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
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EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1996
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-13334
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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.)
2355 Waukegan Road
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
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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
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<PAGE>
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
BALANCE SHEETS
June 30, 1996 and December 31, 1995
(Unaudited)
ASSETS
1996 1995
-------------- --------------
Cash and cash equivalents $ 5,828,992 $ 419,227
Escrow deposits 683,938 1,158,746
Accounts and accrued interest receivable 746,070 189,252
Prepaid expenses 160,232 159,160
Deferred expenses, net of accumulated
amortization of $389,551 in 1996 and
$763,343 in 1995 289,713 565,727
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7,708,945 2,492,112
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Investment in real estate:
Land 4,715,580 11,076,389
Buildings and improvements 25,076,996 71,945,955
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29,792,576 83,022,344
Less accumulated depreciation 11,593,393 31,102,341
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Investment in real estate, net of
accumulated depreciation 18,199,183 51,920,003
-------------- --------------
$ 25,908,128 $ 54,412,115
============== ==============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Loans payable - affiliate $ 8,385,555
Accounts payable $ 151,671 141,388
Due to affiliates 53,975 126,650
Accrued liabilities, principally interest
and real estate taxes 437,466 1,078,917
Security deposits 135,494 273,669
Mortgage notes payable 24,279,591 65,239,773
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Total liabilities 25,058,197 75,245,952
-------------- --------------
Affiliates' participation in joint ventures 191,900 (1,322,633)
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Limited Partners' capital (deficit)
(87,037 Interests issued and outstanding) 1,408,460 (18,559,083)
<PAGE>
General Partner's deficit (750,429) (952,121)
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Total partners' capital (deficit) 658,031 (19,511,204)
-------------- --------------
$ 25,908,128 $ 54,412,115
============== ==============
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 INCOME AND EXPENSES
for the six months ended June 30, 1996 and 1995
(Unaudited)
1996 1995
-------------- --------------
Income:
Rental and service $ 6,585,531 $ 7,732,033
Interest on short-term investments 64,526 33,605
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Total income 6,650,057 7,765,638
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Expenses:
Interest on mortgage notes payable 2,216,636 2,880,999
Interest on short-term loans from an
affiliate 189,838 271,000
Depreciation 907,424 1,094,383
Amortization of deferred expenses 87,602 89,045
Property operating 2,668,878 2,697,078
Real estate taxes 572,765 610,965
Property management fees 318,838 376,423
Administrative 380,798 272,073
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Total expenses 7,342,779 8,291,966
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Loss before gain on sales of properties,
participation in joint ventures and
extraordinary items (692,722) (526,328)
Gain on sales of properties 24,331,787
Affiliates' participation in income
from joint ventures (3,246,631) (9,546)
-------------- --------------
Income (loss) before extraordinary items 20,392,434 (535,874)
-------------- --------------
Extraordinary items:
Gain on forgiveness of debt 157,826
Affiliate's participation in gain on
forgiveness of debt (41,897)
Debt extinguishment expense (360,073)
Affiliate's participation in debt
extinguishment expense 20,945
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Total extraordinary items (223,199)
-------------- --------------
Net income (loss) $ 20,169,235 $ (535,874)
============== ==============
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 INCOME AND EXPENSES
for the six months ended June 30, 1996 and 1995
(Unaudited)
(Continued)
1996 1995
-------------- --------------
Income (loss) before extraordinary
items allocated to General Partner $ 203,924 $ (5,359)
============== ==============
Income (loss) before extraordinary
items allocated to Limited Partners $ 20,188,510 $ (530,515)
============== ==============
Income (loss) before extraordinary
items per Limited Partnership Interest
(87,037 issued and outstanding) $ 231.95 $ (6.10)
============== ==============
Extraordinary items allocated to
General Partner $ (2,232) None
============== ==============
Extraordinary items allocated to
Limited Partners $ (220,967) None
============== ==============
Extraordinary items per Limited
Partnership Interest (87,037 issued
and outstanding) $ (2.54) None
============== ==============
Net income (loss) allocated to
General Partner $ 201,692 $ (5,359)
============== ==============
Net income (loss) allocated to
Limited Partners $ 19,967,543 $ (530,515)
============== ==============
Net income (loss) per Limited
Partnership Interest (87,037
issued and outstanding) $ 229.41 $ (6.10)
============== ==============
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 INCOME AND EXPENSES
