UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(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 0-13334
-------
BALCOR REALTY INVESTORS 84-SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 36-3223939
- - ------------------------------- -------------------
(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>
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-Series II
A Real Estate Limited Partnership:
We have audited the financial statements and the financial statement schedule
of Balcor Realty Investors 84-Series II, A Real Estate Limited Partnership (A
Maryland Limited Partnership) as listed in the index of this Form 10-K. These
financial statements and the financial statement schedule are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements and the 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-Series II, A Real Estate Limited Partnership 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
February 27, 1995
<PAGE>
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
BALANCE SHEETS
December 31, 1994 and 1993
ASSETS
1994 1993
------------- -------------
Cash and cash equivalents $ 325,412 $ 1,160,704
Escrow deposits 1,094,558 1,149,671
Accounts and accrued interest receivable 364,052 65,276
Deferred expenses, net of accumulated
amortization of $585,255 in 1994 and
$1,084,192 in 1993 743,815 1,064,613
------------- -------------
2,527,837 3,440,264
------------- -------------
Investment in real estate, at cost:
Land 11,076,389 15,412,784
Buildings and improvements 71,945,955 86,867,741
------------- -------------
83,022,344 102,280,525
Less accumulated depreciation 28,913,579 32,387,624
------------- -------------
Investment in real estate, net of accumulated
depreciation 54,108,765 69,892,901
------------- -------------
$ 56,636,602 $ 73,333,165
============= =============
LIABILITIES AND PARTNERS' DEFICIT
Loans payable - affiliate $ 8,108,555 $ 7,775,723
Accounts payable 170,393 115,493
Due to affiliates 258,657 268,432
Accrued liabilities, principally interest
and real estate taxes 1,131,065 2,274,720
Security deposits 293,922 372,855
Mortgage notes payable 65,971,823 84,130,907
------------- -------------
Total liabilities 75,934,415 94,938,130
Affiliates' participation in joint ventures (1,201,168) (1,053,382)
Partners' deficit (87,037 Limited Partnership
Interests issued and outstanding) (18,096,645) (20,551,583)
------------- -------------
$ 56,636,602 $ 73,333,165
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland 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 $(25,354,125) $ (1,010,549) $(24,343,576)
Net loss for the year
ended December 31, 1992 (5,099,275) (50,993) (5,048,282)
------------- ------------- -------------
Balance at December 31, 1992 (30,453,400) (1,061,542) (29,391,858)
Net income for the year
ended December 31, 1993 9,901,817 99,018 9,802,799
------------- ------------- -------------
Balance at December 31, 1993 (20,551,583) (962,524) (19,589,059)
Net income for the year
ended December 31, 1994 2,454,938 24,549 2,430,389
------------- ------------- -------------
Balance at December 31, 1994 $(18,096,645) $ (937,975) $(17,158,670)
============= ============= =============
(A) Includes a $95,000 investment by the General Partner.
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the years ended December 31, 1994, 1993 and 1992
1994 1993 1992
------------- ------------- -------------
Income:
Rental and service $ 16,985,963 $ 17,953,526 $ 21,494,257
Interest on short-term
investments 34,580 31,346 161,231
Settlement income 273,294
------------- ------------- -------------
Total income 17,020,543 17,984,872 21,928,782
------------- ------------- -------------
Expenses:
Interest on mortgage notes
payable 6,514,973 8,287,777 10,864,977
Interest on short-term loans 399,006 290,389 281,481
Depreciation 2,492,641 2,712,857 3,573,761
Amortization of deferred
expenses 211,246 441,513 271,755
Property operating 4,968,623 4,729,076 6,092,794
Maintenance and repairs 2,462,717 1,838,831 2,613,933
<PAGE>
Real estate taxes 1,639,635 1,553,880 1,708,931
Property management fees 850,097 893,859 1,047,321
Administrative 870,872 679,625 653,998
------------- ------------- -------------
Total expenses 20,409,810 21,427,807 27,108,951
------------- ------------- -------------
Loss before gain on sale of
properties, participations in
joint ventures and
extraordinary items (3,389,267) (3,442,935) (5,180,169)
Gain on sale of properties 4,257,709 3,606,825
Affiliates' participation in
losses from joint ventures 75,723 70,965 80,894
------------- ------------- -------------
Income (loss) before
