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: 0-14363
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
(Exact name of registrant as specified in governing instruments)
Delaware No. 77-0034849
(State of organization) (I.R.S. Employer
Identification No.)
120 South LaSalle Street
Chicago, Illinois 60603
(Address of principal executive offices
including zip code)
(800) 468-4881
(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
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
(a Delaware limited partnership)
(Liquidation Basis)
Statement of Estimated Net Assets In Liquidation
June 30, 1995
(Unaudited)
ASSETS
Cash and cash equivalents $2,861,236
LIABILITIES
Accounts Payable $ 20,000
Accrued Liquidation Costs 60,000
Total liabilities $ 80,000
Estimated Net Assets In Liquidation $2,781,236
Shares of Limited Partnership Interest 31,180
Estimated Net Assets In Liquidation Per Limited Partnership
Interest $ 88
The accompanying notes are an integral part of these financial statements.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
(a Delaware limited partnership)
(Liquidation Basis)
Statement of Changes In Estimated Net Assets in Liquidation
For The Six Months Ended June 30, 1995
(Unaudited)
Total Partners' Capital at January 1, 1995 (Going Concern Basis) $2,386,624
Adjustment to Reflect Change to Liquidation Basis of Accounting -
Estimated Net Assets in Liquidation at January 1, 1995 $2,386,624
Operating income 688,483
Interest and other income 31,580
Employee compensation and benefits (84,022)
Property management and other professional fees (62,580)
Office supplies and equipment (4,210)
Administration (46,639)
Advertising and promotion (21,424)
Taxes, licenses and insurance (68,226)
Utilities (77,208)
Maintenace and repair (90,193)
Interest (447,280)
Depreciation and amortization (100,672)
Provision for decrease in net realizable value (280,000)
Net gain on sale of properties 20,053
Forgiveness of payable to affiliate 996,950
Estimated costs to liquidate (60,000)
Estimated Net Assets in Liquidation at June 30, 1995 (Unaudited) $2,781,236
The accompanying notes are an integral part of these financial statements.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
(a Delaware limited partnership)
(Going Concern Basis)
Balance Sheets
December 31, 1994
(Audited)
ASSETS
Cash and cash equivalents $ 359,731
Property and equipment, net 6,441,078
Property held for sale, net 6,270,813
Other assets, net 13,598
Total assets $13,085,220
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $ 9,562,625
Payable to affiliates 997,048
Accounts payable and accrued liabilities 42,586
Resident security deposits 96,337
Total liabilities 10,698,596
Partners' capital 2,386,624
Total liabilities and partners' capital $13,085,220
The accompanying notes are an integral part of these financial statements.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
(a Delaware limited partnership)
(Going Concern Basis)
Statement of Operations
For the six months ended June 30, 1994
(Unaudited)
Revenues:
Operating income $1,081,394
Interest income 2,192
1,083,586
Expenses:
Employee compensation and benefits 114,472
Property management and other
professional fees 79,906
Office supplies and equipment 4,810
Administrative 15,814
Advertising and promotion 22,865
Taxes, licenses and insurance 127,878
Utilities 98,521
Maintenance and repair 105,149
Interest 390,354
Depreciation and amortization 204,233
1,164,002
Net loss $ (80,416)
Net loss per weighted average
limited partnership interest ($500
original capital contribution
per interest): $ (2.45)
Weighted average limited partnership
interests outstanding 31,180
The accompanying notes are an integral part of these financial statements.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
(a Delaware limited partnership)
(Going Concern Basis)
Statement of Cash Flows
For the six months ended June 30, 1994
(Unaudited)
Cash flows from operating activities:
Net loss $ (80,416)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 204,233
Amortization of loan fees 3,529
Changes in assets and liabilities:
Decrease in accounts payable
and accrued liabilities (53,908)
Decrease in amounts payable to affiliates (98)
Increase in resident security deposits 2,696
Decrease in other assets 67,343
Net cash provided by operations 143,379
Cash flows from investing activities:
Purchase of property and equipment (29,092)
Cash flows from financing activities:
Payments of principal on mortgage notes payable (45,462)
Increase in cash and cash equivalents 68,825
Beginning cash and cash equivalents 262,930
Ending cash and cash equivalents $ 331,755
Supplemental disclosure of cash flow information:
Cash paid for interest $ 386,825
The accompanying notes are an integral part of these financial statements.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
(a Delaware limited partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. The Partnership:
Kemper/Cymrot Real Estate Investment Fund A, L.P. (the "Partnership") is a
limited partnership organized in August 1984, under the laws of the State of
Delaware. The General Partner is Kemper/Cymrot Partners, L.P. The Partnership
was formed to invest in, acquire, hold, maintain, operate, sell, exchange and
otherwise use real property and interests therein for profit, and to engage in
any and all activities related or incidental thereto. On June 23, 1995 the
Partnership sold its remaining property, the Fox Ridge Apartments in Sacramento,
California. On February 17, 1995, the Partnership sold the Silver Oak I and
Silver Oak II Apartments in Mountlake Terrace, Washington. At June 30, 1995,
the Partnership's remaining assets consist of cash and cash equivalents.