for the quarters ended June 30, 1996 and 1995
(Unaudited)
1996 1995
-------------- --------------
Income:
Rental and service $ 2,724,660 $ 3,841,444
Interest on short-term investments 42,179 13,389
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Total income 2,766,839 3,854,833
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Expenses:
Interest on mortgage notes payable 849,915 1,440,621
Interest on short-term loans from an
affiliate 62,120 139,288
Depreciation 381,412 547,190
Amortization of deferred expenses 36,303 44,525
Property operating 1,281,618 1,390,954
Real estate taxes 250,342 293,465
Property management fees 146,669 190,593
Administrative 278,100 140,352
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Total expenses 3,286,479 4,186,988
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Loss before gain on sales of properties,
participation in joint ventures and
extraordinary items (519,640) (332,155)
Gain on sales of properties 22,968,356
Affiliates' participation in income (loss)
from joint ventures (3,015,441) 682
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Income (loss) before extraordinary items 19,433,275 (331,473)
-------------- --------------
Extraordinary items:
Gain on forgiveness of debt 157,826
Affiliate's participation in gain on
forgiveness of debt (41,897)
Debt extinguishment expense (360,073)
Affiliate's participation in debt
extinguishment expense 20,945
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Total extraordinary items (223,199)
-------------- --------------
Net income (loss) $ 19,210,076 $ (331,473)
============== ==============
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 INCOME AND EXPENSES
for the quarters ended June 30, 1996 and 1995
(Unaudited)
(Continued)
1996 1995
-------------- --------------
Income (loss) before extraordinary
items allocated to General Partner $ 194,332 $ (3,315)
============== ==============
Income (loss) before extraordinary
items allocated to Limited Partners $ 19,238,943 $ (328,158)
============== ==============
Income (loss) before extraordinary
items per Limited Partnership Interest
(87,037 issued and outstanding) $ 221.04 $ (3.78)
============== ==============
Extraordinary items allocated to
General Partner $ (2,232) None
============== ==============
Extraordinary items allocated to
Limited Partners $ (220,967) None
============== ==============
Extraordinary items per Limited
Partnership Interest (87,037 issued
and outstanding) $ (2.54) None
============== ==============
Net income (loss) allocated to
General Partner $ 192,100 $ (3,315)
============== ==============
Net income (loss) allocated to
Limited Partners $ 19,017,976 $ (328,158)
============== ==============
Net income (loss) per Limited
Partnership Interest (87,037
issued and outstanding) $ 218.50 $ (3.78)
============== ==============
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 CASH FLOWS
for the six months ended June 30, 1996 and 1995
(Unaudited)
1996 1995
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Operating activities:
Net income (loss) $ 20,169,235 $ (535,874)
Adjustments to reconcile net income
(loss) to net cash (used in) provided
by operating activities:
Gain on forgiveness of debt (157,826)
Affiliate's participation in gain
on forgiveness of debt 41,897
Debt extinguishment expense 360,073
Affiliate's participation in debt
extinguishment expense (20,945)
Gain on sales of properties (24,331,787)
Affiliates' participation in income
from joint ventures 3,246,631 9,546
Depreciation of properties 907,424 1,094,383
Amortization of deferred expenses 87,602 89,045
Net change in:
Escrow deposits 474,808 143,738
Accounts and accrued
interest receivable (556,818) 350,008
Prepaid expenses (1,072) (353,195)
Accounts payable 10,283 (52,222)
Due to affiliates (72,675) (208,325)
Accrued liabilities (641,451) (130,817)
Security deposits (138,175) (1,520)
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Net cash (used in) provided by
operating activities (622,796) 404,767
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Investing activities:
Proceeds from sales of properties 58,215,000
Costs incurred in connection with sales
of properties (1,069,817)
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Net cash provided by investing activities 57,145,183
--------------
Financing activities:
Capital contributions by joint venture
partners-affiliate 15,749
Distributions to joint venture partners-
affiliates (1,753,050) (54,756)
Proceeds from loans payable-affiliate 307,000
Repayment of loans payable-affiliate (8,385,555) (400,000)
Principal payments on mortgage notes
payable (337,777) (374,962)
<PAGE>
Repayment of mortgage notes payable (40,464,579)
Payment of prepayment penalties (171,661)
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Net cash used in financing activities (51,112,622) (506,969)
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Net change in cash and cash equivalents 5,409,765 (102,202)
Cash and cash equivalents at beginning
of year 419,227 325,412
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Cash and cash equivalents at end of period $ 5,828,992 $ 223,210
============== ==============
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 Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the six months and quarter
ended June 30, 1996, and all such adjustments are of a normal and recurring
nature.
