UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
COMMISSION FILE NUMBER 2-95118
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
MINNESOTA 41-1507989
510 MARQUETTE AVENUE, SUITE 300
MINNEAPOLIS, MINNESOTA 55402
REGISTRANT'S TELEPHONE NUMBER (612) 338-2828
WATS NUMBER 800-328-3788
Indicate by check mark whether the registrant (1) has filed reports 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 filing requirements for the
past 90 days.
Yes __x__ No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-Q
or any amendment to this Form 10-Q.
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
INDEX
PART 1. Financial Information
Condensed Balance Sheets
September 30, 1997 and December 31, 1996...................... 1
Condensed Statements of Operations
for the three and nine months ended
September 30, 1997 and 1996................................... 2
Condensed Statements of Cash Flows
for the nine months ended
September 30, 1997 and 1996................................... 3
Condensed Statements of Changes
in Partners' Equity for the
nine months ended September 30, 1997.......................... 4
Notes to Financial Statements.................................... 5
Management's Discussion and Analysis of
Financial Conditions and Results
of Operations................................................. 6-7
PART II. Other Information................................................ 8
SIGNATURES.................................................................. 9
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
(unaudited)
September 30, December 31,
1997 1996
------------ ------------
ASSETS
- ------
Cash and cash equivalents $ 505,525 $ 450,906
Receivables and other assets 256,232 461,189
------------ ------------
Total 761,757 912,095
------------ ------------
PROPERTY:
Land 2,724,000 3,046,000
Buildings and improvements 15,440,560 17,646,870
Furniture and equipment 1,313,086 1,592,170
------------ ------------
Total 19,477,646 22,285,040
Less accumulated depreciation 7,366,222 8,325,543
------------ ------------
Property - net 12,111,424 13,959,497
------------ ------------
TOTAL ASSETS $ 12,873,181 $ 14,871,592
============ ============
LIABILITIES AND PARTNERSHIP EQUITY
- ----------------------------------
LIABILITIES:
Accounts payable and accrued liabilities $ 235,098 $ 302,614
Security deposits 109,124 125,235
Mortgage loans 10,797,452 13,025,497
------------ ------------
Total liabilities 11,141,674 13,453,346
------------ ------------
PARTNERS' EQUITY:
General Partner (207,661) (210,793)
Limited Partners 1,939,168 1,629,039
------------ ------------
Total partners' equity 1,731,507 1,418,246
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 12,873,181 $ 14,871,592
============ ============
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
---- ---- ---- ----
REVENUES
Rental income $ 833,875 $1,022,915 $2,865,391 $3,047,938
Interest income 6,522 4,403 22,235 13,729
Other income 17,442 20,178 54,873 60,926
Gain (loss) on
sale of property (5,295) -- 673,908 --
--------- ---------- ---------- ----------
Total revenues 852,544 1,047,496 3,616,407 3,122,593
--------- ---------- ---------- ----------
OPERATING EXPENSES
Operating expenses 549,073 649,435 1,710,825 1,858,710
Interest expense 230,942 280,615 794,903 850,971
Depreciation and
amortization 164,047 182,282 604,256 546,845
--------- ---------- ---------- ----------
Total operating
expenses 944,062 1,112,332 3,109,984 3,256,526
--------- ---------- ---------- ----------
NET INCOME (LOSS) (91,518) 64,836 506,423 133,933
NET INCOME (LOSS)
ALLOCATED TO
GENERAL PARTNER (915) 648 5,064 1,339
--------- ---------- ---------- ----------
NET INCOME (LOSS)
ALLOCATED TO
LIMITED PARTNERS $ (90,603) $ 64,188 $ 501,359 $ 132,594
========= ========== ========== ==========
NET INCOME (LOSS)
PER LIMITED
PARTNERSHIP UNIT
(weighted average
basis) $ (2.37) $ 1.68 $ 13.11 $ 3.47
========= ========== ========== ==========
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
For the Nine Months
Ended September 30,
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 506,423 $(133,933)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Gain on sale of property (673,908) --
Depreciation and amortization 604,256 546,845
Decrease in other assets-net 116,174 166,131
Decrease in accounts payable
and accrued liabilities (67,516) (35,953)
Increase (decrease) in security deposits (16,111) 12,678
----------- ---------
Net cash provided by operating activites 469,318 555,768
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITES:
Proceeds from sale of property & equipment 2,328,493 --
Purchase of property (321,985) (424,523)
----------- ---------
Net cash provided (used) by investing activities 2,006,508 (424,523)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction in mortgage payable (2,228,045) (109,520)
Distributions to partners (193,162) --
Repurchased Partnership units -- (13,873)
----------- ---------
Net cash used by financing activities (2,421,207) (123,393)
----------- ---------
INCREASE IN CASH AND CASH EQUIVALENTS 54,619 7,852
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 450,906 501,306
----------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 505,525 $ 509,158
=========== =========
CASH PAID DURING THE PERIOD FOR INTEREST $ 812,810 $ 853,862
=========== =========
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(unaudited)
GENERAL LIMITED TOTAL
PARTNER PARTNERS PARTNERSHIP
--------- ----------- -----------
PARTNERS' EQUITY (DEFICIT) $(210,793) $ 1,629,039 $ 1,418,246
JANUARY 1, 1997
DISTRIBUTIONS (1,932) (191,230) (193,162)
NET INCOME 5,064 501,359 506,423
--------- ----------- -----------
PARTNERS' EQUITY (DEFICIT) $(207,661) $ 1,939,168 $ 1,731,507
SEPTEMBER 30, 1997 ========= =========== ===========
See notes to condensed financial statements.