The General Partner approved a plan of liquidation and dissolution (the "Plan)
in accordance with the Limited Partnership Agreement on July 1, 1995. The
Partnership has accrued for its known and estimated liabilities and plans on
making a final distribution during the fourth quarter. The valuation of assets
and liabilities requires estimates and assumptions and there are uncertainties
in carrying out the provisions of the Plan. Accordingly, if any unanticipated
liabilities or expenses arise, the amounts to be distributed could be less than
estimated.
Partnership profits or losses are allocated 95% to the Limited Partners and 5%
to the General Partner. Under the terms of the Limited Partnership Agreement,
the liquidating distribution will be allocated 99% to the Limited Partners and
1% to the General Partner.
2. Summary of Significant Accounting Policies:
Basis of Accounting:
As a result of the anticipated liquidation and in accordance with generally
accepted accounting principles, the Statement of Estimated Net Assets in
Liquidation at June 30, 1995 and the Statement of Changes in Estimated Net
Assets in Liquidation for the six months ended June 30, 1995 are presented on
the liquidation basis. The financial statements for December 31, 1994 and the
six months ended June 30, 1994 are presented on the going concern basis of
accounting. The liquidation basis of accounting requires that the Partnership's
remaining assets be presented at their estimated realizable value and the
remaining liabilities, including a provision for the estimated costs of the
Plan, be presented at their estimated settlement value.
The estimated costs of the Plan represent future general and administrative
costs anticipated to carry out the final liquidation. Such costs are reflected
as accrued liquidation costs in the accompanying Statement of Estimated Net
Assets in Liquidation. The estimated accrued liquidation costs estimated
presume an orderly liquidation and may change significantly if unforeseen
developments occur.
Cash and Cash Equivalents:
Included in cash and cash equivalents at December 31, 1994 are security deposits
from residents which are restricted as to use. These deposits totaled $96,337.
Property and Equipment:
At December 31, 1994, investments in property and equipment are recorded at the
lower of depreciated cost or net realizable value. Depreciation is calculated
on the straight-line method over the estimated useful lives of the assets which
are 40 years for buildings, 10 to 40 years for building improvements and
five years for equipment.
Syndication Costs:
Syndication costs incurred in organizing, offering and marketing partnership
interests are recognized as an adjustment to the partners' capital.
Income Taxes:
The Partnership does not make provisions for income taxes as all income and
losses are allocated to the partners for inclusion in their respective tax
returns.
3. Property and Equipment:
Property and equipment at December 31, 1994 consisted of:
Land and improvements $ 1,378,873
Buildings and improvements 6,341,340
Equipment 604,290
8,324,503
Less: accumulated depreciation (1,883,425)
$ 6,441,078
Property held for sale 8,079,877
Less: accumulated depreciation (1,809,064)
6,270,813
$12,711,891
Property and equipment were stated at the lower of depreciated cost or net
realizable value. Net realizable value represents the estimated selling price
in the ordinary course of business less estimated costs of holding and
disposition. During March 1995, the Partnership recorded a provision for
decrease in net realizable value in the amount of $280,000. The provision was
applicable to the Fox Ridge Apartments that were sold
June 23, 1995.
4. Mortgage Notes Payable:
Mortgage notes payable consisted of the following at December 31, 1994:
A non-recourse promissory note for which the Fox
Ridge Apartments was pledged as collateral. The
note bears interest at a rate of 9.5%. Principal
and interest were payable in monthly installments
of $42,083 based on a 30-year amortization
schedule. There were certain prepayment penalties
as defined in the loan agreement. The principal
balance was due July 15, 1996. On June 23, 1995,
the Fox Ridge Apartments were sold (see Note 8).