2. Interest Expense:
During the six months ended June 30, 1996 and 1995, the Partnership incurred
interest expense on mortgage notes payable of $2,216,636 and $2,880,999 and
paid interest expense of $2,386,493 and $2,914,520, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
six months and quarter ended June 30, 1996 were:
Paid
-----------------------
Six Months Quarter Payable
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Reimbursement of expenses to
the General Partner, at cost $ 88,363 $ 61,269 $ 53,975
During the six months ended June 30, 1996, the Partnership repaid the General
Partner loan, which had an outstanding balance of $8,385,555 at December 31,
1995, primarily with proceeds from the sales of the La Contenta, Meadow Creek,
and Seabrook apartment complexes. (See Note 4 of Notes to Financial Statements
for additional information.) During the six months ended June 30, 1996 and
1995, the Partnership incurred interest expense of $189,838 and $271,000, and
paid interest expense of $277,324 and $388,238 on these loans, respectively.
Interest expense was computed at the American Express Company cost of funds
rate plus a spread to cover administrative expenses. The interest rate was
5.911% at the date of the loan repayment.
4. Property Sales:
(a) The Seabrook Apartments was owned by a joint venture consisting of the
Partnership and two affiliates. The Partnership and the affiliates held
participating percentages in the joint venture of 83.72% and 16.28%,
respectively. In February 1996, the joint venture sold the property in an all
cash sale for $5,915,000. From the proceeds of the sale, the joint venture paid
$5,081,898 to the third party mortgage holder in full satisfaction of the first
mortgage loan, and paid $190,517 in selling costs. The basis of the property
was $4,361,052, which is net of accumulated depreciation of $2,625,226. For
financial statement purposes, the Partnership recognized a gain of $1,363,431
from the sale of this property, of which $228,084 is the minority joint venture
partners' shares.
<PAGE>
(b) In April 1996, the Partnership sold the La Contenta Apartments in an all
cash sale for $11,300,000. From the proceeds of the sale, the Partnership paid
$6,970,559 to the third party mortgage holder in full satisfaction of the first
mortgage loan, and paid $236,400 in selling costs and $69,765 in prepayment
penalties. The basis of the property was $4,737,918, which is net of
accumulated depreciation of $3,049,224. For financial statement purposes, the
Partnership recognized a gain of $6,325,682 from the sale of this property.
(c) In May 1996, the Partnership sold the Meadow Creek Apartments in an all
cash sale for $11,100,000. From the proceeds of the sale, the Partnership paid
$5,076,321 to the third party mortgage holder in full satisfaction of the first
mortgage loan, and paid $365,650 in selling costs and $101,896 in prepayment
penalties. The basis of the property was $4,195,785, which is net of
accumulated depreciation of $2,861,903. For financial statement purposes, the
Partnership recognized a gain of $6,538,565 from the sale of this property.
(d) In June 1996, the Partnership sold the Ridgetree Apartments - Phase II in
an all cash sale for $9,200,000. From the proceeds of the sale, the Partnership
paid $7,798,124 to the third party mortgage holder in full satisfaction of the
first and second mortgage loans, and paid $107,000 in selling costs. The basis
of the property was $6,909,090, which is net of accumulated depreciation of
$4,455,600. For financial statement purposes, the Partnership recognized a gain
of $2,183,910 from the sale of this property.
(e) The Rosehill Pointe Apartments was owned by a joint venture consisting of
the Partnership and an affiliate. The Partnership and the affiliate hold
participating percentages in the joint venture of 61.62% and 38.38%,
respectively. In June 1996, the joint venture sold the property in an all cash
sale for $20,700,000. From the proceeds of the sale, the joint venture paid
$15,537,677 to the third party mortgage holders in full satisfaction of the
first and second mortgage loans, and paid $170,250 in selling costs. The basis
of the property was $12,609,551, which is net of accumulated depreciation of
$7,424,419. For financial statement purposes, the Partnership recognized a gain
of $7,920,199 from the sale of this property, of which $3,055,484 is the
minority joint venture partner's share.
