UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 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
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the act: $19,173,000
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 ____
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-K
or any amendment to this form 10-K. [ ]
Form 8-K dated July 1, 1997 is incorporated by reference in this report.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
TABLE OF CONTENTS
PART I
Item 1. Business....................................................... 1-3
Item 2. Properties...................................................... 3
Item 3. Legal Proceedings............................................... 3-4
Item 4. Submission of Matters to a Vote
of Limited Partners............................................... 4
PART II
Item 5. Market for the Partnership's Limited Partnership
Interests and Related Limited Partner Matters................... 4
Item 6. Selected Financial Data......................................... 4-5
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations................... 5-7
Item 8. Financial Statements and Supplementary Data..................... 8
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure............................. 8
PART III
Item 10. The General Partner of the Partnership......................... 8-9
Item 11. Management Remuneration and Transactions....................... 10
Item 12. Limited Partnership Ownership of Certain
Beneficial Owners and Management.............................. 10-11
Item 13. Certain Relationships and Related
Transactions.................................................. 11
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K....................................... 12
SIGNATURES ............................................................. 13
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
PART I
Item 1. Business
The registrant, Griffin Real Estate Fund-V, A Limited Partnership (the
"Partnership"), was organized on January 31, 1985 under the laws of the State of
Minnesota and became effective on April 15, 1985. The Partnership was formed by
the General Partners, Griffin Equity Partners, A Minnesota Partnership and
Guardian Investment Corporation, A Minnesota Corporation, to acquire existing,
income-producing real properties for rental purposes. On March 5, 1985 the
Partnership commenced an offering of $15,000,000 pursuant to a Registration
Statement on Form S-11 under the Securities Act of 1933. The offering terminated
March 4, 1986 upon the acceptance of 38,346 units $19,173,000).
The Partnership is engaged solely in the business of real estate investment,
and is limiting its investment to the real property acquired at its inception
plus reasonable repairs and capital improvements. The goal of these investments
is to generate both capital gain income and current income from cash flow. The
Partnership does not invest in real estate mortgages, securities of or interests
in persons primarily engaged in real estate activities, or in other securities.
A presentation of information about industry segments is not applicable and
would not be material to an understanding of the Partnership's business taken as
a whole.
The General Partner manages and controls all of the affairs of the
Partnership, including deciding when and on what terms properties should be sold
or refinanced.
As of December 31, 1997 the Partnership has made the real property
investments set forth in the following table:
Name, type of property Date of Type of
and location (a) Size Purchase Ownership (b)
---------------------- ---- -------- -------------
1. Country Club Apartments 180 units 5/14/86 Mortgage Note
Anderson, South Carolina
2. Savannah Oaks Apartments 200 units 9/30/86 Mortgage Note
Marietta, Georgia
3. Desert Pines Apartments 272 units 2/02/87 Mortgage Note
Tucson, Arizona
(a) Reference is made to Schedule III of this annual report.
(b) Reference is made to Note 3 of Notes to Financial Statements filed
with this annual report for the current outstanding principal balances
and a description of the long-term indebtedness secured by the
Partnership's real property investments;
The Partnership's real property investments are subject to competition from
similar types of properties in the vicinities in which they are located.
The Terms of Transactions between the Partnership and affiliates of the
General Partners are described in Item 11 to which reference is hereby made.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
It is the Partnership's policy to conduct its business activities in
accordance with the Partnership Agreement which may not be changed without a
vote of a majority of the Limited Partnership units outstanding.
Pursuant to the Partnership Agreement, the Partnership may not issue senior
securities, make loans to other persons, invest in the securities of other
entities for the purposes of exercising control, underwrite the securities of
others or offer securities in exchange for property.
As circumstances dictate, the Partnership has the right under the
Partnership Agreement to borrow money, and to use its investments in real
property as collateral for that debt. The amount of debt for acquisitions was
subject to a maximum of 75% loan to value. Although not required, the General
Partner intends to maintain this limit with any subsequent refinancings. Country
Club Apartments was refinanced on October 24, 1995. No other refinancings
occurred in 1997, 1996, or 1995. There is no limit on the number of mortgages
that may be taken out on any one piece of the Partnership's real properties.
The Partnership Agreement provides for the redemption of limited
partnership units under certain circumstances. In 1997, 1996, and 1995 the
Partnership redeemed zero, thirty and zero units respectively.
It is the policy of the General Partner to report on a quarterly basis to
the limited partners. Each interim report contains limited financial reporting
with a management discussion of operations and goals for the Partnership. The
annual report contains financial statements that are audited by independent
public accountants, and is accompanied by a management discussion of operations
and goals.