extraordinary items 944,165 234,855 (5,099,275)
------------- ------------- -------------
Extraordinary items:
Gain on forgiveness of debt 1,510,773 1,234,276
Gain on foreclosure of
properties 8,432,686
------------- ------------
Total extraordinary items 1,510,773 9,666,962
------------- ------------- -------------
Net income (loss) $ 2,454,938 $ 9,901,817 $ (5,099,275)
============= ============= =============
Income (loss) before
extraordinary items allocated
to General Partner $ 9,441 $ 2,349 $ (50,993)
============= ============= =============
Income (loss) before
extraordinary items allocated
to Limited Partners $ 934,724 $ 232,506 $ (5,048,282)
============= ============= =============
Income (loss) before
extraordinary items per
Limited Partnership Interest
(87,037 issued and
outstanding) $ 10.74 $ 2.68 $ (58.00)
============= ============= =============
Extraordinary items allocated
to General Partner $ 15,108 $ 96,669 None
============= ============= =============
Extraordinary items allocated
to Limited Partners $ 1,495,665 $ 9,570,293 None
============= ============= =============
Extraordinary items per Limited
Partnership Interest (87,037
issued and outstanding) $ 17.18 $ 109.95 None
============= ============= =============
Net income (loss) allocated to
General Partner $ 24,549 $ 99,018 $ (50,993)
============= ============= =============
Net income (loss) allocated to
Limited Partners $ 2,430,389 $ 9,802,799 $ (5,048,282)
============= ============= =============
Net income (loss) per Limited
Partnership Interest (87,037
issued and outstanding) $ 27.92 $ 112.63 $ (58.00)
============= ============= =============
The accompanying notes are an integral part of the financial statements.
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1994, 1993 and 1992
1994 1993 1992
------------- ------------- -------------
Operating activities:
Net income (loss) $ 2,454,938 $ 9,901,817 $ (5,099,275)
Adjustments to reconcile net
income (loss) to net cash
used in operating activities:
Gain on forgiveness of debt (1,510,773) (1,234,276)
Gain on foreclosure of
properties (8,432,686)
Gain on sale of properties (4,257,709) (3,606,825)
<PAGE>
Affiliates' participation
in losses from joint
ventures (75,723) (70,965) (80,894)
Depreciation of properties 2,492,641 2,712,857 3,573,761
Amortization of deferred
expenses 211,246 441,513 271,755
Deferred interest expense 689,421
Net change in:
Escrow deposits 55,113 (360,723) 1,166
Accounts and accrued
interest receivable (298,776) 165,444 81,663
Accounts payable 54,900 (185,544) (467,175)
Due to affiliates (9,775) 99,586 15,662
Accrued liabilities (615,274) 341,199 (218,889)
Security deposits (78,933) (102,146) (17,016)
------------- ------------- -------------
Net cash used in operating
activities (1,578,125) (330,749) (1,249,821)
------------- ------------- -------------
Investing activities:
Proceeds from sale of
properties 17,790,715 9,385,000
Costs incurred in connection
with sale of properties (241,511) (164,056)
------------- ------------
Net cash provided by investing
activities 17,549,204 9,220,944
------------- ------------
Financing activities:
Capital contributions by joint
venture partners -
affiliates 17,320 114,741
Distributions to joint venture
partners - affiliates (89,383) (25,037) (82,416)
Proceeds from loans payable -
affiliate 866,905 1,086,469 2,383,975
Repayment of loans payable -
affiliate (534,073) (1,429,236)
Proceeds from issuance of
mortgage notes payable 7,448,362 13,236,340
Principal payments on mortgage
notes payable (576,339) (614,974) (1,311,635)
Repayments of mortgage notes
payable (23,693,178) (19,792,049)
Payment of deferred expenses (245,985) (414,832) (58,585)
------------- ------------ ------------
Net cash (used in) or provided
by financing activities (16,806,371) (7,953,319) 1,046,080
------------- ------------ ------------
Net change in cash and cash
equivalents (835,292) 936,876 (203,741)
Cash and cash equivalents at
beginning of year 1,160,704 223,828 427,569
------------- ------------- -------------
Cash and cash equivalents at
end of year $ 325,412 $ 1,160,704 $ 223,828
============= ============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies:
(a) Depreciation expense is computed using the straight-line and accelerated
methods. Rates used in the determination of depreciation are based upon the
following estimated useful lives:
Years
-----
Buildings, building appurtenances
and land improvements 30
Furniture and fixtures 5
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 loan refinancing and modification fees which
are amortized over the terms of the respective loan agreements.