5. Extraordinary Items:
(a) During 1996, the Partnership recognized an extraordinary gain on
forgiveness of debt of $157,826 as a result of the sales of the La Contenta,
Meadow Creek and Rosehill Pointe apartment complexes, of which $41,897
represents the Rosehill Pointe Apartments affiliate's share.
(b) In connection with the sales of the La Contenta and Meadow Creek apartment
complexes during 1996, the Partnership paid $171,661 of prepayment penalties.
In addition, the Partnership fully amortized the remaining deferred financing
fees in the amount of $188,412 as a result of the sales of the La Contenta,
Meadow Creek, Ridgetree - Phase II and Rosehill Pointe apartment complexes
during 1996. These amounts were recognized as extraordinary items and
classified as debt extinguishment expense of $360,073, of which $20,945
represents the Rosehill Pointe Apartments affiliate's share.
<PAGE>
6. Subsequent Event:
In July 1996, the Partnership commenced distributions and paid $4,177,776 ($48
per Interest) to Limited Partners, representing a special distribution of Net
Cash Proceeds received in connection with the sales of the Meadow Creek,
Ridgetree - Phase II and Rosehill Pointe apartment complexes.
<PAGE>
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Realty Investors 84-Series II, A Real Estate Limited Partnership (the
"Partnership") is a limited partnership formed in 1983 to invest in and operate
income-producing real property. The Partnership raised $87,037,000 through the
sale of Limited Partnership Interests and utilized these proceeds to acquire
fourteen real property investments. The Partnership has since disposed of
eleven of these properties, including five properties which were sold during
1996. The Partnership continues to operate the three 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
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Summary of Operations
- ---------------------
The Partnership has sold five properties to date in 1996 and recognized
significant gains on these sales for financial statement purposes. As a result
of these gains, the Partnership generated net income during the six months and
quarter ended June 30, 1996 as compared to a net loss during the same periods
in 1995. Further discussion of the Partnership's operations is summarized
below.
1996 Compared to 1995
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1996 and 1995 refer
to both the six months and quarters ended June 30, 1996 and 1995.
The Partnership sold the La Contenta, Meadow Creek, Ridgetree - Phase II,
Rosehill Pointe and Seabrook apartment complexes during 1996. As a result, the
Partnership recognized gains of $24,331,787 on the sales during the six months
ended June 30, 1996. 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.
All three of the Partnership's 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 five
property sales.
Proceeds received in connection with the sales of the Meadow Creek, Ridgetree -
Phase II and Rosehill Pointe apartment complexes were invested in short-term
investments prior to their distribution to Limited Partners in July 1996. As a
result, interest income on short-term investments increased during 1996 as
compared to 1995.
<PAGE>
Due to decreases in the short-term loan balance during 1996 and its full
repayment in June 1996, interest expense on short-term loans from an affiliate
decreased during 1996 as compared to 1995.
Costs were incurred at the Rosehill Pointe Apartments during the second quarter
of 1996 to prepare the property for sale. These costs resulted in increased
property operating expense and partially offset the decreases from the five
property sales.
Due to higher consulting fees, administrative expenses increased during 1996 as
compared to 1995.
The gains recognized in connection with the sales of the Rosehill Pointe and
Seabrook apartment complexes resulted in an increase in affiliates'
participation in income from joint ventures during the six months ended June
30, 1996 as compared to the same period in 1995 and affiliates' participation
in income from joint ventures during the quarter ended June 30, 1996 as
compared to a loss during the same period in 1995.
As a result of the sales of the La Contenta, Meadow Creek and Rosehill Pointe
apartment complexes, the Partnership recognized an extraordinary gain on
forgiveness of debt of $157,826, of which $41,897 represents Rosehill Pointe
Apartments affiliate's share.