$4,879,467
Two separate identical non-recourse promissory
notes for which the Silver Oak I Apartments and
the Silver Oak II Apartments were separately
pledged as collateral. In November 1993, the
Partnership extended the maturity of the notes
payable for five years at an interest rate of 6.5%.
Monthly installments of principal and interest totaling
$29,965 were required through the maturity date of
November 15, 1998. There were certain prepayment
penalties as defined in the loan agreements. On
February 17, 1995, the Silver Oak I and II Apartments
were sold and the existing mortgage notes were assumed
by the Buyers (see Note 8). 4,683,158
$9,562,625
5. Related Party Transactions:
There were no fees and other compensation paid to the General Partner and
affiliates for the six months ended June 30, 1995 and June 30, 1994.
Kemper/Cymrot, Inc. ("KCI"), an affiliate of the General Partner, provided
property acquisition services and earned, as compensation, a deferred
acquisition fee in an amount equal to 7.5% of gross proceeds from the offering
of Partnership Interests, payable only from Net Cash Receipts from Partnership
operations and not from proceeds of the offering. The Partnership incurred a
total deferred acquisition fee of $1,169,250. As of June 30, 1995, the General
Partner had forgiven the unpaid deferred acquisition fee in the amount of
$996,950. As of December 31, 1994 the unpaid balance totaled $996,950 and is
included in payable to affiliates.
6. Property Management:
Effective January 1, 1994, the Partnership entered into a property management
agreement and a disposition services agreement with Western National Securities,
a California corporation, dba Western National Property Management, Inc.
("Western National"). The initial terms of the agreements are for twelve
months, with the option to renew for successive six-month periods. Compensation
under the property management agreement is equal to 4 percent of property gross
revenues. The disposition services agreement calls for a 1 percent fee based on
the property's gross sales price to be paid upon closing of a sales transaction.
Western National is not an affiliate of the General Partner.
Upon closing of the Silver Oak I and Silver Oak II Apartments and the Fox Ridge
Apartments sales transactions, Western National was paid disposition fees in the
amount of $69,000 and $62,175, respectively, from the sales proceeds, which were
paid through escrow.
7. Commitments and Contingencies:
From time to time the Partnership is involved in various claims and legal
actions arising in the ordinary course of business. In the opinion of
management, the ultimate disposition of these matters will not have a material
adverse effect on the Partnership's financial statements.
8. Sales of Properties:
On June 23, 1995, the Partnership sold the Fox Ridge Apartments (the "Property")
to an unrelated third party for a sales price of $6,527,500. The sales price
was paid in cash. After combined selling and closing costs of $584,034 and
payment of the non-recourse mortgage note payable and related fees totalling
$5,046,081, the Partnership received net cash proceeds of $897,385. The
Partnership recognized a loss on the sale of the Property of approximately
$177,000.
On February 17, 1995, the Partnership sold the Silver Oak I and Silver Oak II
Apartments (the "Properties") to two separate unrelated third parties (the
"Buyers") for a combined sales price of $6,900,000. The Buyers assumed the two
existing mortgage notes on the Properties in the aggregate amount of $4,673,938
and paid the remaining portion of the sales prices in cash. After combined
selling and closing costs of $449,035, the Partnership received net cash
proceeds of $1,777,027. The Partnership recognized a gain on the sale of the
Properties of approximately $197,000.
The net cash proceeds received from the sales of the Fox Ridge and Silver Oaks
Apartments are expected to be distributed to the Partners with the final
liquidating distribution, in accordance with the terms of the Limited
Partnership Agreement during the fourth quarter.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
As of June 30, 1995, Kemper/Cymrot Real Estate Investment Fund A, L.P. (the
"Partnership") had disposed of all of its properties and had adopted a plan of
liquidation and dissolution (the "Plan") in accordance with the Limited
Partnership Agreement.
Under liquidation basis accounting, a Statement of Estimated Net Assets in
Liquidation is presented in lieu of a balance sheet. In the Statement of
Estimated Net Assets in Liquidation, remaining assets are stated at their
estimated realizable values, and remaining liabilities, including a provision
for the estimated costs of the Plan, are stated at their estimated settlement
amounts. A Statement of Changes in Estimated Net Assets in Liquidation is
presented in lieu of a Statement of Operations. (See Note 1 to the financial
statements.)
