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, 1998
/___/ Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
for the transition period from ______________ to ________________.
Commission File Number 2-90168
DSI REALTY INCOME FUND VIII, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California_______________________________________33-0050204
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
6700 E. Pacific Coast Hwy, Long Beach, California 90803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code-(562)493-8881
_________________________________________________________________
Former name, former address and former fiscal year, if changed
since last report.
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__.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The information required by Rule 10-01 of Regulation S-X is
included in the Quarterly Report to the Limited Partners of Registrant for
the period ended September 30, 1998, which is attached hereto as Exhibit "20"
and incorporated herein by this reference.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Registrant incorporates by this reference its Quarterly Report to
Limited Partners for the period ended September 30, 1998.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8K.
(a) Attached hereto as Exhibit "20" is Registrant's Quarterly
Report to Limited Partners for the period ended September 30, 1998.
(B) Registrant did not file any reports on Form 8-K for the
period reported upon.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 31, 1998 DSI REALTY INCOME FUND VIII
A California Limited Partnership
(Registrant)
By____\s\ Robert J. Conway_____
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 31, 1998 DSI REALTY INCOME FUND VIII
A California Limited Partnership
(Registrant)
By__\s\ Robert J. Conway________
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
October 31, 1998
QUARTERLY REPORT TO THE LIMITED PARTNERS
OF DSI REALTY INCOME FUND VIII
DEAR LIMITED PARTNERS:
We are pleased to enclose the Partnership's unaudited financial
statements for the period ended September 30, 1998. The following is
Management's discussion and analysis of the Partnership's financial
condition and results of its operations.
For the three-month periods ended September 30, 1998 and 1997, total
revenues increased 11.6% from $430,542 to $480,504 and total expenses increased
7.7% from $285,306 to $307,377. Equity in income of the real estate joint
venture increased 28.8% from $24,611 to $31,688. As a result, net income
increased 20.6% from $169,847 to $204,815 for the three-month period ended
September 30, 1998, as compared to the same period in 1997. Rental revenue
increased as a result of higher unit rental rates. Occupancy levels for the
Partnership's five mini-storage facilities averaged 85.3% for the three month
period ended September 30, 1998 as compared to 86.8% for the same period in
1997. The Partnership is continuing its marketing efforts to attract and keep
new tenants in its various mini-storage mini-storage facilities. Operating
expenses increased approximately $18,200 (7.3%) primarily as a result of higher
real estate tax expenses and property management fees, partially offset by
lower yellow pages advertising costs. Property management fees, which are
based on rental income, increased as a result of the increase in rental revenue.
General and administrative expenses increased approximately $3,900 (10.4%)
primarily as a result of higher incentive management. Incentive management
fees, which are based on cash available for distribution, increased as a result
of the increase in net income. Equity in income from the real estate joint
venture increased primarily as a result of higher rental revenue.
For the nine-month periods ended September 30, 1998, and 1997, total revenues
increased 12.6% from $1,273,012 to $1,433,539 and total expenses increased 2.3%
from $923,026 to $944,571. Equity in income of the real estate joint venture
increased 25.7% from $66,421 to $83,512. As a result, net income increased
37.5% from $416,407 to $572,480 for the nine-month period ended September 30,
1998, as compared to the same period in 1997. Rental revenue increased as a
result of higher unit rental rates. Operating expenses increased approximately
$3,100 (0.4%) primarily as a result of increases in real estate tax expenses
and property management fees, partially offset by decreases yellow pages
advertising costs and legal expenses. Property management fees, which are
based on rental income, increased as a result of the increase in rental
revenue. General and administrative expenses increased approximately $18,400
(13.0%) primarily as a result of higher incentive management fees, which was
discussed above. Equity in income from the real estate joint venture increased
as a result of higher rental revenue and lower yellow pages advertising costs
and salaries and wage expenses.