(c) Cash equivalents include all highly liquid investments with a maturity of
three months or less when purchased.
(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.
2. Partnership Agreement:
The Partnership was organized in February 1983. The Partnership Agreement
provides for Balcor Partners-84 II, Inc. to be the General Partner and for the
admission of Limited Partners through the sale of up to 110,000 Limited
Partnership Interests at $1,000 per Interest, 87,037 of which were sold on or
prior to September 28, 1984, the termination date of the offering.
The Partnership Agreement provides that the General Partner will be allocated
1% of the profits and losses and the Limited Partners will be allocated 99% 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.
However, 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
participate in the Net Cash Proceeds of the sale or refinancing of Partnership
properties. The General Partner's participation is limited to 15% of Net Cash
Proceeds, including its share of accrued Net Cash Receipts, and is subordinated
to the return of Original Capital plus any deficiency in a Cumulative
Distribution of 6% on Adjusted Original Capital to the holders of Interests, as
defined in the Partnership Agreement.
<PAGE>
3. Mortgage Notes Payable:
Mortgage notes payable at December 31, 1994 and 1993 consisted of the following:
<TABLE>
<CAPTION>
Carrying Carrying
Amount Amount
Current Current Estimated Final
Property Pledged of Notes at of Notes at Interest Monthly Balloon Maturity
as Collateral 12/31/94 12/31/93 Rate Payment Payment Date
----------------- ---------- ---------- -------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Apartment Complexes:
La Contenta $ 7,119,382 $ 7,194,869 9.50% $ 62,634 $ 6,933,000 1996
Meadow Creek (A) 5,141,497 5,182,477 8.54% 40,131 4,972,000 1998
Park Colony (B) 9,975,000 9,975,000 9.375% 78,125 9,753,000 1999
Ridgepoint Green (C) 8,579,085
Ridgepoint Way (C) 9,352,022
Ridgetree (Phase II)(D) 7,868,144 7,914,857 10.05% 70,004 7,529,000 2000
Rosehill Pointe 14,750,078 15,000,906 7.875% 117,886 13,619,000 1998
1,344,000(E) 1,344,000 9.75% 14,238 1,206,000 1998
Seabrook 5,081,898 5,081,898 10.85% 45,949 5,082,000 1997
Spring Creek (F) 7,420,202 7,091,610 9.21% 61,060 7,076,000 2000
Westwood Village 7,271,622 7,414,183 6.498% 52,333 6,612,000 1998
------------ ------------
Total $65,971,823 $84,130,907
============ ============
</TABLE>See notes (A) through (F).
<PAGE>
(A) In May 1993, this loan was refinanced. The interest rate decreased from 10%
to 8.54%, the maturity date was extended from September 1993 to June 1998 and
the monthly payments decreased from $46,444 to $40,131. Proceeds from the new
$5,200,000 first mortgage loan were used to repay the existing first mortgage
loan of $5,178,672.
(B) In December 1993, this loan was modified. The interest rate decreased from
10.25% to 9.375%, the maturity date was extended from July 1996 to January
1999, and monthly payments decreased from $92,223 to $78,125.
(C) Plans of reorganization related to these loans were confirmed by the
Bankruptcy Court in March 1994 and made effective in April 1994. The lender's
secured claims for these loans totaled $19,195,524 which equaled the
outstanding principal balances of the loans, unpaid interest through the
effective date of the plans and legal and professional fees incurred by the
lender in the bankruptcy proceedings. The outstanding principal amount of the
loans were to bear interest at 8% through the new maturity date of October 1,
1995. Under the plans, the Partnership had until maturity to sell the
properties on certain specified terms, and did so during August 1994. See Notes
9 and 10 of Notes to Financial Statements for additional information.
