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 March 31, 1997
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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 0-14353
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BALCOR REALTY INVESTORS 85-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Illinois 36-3244978
- ------------------------------- -------------------
(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 85 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
ASSETS
1997 1996
--------------- ---------------
Cash and cash equivalents $ 13,356,615 $ 16,372,728
Accounts and accrued interest receivable 168,682 168,416
Prepaid expenses 3,505 29,911
--------------- ---------------
13,528,802 16,571,055
--------------- ---------------
Investment in real estate:
Land 1,958,223
Buildings and improvements 15,033,831
---------------
16,992,054
Less accumulated depreciation 6,849,503
---------------
Investment in real estate, net of
accumulated depreciation 10,142,551
--------------- ---------------
$ 13,528,802 $ 26,713,606
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Accounts payable $ 276,909 $ 120,413
Due to affiliates 129,528 130,331
Accrued liabilities, principally
real estate taxes 91,810
Security deposits 62,326
Losses in excess of investments in joint
ventures with affiliates 531,283 499,671
Mortgage notes payable 11,495,334
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Total liabilities 937,720 12,399,885
--------------- ---------------
Commitments and contingencies
Limited Partners' capital (82,697
Interests issued and outstanding) 12,895,082 14,675,847
General Partner's deficit (304,000) (362,126)
--------------- ---------------
Total partners' capital 12,591,082 14,313,721
--------------- ---------------
$ 13,528,802 $ 26,713,606
=============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
--------------- ---------------
Income:
Rental and service $ 443,934 $ 3,948,816
Interest on short-term investments 124,005 35,087
Participation in (loss) income of joint
ventures with affiliates (527) 145,326
--------------- ---------------
Total income 567,412 4,129,229
--------------- ---------------
Expenses:
Interest on mortgage notes payable 99,717 1,112,417
Lender participation 1,025,000
Depreciation 62,779 480,025
Amortization of deferred expenses 42,084
Property operating 263,437 1,314,078
Real estate taxes 12,325 233,228
Property management fees 17,151 198,365
Administrative 98,760 124,663
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Total expenses 1,579,169 3,504,860
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(Loss) income before gain on sale of
property and extraordinary item (1,011,757) 624,369
Gain on sale of property 12,768,729 4,627,131
--------------- ---------------
Income before extraordinary item 11,756,972 5,251,500
Extraordinary item:
Debt extinguishment expense (251,004)
--------------- ---------------
Net income $ 11,756,972 $ 5,000,496
=============== ===============
Income before extraordinary item
allocated to General Partner $ 58,126 $ 52,515
=============== ===============
Income before extraordinary item
allocated to Limited Partners $ 11,698,846 $ 5,198,985
=============== ===============
Income before extraordinary item
per Limited Partnership Interest
(82,697 issued and outstanding) $ 141.47 $ 62.87
=============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1997 and 1996
(Unaudited)
(Continued)
1997 1996
--------------- ---------------
Extraordinary item allocated to
General Partner None $ (2,510)
=============== ===============
Extraordinary item allocated to
Limited Partners None $ (248,494)
=============== ===============
Extraordinary item per Limited
Partnership Interest (82,697
issued and outstanding) None $ (3.00)
=============== ===============
Net income allocated to General Partner $ 58,126 $ 50,005
=============== ===============
Net income allocated to Limited Partners $ 11,698,846 $ 4,950,491
=============== ===============
Net income per Limited Partnership
Interest (82,697 issued and outstanding) $ 141.47 $ 59.87
=============== ===============
Distribution to Limited Partners $ 13,479,611 $ 620,228
=============== ===============
Distribution per Limited Partnership
Interests (82,697 issued and
outstanding) $ 163.00 $ 7.50
=============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
--------------- ---------------
Operating activities:
Net income $ 11,756,972 $ 5,000,496
Adjustments to reconcile net income to
net cash (used in) or provided by
operating activities:
Gain on forgiveness of debt
Gain on sale of property (12,768,729) (4,627,131)
Debt extinguishment expense 7,292
Participation in loss (income) of
joint ventures with affiliates 527 (145,326)
Depreciation of properties 62,779 480,025
Amortization of deferred expenses 42,084
Net change in:
Accounts and accrued interest
receivable (266) (105,286)
Escrow deposits (99,778)
Prepaid expenses 26,406 122,402
Accounts payable 156,496 (95,703)
Due to affiliates (803) 18,001
Accrued liabilities (91,810) (79,127)
Security deposits (62,326) (33,198)
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Net cash (used in) or provided by
operating activities (920,754) 484,751
--------------- ---------------
Investing activities:
Capital contributions to joint ventures
with affiliates (14,533)
Distribution from joint ventures
with affiliates 31,085 112,458
Proceeds from sale of real estate 23,300,000 9,985,000
Payment of selling costs (451,499) (240,515)
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Net cash provided by investing
activities 22,879,586 9,842,410
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1997 and 1996
(Unaudited)
(Continued)
1997 1996
--------------- ---------------
Financing activities:
Distribution to Limited Partners (13,479,611) (620,228)
Repayment of mortgage note payable (11,458,759) (5,790,869)
Principal payments on mortgage
notes payable (36,575) (799,958)
Disbursements from improvement escrows 136,699
--------------- ---------------
Net cash used in financing activities (24,974,945) (7,074,356)
--------------- ---------------
Net change in cash and cash equivalents (3,016,113) 3,252,805
Cash and cash equivalents at
beginning of period 16,372,728 2,369,231
--------------- ---------------
Cash and cash equivalents at end of period $ 13,356,615 $ 5,622,036
=============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies:
(a) A reclassification has been made to the previously reported 1996 statements
in order to provide comparability with the 1997 statements. This
reclassification has not changed the 1996 results. In the opinion of
management, all adjustments necessary for a fair presentation have been made
to the accompanying statements for the quarter ended March 31, 1997, and all
such adjustments are of a normal and recurring nature.
(b) For financial statement purposes, in previous years partners were allocated
income and loss in accordance with the profit and loss percentages in the
Partnership Agreement. In order for the capital accounts of the General Partner
and Limited Partners to appropriately reflect their respective remaining
economic interests as provided for in the Partnership Agreement, the General
Partner was allocated less income in 1997 for financial statement purposes.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1996, the Partnership sold six properties and its minority
joint venture interest in one additional property. During February 1997, the
Partnership sold the Templeton Park Apartments. Currently, the General Partner
is actively marketing for sale its remaining investment, the North Hill
Apartments, in which the Partnership holds a minority joint venture interest.
The Partnership has retained a portion of the cash to satisfy obligations of
the Partnership as well as establish a reserve for contingencies. The timing of
the termination of the Partnership and final distribution of cash will depend
upon the nature and extent of liabilities and contingencies which exist or may
arise. Such contingencies may include legal and other fees stemming from
litigation involving the Partnership including, but not limited to, the
lawsuits discussed in Note 6 of Notes to the Financial Statements. In the
absence of any such contingency, the reserves will be paid within twelve months
of the last property being sold. In the event a contingency exists, reserves
may be held by the Partnership for a longer period of time.
3. Interest Expense:
During the quarters ended March 31, 1997 and 1996, the Partnership incurred and
paid interest expense on mortgage notes payable of $99,717 and $1,112,417,
respectively.
4. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1997 are:
<PAGE>
Paid Payable
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Reimbursement of expenses to
the General Partner, at cost $13,294 $129,528
5. Property Sales:
In February 1997, the Partnership sold the Templeton Park Apartments in an all
cash sale for $23,300,000. From the proceeds of the sale, the Partnership paid
$11,458,759 to the third party mortgage holder in full satisfaction of the
first mortgage loan, paid $451,499 in selling costs and $1,025,000 in lender
participation calculated as a percentage of proceeds in excess of the
outstanding mortgage debt. Lender participation represents additional interest
paid to the lender calculated as a percentage of the sales price in excess of
amounts specified in the loan agreement. The basis of the property was
$10,079,772, which is net of accumulated depreciation of $6,912,282. For
financial statement purposes, the Partnership recognized a gain of $12,768,729
from the sale of this property.
6. Contingencies:
The Partnership is currently involved in two lawsuits whereby the Partnership
and certain affiliates have been named as defendants alleging substantially
similar claims involving certain federal securities law violations with regard
to the adequacy and accuracy of disclosures of information concerning, as well
as marketing efforts related to, the offering of the Limited Partnership
Interests of the Partnership. The defendants continue to vigorously contest
these actions. A plaintiff class has not been certified in either action and,
no determinations of the merits have been made. It is not determinable at this
time whether or not an unfavorable decision in either action would have a
material adverse impact on the financial position, operations and liquidity of
the Partnership. The Partnership believes it has meritorious defenses to
contest the claims.
