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 June 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 June 30, 1995
and December 31, 1994 . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Operations for the
Six Months Ended June 30, 1995 and 1994 . . . . . . . . . . . 5
Consolidated Statements of Operations for the
Three Months Ended June 30,1995 and 1994. . . . . . . . . . . 6
Consolidated Statement of Partners' Capital for
the Period January 1, 1995 to June 30, 1995 . . . . . . . . . 7
Consolidated Statements of Cash Flows for the
Six Months Ended June 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 . . . . . . . . . . . . . . . . . . . . 13
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . 13
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . 13
Item 4. Submissions of Matters to a Vote of Security Holders. . . 13
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 13
SIGNATURES 14
<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 June 30, 1995, Consolidated
Statements of Operations for the six and three months ended June 30, 1995
and 1994, Consolidated Statement of Partners' Capital for the period
January 1, 1995 to June 30, 1995 and Consolidated Statements of Cash Flows
for the six months ended June 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
June 30, 1995 December 31, 1994
(Unaudited) (Audited)
ASSETS
Cash and cash equivalents $ 479,882 $ 404,347
Tenant receivables (net of allowance of
$21,276 and $19,204, respectively) 58,242 45,979
Escrow and other deposits 200,410 147,988
Other assets 92,421 56,922
Investment in affiliated joint venture 1,020,095 1,019,775
1,851,050 1,675,011
Investment in real estate, at cost:
Land 4,035,301 4,035,301
Buildings 16,211,777 16,195,230
20,247,078 20,230,531
Less: accumulated depreciation (4,756,291) (4,536,911)
Total investment in real estate, net 15,490,787 15,693,620
Total Assets $17,341,837 $17,368,631
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accounts payable and accrued expenses $ 218,410 $ 124,588
Security deposits 44,534 40,013
Mortgages payable 12,086,165 12,155,027
Total Liabilities 12,349,109 12,319,628
Minority interest in affiliated
joint venture 671,326 712,179
Partners' Capital
General Partners (16,989) (16,835)
Limited Partners (9,550 limited
partnership units issued and
outstanding) 4,338,391 4,353,659
Total Partners' Capital 4,321,402 4,336,824
Total Liabilities and Partners'
Capital $17,341,837 $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 Six Months Ended June 30, 1995 and 1994
(UNAUDITED)
1995 1994
INCOME
Rental $ 932,023 $ 969,029
Interest 12,870 2,673
Other, primarily expense reimbursements 88,331 142,994
Total income 1,033,224 1,114,696
EXPENSES
Mortgage and other interest 546,379 550,585
Depreciation 219,380 231,502
Real estate taxes 134,182 139,200
Repairs and maintenance 21,480 25,720
Other property operating 108,109 113,657
General and administrative 116,689 117,921
Total expenses 1,146,219 1,178,585
Loss before participation in
affiliated joint ventures (112,995) (63,889)
Equity in net income from affiliated
joint venture 56,720 44,398
Minority interest's share of affiliated
joint venture net loss 40,853 38,328
Net (Loss) Income $ (15,422) $ 18,837
Net (Loss) Income Per Limited Partnership
Interest (9,550 Units): $(1.60) $1.95
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 June 30, 1995 and 1994
(UNAUDITED)
1995 1994
INCOME
Rental $ 478,881 $ 519,806
Interest 7,433 2,020
Other, primarily expense reimbursements 19,982 80,255
Total income 506,296 602,081
EXPENSES
Mortgage and other interest 272,809 287,055
Depreciation 110,581 115,988
Real estate taxes 66,982 69,600
Repairs and maintenance 5,518 11,279
Other property operating 54,541 55,340
General and administrative 62,046 60,181
Total expenses 572,477 599,443
(Loss) income before participation
in affiliated joint ventures (66,181) 2,638
Equity in net income from affiliated
joint venture 4,511 892
Minority interest's share of affiliated
joint venture net loss 18,599 14,573
Net (Loss) Income $ (43,071) $ 18,103
Net (Loss) Income Per Limited Partnership
Interest (9,550 Units): $(4.47) $1.87
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 June 30, 1995
(UNAUDITED)
General Limited
Partners Partners Total
BALANCE at January 1, 1995 $(16,835) $4,353,659 $4,336,824
Net loss (154) (15,268) (15,422)
BALANCE at June 30, 1995 $(16,989) $4,338,391 $4,321,402
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 Six Months Ended June 30, 1995 and 1994
(UNAUDITED)
1995 1994
Cash Flows From Operating Activities:
Net (loss) income $(15,422) $18,837
Adjustments to reconcile net (loss)
income to net cash
provided by operating activities:
Equity in net income from affiliated
joint venture (56,720) (44,398)
Minority interest's share of affiliated
joint venture net loss (40,853) (38,328)
Provision for doubtful accounts 6,405 12,350
Depreciation 219,380 231,502
Normalized rental revenue 2,494 (6,216)
Changes in operating assets and liabilities:
Increase in tenant receivables (21,162) (7,830)