AVERAGE EFFECTIVE ANNUAL
RENTAL PER UNIT
RAVENWOOD SAVANNAH
COUNTRY CLUB DESERT PINES APARTMENTS OAKS
APARTMENTS APARTMENTS CINCINNATI, APARTMENTS
ANDERSON, SC TUCSON, AZ OH MARIETTA, GA
- ------------ ------------ ------------- ------------- --------------
1997 $5,284 $4,576 $4,447 $6,542
- ------------ ------------ ------------- ------------- --------------
1996 5,292 4,696 4,508 6,341
- ------------ ------------ ------------- ------------- --------------
1995 5,118 4,805 4,637 5,996
- ------------ ------------ ------------- ------------- --------------
1994 4,877 4,570 4,634 5,528
- ------------ ------------ ------------- ------------- --------------
1993 4,764 4,263 4,547 5,085
- ------------ ------------ ------------- ------------- --------------
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
SCHEDULE OF REAL
ESTATE TAXES
SAVANNAH
RAVENWOOD OAKS
COUNTRY CLUB DESERT PINES APARTMENTS APARTMENTS
APARTMENTS APARTMENTS CINCINNATI MARIETTA,
ANDERSON, SC TUCSON, AZ OH (a) GA
- --------------- ------------- ------------- ------------- -------------
1997
TAX RATE 20.85 16.94 * 11.35
ASSESSMENT $75,877 $99,037 * $56,760
- --------------- ------------- ------------- ------------- -------------
1996
TAX RATE 20.36 17.65 20.99 11.55
ASSESSMENT $73,282 $96,005 $75,889 $57,760
- --------------- ------------- ------------- ------------- -------------
1995
TAX RATE 19.67 17.57 20.57 11.56
ASSESSMENT $70,802 $92,053 $73,026 $54,902
- --------------- ------------- ------------- ------------- -------------
1994
TAX RATE 19.23 17.42 18.89 11.02
ASSESSMENT $69,245 $84,284 $66,989 $52,356
- --------------- ------------- ------------- ------------- -------------
1993
TAX RATE 19.41 18.32 18.60 10.97
ASSESSMENT $69,867 $79,286 $66,063 $52,115
- --------------- ------------- ------------- ------------- -------------
* Indicates the Partnership did not own the property at the time of
assessment.
(a) The Partnership is allocated 70% of the stated assessment. Griffin Real
Estate Fund IV, A Limited Partnership is allocated the remaining 30%.
It is the opinion of the General Partner that the Partnership's properties are
adequately covered by insurance.
Item 2. Properties
The Partnership owns the real properties referred to in Item 1 to which
reference is hereby made.
Item 3. 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.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
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 4. Submission of Matters to a Vote of Limited Partners
There were no matters submitted to a vote of the Limited Partners.
PART II
Item 5. Market for the Partnership's Limited Partnership Interests and
Related Limited Partner Matters
There are approximately 2,000 holders of record of units of the Partnership.
There is no public market for units and it is not anticipated that a public
market for units will develop. The General Partner will not redeem or repurchase
units except upon death of the original limited partner.
Reference is made to Item 6 in this annual report for a discussion of cash
distributions made to the Limited Partners.
Item 6. Selected Financial Data
Griffin Real Estate Fund-V, A Limited Partnership
For the Years Ended December 31, 1997, 1996, 1995, 1994, and 1993
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Total revenues $ 4,537,913 $ 4,198,088 $ 4,412,009 $ 4,006,285 $ 3,773,002
Net income (loss) 468,804 (190,249) (127,619) 111,727 578,873
Net income (loss) per
limited partner
unit (c) 6.63 (4.92) (3.30) 2.89 14.96
Total assets 12,734,515 14,871,592 15,201,548 15,453,497 15,555,146
Mortgage notes
payable 10,761,037 13,025,497 13,171,774 13,055,496 13,117,472
</TABLE>
(a) The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing in Exhibit 13 in this
annual report.
(b) Cash distributions of $55 per limited partnership unit have been made to the
Limited Partners since the inception of the Partnership. These distributions
have not resulted in taxable income to such Limited Partners and have
therefore all represented a return of capital under Generally Accepted
Accounting Principles. Each Partner's taxable income (or loss) from the
Partnership in each year is equal to his allocable share of the taxable
income (loss) of the Partnership, without regard to cash generated or
distributed by the Partnership. The Partnership's taxable income and tax
losses (including net income and losses from operations but not interest
income earned on cash reserves and investments) as well as profit or loss on
the sale of properties will constitute passive activity income and losses
under the 1986 Act with respect to those taxpayers to which the passive
activity rules apply.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
(c) The net loss and cash distribution per limited partnership unit are based
upon the weighted average number of limited partnership units outstanding
during the period.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
Summary of Operations - 1997 Compared to 1996
In 1997 the General Partner began marketing the properties for sale
resulting in the sale of one of the four apartment communities. The
remaining three continue to be marketed for sale. On June 16, 1997 the
Partnership sold the Ravenwood Apartments. Therefore comparison of results
from one year to the next is not possible for the Partnership taken as
whole. The following discussion is therefore limited to the three remaining
properties that were held for the entire year.