7. Subsequent Event:
In April 1997, the Partnership made a distribution of $10,419,822 ($126.00 per
Interest) to the holders of Limited Partnership Interests representing a
special distribution of Net Cash Proceeds primarily from the net proceeds
received in connection with the sale of the Templeton Park Apartments.
<PAGE>
BALCOR REALTY INVESTORS 85-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Realty Investors 85 - Series I A Real Estate Limited Partnership (the
"Partnership") was formed in 1983 to invest in and operate income-producing
real property. The Partnership raised $82,697,000 through the sale of Limited
Partnership Interests and utilized these proceeds to acquire ten real property
investments and minority joint venture interests in three additional
properties. As of March 31, 1997, the Partnership has disposed of nine of these
properties and two of the properties in which it held a minority joint venture.
During February 1997, the Partnership sold the Templeton Park Apartments and
continues to own a minority joint venture interest in the North Hill
Apartments. Currently, the North Hill Apartments is being marketed for sale.
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 1996 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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During February 1997, the Partnership sold the Templeton Park Apartments and
recognized a significant gain on the sale. This was the primary reason for the
increase in net income during the quarter ended March 31, 1997 as compared to
the same period in 1996. This increase in net income was partially offset by a
decrease in income generated from property operations resulting from the sale
of the properties in 1996 and 1997. Further discussion of the Partnership's
operations are summarized below.
1997 Compared to 1996
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Discussions of fluctuations between 1997 and 1996 refer to the quarters ended
March 31, 1997 and 1996.
The Partnership sold six properties during 1996, which were generating income
prior to their sales. The Partnership sold the Templeton Park Apartments in
February 1997 and recognized a gain in connection with the sale for financial
statement purposes of $12,768,729. These sales resulted in decreases in rental
and service income, interest expense on mortgage notes payable, depreciation,
amortization, property operating expense, real estate taxes, and property
management fees during 1997 as compared to 1996.
<PAGE>
Higher average cash balances were available for investment due to proceeds
received in connection with the 1996 and 1997 property sales prior to
distribution to Limited Partners in January and April 1997. As a result,
interest income on short-term investments increased during 1997 as compared to
1996. This amount has been recorded as lender participation.
Seabrook Apartments, in which the Partnership held a minority joint venture
interest, was sold during February 1996. While the Partnership recognized
participation in income during 1996 in connection with the gain on the sale of
the Seabrook Apartments, the Partnership recognized participation in loss from
joint ventures with affiliates from the North Hill Apartments during 1997.
The Partnership paid to the holder of the first mortgage loan a percentage of
the net sale proceeds equal to $1,025,000 in connection with the sale of the
Templeton Park Apartments during 1997.
Lower portfolio management fees during 1997 and printing and postage costs
incurred during 1996 in connection with tender offers during quarter of 1996
were the primary reasons for the decrease in administrative expenses during
1997 as compared to 1996.
During 1996, the Partnership wrote off the remaining unamortized deferred
expenses of $7,292 and paid a prepayment penalty of $243,712 in connection with
the March 1996 sale of the Willowbend Apartments. These amounts were recognized
as debt extinguishment expense and classified as an extraordinary item for
financial statement purposes.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased by approximately $3,016,000 as
of March 31, 1997 as compared to December 31, 1996, primarily due to the
special distribution made in January 1997 to Limited Partners from the 1996
property sales which was partially offset by the net proceeds received from the
sale of the Templeton Park Apartments in February 1997. The Partnership used
cash in operating activities of approximately $921,000. Cash was used to pay
administrative expenses and lender participation which was offset by cash flow
from the operation of the Partnership's property and interest income earned on
short-term investments. The Partnership's net cash provided by investing
activities of approximately $22,880,000, consisted primarily of the net
proceeds received from the sale of the Templeton Park Apartments. Cash was
used in the Partnership's financing activities for the repayment of the
mortgage note in connection with the sale of the Templeton Park Apartments
of approximately $11,459,000, principal payments on the mortgage note of
approximately $36,000 and distributions to Limited Partners of approximately
$13,480,000. In addition, in April 1997 the Partnership made a special
distribution of $10,419,822 to Limited Partners primarily from the net
proceeds received in connection with the sale of the Templeton Park Apartments.