Due to the sales of the La Contenta, Meadow Creek, Ridgetree - Phase II and
Rosehill Pointe apartment complexes, remaining unamortized deferred financing
fees in the amount of $188,412 and prepayment penalties of $171,661 were
recognized as an extraordinary item and classified as debt extinguishment
expense of $360,073, of which $20,945 represents the Rosehill Pointe Apartments
affiliate's share.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership increased by approximately $5,410,000 as
of June 30, 1996 when compared to December 31, 1995. The Partnership used cash
of approximately $623,000 to fund its operating activities. The revenue
generated by the Partnership's properties was offset by the payment of
administrative expenses, short-term interest expense and expenditures relating
to damage caused by a hail storm at the Westwood Village Apartments and snow
damage incurred at the Spring Creek Apartments. The Partnership expects to be
reimbursed by its insurance carrier for the costs of the damage. The
Partnership received cash of approximately $57,145,000 from its investing
activities relating to the sales of the La Contenta, Meadow Creek, Ridgetree -
Phase II, Rosehill Pointe and Seabrook apartment complexes. The Partnership
used cash to fund its financing activities which consisted of the repayment of
the $8,385,555 loan from the General Partner, the repayment of mortgage notes
payable of approximately $40,465,000 and the payment of prepayment penalties of
approximately $172,000 related to the five property sales, principal payments
on mortgage notes payable of approximately $338,000 and distributions to joint
venture partners of approximately $1,753,000. The Partnership also made a
special distribution to Limited Partners from Net Cash Proceeds in July 1996 as
described below.
<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 the six months ended June 30, 1996 and 1995, all three of the
remaining properties owned by the Partnership generated positive cash flow. In
addition, the Meadow Creek, and Rosehill Pointe apartment complexes, which were
sold in May and June 1996, respectively, generated positive cash flow during
1995 and prior to their sales in 1996. The Seabrook and Ridgetree - Phase II
apartment complexes, which were sold in February and June 1996, respectively,
generated marginal cash flow deficits during 1995 and prior to their sales in
1996. The La Contenta Apartments, which was sold in April 1996, generated
positive cash flow during 1995 and a marginal cash flow deficit prior to its
sale in 1996. As of June 30, 1996, occupancy rates of the Partnership's
remaining properties ranged from 95% to 99%.
The General Partner continues to pursue a number of actions aimed at improving
the cash flow of the Partnership's remaining properties, including improving
property operating performance, and seeking rent increases where market
conditions allow.
The General Partner believes that the market for multifamily housing properties
is favorable to sellers of these properties. During 1996, the Partnership sold
the La Contenta, Meadow Creek, Ridgetree - Phase II, Rosehill Pointe and
Seabrook apartment complexes. Currently, the Partnership is actively marketing
two additional properties in its portfolio. If current market conditions remain
favorable and the General Partner can obtain appropriate sales prices, the
Partnership's liquidation strategy will be accelerated.
The Seabrook Apartments was owned by a joint venture consisting of the
Partnership and two affiliates. In February 1996, the joint venture sold the
property in an all cash sale for $5,915,000. From the proceeds of the sale, the
joint venture paid $5,081,898 to the third party mortgage holder in full
satisfaction of the first mortgage loan, and paid $190,517 in selling costs.
The net proceeds of the sale were $642,585, of which $538,815 was the
Partnership's share. Pursuant to the terms of the sale, $250,000 of the
proceeds will be retained by the joint venture until August 1996. The remainder
of the proceeds received by the Partnership were used to repay a portion of the
General Partner loan. See Note 4 of Notes to Financial Statements for
additional information.
In April 1996, the Partnership sold the La Contenta Apartments in an all cash
sale for $11,300,000. From the proceeds of the sale, the Partnership paid
$6,970,559 to the third party mortgage holder in full satisfaction of the first
mortgage loan, paid $236,400 in selling costs and paid $69,765 of prepayment
penalties. The remainder of the proceeds were used to repay a portion of the
General Partner loan. See Note 4 of Notes to Financial Statements for
additional information.
In May 1996, the Partnership sold the Meadow Creek Apartments in an all cash
sale for $11,100,000. From the proceeds of the sale, the Partnership paid
$5,076,321 to the third party mortgage holder in full satisfaction of the first
mortgage loan, paid $365,650 in selling costs and paid $101,896 of prepayment
penalties. The remainder of the proceeds were used to repay the remaining
<PAGE>
balance of the General Partner loan and to make a special distribution to the
Limited Partners in July 1996. See Note 4 of Notes to Financial Statements for
additional information.