(D) In April 1993, this loan was refinanced. The interest rate decreased from
11.00% to 10.05%, the maturity date was extended from August 1996 to May 2000
and monthly payments decreased from $83,300 to $70,004. Proceeds from the
$7,784,630 first mortgage loan and the $158,870 second mortgage loan, along
with a principal payment of $400,302, were used to repay the existing
$9,578,078 first mortgage loan which represents a discount of $1,234,276.
(E) In January 1995, this loan was modified. The interest rate remained at
9.75%, the maturity date was extended from January 1995 to January 1998, and
the monthly payments of $10,920 increased to $14,238.
(F) In July 1994, this loan was refinanced. The interest rate decreased from
9.25% to 9.21%, the maturity date was extended from August 1994 to August 2000,
and the monthly payments increased from $54,729 to $61,060. Proceeds from the
new $7,448,362 first mortgage loan were used to repay the existing first
mortgage loan of $7,100,000.
The Partnership's loans described above require current monthly payments of
principal and interest except for the Park Colony and Seabrook mortgage loans
which require interest only payments.
Five-year maturities of the mortgage notes payable are approximately as
follows:
1995 $ 700,000
1996 7,738,000
1997 5,891,000
1998 26,912,000
1999 9,903,000
During 1994, 1993 and 1992, the Partnership incurred interest expense on
mortgage notes payable of $6,514,973, $8,287,777 and $10,864,977 and paid
interest expense of $6,863,768, $7,888,588 and $10,255,657, respectively.
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. Seller's Participation in Joint Venture:
Meadow Creek Apartments is owned by a joint venture between the Partnership and
the seller. The seller retains an interest in the property through an interest
<PAGE>
in the joint venture. 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, if any, for the seller's participation in
the joint venture.
6. Affiliates' Participation in Joint Ventures:
Rosehill Pointe Apartments is owned by a joint venture between the Partnership
and an affiliated partnership. Profits and losses are allocated 61.62% to the
Partnership and 38.38% to the affiliate. In addition, Seabrook Apartments is
owned by a joint venture between the Partnership and two affiliates of the
Partnership. Profits and losses are allocated 83.72% to the Partnership and
16.28% to the affiliates. All assets, liabilities, income and expenses of the
joint ventures are included in the financial statements of the Partnership with
appropriate adjustment of profit or loss for the affiliates' participation in
the joint ventures.
7. Tax Accounting:
The Partnership keeps its books in accordance with the Internal Revenue Code,
rules and regulations promulgated thereunder and existing interpretations
thereof. The accompanying financial statements, which are prepared in
compliance with generally accepted accounting principles, will differ from the
tax returns 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 $4,255,189 less than the
tax income of the Partnership for the same period.
8. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates are:
Year Ended Year Ended Year Ended
12/31/94 12/31/93 12/31/92
------------------ ------------------ ------------------
Paid Payable Paid Payable Paid Payable
--------- ------- -------- ------- -------- -------
Property manage-
ment fees $827,716 None $866,889 $104,097 $976,555 $77,127
Reimbursement of
expenses to
General Partner
at cost:
Accounting 80,957 31,333 64,215 5,310 65,890 4,813
Data processing 64,251 14,023 36,471 6,722 41,631 3,428
Investment
processing 7,068 571 10,056 831 1,711 125
Investor com-
munications 12,403 5,388 8,223 680 10,182 744
Legal 15,160 9,948 16,178 1,338 20,582 1,504
Portfolio
management 76,659 32,097 73,612 8,332 53,175 12,888
Other 25,194 4,658 15,075 1,246 19,106 1,396
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.
As of December 31, 1994, the General Partner has advanced $8,108,555, including
net advances of $332,832 during 1994, to the Partnership to provide working
capital and meet other Partnership obligations. During 1994, 1993 and 1992, the
Partnership incurred interest expense of $399,006, $290,389 and $281,481,
respectively, in connection with these loans. The Partnership paid interest
expense of $378,243, $217,334 and $248,308 during 1994, 1993 and 1992,
respectively. As of December 31, 1994, interest of $160,639 was payable on
these advances. Interest was computed at the American Express Company cost of
<PAGE>
funds rate plus a spread to cover administrative expenses. As of December 31,
1994, this rate was 6.56%.