During 1996, the Partnership sold six properties and its minority joint venture
in one additional property. During February 1997, Partnership sold the
Templeton Park Apartments. The General Partner is actively marketing for sale
the Partnership's remaining property, the North Hill Apartments, in which the
<PAGE>
Partnership holds a minority joint venture interest. The timing of the
termination of the Partnership and final distribution of cash will depend upon
the nature and extent of liabilities and contingencies which exists or may
arise. The Partnership has retained a portion of the cash from property sales
to satisfy obligations of the Partnership as well as establish a reserve for
contingencies. Such contingencies may include legal and other fees stemming
from litigation involving the Partnership including, but not limited to, the
lawsuits discussed in Note 6 of Notes to Financial Statements. In the
absence of any such contingency, the reserves will be paid within twelve months
of the last property sale. In the event a contingency arises, reserves may be
held by the Partnership for a longer period of time.
In February 1997, the Partnership sold the Templeton Park Apartments in an all
cash sale for $23,300,000. From the proceeds of the sale, the Partnership paid
$11,458,759 to the third party mortgage holder in full satisfaction of the
first mortgage loan, paid $451,499 in selling costs and paid $1,025,000 to the
lender as a percentage of proceeds in excess of the outstanding mortgage debt.
The remaining available proceeds were distributed to Limited Partners in April
1997. See Note 5 of Notes to Financial Statements for additional information.
Pursuant to the sale agreement for the Forestwood Apartments, $250,000 of the
sale proceeds was retained by the Partnership and was unavailable for
distribution until February 1997, at which time the funds were released in
full.
In April 1997, the Partnership made a distribution of $10,419,822 ($126.00 per
Interest) to the holders of Limited Partnership Interests representing a
special distribution of Net Cash Proceeds primarily from the net proceeds
received in connection with the sale of the Templeton Park Apartments.
Including the April 1997 distribution, Limited Partners have received
cumulative cash distributions of $562.50 per $1,000 Interest as well as certain
tax benefits. Of this amount, $92.50 has been from Net Cash Receipts and
$470.00 has been from Net Cash Proceeds. Future distribution will be made from
proceeds received from the sale of the Partnership's interest in the remaining
property, as to which there can be no assurances. Investors will not recover
all 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
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR REALTY INVESTORS 85-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
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North Hill Apartments
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As previously reported, on February 21, 1997, a joint venture consisting of the
Partnership and an affiliate (the "Joint Venture") contracted to sell the North
Hill Apartments, DeKalb County, Georgia, to an unaffiliated party, EEA
Development, Inc., a Delaware corporation, for a sale price of $22,750,000. On
March 27, 1997, the purchaser exercised its option to terminate the agreement
of sale. On April 1, 1997, the agreement was reinstated by the Joint Venture
and the purchaser. On April 4, 1997, the purchaser again exercised its option
to terminate the agreement. Pursuant to the agreement, the earnest money
previously deposited by the purchaser and interest accrued thereon has been
returned to the purchaser.
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
(4) The Subscription Agreement as set forth as Exhibit 4.1 to Amendment No. 1
to Registrant's Registration Statement on Form S-11 dated November 29, 1984
(Registration No. 2-92777) and Form of Confirmation regarding Interests in the
Partnership as set forth as Exhibit 4.2 to the Partnership's Report on Form
10-Q for the quarter ended June 30, 1995 are incorporated herein by reference.
(10) Material Contracts:
(a)(i) Agreement of Sale and attachments thereto relating to the sale of
Forestwood Apartments, East Baton Rouge Parish, Louisiana, previously filed as
Exhibit (2) to the Partnership's Current Report on Form 8-K dated October 14,
1996, is incorporated herein by reference.
(ii) First Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of Forestwood Apartments, East Baton Rouge, Louisiana previously filed as
Exhibit (10)(a)(ii) to the Partnership's Report on Form 10-Q for the quarter
ended September 30, 1996, is incorporated herein by reference.
(iii) Second Amendment to Agreement of Sale relating to the sale of Forestwood
Apartments, East Baton Rouge, Louisiana previously filed as Exhibit
(10)(a)(iii) to the Partnership's Report on Form 10-Q for the quarter ended
September 30, 1996, is incorporated herein by reference.
<PAGE>
(b)(i) Agreement of Sale and attachments thereto relating to Forest Ridge
Apartments, Phase I, Arlington, Texas previously filed as Exhibit (2) to the
Partnership'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
Forest Ridge Apartments, Phase I, Dallas, Texas previously filed as Exhibit
(99)(a) to the Partnership's Current Report on Form 8-K dated June 28, 1996 is
incorporated herein by reference.
(iii) Master Amendment and Agreement #2 dated May 22, 1996 relating to the sale
of Forest Ridge Apartments, Phase I, Dallas, Texas previously filed as Exhibit
(99)(b) to the Partnership's Current Report on Form 8-K dated June 28, 1996 is
incorporated herein by reference.