The City of Stockton acquired 6,089 square feet or 5.4% of the Stockton
property in 1997. In April 1998 the Partnership received $65,000 as
compensation for the acquisition. A gain on sale of land was recorded in
the amount of $46,974, and the cost of land was reduced by $18,026. Based
on operations since the disposition, neither cash flow from nor the value
of the remaining property appears materially impaired.
The General Partners will continue their policy of funding improvements
and maintenance of Partnership properties with cash generated from
operations. The Partnership's financial resources appear to be adequate
to meet its needs. The General Partners anticipate distributions to Limited
Partners to remain at the current level for the foreseeable future.
The Year 2000 issue refers to the inability of certain computer systems to
recognize a date using "00" as the Year 2000. The Partnership has implemented
a Year 2000 program, which has three phases: (1) identification;
(2) remediation; and (3) testing and verification. The Partnership, as well
as the property management company and the Partnership's warehouse facilities
have completed those phases. Computer programs have been upgraded and tested
to function properly with respect to the dates in the Year 2000 and thereafter.
Year 2000 compliance costs are nominal and have been expensed in the regular
course of business. The Partnership provides no assurance that third-party
suppliers and customers will be compliant. Nevertheless, the Partnership does
not beiieve that the Year 2000 issue will have a material adverse effect on
its financial condition or results of operations.
We are not enclosing a copy of the Partnership Form 10-Q as filed with the
Securities and Exchange Commission since all the information set forth
therein is contained either in this letter or in the attached financial
statements. However, if you wish to receive a copy of said report, please
send a written request to DSI Realty Income Fund VIII, P.O. Box 357, Long
Beach, California 90801.
Very truly yours,
DSI REALTY INCOME FUND VIII
By: DSI Properties, Inc., as
General Partner
By /s/ Robert J. Conway
____________________________
ROBERT J. CONWAY, President
DSI REALTY INCOME FUND VIII
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED)
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS $ 602,547 $ 399,704
PROPERTY 3,017,303 3,387,178
INVESTMENT IN REAL ESTATE
JOINT VENTURE 276,261 313,650
OTHER ASSETS 31,604 31,604
TOTAL $3,927,715 $4,132,136
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES $ 653,730 $ 612,450
PARTNERS' EQUITY:
General Partners (75,040) (72,584)
Limited Partners 3,349,025 3,592,270
Total partners' equity 3,273,985 3,519,686
TOTAL $3,927,715 $4,132,136
See accompanying notes to financial statements(unaudited).
</TABLE>
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
REVENUES:
<S> <C> <C>
Rental Income $ 477,908 $ 428,743
Interest 2,596 1,799
Total revenues 480,504 430,542
EXPENSES:
Operating Expenses 265,825 247,659
General and administrative 41,552 37,647
Total expenses 307,377 285,306
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 173,127 145,236
EQUITY IN INCOME OF
REAL ESTATE JOINT VENTURE 31,688 24,611
NET INCOME $ 204,815 $ 169,847
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 202,767 $ 168,149
General partners 2,048 1,698
TOTAL $ 204,815 $ 169,847
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 8.45 $ 7.01
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 24,000 24,000
See accompanying notes to financial statements(unaudited).
</TABLE>
STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
<S> <C> <C>
REVENUES:
Rental Income $1,379,910 $1,267,821
Gain on sale of land 46,974 0
Interest 6,655 5,191
Total Revenues 1,433,539 1,273,012
EXPENSES:
Operating Expenses 784,288 781,159
General and Administrative 160,283 141,867
Total Expenses 944,571 923,026
INCOME BEFORE EQUITY IN INCOME
OF REAL ESTATE JOINT VENTURE 488,968 349,986
EQUITY IN INCOME OF REAL
ESTATE JOINT VENTURE 83,512 66,421
NET INCOME $572,480 $416,407
AGGREGATE NET INCOME ALLOCATED TO:
Limited Partners 566,755 412,243
General Partners 5,725 4,164
TOTAL 572,480 416,407
NET INCOME PER LIMITED
PARTNERSHIP UNIT $23.61 $17.18
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 24,000 24,000
See accompanying notes to financial statements(unaudited).