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(unaudited)
1. Griffin Real Estate Fund-V, A Limited Partnership (the Partnership) was
formed by the general partners, Griffin Equity Partners, A Minnesota
partnership and Guardian Investment Corporation, a Minnesota corporation
on March 5, 1985 under the laws of the State of Minnesota. The limited
partnership offering terminated on March 4, 1986 at which time 38,346
units had been sold.
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly Griffin
Real Estate Fund-V, A Limited Partnership's financial position as of
September 30, 1997 and December 31, 1996 and the results of its operations
for the three months and nine months ended September 30, 1997 and 1996 and
its cash flows for the nine months ended September 30, 1997 and 1996.
The accounting policies followed by the Partnership are set forth in Note
1 to the Partnership financial statements in the 1996 Griffin Real Estate
Fund-V, A Limited Partnership Form 10K.
2. RELATED PARTY TRANSACTIONS
The partners of Griffin Equity Partners and the shareholders, of Guardian
Investment Corporation, the general partners of the Partnership are also
owners and/or employees of the Griffin Companies, a Minnesota corporation.
The following is summary of fees incurred for the nine months ended
September 30, 1997 and 1996 relating to the Griffin Companies and its
affiliates:
1997 1996
---- ----
Management fees $ 161,872 $ 166,801
Supervisory fees $ 45,590 $ 64,493
3. TAXABLE INCOME
The net income shown on the statement of operations is reconciled to the
taxable income as follows:
For the Nine Months
Ended September 30,
1997 1996
---- ----
Net income per statement of operations $ 506,423 $ 133,933
Excess of book depreciation over (under)
tax depreciation (15,456) 9,161
---------- ----------
Taxable income $ 490,967 $ 143,094
========== ==========
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Griffin Real Estate Fund-V, A Limited Partnership (the "Partnership") is a
limited partnership formed in 1985 to invest in and operate income-producing
real property. The Partnership raised $19,173,000 through the sale of Limited
Partnership Interests and utilized these proceeds to acquire six real property
investments and a majority joint venture interest in one additional real
property. Prior to 1997, title to two of these properties was relinquished
through foreclosure and one was sold. The joint venture property, Ravenwood
Apartments, was sold on June 16, 1997. The sale was reported on form 8-K to the
SEC. The Partnership continues to operate its three remaining properties.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1996 for a more complete understanding of the
Partnership's financial position.
RESULTS OF OPERATIONS
The General Partner, after reasonable inquiry, is not aware of any material
factors relating to any of the Partnership's properties or the operations of the
Partnership that would cause the financial information of the Partnership not to
be indicative of future operating results or of future financial conditions.
1997 Compared to 1996
With a property sale occuring before the end of the second quarter of 1997,
results of operations are not easily comparable for the Partnership as a whole.
Comparisons are only meaningful either on a property by property basis or by
comparing the combined results of the three remaining properties.
For the third quarter, the property portfolio experienced rental rate increases
of 3%, yet an increase of approximately $69,000 in rent loss due to vacancy. A
similiar situation existed for the three quarters ended September 30, 1997
compared to 1996 where rental rate increases of nearly 3.5% were not sufficient
to offset the vacancy of nearly $95,000. All three properties have had to
struggle with a soft market with rental concessions being offered at Desert
Pines and Savannah Oaks. After some success at Desert Pines the concessions were
terminated. The market forces responsible for the vacancy situation are
concessions by the competition, low mortgage rates which spur new home buying
and, in the case of Savannah Oaks, a special effort by the Federal National
Mortgage Association to make it easier for low income and minority tenants in
the area to become home owners.