(c)(i) Agreement of Sale and attachment thereto relating to the sale of Boulder
Springs Apartments, Chesterfield County, Virginia, previously filed as Exhibit
(2)(a)(i) to the Partnership's Current Report on Form 8-K dated August 8, 1996,
is incorporated herein by reference.
(ii) Letter dated August 19, 1996 relating to the sale of Boulder Springs
Apartments, Chesterfield County, Virginia, previously filed as Exhibit
(2)(a)(ii) to the Partnership's Current Report on Form 8-K dated August 8,
1996, is incorporated herein by reference.
(iii) Amendment to Agreement of Sale relating to the sale of Boulder Springs
Apartments, Chesterfield County, Virginia, previously filed as Exhibit
(99)(b)(i) to the Partnership's Current Report on Form 8-K dated October 14,
1996, is incorporated herein by reference.
(iv) Second Amendment of Agreement of Sale relating to the sale of Boulder
Springs Apartments, Chesterfield County, Virginia, previously filed as Exhibit
(99)(b)(ii) to the Partnership's Current Report on Form 8-K dated October 14,
1996, is incorporated herein by reference.
(d)(i) Agreement of Sale and attachment thereto relating to the sale of
Timberlake Apartments, Phase I, Altamonte Springs, Florida, previously filed as
Exhibit (2)(b) to the Partnership's Current Report on Form 8-K dated August 8,
1996, is incorporated herein by reference.
(ii) Letter Agreement relating to the sale of Timberlake Apartments, Phase I,
Altamonte Springs, Florida, previously filed as Exhibit (99)(c) to the
Partnership's Current Report on Form 8-K dated October 14, 1996, is
incorporated herein by reference.
(e)(i) Agreement of Sale and Attachments thereto relating to the sale of
Templeton Park Apartments, Colorado Springs, Colorado, previously filed as
Exhibit (2) to the Partnership's Current Report on Form 8-K dated August 26,
1996, is incorporated herein by reference.
(ii) Letter agreements relating to the sale of the Templeton Park Apartments,
Colorado Springs, Colorado, previously filed as Exhibit (99)(a) to the
Partnership's Current Report on Form 8-K dated October 14, 1996, is
incorporated herein by reference.
<PAGE>
(iii) Letter agreement and Notice of Disapproval dated October 25, 1996,
regarding the sale of Templeton Park Apartments, Colorado Springs, Colorado
previously filed as Exhibit (10)(e)(iii) to the Partnership's Report on Form
10-Q for the quarter ended September 30, 1996, is incorporated herein by
reference.
(iv) First Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of Templeton Park Apartments, Colorado Springs, Colorado previously filed
as Exhibit (10)(e)(iv) to the Partnership's Report on Form 10-Q for the quarter
ended September 30, 1996, is incorporated herein by reference.
(v) Letter Agreements dated November 21, 1996, December 6, 1996, December 11,
1996, December 13, 1996, December 20, 1996, and January 20, 1997, relating to
the sale of the Templeton Park Apartments, Colorado Springs, Colorado,
previously filed as Exhibit (99)(i) to the Partnership's Current Report on Form
8-K dated February 21, 1997 is incorporated herein by reference.
(vi) Second Amendment to Agreement of Sale and Escrow Agreement dated January
3, 1997, relating to the sale of the Templeton Park Apartments, Colorado
Springs, Colorado, previously filed as Exhibit (99)(ii) to the Partnership's
Current Report on Form 8-K dated February 21, 1997 is incorporated herein by
reference.
(f)(i) Agreement of Sale and attachment thereto relating to the sale of North
Hill Apartments, Atlanta, Georgia, previously filed as Exhibit (2)(a)(i) to the
Partnership's Current Report on Form 8-K dated February 21, 1997, is
incorporated herein by reference.
(ii) Termination Notice relating to the sale of North Hill Apartments, Atlanta,
Georgia, previously filed as Exhibit (2)(a)(ii) to the Partnership's Current
Report on Form 8-K dated February 21, 1997, is incorporated herein by
reference.
(iii) Reinstatement of, and First Amendment to the Agreement of Sale and Escrow
Agreement relating to the sale of North Hill Apartments, Atlanta, Georgia,
previously filed as Exhibit (2)(a)(iii) to the Partnership's Current Report on
Form 8-K dated February 21, 1997, is incorporated herein by reference.
