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 March 31, 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)
<TABLE>
<CAPTION>
BALANCE SHEETS
ASSETS
March 31, December 31,
1995 1994
(Unaudited) (Audited)
<S> <C> <C>
Cash and cash equivalents $ 2,083,712 $ 359,731
Property and equipment, net - 6,441,078
Property held for sale, net 6,130,403 6,270,813
Other assets, net 8,000 13,598
Total assets $ 8,222,115 $13,085,220
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $ 4,868,972 $ 9,562,625
Payable to affiliates 996,950 997,048
Accounts payable and accrued liabilities 65,479 42,586
Resident security deposits 57,955 96,337
Total liabilities 5,989,356 10,698,596
Partners' capital 2,232,759 2,386,624
Total liabilities and
partners' capital $ 8,222,115 $13,085,220
The accompanying notes are an integral part of these financial statements.
</TABLE>
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the quarters ended March 31, 1995 and March 31, 1994
1995 1994
<S> <C> <C>
Revenues:
Operating income $ 430,218 $ 538,457
Interest income 4,271 657
434,489 539,114
Expenses:
Employee compensation and benefits 50,914 56,549
Property management and other
professional fees 50,096 52,115
Office supplies and equipment 2,744 3,206
Administrative 11,452 7,748
Advertising and promotion 13,611 10,110
Taxes, licenses and insurance 74,130 66,557
Utilities 33,177 49,475
Maintenance and repair 46,294 48,097
Interest 155,713 195,384
Depreciation and amortization 67,090 102,117
Provision for decrease in net realizable value 280,000 --
785,221 591,358
Net loss before gain on sale of property $(350,732) $ (52,244)
GAIN ON SALE OF PROPERTY 196,867 --
Net loss $ (153,865) $ (52,244)
Limited Partners' allocable net loss
per weighted average limited partnership
interest ($500 original capital contribution
per interest):
Loss before gain on sale of property $ (10.69) $ (1.59)
Gain on sale of property 6.00 --
$ (4.69) (1.59)
Weighted average limited partnership
interests outstanding 31,180 31,180
The accompanying notes are an integral part of these financial statements.
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
For the quarters ended March 31, 1995 and March 31, 1994
General Limited
Partner Partners Total
<S> <C> <C> <C>
Balance, December 31, 1994 $(1,282,130) $3,668,754 $2,386,624
Net loss (7,693) (146,172) (153,865)
Balance, March 31, 1995 $(1,289,823) $3,522,582 $2,232,759
Balance, December 31, 1993 $(1,274,560) $3,812,581 $2,538,021
Net loss (2,612) (49,632) (52,244)
Balance, March 31, 1994 $(1,277,172) $3,762,949 $2,485,777
The accompanying notes are an integral part of these financial statements.
</TABLE>
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the quarters ended March 31, 1995 and March 31, 1994
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (153,865) $ (52,244)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation 67,090 102,117
Gain on sale of property (196,867) --
Provision for decrease in net
realizable value 280,000 --
Amortization of loan fees 5,598 1,764
Changes in assets and liabilities:
Increase (decrease) in accounts payable
and accrued liabilities 22,893 (4,287)
Decrease in amounts payable to affiliates (98) --
(Decrease) increase in resident
security deposits (38,382) 2,789
Decrease in other assets -- 66,842
Net cash (used in) provided by operations (13,631) 116,981
Cash flows from investing activities:
Purchase of property and equipment (19,700) (9,502)
Net cash received on sale of property 1,777,027 --
Net cash provided by (used in) investing
activities 1,757,327 (9,502)
Cash flows from financing activities:
Payments of principal on mortgage (19,715) (22,524)
Increase in cash and cash equivalents 1,723,981 84,955
Beginning cash and cash equivalents 359,731 262,930
Ending cash and cash equivalents $2,083,712 $ 347,885
Supplemental disclosure of cash flow information:
Cash paid for interest $ 150,115 $ 193,620
Supplemental disclosure of noncash transaction:
Reduction of investment in real estate $6,254,098 $ --
Disposition by assumption of mortgage
note payable $4,683,158 $ --
The accompanying notes are an integral part of these financial statements.
</TABLE>
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. At March 31, 1995, the
Partnership owned and operated one apartment property, the Fox Ridge Apartments,
located in Sacramento, California. Two other properties, Silver Oak I and
Silver Oak II Apartments, located in Mountlake Terrace, Washington, were sold on
February 17, 1995. In accordance with the Limited Partnership Agreement, the
Partnership will continue until December 31, 2028 unless terminated earlier.
Partnership profits or losses are allocated 95% to the Limited Partners and 5%
to the General Partner.
2. Summary of Significant Accounting Policies:
Basis of Accounting:
These statements have been prepared in accordance with instructions to the
Securities and Exchange Commission Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
In the opinion of the General Partner, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The results of operations for the quarter and three months ended
March 31, 1995 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1995.
Cash and Cash Equivalents:
Included in cash and cash equivalents are security deposits from residents which
are restricted as to use. These deposits totaled $57,955 and $96,337 at
March 31, 1995 and December 31, 1994, respectively.
Property and Equipment:
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.<PAGE>
3. Property and Equipment:
Property and equipment at March 31, 1995 and December 31, 1994 consisted of:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
<S> <C> <C>
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 8,064,203 8,079,877
Less: accumulated depreciation (1,933,800) (1,809,064)
6,130,403 6,270,813
$ 6,130,403 $12,711,891
</TABLE>
Property and equipment are 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. At March 31, 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 is classified as property held for
sale in the accompanying balance sheet as of March 31, 1995.
During March 1995, the Partnership began actively marketing the Fox Ridge
Apartments for sale. On May 9, 1995, the Partnership entered into a contract to
sell the Fox Ridge Apartments for $6,600,000. The sale is subject to the
buyer's due diligence.