Country Club Apartments:
After a strong 1996, physical occupancy decreased from 98% to 90% by
December 31, 1997. Rental rates for the year increased 3.5%, but with the
higher vacancies total revenues decreased by .9%.
The 1997 operating expenses were mostly consistent with 1996 levels,
however painting and decorating expense increased by $4,792 from $20,597 in
1996 to $25,389 in 1997. This increase is the result of the higher vacancy
rates and the expenses associated with getting apartments rent ready.
Insurance also declined by $14,823 from $26,629 in 1996 to $11,806 in 1997
due to a risk re-evaluation by the insurance carrier. Capital expenditures
of $29,244 were for exterior wood repairs in 1997.
Desert Pines Apartments:
Physical occupancy was steady throughout 1997 at or about 90%, finishing
the year at 91%. Rental rates increased 1.8% while vacancies showed an
increase over 1996. The net result was a decrease in total revenues of 2.6%
from 1996 to 1997.
Most 1997 operating expenses were similar to the amounts spent in 1996
with the exception of repairs and maintenance. There was a drop of $52,091
in repairs and maintenance expense from $222,464 in 1996 to $170,373 in
1997. The decrease was mainly due to an unusually high amount spent in 1996
for carpet, appliances and unit repairs. Capital expenditures of $255,388
were for sidewalk and concrete repairs, roof repairs, exterior paint, and
siding replacement.
Savannah Oaks Apartments:
Physical occupancy in 1997 was 97% after the first two quarters, just as
it had been for most of 1996. By the end of the third quarter, occupancy had
decreased to 93% and stayed there through the rest of 1997. Rental rates
increased 4.6% in 1997 but vacancies increased 26.8%. The net effect was an
increase in total revenues of 3.1% for 1997 over 1996.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
The 1997 utilities expense was $42,708 higher than in 1996. The amount
went from $133,718 in 1996 to $176,426 in 1997 due to an increase in the
cost of water. New water usage meters installed by the city have provided
readings much higher than the old meters. An investigation is underway to
explain the change. Meanwhile, the common water line shared with an adjacent
property is being split off so that neither property will pay more or less
that its share. Repairs and maintenance increased $18,650 from $225,366 in
1996 to $244,016 in 1997. This increase is mainly due to increased carpet
and appliance replacement caused by increased tenant turnover. Capital
expenditures of $56,910 were used for repairs to sidewalks, roofs and
interior walls and floors.
YEAR 2000
The year 2000 compliance issue concerns the inability of computerized
information systems to accurately calculate, store or use a date after 1999.
This could result in a system failure or miscalculations causing disruptions
of operations. The General Partner is currently evaluating the accounting
software to find out if a Year 2000 problem exists. If the results of that
evaluation show that there is a problem, there will be conversion to another
software that is widely used in the real estate industry, is readily
available and is Year 2000 compliant. Such a conversion, if necessary, would
occur in 1999. The General Partner's current estimate is that the costs
associated with the Year 2000 issue, and the consequences of incomplete or
untimely resolution of the Year 2000 issue, will not have a material adverse
affect on the results of operations or financial position of the Partnership
in any given year.
Summary of Operations - 1996 Compared to 1995
Rental rates of the property portfolio increased an average of 4.1%. Rental
rate increases at individual properties ranged from a decline of 1.2% at
Ravenwood Apartments to 7.4% at Savannah Oaks Apartments. The Ravenwood rental
rate decline was a result of holding on rental rates and foregoing the
anticipated market rate increases. Occupancy average for the entire property
portfolio declined in 1996 to 93.1% compared to 95.5% for 1995. Occupancy at
Country Club Apartments and Savannah Oaks Apartments declined slightly, but
remained in the high 90% range. Desert Pines occupancy continued the trend
established at the end of 1995 and declined from 96.3% to 91.5%. Ravenwood
Apartments occupancy also declined from 88.1% in 1995 to 86.7% in 1996. The
weakness in the Ravenwood rental market area from 1995 remained throughout 1996.
Although vacancies increased by $120,078 from 1995 to 1996, these were more than
offset by rental increases resulting in an increase of net rents of $53,264.
Excluding the $246,635 of recognition of deferred revenue in 1995, total
revenues increased for 1996 compared to 1995 by $32,714.
Total expenses for 1996 compared to 1995 decreased by $151,291 or 3.3%. This
was essentially due to a substantial decline in interest expense of $171,317.
