agrees to pay the excess.
Notwithstanding anything contained in Paragraph 3 of the Agreement to the
contrary, if the Consent is not received by Seller within five (5) days prior
to the Closing Date, either party shall have the right upon notice to the other
party delivered not less than three (3) days prior to the Closing Date to
extend the Closing Date for a period not to exceed thirty (30) days in order to
obtain the Consent. If the Consent is not received by the fifth (5th) day
prior to the extended date, then either party may terminate the Agreement by
notice to the other party. In the event of termination, the Earnest Money plus
interest earned thereon shall immediately be returned to the Purchaser and,
subject to the provisions of Paragraph 17b of the Agreement, neither party
shall have any further liability under the Agreement. If there is a conflict
between the terms of this letter and the Agreement, then this letter shall
prevail.
<PAGE>
Sincerely
UNITED DOMINION REALTY TRUST, (Purchaser)
INC., a Virginia corporation
By: /s/ Rob Weber
-------------------------------
Asst. Vice President
Agreed to:
ANTLER INVESTORS, an Illinois limited (Seller)
partnership
By: Balcor Partners-XV, an Illinois general
partnership, its sole general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, general partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ Phillip Schechter
------------------------------
Authorized Agent
<PAGE>
VIA FACSIMILE
- -------------
May 2, 1996
Ms. Sarah S. Schimmels
United Dominion Realty Trust, Inc.
10 S. Sixth Street
Suite 203
Richmond, Virginia 23219
Re: Antlers Apts.
Dear Sarah:
Pursuant to the provisions of the Side Letter with reference to the above
property, we hereby notify you that the Seller has not received the Consent
from John Hancock Mutual Life Insurance Company. We, therefore, are extending
the Closing Date to June 6, 1996.
However, if the Consent is received prior to June 1, 1996, we will be prepared
to close earlier.
If you have any questions, please call.
Sincerely,
SCHWARTZ & FREEMAN
/s/ Morton M. Poznak
Morton M. Poznak
MMP:cm
cc: Phillip Schechter
Rick Sollner
Frances Chetta
<PAGE>
May 3, 1996
VIA TELECOPY (312) 222-0618
Morton M. Poznak, Esq.
Schwartz & Freeman
401 North Michigan Avenue, Suite 1900
Chicago, Illinois 60611-4206
Re: Antlers Apartments
Jacksonville, Florida
Dear Mort:
As you know, the Approval Period as defined in the Agreement of Sale dated as
of March 29, 1996 (the "Agreement") for the referenced property expired
yesterday, with objections due no later than today. Several issues remain
outstanding. They are as follows:
General Matters:
1. John Hancock Consent. In connection with the consent from John Hancock,
United Dominion has requested the modification of several provisions of the
Loan Documents. Those issues include: (1) the restrictions on the
administration of tenant leases, (ii) the restriction against the transfer of
beneficial ownership of the owner of the Property, and (iii) the
representations made in Sections 37, 38, and 41 of Paragraph 20 of the
Modification Agreement. Marki Shalloe, the John Hancock analyst handling this
matter, indicated that it would take a week or more to address the consent and
United Dominion's issues.
With respect to Title: Reference is made to that certain owner's title
insurance commitment no. FL 014 10 509600078LW, issued by Chicago Title
Insurance Corporation (the "Commitment"), as amended.
2. Schedule B, Section 2 Exceptions: Satisfactory evidence that the
Covenants and Restrictions of record in O.R. Volume 3448, page 900, restricting
the use of the property to "single family dwellings" has been removed or other
resolution reasonably acceptable to United Dominion.
3. Title Commitment. United Dominion's receipt of a satisfactory revised
title commitment,reflecting the comment made in Paragraph 2 above.
To resolve these remaining issues, I propose that the parties agree to extend
the Approval Period for an additional period of two weeks, with a new
expiration date for the Approval Period of May 16, during which time we can
attempt to resolve these outstanding matters.
<PAGE>
United Dominion is prepared to waive its rights to terminate with respect to
all other matters.
Please review this information with your client and in the event this proposal
is acceptable, please have the Seller indicate its approval in the space
provided below. In the event the Seller does not agree to an extension, please
notify me.
Best Regards.
Sincerely,
UNITED DOMINION REALTY TRUST, INC.
/s/ Sarah S. Schimmels
- ----------------------------------
Sarah S. Schimmels
Corporate Counsel
Enclosures
cc: Richard H. Sollner, Esq.
Robert M. Weber
SEEN AND AGREED TO:
ANTLER INVESTORS, an Illinois limited partnership
By: Balcor Partners-XV, an Illinois general partnership,
its sole general partner
By: RGF-Balcor Associates-II, an Illinois general partnership,
general partner
By: The Balcor Company, a Delaware corporation, a general partner
By: /s/ Phillip Schechter
------------------------------
Authorized Agent
<PAGE>
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<PERIOD-END> MAR-31-1996
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<BONDS> 95695
0
0
<COMMON> 0
<OTHER-SE> (18525)
<TOTAL-LIABILITY-AND-EQUITY> 78784
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