(iv) Second Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of North Hill Apartments, Atlanta, Georgia, is attached hereto.
(v) Termination notice relating to the sale of North Hill Apartments, Atlanta,
Georgia, is attached hereto.
(vi) Reinstatement and Third Amendment to Agreement of Sale and Escrow
Agreement relating to the sale of North Hill Apartments, Atlanta, Georgia, is
attached hereto.
(27) Financial Data Schedule of the Partnership for the three months ended
March 31, 1997 is attached hereto.
(b) Reports on Form 8-K:
(i) A Current Report on Form 8-K dated March 7, 1997, was filed reporting the
termination and reinstatement of the agreement of sale for the North Hill
Apartments, DeKalb County, Georgia.
<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 85-SERIES I
A REAL ESTATE LIMITED PARTNERSHIP
By:/s/Thomas E. Meador
--------------------------------
Thomas E. Meador
President and Chief Executive Officer (Principal
Executive Officer) of Balcor Partners-XVI, the
General Partner
By:/s/Jayne A. Kosik
--------------------------------
Jayne A. Kosik
Managing Director and Chief Financial Officer
(Principal Accounting Officer) of Balcor
Partners-XVI, the General Partner
Date: May 14, 1997
------------
<PAGE>
SECOND AMENDMENT TO
AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS SECOND AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is made and entered into as of this 13 day of March, 1997, by and
between N.H. Associates, an Illinois limited partnership ("Seller"), EEA
DEVELOPMENT, INC., a Delaware corporation ("Purchaser"), and CHICAGO TITLE
INSURANCE COMPANY ("Escrow Agent").
RECITALS:
A. Seller and Purchaser are parties to that certain Agreement of Sale,
dated February 21, 1997 (the "Original Agreement"), as amended by that certain
Reinstatement and First Amendment to Agreement of Sale and Escrow Agreement
dated March 4, 1997 (the "First Amendment"; the Original Agreement, as amended
by the First Amendment shall hereinafter be referred to as the "Agreement")
pursuant to which Purchaser has agreed to purchase and Seller has agreed to
sell certain Property (as defined in the Agreement) legally described and
depicted on Exhibit A attached to the Agreement.
B. Seller, Purchaser and Escrow Agent are parties to that certain Escrow
Agreement, dated February 21, 1997 (the "Original Escrow Agreement"), as
amended by the First Amendment (the Original Escrow Agreement, as amended by
the First Amendment shall hereinafter be referred to as the "Escrow Agreement")
pursuant to which Purchaser has deposited funds in escrow to be held by Escrow
Agent in accordance with the terms of the Escrow Agreement.
C. Seller and Purchaser desire to amend the Agreement and the Escrow
Agreement in accordance with the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. All terms not otherwise defined herein shall have the meanings ascribed to
each in the Agreement.
2. Paragraph 2.2 of the Agreement is deleted in its entirety and replaced
with the following:
" 2.2 On or before 2:00 p.m. Chicago time on March 27, 1997,
Purchaser shall deliver to Escrow Agent funds in the amount of One Hundred
Fifty Thousand and No/100 Dollars ($150,000.00) (the "Additional Earnest
Money"; the Original Earnest Money, plus the Additional Earnest Money, if any,
being referred to herein together as the "Earnest Money"), provided that
Purchaser has not terminated this Agreement pursuant to Paragraph 7;"
<PAGE>
3. The first grammatical sentence of Paragraph 7.1 of the Agreement is
deleted in its entirety and replaced with the following:
" 7.1 During the period commencing on January 10, 1997 and
ending at 5:00 p.m. Chicago time on March 27, 1997 (said period being herein
referred to as the "Inspection Period"), Purchaser and the agents, engineers,
employees, contractors and surveyors retained by Purchaser may enter upon the
Property, at any reasonable time and upon reasonable prior notice to Seller, to
inspect the Property, including a review of leases located at the Property, and
to conduct and prepare such studies, tests and surveys as Purchaser may deem
reasonably necessary and appropriate."
4. All references to the date of March 13, 1997 in the Escrow Agreement are
hereby deleted and the date of March 27, 1997 is hereby inserted in lieu
thereof.
5. Except as amended hereby, the Agreement shall be and remain unchanged and
in full force and effect in accordance with its terms.
6. This Amendment may be executed in counterparts each of which shall be
deemed an original, but all of which, when taken together shall constitute one
and the same instrument. To facilitate the execution of this Amendment,
Seller, Purchaser and Escrow Agent may execute and exchange by telephone
facsimile counterparts of the signature pages, with each facsimile being deemed
an "original" for all purposes.