4. Mortgage Notes Payable:
Mortgage notes payable consisted of the following at March 31, 1995 and
December 31, 1994:
March 31, December 31,
1995 1994
A non-recourse promissory note for which
the Fox Ridge Apartments is pledged as
collateral. The note bears interest
at a rate of 9.5%. Principal and interest
are payable in monthly installments of
$42,083 based on a 30-year amortization
schedule. There are certain prepayment
penalties as defined in the loan agreement.
The principal balance is due July 15, 1996.
$4,868,972 $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
Partnership sold the Silver Oak I and II
Apartments and the existing mortgage notes
were assumed by the Buyers (see Note 8). -- 4,683,158
$4,868,972 $9,562,625
5. Related Party Transactions:
There were no fees and other compensation paid to the General Partner and
affiliates for the three months ended March 31, 1995 and March 31, 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 March 31, 1995 and
December 31, 1994 the unpaid balance totaled $996,950, which 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 sales transaction,
Western National was paid a disposition fee in the amount of $69,000 from the
sales proceeds, which was paid through escrow on February 17, 1995.
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. Sale of Property:
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. These funds are expected to be distributed to the
Partners in accordance with the terms of the Limited Partnership Agreement
during 1995. The Partnership recognized a gain on the sale of the Properties of
$196,867.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
INTRODUCTION
As of March 31, 1995, Kemper/Cymrot Real Estate Investment Fund A, L.P.
("Fund A") owned one property totaling 180 apartments, the Fox Ridge Apartments
in Sacramento, California. Two other properties, the Silver Oak I and Silver
Oak II Apartments (the "Silver Oak Apartments"), located in Mountlake Terrace,
Washington, were sold on February 17, 1995.
During the quarter ended March 31, 1995, Fund A had a weighted average occupancy
of 94% as compared to 88.5% at March 31, 1994. As of March 31, occupancy at the
Fox Ridge Apartments was 95.5% in 1995, and 94% in 1994, respectively.<PAGE>
FUND LIQUIDITY AND CAPITAL RESOURCES
The main sources of liquidity for Fund A are cash from operations, borrowings
from financial institutions, cash reserves and the sale of real properties.
Fund A currently has no intention to raise additional capital.
Fund A generated a cash deficit from operations of $13,631 and positive cash
from operations of $116,981 for the three months ending March 31, 1995 and 1994,
respectively. The decrease in cash generated from operations is attributable to
the sale of the Silver Oak Apartments in February 1995.
On February 17, 1995, Fund A sold the Silver Oak Apartments to two separate
unrelated third parties (the "Buyers") for a combined sales price of $6,900,000.
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.
The Buyers assumed the two existing mortgage notes on the Silver Oak Apartments.
Fund A received net cash proceeds of $1,777,027, which it expects to distribute
to the Partners during 1995, in accordance with the terms of the Limited
Partnership Agreement. Fund A recognized a gain on the sale of the Silver Oak
Apartments in the amount of $196,867.
Capital expenditures for the three months ended March 31, 1995 were kept to a
minimum. Total capital expenditures made for the period were approximately
$19,700 and included upgrading carpet and vinyl at the Fox Ridge Apartments.
In March 1995, Fund A decided to actively market the Fox Ridge Apartments for
sale as the General Partner believes this is an opportune time to sell the
Property given recent increases in apartment acquisition activity. On May 9,
1995 Fund A entered into a contract to sell the Fox Ridge Apartments for
$6,600,000 with an independent third party. The sale is subject to the buyer's
due diligence. In the event the sale occurs, Fund A would subsequently be
dissolved under the terms of the Limited Partnership Agreement.
As of March 31, 1995, Fund A 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 is classified as property held for sale in the
accompanying balance sheet.
RESULTS OF OPERATIONS
Operating income for Fund A totaled $430,218 for the three months ended
March 31, 1995, as compared with $538,457 for the three months ended
March 31, 1994. The decrease in operating income is attributable to the sale of
the Silver Oak Apartments in February 1995. Operating expenses, exclusive of
interest, depreciation and provision for decrease in net realizable value
totaled $282,418 for the three months ended March 31, 1995, as compared with
$293,857 for the three months ended March 31, 1994. The decrease in operating
expenses is primarily due to the sale of the Silver Oak Apartments in February
1995.
The Net Cash Receipts (Deficit) from property operations was approximately
$(17,000) and $61,000 for the three months ended March 31, 1995 and 1994,
respectively.
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 February 17, 1995 reported the sale of the Silver Oak
I Apartments and the Silver Oak II 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: May 12, 1995 By: /s/ John E. Neal
John E. Neal, President
(Principal Executive Officer)
Date: May 12, 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 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains first quarter summary financial information extracted
from the Kemper/Cymrot Real Estate Investment Fund A, L.P. first quarter Form
10-Q and is qualified in its entirety by reference to such Form 10-Q filing.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 2,083,712
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,083,712
<PP&E> 8,064,203
<DEPRECIATION> (1,933,800)
<TOTAL-ASSETS> 8,222,115
<CURRENT-LIABILITIES> 123,434
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,989,356
<SALES> 430,218
<TOTAL-REVENUES> 631,356
<CGS> 282,418
<TOTAL-COSTS> 282,418
<OTHER-EXPENSES> 67,090
<LOSS-PROVISION> 280,000
<INTEREST-EXPENSE> 155,713
<INCOME-PRETAX> (153,865)
<INCOME-TAX> 0
<INCOME-CONTINUING> (153,865)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (153,865)
<EPS-PRIMARY> (4.69)
<EPS-DILUTED> 0
</TABLE>