As of January 1, 1993, the Partnership had a $300,000 outstanding letter of
credit which was guaranteed by an affiliate of the General Partner. This letter
of credit was required by the lending institution of the Ridgetree II mortgage
loan. During 1993, the $300,000 guarantee was released.
The General Partner may continue to provide additional short-term loans to the
Partnership or to fund working capital needs or property operating deficits,
although there is no assurance that such loans will be available. Should such
short-term loans not be available, the General Partner will seek alternative
third party sources of financing working capital. However, the current economic
environment and its impact on the real estate industry make it unlikely that
the Partnership would be able to secure financing from third parties to fund
working capital needs or operating deficits. Should additional borrowings be
needed and not be available either through the General Partner or third
parties, the Partnership may be required to dispose of some of its properties
to satisfy these obligations.
The Partnership 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 $186,498, $126,927 and
$158,266 in 1994, 1993 and 1992, respectively.
9. Property Sales:
The Partnership sold the Ridgepoint Green and Ridgepoint Way apartment
complexes during 1994 and the Butterfield Village Apartments during 1993 in
separate all cash sales for $17,790,715 and $9,385,000, respectively. From the
proceeds of the sales, the Partnership paid $16,593,178 and $6,269,575 in full
satisfaction of the properties' first mortgage loans, respectively. The bases
of these properties totaled $13,291,495 and $5,614,119, net of accumulated
depreciation of $5,966,686 and $2,713,101, respectively. For financial
statement purposes, the Partnership recognized gains of $4,257,709 and
$3,606,825 from the sale of these properties during 1994 and 1993,
respectively. The remaining proceeds from the sales were used to repay a
portion of the loan from the General Partner.
10. Extraordinary Items:
(a) During 1994, the Ridgepoint Green and Ridgepoint Way apartment complexes
were sold. In connection with the sale, the mortgage notes which had
outstanding balances of $18,459,488, including accrued interest, were repaid
for $16,593,178. The Partnership also fully amortized the remaining $355,537 of
loan modification fees related to the 1989 modifications of these mortgage
notes. During 1993, the Ridgetree II mortgage note was refinanced. In
connection with the refinancing, the mortgage note which had an outstanding
balance of $9,578,078, including accrued interest and other fees, was repaid
for $8,343,802. These transactions resulted in extraordinary gains on
forgiveness of debt totaling $1,510,773 in 1994 and $1,234,276 in 1993 for
financial statement purposes.
(b) During 1993, title to the Rancho Mirage and Highland Ridge Apartments were
relinquished through foreclosure. The Partnership wrote off the property bases
of $19,861,720, net of accumulated depreciation of $8,478,201, mortgage loan
balances of $27,645,298, accrued and unpaid interest expense and real estate
taxes of $619,926 and security deposits of $29,182. The Partnership recognized
extraordinary gains of $8,432,686 during 1993 for financial statement purposes.
<PAGE>
BALCOR REALTY INVESTORS 84-SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATIO
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
Encum- and Im- Improve- Costs Reduction
Description brances Land provements ments (a) of Basis
- - --------------------- ------- -------- ------------ --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
La Contenta Apts., 274-
units in Tempe, AZ (d) $1,300,000 $5,875,000 None $612,142 None
Meadow Creek Apts., 250-
units in Pineville, NC (d) 550,000 6,150,000 None 905,804 $(548,116)(f)
Park Colony Apts.,
352-units in
Gwinnett County, GA (d) 1,450,000 9,000,000 $44,720 1,255,336 None
Ridgetree Apts.
