UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1995
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 0-13402
Brauvin Real Estate Fund L.P. 4
(Exact name of registrant as specified in its charter)
Delaware 36-3304339
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 South Wacker Drive, Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
(312) 443-0922
(Registrant's telephone number, including area code)
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>
BRAUVIN REAL ESTATE FUND L.P. 4
INDEX
Page
PART I Financial Information
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheets at September 30, 1995
and December 31, 1994. . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations for the
Nine Months Ended September 30, 1995 and 1994. . . . . . . 5
Consolidated Statements of Operations for the
Three Months Ended September 30, 1995 and 1994 . . . . . . 6
Consolidated Statement of Partners' Capital for
the Period January 1, 1995 to September 30, 1995 . . . . . 7
Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1995 and 1994. . . . . . . 8
Notes to Consolidated Financial Statements . . . . . . . . 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . 11
PART II Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 14
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . 14
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . 14
Item 4. Submissions of Matters to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 14
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 15
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Except for the December 31, 1994 Consolidated Balance Sheet, the
following Consolidated Balance Sheet as of September 30, 1995, Consolidated
Statements of Operations for the nine and three months ended September 30,
1995 and 1994, Consolidated Statement of Partners' Capital for the period
January 1, 1995 to September 30, 1995 and Consolidated Statements of Cash
Flows for the nine months ended September 30, 1995 and 1994 for Brauvin
Real Estate Fund L.P. 4 (the "Partnership") are unaudited but reflect, in
the opinion of the management, all adjustments necessary to present fairly
the information required. All such adjustments are of a normal recurring
nature.
These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Partnership's 1994
Annual Report on Form 10-K.
<PAGE>
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
CONSOLIDATED BALANCE SHEETS
September 30, 1995 December 31, 1994
(Unaudited) (Audited)
ASSETS
Cash and cash equivalents $ 533,546 $ 404,347
Tenant receivables (net of allowance of
$12,050 and $19,204, respectively) 145,076 45,979
Escrow and other deposits 132,534 147,988
Other assets 92,561 56,922
Due from affiliates 56,069 --
Investment in affiliated joint venture 990,961 1,019,775
1,950,747 1,675,011
Investment in real estate, at cost:
Land 4,035,301 4,035,301
Buildings 16,212,111 16,195,230
20,247,412 20,230,531
Less: accumulated depreciation (4,866,016) (4,536,911)
Total investment in real estate, net 15,381,396 15,693,620
Total Assets $17,332,143 $17,368,631
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 217,940 $ 124,588
Security deposits 45,484 40,013
Mortgages payable 12,031,441 12,155,027
Total Liabilities 12,294,865 12,319,628
Minority interest in affiliated
joint venture 646,460 712,179
Partners' Capital
General Partners (16,295) (16,835)
Limited Partners (9,550 limited
partnership units issued and
outstanding) 4,407,113 4,353,659
Total Partners' Capital 4,390,818 4,336,824
Total Liabilities and Partners'
Capital $17,332,143 $17,368,631
See notes to consolidated financial statements (unaudited).
<PAGE>
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 1995 and 1994
(UNAUDITED)
1995 1994
INCOME
Rental $1,413,723 $1,407,575
Interest 19,845 6,725
Other, primarily expense
reimbursements 201,120 206,923
Total income 1,634,688 1,621,223
EXPENSES
Mortgage and other interest 818,198 825,155
Depreciation and amortization 329,105 332,681
Real estate taxes 199,312 208,800
Repairs and maintenance 31,795 56,614
Other property operating 160,378 175,677
General and administrative 161,061 134,357
Total expenses 1,699,849 1,733,284
Loss before participation in
affiliated joint ventures (65,161) (112,061)
Equity in net income from
affiliated joint venture 53,436 27,882
Minority interest's share of
affiliated joint venture net loss 65,719 52,208
Net Income (Loss) $ 53,994 $ (31,971)
Net Income (Loss) Per Limited
Partnership Interest (9,550 Units) $5.60 $(3.31)
See notes to consolidated financial statements (unaudited).
<PAGE>
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 1995 and 1994
(UNAUDITED)
1995 1994
INCOME
Rental $481,700 $438,546
Interest 6,975 4,052
Other, primarily expense
reimbursements 112,789 63,929
Total income 601,464 506,527
EXPENSES
Mortgage and other interest 271,819 274,570
Depreciation and amortization 109,725 101,179
Real estate taxes 65,130 69,600
Repairs and maintenance 10,315 17,087
Other property operating 52,269 75,827
General and administrative 44,372 16,436
Total expenses 553,630 554,699
Income (loss) before participation in
affiliated joint ventures 47,834 (48,172)
Equity in net income from
affiliated joint venture (3,284) (16,517)
Minority interest's share of
affiliated joint venture net loss 24,866 13,880
Net Income (Loss) $ 69,416 $(50,809)
Net Income (Loss) Per Limited
Partnership Interest (9,550 Units) $7.20 $(5.27)
See notes to consolidated financial statements (unaudited).