</TABLE>
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
<S> <C> <C> <C>
EQUITY AT JANUARY 1, 1997 ($ 67,560) $4,089,606 $4,022,046
NET INCOME 4,164 412,243 416,407
DISTRIBUTIONS (8,181) (810,000) (818,181)
EQUITY AT SEPTEMBER 30, 1997 ($71,577) $3,691,849 $3,620,272
EQUITY AT JANUARY 1, 1998 ($72,584) $3,592,270 $3,519,686
NET INCOME 5,725 566,755 572,480
DISTRIBUTIONS (8,181) (810,000) (818,181)
EQUITY AT SEPTEMBER 30, 1998 ($75,040) $3,349,025 $3,273,985
See accompanying notes to consolidated financial statements(unaudited).
</TABLE>
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 572,480 $416,407
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 351,850 351,850
Gain on sale of land (46,974) 0
Distributions in excess
of earnings in
real estate joint venture 37,388 36,779
Changes in assets and
liabilities:
Increase in liabilities 41,280 50,168
Net cash provided by
operating activities 956,024 855,204
CASH FLOWS FROM INVESTING ACTIVITIES -
Proceeds from sale of land 65,000
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (818,181) (818,181)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 202,843 37,023
CASH AND CASH EQUIVALENTS:
At beginning of period 399,704 389,413
At end of period $ 602,547 $426,436
See accompanying notes to financial statements(unaudited).
</TABLE>
DSI REALTY INCOME FUND VIII
(A California Real Estate Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund VIII (the "Partnership"), a limited partnership, has
two general partners (DSI Properties, Inc., and Diversified Investors Agency)
and limited partners owning 24,000 limited partnership units. The
Partnership was formed under the California Uniform Limited Partnership
Act for the primary purpose of acquiring and operating real estate.
The accompanying financial information as of September 30, 1998, and for
the periods ended September 30, 1998, and 1997 is unaudited. Such financial
information includes all adjustments considered necessary by the
Partnership's management for a fair presentation of the results for the
periods indicated.
2. PROPERTY
The Partnership owns five mini-storage facilities located in Stockton,
Pittsburg, El Centro, Lompoc and Huntington Beach, California. The total
cost of property and accumulated depreciation at September 30, 1998,
is as follows:
<TABLE>
<S> <C>
Land $ 2,287,284
Buildings and improvements 7,071,497
Equipment 22,831
Total 9,381,612
Less: Accumulated Depreciation ( 6,364,309)
Property - Net $ 3,017,303
</TABLE>
3. INVESTMENT IN REAL ESTATE JOINT VENTURE
The Partnership is involved in a joint venture with DSI Realty Income
Fund IX through which the Partnership has a 30% interest in a mini-storage
facility in Aurora, Colorado. Under the terms of the joint venture
agreement, the Partnership is entitled to 30% of the profits and losses of
the venture and owns 30% of the mini-storage facility as a tenant in common
with DSI Realty Income Fund IX, which has the remaining 70% interest in
the venture. Summarized income statement information for the nine months
ended September 30, 1998, and 1997 is as follows:
<TABLE>
1998 1997
<S> <C> <C>
Revenue $536,966 $489,546
Operating Expenses 258,593 268,143
Net Income $278,373 $221,403
</TABLE>
The Partnership accounts for its investment in the real estate joint
venture under the equity method of accounting.
4. NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partnership unit is calculated by dividing the net
income allocated to the limited partners by the number of limited
partnership units outstanding during the period.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-END> SEP-30-1998 DEC-31-1998
<CASH> 602,547 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 9381612 0
<DEPRECIATION> 6364309 0
<TOTAL-ASSETS> 3927715 0
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
<COMMON> 0 0
0 0
0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 3927715 0
<SALES> 1379910 0
<TOTAL-REVENUES> 1433539 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 572480 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 572480 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 572480 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