[EXECUTION PAGE TO FOLLOW]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PURCHASER:
EEA DEVELOPMENT, INC., a Delaware corporation
By: /s/R. Stewart Bartley
--------------------------------
Name: R. Stewart Bartley
Its: Vice President
SELLER:
N.H. ASSOCIATES, an Illinois limited partnership
By: North Hill Partners, an Illinois joint venture, its general partner
By: Thornhill Limited Partnership, an Illinois limited partnership, a
joint venture partner
By: Balcor Partners-XVI, an Illinois general partnership, its
general partner
By: RGF-Balcor Associates-II, an Illinois general partnership,
a partner
By: The Balcor Company, a Delaware corporation, a general
partner
By: /s/James E. Mendelson
----------------------------------
Name: James E. Mendelson
----------------------------------
Its: Sr. V.P.
----------------------------------
ESCROW AGENT:
CHICAGO TITLE INSURANCE COMPANY
By: /s/R. Eric Taylor
---------------------------
Name: R. Eric Taylor
---------------------------
Its: Authorized Agent
<PAGE>
EEA REALTY, LLC
1925 N. LYNN STREET
SUITE 901
ARLINGTON, VA 22208
TEL. (703) 525-1600 FAX (703) 525-1609
Via Facsimile & U.S. Mail - 847-317-4462
April 4, 1997
N. H. Associates
c/o The Balcor Company
Bannockburn Lake Office Plaza
2355 Waukegan Road
Suite A-200
Bannockburn, Illinois 60015
Attention: Ms. Ilona Adams
Re: Agreement of Sale by and Between EEA Development, Inc. as Purchaser
and N. H. Associates, as Seller, dated February 21, 1997, with
respect to property known as the North Hill Apartments, as amended
Dear Ms. Adams:
EEA Development, Inc., the Purchaser under the above referenced Agreement of
Sale, as amended, the (_Agreement_), is hereby terminating the Agreement.
However, we would like to proceed with the transaction under revised terms
which we are discussing with Dan Charleston under separate cover.
If we are able to reach an agreement under the aforementioned revised terms,
please have your counsel prepare an appropriate amendment to the agreement.
If, however, we are unable to reach an agreement under revised terms, the
Earnest Money Deposit shall be returned as set forth in the Agreement. Thank
you for your consideration.
Sincerely,
/s/ R. Stewart Bartley, V.P.
R. Stewart Bartley
Finance and Acquisitions
Attachment
RSB/lab
cc: Mark D. Betts
Dan Charleston
Traci Harris
Kyle Hauberg
Mike Kelly
Al Suto
<PAGE>
REINSTATEMENT AND THIRD AMENDMENT TO
AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS REINSTATEMENT AND THIRD AMENDMENT TO AGREEMENT OF SALE AND ESCROW
AGREEMENT (this "Amendment") is made and entered into as of this 1 day of
April, 1997, by and between N. H. ASSOCIATES, an Illinois limited partnership
("Seller"), EEA DEVELOPMENT, INC., a Delaware corporation ("Purchaser"), and
CHICAGO TITLE INSURANCE COMPANY ("Escrow Agent").
RECITALS:
A. Seller and Purchaser are parties to that certain Agreement of Sale,
dated February 21, 1997 (the "Original Agreement"), as amended by that certain
Reinstatement and First Amendment to Agreement of Sale and Escrow Agreement
dated March 4, 1997 (the "First Amendment") and that certain Second Amendment
to Agreement of Sale and Escrow Agreement dated March 13, 1997 (the "Second
Amendment"; the Original Agreement, as amended by the First Amendment and the
Second Amendment shall hereinafter be referred to as the "Agreement"), pursuant
to which Purchaser has agreed to purchase and Seller has agreed to sell certain
Property (as defined in the Agreement) legally described and depicted on
Exhibit A attached to the Agreement.
B. Seller, Purchaser and Escrow Agent are parties to that certain Escrow
Agreement, dated February 21, 1997, as amended by the First Amendment and the
Second Amendment (the "Escrow Agreement"), pursuant to which Purchaser has
deposited funds in escrow to be held by Escrow Agent in accordance with the
terms of the Escrow Agreement.
C. Seller and Purchaser desire to amend the Agreement and the Escrow
Agreement in accordance with the terms of this Amendment.
D. Pursuant to the terms of the Agreement and the Escrow Agreement,
Purchaser terminated its obligations thereunder pursuant to the respective
terms thereof on March 27, 1997.