<PAGE>
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
For the Period January 1, 1995 to September 30, 1995
(UNAUDITED)
General Limited
Partners Partners Total
BALANCE at January 1, 1995 $(16,835) $4,353,659 $4,336,824
Net income 540 53,454 53,994
BALANCE at September 30, 1995 $(16,295) $4,407,113 $4,390,818
See notes to consolidated financial statements (unaudited).
<PAGE>
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1995 and 1994
(UNAUDITED)
1995 1994
Cash Flows From Operating Activities:
Net income (loss) $ 53,994 $(31,971)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Equity in net income from affiliated
joint venture (53,436) (27,882)
Minority interest's share of affiliated
joint venture net loss (65,719) (52,208)
Provision for doubtful accounts 2,821 14,150
Depreciation and amortization 329,105 332,681
Normalized rental revenue 4,446 9,261
Changes in operating assets and liabilities:
Increase in tenant receivables (106,364) (56,222)
Decrease (increase) in escrow and other
deposits 15,454 (61,194)
Increase in due from affiliates (56,069) (3,349)
(Increase) decrease in other assets (35,639) 665
Increase (decrease) in accounts payable
and accrued expenses 93,352 (68,089)
Increase (decrease) in security deposits 5,471 (2,021)
Net cash provided by operating activities 187,416 53,821
Cash Flows From Investing Activities:
Capital expenditures (16,881) (44,843)
Cash distribution from affiliated
joint venture 82,250 81,545
Net cash provided by investing activities 65,369 36,702
Cash Flows From Financing Activities:
Repayment of mortgages (123,586) (125,580)
Contribution from minority partner of
affiliated joint venture -- 16,800
Net cash used in financing activities (123,586) (108,780)
Net increase (decrease) in cash and
cash equivalents 129,199 (18,257)
Cash and cash equivalents at beginning
of period 404,347 276,652
Cash and cash equivalents at end of period $533,546 $258,395
See notes to consolidated financial statements (unaudited).
<PAGE>
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the nine month period ended September 30, 1995 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1995. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Annual Report on Form 10-K for the year ended December 31, 1994.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reclassifications
Certain amounts in the 1994 financial statements have been
reclassified to conform to the 1995 presentation. This has not affected
the previously reported results of operations.
(3) TRANSACTIONS WITH AFFILIATES
Fees and other expenses paid to the General Partners or its affiliates
for the nine months ended September 30, 1995 and 1994, were as follows:
1995 1994
Management fees $96,437 $95,745
Reimbursable office expenses 63,000 73,865
Legal fees 376 2,700
The Partnership believes the amounts paid to affiliates are
representative of amounts which would have been paid to independent parties
for similar services. The Partnership had made all payments to affiliates,
except for $7,452 for legal services, as of September 30, 1995.
<PAGE>
(4) INVESTMENT IN AFFILIATED JOINT VENTURE
The Partnership owns a 47% interest in Sabal Palm and accounts for
its investment under the equity method. The following are condensed
income statements for Sabal Palm:
INCOME STATEMENTS:
Nine Months Ended September 30,
1995 1994
Rental income $551,880 $506,188
Interest income 2,098 1,794
Other income 71,065 79,605
625,043 587,587
Mortgage and other interest 226,532 228,588
Depreciation 105,165 101,479
Operating and administrative
expenses 179,653 198,198
511,350 528,265
Net income $113,693 $ 59,322
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Partnership intends to satisfy its short-term liquidity needs
through cash flow from the properties. Long-term liquidity needs are
expected to be satisfied through modification of the mortgages.
In November 1991, the Partnership reached an agreement with the lender
to modify the terms of the Fortune mortgage loan in a manner which has
allowed the property to operate at a break-even or positive cash flow level
(the "Second Loan Modification"). Pursuant to the Second Loan
Modification, the annual interest rate was reduced from 11.875% to 3%
effective as of July 1, 1991. The Partnership makes monthly principal and
interest payments based upon a 15-year amortization schedule plus 50% of
available cash flow for the period from July 1, 1993 through July 1, 1997.
Fortune is currently operating at a slight negative cash flow level and the
Partnership is current on its mortgage payments for the Fortune loan.
The lender had the option to accelerate the loan maturity beginning on
July 1, 1994, and each anniversary thereafter, if the property is not: (I)
in good condition and repair; (ii) occupied at a rate that is equal to the
prevailing occupancy rate for similar properties in the same locale; and
(iii) leased at rental rates which are at least 90% of the prevailing rate
for similar properties in the same locale. The Partnership believes that
the property currently meets these standards and will continue to meet
these standards.
In November 1992, the Partnership negotiated a modification of the
terms of the mortgage on Raleigh Springs Marketplace with the lender (the
"Modified Loan"). In October 1992, the interest rate was reduced from
12.75% to 10.00%. Since November 1992 and through September 1999,
principal and interest payments are based on a 25-year amortization
schedule. The Modified Loan capitalized the August, September and October
1992 mortgage payments with the final payment due on October 1, 1999. The
Partnership is current on its mortgage payments for the Raleigh Springs
loan.