In June 1996, the Partnership sold the Ridgetree Apartments - Phase II in an
all cash sale for $9,200,000. From the proceeds of the sale, the Partnership
paid $7,798,124 to the third party mortgage holder in full satisfaction of the
first and second mortgage loans, and paid $107,000 in selling costs. Pursuant
to the terms of the sale, $500,000 of the proceeds will be retained by the
Partnership until October 1996. The remainder of the proceeds were distributed
as a special distribution to the Limited Partners in July 1996. See Note 4 of
Notes to Financial Statements for additional information.
The Rosehill Pointe Apartments was owned by a joint venture consisting of the
Partnership and an affiliate. In June 1996, the joint venture sold the property
in an all cash sale for $20,700,000. From the proceeds of the sale, the joint
venture paid $15,537,677 to the third party mortgage holders in full
satisfaction of the first and second mortgage loans, and paid $170,250 in
selling costs. The net proceeds of the sale were $4,992,073, of which
$3,076,115 was the Partnership's share. Pursuant to the terms of the sale,
$500,000 of the proceeds will be retained by the joint venture until October
1996. A portion of the remaining proceeds received by the Partnership were
distributed as a special distribution to the Limited Partners in July 1996,
while the remainder has been retained for working capital purposes. See Note 4
of Notes to Financial Statements for additional information.
Each of the Partnership's remaining 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 refinance certain of the existing loans with new lenders,
the Partnership has no third-party, first mortgage financing which matures
prior to April 1998.
During July 1996, the Partnership commenced distributions and paid $4,177,776
($48 per Interest) to Limited Partners representing a special distribution of
Net Cash Proceeds received in connection with the sales of the Meadow Creek,
Ridgetree - Phase II and Rosehill Pointe apartment complexes. The Partnership
expects to continue making distributions from proceeds generated from future
property sales, although there can be no assurance in this regard. The General
Partner, however, does not anticipate that investors will recover a substantial
portion of their original investment.
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
will increase operating costs and replacement costs and may lead to increased
rental revenues and real estate values.
<PAGE>
BALCOR REALTY INVESTORS 84-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
(A Maryland Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 2
of the Registrant's Registration Statement on Form S-11 dated May 16, 1984
(Registration No. 2-89319), 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. 0-13334) are incorporated
herein by reference.
(10) (a) (i) Agreement of Sale and attachment thereto relating to the sale of
Ridgetree Apartments, Phase II, 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.
(ii) Master Amendment and Agreement dated May 22, 1996 relating to the sale of
Ridgetree Apartments, Phase II and Rosehill Pointe Apartments, previously filed
as Exhibit 2(a)(i) to the Registrant's Current Report on Form 8-K dated May 31,
1996, is incorporated herein by reference.
(iii) Master Amendment and Agreement #2 dated May 22, 1996 relating to the sale
of Ridgetree Apartments, Phase II and Rosehill Pointe Apartments, previously
filed as Exhibit 2(a)(ii) to the Registrant's Current Report on Form 8-K dated
May 31, 1996, is incorporated herein by reference.
(b) Agreement of Sale and attachment thereto relating to the sale of Rosehill
Pointe Apartments, 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.
(27) Financial Data Schedule of the Registrant for the six month period ended
June 30, 1996 is attached hereto.
(b) Reports on Form 8-K:
(i) A Current Report on Form 8-K dated April 22, 1996 was filed reporting the
sale of La Contenta Apartments in Tempe, Arizona.
(ii) A Current Report on Form 8-K dated April 23, 1996 was filed reporting the
contract to sell the Ridgetree - Phase II and Rosehill Pointe apartment
complexes in Dallas, Texas and Lenexa, Kansas, respectively.
(iii) A Current Report on Form 8-K dated May 31, 1996 was filed reporting each
of the closings of the sales of Ridgetree Apartments - Phase II, Rosehill
Pointe Apartments, and Meadow Creek Apartments in Dallas, Texas, Lenexa,
Kansas, and Pineville, North Carolina, 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-SERIES II,
A REAL ESTATE LIMITED PARTNERSHIP
By: /s/ Thomas E. Meador
--------------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners-84 II, Inc., 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-84
II, Inc., the General Partner
Date: August 14, 1996
---------------------------
<PAGE>
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