Overall, operating expenses were stable for the third quarter for the three
properties, although the water expense continued to be a concern at Savannah
Oaks which shares a common supply line with the adjoining property. In the
fourth quarter, this supply line will be separated at a cost of approximately
$14,000 which will be recovered through future savings from conservation
measures. Capital improvements during the quarter included the remodeling of two
of the thirty-four buildings at Desert Pines. The Desert Pines remodeling is an
ongoing project with nine buildings remaining.
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Partnership had cash and cash equivalents of $505,525
which will be used for working capital requirements of the Partnership and its
properties. It is anticipated that the Partnership will be able to meet current
obligations and commitments from cash on hand and from cash generated from
operations during 1997.
On July 23, 1997 distributions of $5 per Limited Partnership unit were made
representing the proceeds form the sale of Ravenwood Apartments on June 16,
1997. Future cash distributions will depend on future property operations.
OCCUPANCY TABLE
Approximate occupancy levels of the Partnership's investment property by
quarter.
1996 1997
-------------------------- --------------------------
at at
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
1. Ravenwood Apts.
Cincinnati, OH 87% 87% 87% 85% 85% * *
2. Country Club
Apartments
Anderson, SC 99% 97% 97% 98% 97% 92% 94%
3. Savannah Oaks
Apartments
Marietta, GA 97% 98% 96% 96% 97% 97% 93%
4. Desert Pines
Apartments
Tucson, AZ 94% 89% 93% 90% 90% 88% 91%
* Indicates Partnership did not own this property at the end of the quarter.
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
On September 20, 1995 Everest Investors, LLC ("Everest") filed
a lawsuit in Hennepin County Minnesota's Fourth Judicial District Court
against Griffin Equity Partners and Guardian Investment Corporation
("General Partner"), the general partner of Griffin Real Estate Fund-V,
A Limited Partnership("Partnership"). The lawsuit alleged that the
General Partner had wrongfully denied Everest access to the books and
records of the Partnership. The court granted, in part, Everest's
request for access to the books and records and ordered the General
Partner to provide Everest access to these records. The General Partner
complied with this court order. Everest continued to seek access to
additional books and records of the Partnership beyond the scope of the
court order. The General Partner vigorously defended the Partnership's
right to keep its proprietary records from being reviewed by Everest,
who has not been admitted as a limited partner of the Partnership
despite having been assigned a financial interest in 10 units by some
original limited partners. The General Partner filed for a dismissal of
the matter. The court heard arguments on September 29, 1995, October
26, 1995 and November 17, 1995. On November 27, 1995 the court
dismissed Everest's lawsuit. Everest appealed the dismissal in the
Minnesota Court of Appeals on March 12, 1996. Briefs were filed and
oral arguments were heard by the court on July 1, 1996. On September
10, 1996 the court affirmed the dismissal.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) On July 1, 1997 Form 8-K was filed to report the sale of the
Partnership's 70% interest in Ravenwood Apartments on June 16,
1997.
<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.
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
Date: November 14, 1997 By /s/ Larry D. Fransen
--------------------
Larry D. Fransen, for the
General Partner, Griffin
Equity Partners
Date: November 14, 1997 By /s/ Larry D. Fransen
--------------------
Larry D. Fransen, for the
Managing General Partner
of the General Partner
Griffin Equity Partners
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 505,525
<SECURITIES> 0
<RECEIVABLES> 256,232
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 761,757
<PP&E> 19,477,646
<DEPRECIATION> 7,366,222
<TOTAL-ASSETS> 12,873,181
<CURRENT-LIABILITIES> 344,222
<BONDS> 10,797,452
0
0
<COMMON> 0
<OTHER-SE> 1,731,507<F1>
<TOTAL-LIABILITY-AND-EQUITY> 12,873,181
<SALES> 0
<TOTAL-REVENUES> 3,594,172
<CGS> 0
<TOTAL-COSTS> 2,315,081
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 772,668
<INCOME-PRETAX> 506,423
<INCOME-TAX> 0
<INCOME-CONTINUING> 506,423
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 506,423
<EPS-PRIMARY> 13.11<F2>
<EPS-DILUTED> 0
<FN>
<F1>THIS ENTITY IS A LIMITED PARTNERSHIP. THE OTHER STOCKHOLDERS EQUITY LINE
REPRESENTS TOTAL PARTNERSHIP EQUITY.
<F2>THE EPS-PRIMARY LINE REPRESENTS NET INCOME PER LIMITED PARTNERSHIP UNIT.
</FN>
</TABLE>