The occupancy level at Fortune at September 30, 1995 was 97% as
compared to 79% at December 31, 1994. The Partnership is continuing to work
to sustain the occupancy level of Fortune. Fortune operated at a slight
negative cash flow for the nine months ended September 30, 1995.
Raleigh continued to generate positive cash flow for the nine months
ended September 30, 1995. The occupancy level at Raleigh at September 30,
1995 was 99% compared to 92% at December 31, 1994.
Strawberry Fields continued to generate a negative cash flow for the
nine months ended September 30, 1995. The occupancy level at Strawberry
Fields at September 30, 1995 was 83% compared to 78% at December 31, 1994.
At Sabal Palm, the Partnership and its joint venture partner are
continuing to work to sustain the occupancy level, which stood at 99% at
September 30, 1995 and December 31, 1994. Although the Sabal Palm retail
market appears to be overbuilt, the property has continued to generate
positive cash flow since its acquisition in 1986.
The General Partners of the Partnership expect to distribute proceeds
from operations, if any, and from the sale of real estate, to Limited
Partners in a manner that is consistent with the investment objectives of
the Partnership. Management of the Partnership believes that cash needs
may arise from time to time which will have the effect of reducing
distributions to Limited Partners to amounts less than would be available
from refinancings or sale proceeds. These cash needs include, among other
things, maintenance of working capital reserves in compliance with the
partnership agreement as well as payments for major repairs, tenant
improvements and leasing commissions in support of real estate operations.
Results of Operations - Nine Months Ended September 30, 1995 and 1994
(Amounts rounded to 000's)
The Partnership generated a net income of $53,000 for the nine months
ended September 30, 1995, as compared to a net loss of $32,000 in 1994.
The $85,000 increase in net income resulted primarily from a decrease in
expenses at all properties and an increase in operations at the joint
venture properties.
Total income was $1,635,000 for the nine months ended September 30,
1995, as compared to $1,621,000 in 1994, an increase of $14,000. The
$14,000 increase in total income resulted primarily from an increase in
interest income due to the increase in cash flow.
Expenses were $1,700,000 for the nine months ended September 30, 1995,
as compared to $1,733,000 in 1994, a decrease of $33,000. This decrease
was a result of the steady decrease of expenses at all properties.
<PAGE>
Results of Operations - Three Months Ended September 30, 1995 and 1994
(Amounts rounded to 000's)
The Partnership generated net income of $69,000 for the three months
ended September 30, 1995, as compared to a net loss of $51,000 in 1994.
The $120,000 increase in net income resulted primarily from a $94,000
increase in total income.
For the three months ended September 30, 1995, total income was
$601,000 in 1995, as compared to $507,000 in 1994, an increase of $94,000.
The $94,000 increase in total income resulted primarily from a $62,000
increase in accrued tenant reimbursables at Raleigh Springs and a $42,000
increase in rental income, also at Raleigh Springs.
For the three months ended September 30, 1995, total expenses were
$554,000 in 1995 as compared to $555,000 in 1994, a decrease of $1,000.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
None.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission Of Matters To a Vote of Security Holders.
None.
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports On Form 8-K.
Exhibit 27. Financial Data Schedule.
<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.
BY: Brauvin Ventures, Inc.
Corporate General Partner of
Brauvin Real Estate Fund L.P. 4
BY: /s/ Jerome J. Brault
Jerome J. Brault
Chairman of the Board of
Directors and President
DATE: November 13, 1995
BY: /s/ Thomas J. Coorsh
Thomas J. Coorsh
Chief Financial Officer
and Treasurer
DATE: November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 533,546
<SECURITIES> 990,961 <F1>
<RECEIVABLES> 145,076
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 20,247,412 <F2>
<DEPRECIATION> 4,866,016
<TOTAL-ASSETS> 17,332,143
<CURRENT-LIABILITIES> 0
<BONDS> 12,031,441 <F3>
0
0
<COMMON> 4,390,818 <F4>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 17,332,143
<SALES> 0
<TOTAL-REVENUES> 1,634,688 <F5>
<CGS> 0
<TOTAL-COSTS> 1,699,849 <F6>
<OTHER-EXPENSES> 119,155 <F7>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 818,198
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,994
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> "SECURITIES" REPRESENTS INVESTMENT IN JOINT VENTURE
<F2> "PP&E" REPRESENTS INVESTMENT IN REAL ESTATE [LAND AND
BUILDING]
<F3> "BONDS" REPRESENTS MORTGAGES PAYABLE
<F4> "COMMON" REPRESENTS TOTAL PARTNERS' CAPITAL
<F5> "TOTAL REVENUES" REPRESENTS RENTAL, INTEREST, AND OTHER
INCOME
<F6> "TOTAL COSTS" REPRESENTS TOTAL EXPENSES
<F7> "OTHER EXPENSES" REPRESENTS EQUITY AND MINORITY INTEREST
IN JOINT VENTURES' NET INCOME/LOSS
</FN>
</TABLE>