E. Seller and Purchaser desire to reinstate and amend the Agreement and
the Escrow Agreement in accordance with the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. All terms not otherwise defined herein shall have the meanings ascribed to
each in the Agreement.
2. Paragraph 2.2 of the Agreement is deleted in its entirety and replaced
with the following:
<PAGE>
" 2.2 On or before 2:00 p.m. Chicago time on April 4, 1997,
Purchaser shall deliver to Escrow Agent funds in the amount of One Hundred
Fifty Thousand and No/100 Dollars ($150,000.00) (the "Additional Earnest
Money"; the Original Earnest Money, plus the Additional Earnest Money, if any,
being referred to herein together as the "Earnest Money"), provided that
Purchaser has not terminated this Agreement pursuant to Paragraph 7;"
3. The first grammatical sentence of Paragraph 7.1 of the Agreement is
deleted in its entirety and replaced with the following:
" 7.1 During the period commencing on January 10, 1997 and
ending at 5:00 p.m. Chicago time on April 4, 1997 (said period being herein
referred to as the "Inspection Period"), Purchaser and the agents, engineers,
employees, contractors and surveyors retained by Purchaser may enter upon the
Property, at any reasonable time and upon reasonable prior notice to Seller, to
inspect the Property, including a review of leases located at the Property, and
to conduct and prepare such studies, tests and surveys as Purchaser may deem
reasonably necessary and appropriate.
4. The first grammatical sentence of Paragraph 8.1 of the Agreement is
deleted in its entirety and replaced with the following:
" 8.1 The closing of this transaction shall be on April 29, 1997
(the "Closing Date"), at the office of Title Insurer, Atlanta, Georgia, at
which time Seller shall deliver possession of the Property to Purchaser."
5. All references to the date of March 27, 1997 in Paragraphs 1 and 2 of the
Escrow Agreement are hereby deleted and the date of April 4, 1997 is hereby
inserted in lieu thereof.
6. All references to the date of March 27, 1997 in Paragraph 3 of the Escrow
Agreement are hereby deleted and the date of April 29, 1997 is hereby inserted
in lieu thereof.
7. The Purchaser hereby directs the Escrow Agent that the funds together with
interest thereon (if any) that were (i) heretofore deposited with Escrow Agent
by Purchaser and (ii) subsequently directed to be returned to Purchaser
pursuant to the termination notice delivered on March 27, 1997, shall be held
as, and shall constitute, the Earnest Money, as provided in the Agreement and
the Escrow Agreement.
8. The Agreement is hereby reinstated and, except as amended hereby, the
Agreement shall be and remain unchanged and in full force and effect in
accordance with its terms.
9. This Amendment may be executed in counterparts each of which shall be
deemed an original, but all of which, when taken together shall constitute one
and the same instrument. To facilitate the execution of this Amendment,
Seller, Purchaser and Escrow Agent may execute and exchange by telephone
facsimile counterparts of the signature pages, with each facsimile being deemed
an "original" for all purposes.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PURCHASER:
- ----------
EEA DEVELOPMENT, INC., a Delaware corporation
By:/s/R. Stewart Bartley
-------------------
Name: R. Stewart Bartley
Its: Vice President
SELLER:
- -------
N.H. ASSOCIATES, an Illinois limited partnership
By: North Hill Partners, an Illinois joint venture, its general partner
By: Thornhill Limited Partnership, an Illinois limited partnership, a
joint venture partner
By: Balcor Partners-XVI, an Illinois
general partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware
corporation, a general partner
By:/s/Daniel L. Charleston
----------------------
Name: Daniel L. Charleston
----------------------
Its: Authorized Agent
----------------------
ESCROW AGENT:
CHICAGO TITLE INSURANCE COMPANY
By:
---------------------------
Name:
---------------------------
Its: Authorized Agent
---------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 13357
<SECURITIES> 0
<RECEIVABLES> 169
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13529
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 13529
<CURRENT-LIABILITIES> 406
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 12591
<TOTAL-LIABILITY-AND-EQUITY> 13529
<SALES> 0
<TOTAL-REVENUES> 13337
<CGS> 0
<TOTAL-COSTS> 293
<OTHER-EXPENSES> 162
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1125
<INCOME-PRETAX> 11757
<INCOME-TAX> 0
<INCOME-CONTINUING> 11757
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11757
<EPS-PRIMARY> 141.47
<EPS-DILUTED> 141.47
</TABLE>