(Phase II), 354-units
in Dallas, TX (d) 1,432,000 8,643,000 None 1,289,690 None
Rosehill Pointe Apts.,
498-units in
Lenaxa, KS (d) 2,350,000 15,948,000 None 1,799,487 (63,517)(f)
Seabrook Apts.,
200-units in
Orange County, FL (d) 757,000 5,465,000 None 764,278 None
Spring Creek Apts., 288-
units in Columbus, OH (d) 1,400,000 7,005,000 None 1,054,199 (856,121)(f)
Westwood Apts., 320-
units in Irving, TX (d) 2,265,000 6,914,000 None 1,261,442 (1,001,000)(g)
----------- ----------- -------- ----------- -----------
Total $11,504,000 $65,000,000 $ 44,720 $ 8,942,378 $(2,468,754)
=========== =========== ======== =========== ===========
</TABLE>
See Notes (a) through (g).
<PAGE>
BALCOR REALTY INVESTORS 84-SERIES II
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1994
(Continued)
<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 (b)(c) tion(c) struction uired is Computed
- - ------------------- ----------------------------------------------- ---------- ----- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
La Contenta Apts., 274-
units in Tempe, AZ $1,301,240 $6,485,902 $7,787,142 $ 2,797,678 1984 7/83 (e)
Meadow Creek Apts., 250-
units in Pineville, NC 509,743 6,547,945 7,057,688 2,576,785 1985 1/84 (e)
Park Colony Apts.,
352-units in
Gwinnett County, GA 1,451,544 10,298,512 11,750,056 4,241,310 1984 5/83 (e)
Ridgetree Apts.
(Phase II) 354-units
in Dallas, TX 1,432,426 9,932,264 11,364,690 4,022,094 1984 2/83 (e)
Rosehill Pointe Apts.,
498-units in
Lenexa, KS 2,343,930 17,690,040 20,033,970 6,649,112 1985 11/84 (f)
Seabrook Apts.,
200-units in
Orange County, FL 773,470 6,212,808 6,986,278 2,406,343 1985 12/83 (e)
Spring Creek Apts., 288-
units in Columbus, OH 1,262,965 7,340,113 8,603,078 2,978,143 1985 2/84 (e)
Westwood Apts., 320-
units in Irving, TX 2,001,071 7,438,371 9,439,442 3,242,114 1984 3/83 (e)
----------- ----------- ------------ -----------
Total $11,076,389 $71,945,955 $ 83,022,344 $28,913,579
=========== =========== ============ ===========
</TABLE>
See Notes (a) through (g).
<PAGE>
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
NOTES TO SCHEDULE XI
(a) Consists of legal fees, appraisal fees, title costs, other related
professional fees and capitalized construction-period interest.
(b) The aggregate cost of land for Federal income tax purposes is $11,472,495
and the aggregate cost of buildings and improvements for Federal income tax
purposes is $64,883,866. The total of the above-mentioned is $76,356,361.
(c)
Reconciliation of Real Estate
---------------------------------------
1994 1993 1992
------------ ------------ ------------
Balance at beginning of year $102,280,525 $138,947,666 $138,947,666
Reductions during the year:
Cost of real estate sold (19,258,181) (8,327,220)
Foreclosure of properties (28,339,921)
------------ ------------ ------------
Balance at end of year $ 83,022,344 $102,280,525 $138,947,666
============ ============ ============
Reconciliation of Accumulated Depreciation
-----------------------------------------
1994 1993 1992
------------ ------------ ------------
Balance at beginning of year $32,387,624 $40,866,069 $ 37,292,308
Depreciation expense for the
year 2,492,641 2,712,857 3,573,761
Accumulated depreciation of
real estate sold (5,966,686) (2,713,101)
Foreclosure of properties (8,478,201)
------------ ------------ ------------
Balance at end of year $28,913,579 $ 32,387,624 $ 40,866,069
============ ============ ============
(d) See description of Mortgage Notes Payable in Note 3 of Notes to Financial
Statements.
(e) Depreciation expense is computed based upon the following estimated useful
lives:
Years
-----
Buildings, building appurtenances
and land improvements 30
Furniture and fixtures 5
(f) Guaranteed income earned on properties under the terms of certain
management and guarantee agreements is recorded by the Partnership as a
reduction of the basis of the property to which the guaranteed income relates.
(g) A reduction of basis was made to write down the property to its December
31, 1988 mortgage liability balance (net of an outstanding letter of credit of
$500,000).
<PAGE>