Liquidity and Capital Resources
As of June 30, 1995 the Partnership had sold all of its properties. In its
efforts to maximize value for the Limited Partners, the General Partner made the
decision to sell the properties at a time when multifamily sales prices have
risen as a result of recent acquisition activity. The General Partner believes
that the sales prices negotiated were favorable for properties of this age and
type.
On February 17, 1995, the Partnership sold the Silver Oak Apartments to two
separate unrelated third parties (the "Buyers") for a combined sales price of
$6,900,000. The Buyers assumed the two existing mortgage notes on the Silver
Oaks Apartments. The Partnership received net cash proceeds of $1,777,027. The
Partnership recognized a gain on the sale of the Silver Oak Apartments of
approximately $197,000.
On June 23, 1995, the Partnership sold the Fox Ridge Apartments to an unrelated
third party for a sales price of $6,527,500 which was paid in cash. The
Partnership received net cash proceeds of $897,385. A loss of $177,000 was
recognized on the sale of the Fox Ridge Apartments.
The net sales proceeds received on the sales of the Silver Oak and Fox Ridge
Apartments are expected to be distributed in accordance with the terms of the
limited partnership agreement and will be included in the final liquidating
distribution.
During 1995, the Partnership recorded a provision for decrease in net realizable
value in the amount of $280,000. The provision is applicable to the Fox Ridge
Apartments property which was sold on June 23, 1995.
As of June 30, 1995, the Partnership had estimated net assets in liquidation of
$2,781,236. Estimated net assets in liquidation reflect total assets less
remaining liabilities and obligations expected to be incurred by the Partnership
in connection with the Plan. At June 30, 1995 the Partnership had cash and cash
equivalents of $2,861,236.
The valuation of assets and liabilities for purposes of calculating estimated
net assets in liquidation requires many estimates and assumptions, and
consummation of the Plan will entail significant uncertainties. As a result,
the actual amounts of assets, liabilities, and net assets in liquidation set
forth in the accompanying Statement of Net Assets in Liquidation reflect
accruals for expenses in connection with the Partnership's liquidation and wind-
up at June 30, 1995.
Based on facts presently available to it, the Partnership anticipates that
approximately $88 per limited partnership interest will be available for
liquidating distributions to the limited partners. (See Note 1 to the
Partnership's financial statements.) There can be no assurance, however, that
this amount will ultimately be available for distribution. The actual amount of
the final liquidating distribution will depend upon the amounts deemed necessary
or appropriate to pay for the Partnership's liabilities and expenses of
liquidation. Accordingly, no assurance can be given that the amounts estimated
to be distributed will not be reduced below the Partnership's current
expectations.
Material Changes In Results Of Operations
As previously noted, the financial statements for the six months ended June 30,
1995 have been presented on the liquidation basis of accounting. The financial
statements for the year ended December 31, 1994 and the six months ended June
30, 1994 were prepared on a going concern basis of accounting. Therefore, a
comparison of material changes in results of operations is not applicable.
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
(a) Exhibits:
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
Form 8-K dated June 23, 1995 reported the sale of the Fernwood
Apartments.
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.
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
By: Kemper/Cymrot Partners, L.P.
its General Partner
By: Kemper Real Estate, Inc.
its general partner
Date: August 11, 1995 By: /s/ John E. Neal
John E. Neal, President
(Principal Executive Officer)
Date: August 11, 1995 By: /s/ John H. Fitzpatrick
John H. Fitzpatrick, Vice President
(Principal Financial Officer)
KEMPER/CYMROT REAL ESTATE INVESTMENT FUND A, L.P.
EXHIBIT INDEX
Exhibit Number Page Number
27 Financial Data Schedule 15
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<ARTICLE> 5
<LEGEND>
This schedule contains second quarter summary financial information extracted
from the Kemper/Cymrot Real Estate Investment Fund A, L.P. second quarter Form
10-Q and is qualified in its entirety by reference to such Form 10-Q filing.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,861,236
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,861,236
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,861,236
<CURRENT-LIABILITIES> 80,000
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,861,236
<SALES> 688,483
<TOTAL-REVENUES> 1,737,066
<CGS> 454,502
<TOTAL-COSTS> 454,502
<OTHER-EXPENSES> 160,672
<LOSS-PROVISION> 280,000
<INTEREST-EXPENSE> 447,280
<INCOME-PRETAX> 394,612
<INCOME-TAX> 0
<INCOME-CONTINUING> 394,612
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 394,612
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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