Increase in escrow and other deposits (52,422) (74,020)
Increase in other assets (35,499) (7,316)
Increase in accounts payable
and accrued expenses 93,822 43,233
Increase (decrease) in security deposits 4,521 (2,021)
Net cash provided by operating activities 104,544 125,793
Cash Flows From Investing Activities:
Capital expenditures (16,547) (24,120)
Cash distribution from affiliated joint
venture 56,400 76,845
Net cash provided by investing activities 39,853 52,725
Cash Flows From Financing Activities:
Repayment of mortgages (68,862) (92,406)
Contribution from minority partner of
affiliated joint venture -- 16,800
Net cash used in financing activities (68,862) (75,606)
Net increase in cash and cash equivalents 75,535 102,912
Cash and cash equivalents at beginning
of period 404,347 276,652
Cash and cash equivalents at end of period $479,882 $379,564
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 six month period ended June 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 six months ended June 30, 1995 and 1994, were as follows:
1995 1994
Management fees $64,588 $67,850
Reimbursable office expenses 42,000 42,156
Legal fees 281 609
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 $7,822 for legal services, as of June 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:
Six Months Ended June 30,
1995 1994
Rental income $459,746 $420,231
Interest income 1,167 1,059
460,913 421,290
Mortgage and other interest 151,140 152,606
Depreciation 67,718 67,652
Operating and administrative
expenses 121,374 106,569
340,232 326,827
Net income $120,681 $ 94,463
<PAGE>
BRAUVIN REAL ESTATE FUND L.P. 4
(a Delaware limited partnership)
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 June 30, 1995 was 93% 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 six months ended June 30, 1995.
Raleigh continued to generate positive cash flow for the six months
ended June 30, 1995. The occupancy level at Raleigh at June 30, 1995 was
98% compared to 92% at December 31, 1994.
Strawberry Fields continued to generate positive cash flow for the six
months ended June 30, 1995. The occupancy level at Strawberry Fields at
June 30, 1995 was 82% 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
June 30, 1995 and at 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 - Six Months Ended June 30, 1995 and 1994
(Amounts rounded to 000's)
The Partnership generated a net loss of $15,000 in the first six months
of 1995, as compared to a net income of $19,000 in 1994. The $34,000
decrease in net income resulted primarily from a decrease in rental and
other income for Strawberry Fields and Raleigh Springs.
Total income was $1,033,000 for the six months ended June 30, 1995, as
compared to $1,115,000 in 1994, a decrease of $82,000. The $82,000
decrease in total income resulted primarily from a decrease in rental
income at Raleigh Springs and Strawberry Fields. Rental income should
increase during the third quarter, as a result of the increase in occupancy
rates for in the six month ended June 30, 1995.
Expenses were $1,146,000 for the six months ended June 30, 1995, as
compared to $1,179,000 in 1994, a decrease of $33,000. This decrease was a
result of the steady decrease of expenses at all properties.
Results of Operations - Three Months Ended June 30, 1995 and 1994
(Amounts rounded to 000's)
The Partnership generated a net loss of $43,000 for the three months
ended June 30, 1995, as compared to a net income of $18,000 in 1994. The
$61,000 decrease in net income resulted primarily from a $96,000 decrease
in total income.
For the three months ended June 30, 1995, total income was $506,000 in
1995, as compared to $602,000 in 1994, a decrease of $96,000. The $96,000
decrease in total income resulted primarily from a $48,000 decrease in
accrued tenant reimbursables at Raleigh Springs and a $45,000 decrease in
rental income at Raleigh Springs and Strawberry Fields.
For the three months ended June 30, 1995, total expenses were $572,000
in 1995 as compared to $599,000 in 1994, a decrease of $27,000. This
decrease was also a result of the steady decrease of expenses at all
properties.
<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: August 11, 1995
BY: /s/ Thomas J. Coorsh
Thomas J. Coorsh
Chief Financial Officer and Treasurer
DATE: August 11, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 479,882
<SECURITIES> 1,020,095 <F1>
<RECEIVABLES> 58,242
<ALLOWANCES> 21,276
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 20,247,078 <F2>
<DEPRECIATION> 4,756,291
<TOTAL-ASSETS> 17,341,837
<CURRENT-LIABILITIES> 0
<BONDS> 12,086,165 <F3>
0
0
<COMMON> 4,321,402 <F4>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 17,341,837
<SALES> 0
<TOTAL-REVENUES> 1,033,224 <F5>
<CGS> 0
<TOTAL-COSTS> 599,840 <F6>
<OTHER-EXPENSES> (97,573) <F7>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 546,379
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,422)
<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 LESS INTEREST EXPENSE
<F7> "OTHER EXPENSES" REPRESENTS EQUITY AND MINORITY INTEREST IN
JOINT
VENTURES' NET INCOME/LOSS
</FN>
</TABLE>