Individually interest expense decreased at all four properties, the largest
decrease coming at Country Club Apartments with a decrease of interest expense
of $120,066. This decrease was a result of refinancing the mortgage debt in
October 1995 described below. Savannah Oaks Apartments interest expense declined
$44,109 as a result of the loan modification in June 1995. A decrease in
interest expense at Desert Pines Apartments and Ravenwood Apartments totaled
$7,144 which resulted from a slight decline in 1996 of the adjustable interest
rates.
Excluding the recognition of deferred revenue in 1995 the 1996 revenue
increase of $32,714 and the decrease in operating expenses of $151,291 resulted
in an overall decrease of $184,005 in the net loss for the Partnership.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
LIQUIDITY
The Partnership has approximately $575,355 of cash reserves on hand at
December 31, 1997. This should provide the Partnership with ample liquidity with
which to operate the Partnership and provide funds for capital improvements to
the properties in the near term and into the future. Sales proceeds of $5 per
unit were distributed following the sale of Ravenwood Apartments in 1997. Future
distributions will depend on the cash flow from property operations and from
property sales.
Although there can be no assurance that sales will ultimately be completed,
the Partnership intends to sell the Country Club, Desert Pines and Savannah Oaks
Apartments during 1998. Upon a successful completion of each sale, the proceeds
will be distributed.
OCCUPANCY TABLE
Approximate occupancy levels of the Partnership's investment property by
quarter.
Country Club Desert Pines Savannah Oaks Ravenwood
Apartments Apartments Apartments Apartments
Anderson, SC Tucson, AZ Marietta, GA Cincinnati, OH
3/31/97 97% 90% 97% 85%
6/30/97 92% 88% 97% *
9/30/97 94% 91% 93% *
12/31/97 90% 91% 93% *
3/31/96 99% 94% 97% 87%
6/30/96 97% 89% 98% 87%
9/30/96 97% 93% 96% 87%
12/31/96 98% 90% 96% 85%
3/31/95 97% 99% 97% 86%
6/30/95 98% 95% 99% 91%
9/30/95 98% 96% 99% 91%
12/31/95 99% 95% 97% 86%
3/31/94 93% 98% 100% 91%
6/30/94 98% 95% 95% 92%
9/30/94 98% 96% 99% 90%
12/31/94 98% 96% 99% 90%
3/31/93 98% 96% 94% 92%
6/30/93 99% 92% 92% 96%
9/30/93 99% 96% 96% 94%
12/31/93 96% 97% 97% 90%
* Indicates the Partnership did not own the property at the end of the
quarter.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
Item 8. Financial Statements and Supplementary Data
The Table of Contents to Financial Statements, Financial Statements and
Supplementary Data listed in Item 14 are referenced herein as included in the
exhibits attached to this report and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
There have been no changes in independent auditors and as of the date of
the filing, there were no material disagreements with the current independent
auditors (Larson, Allen, Weishair & Co.,LLP) regarding any of the following:
1) Accounting principles or practices
2) Extent and quality of financial statement disclosure
3) Auditing scope or procedures
PART III
Item 10. The General Partner of the Partnership
The General Partners of the Partnership are Griffin Equity Partners, a
Minnesota general partnership formed in October of 1984 by the owners of Griffin
Companies to act, along with Guardian Investment Corporation, a Minnesota
corporation and a wholly owned subsidiary of Griffin Companies ("General
Partner"), as the General Partner for various limited partnerships sponsored by
Griffin Companies. As General Partner, Griffin Equity Partners and Guardian
Investment Corporation manage and control the affairs of the Partnership and
have general responsibility and authority in all matters affecting its business.
Griffin Companies, A Minnesota Corporation organized in 1969, and its
affiliates are engaged in real estate brokerage, real estate investment
counseling, and management of commercial and multi-family real estate. Griffin
Companies and its Affiliates have organized and served as general partners in
thirty-two privately placed partnerships and six publicly offered partnerships,
which were formed for the purpose of real estate investment.
The General Partner and its Affiliates provide executive, supervisory
and certain administrative services for the Partnership's operations and the
General Partners are responsible for determining whether, when and on what terms
properties should be sold or refinanced. In addition, the books and records of
the Partnership are maintained by Griffin Companies, and are subject to audit by
independent certified public accountants. The principals of the General Partner
intend to devote only as much of their time to the business of the Partnership
as they determine to be reasonably required. Limited Partners have no right to
participate in the management of the Partnership.
The identity and business experience of each of the partners of the
General Partner is as follows:
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
Larry D. Fransen (age 57) founded Griffin Companies in 1969. He is a
Director and senior officer of each of its operating entities, in addition to
serving as Chairman. Since 1969, he has acted as general partner in many
partnerships investing in apartments, office buildings, warehouses, land and
motels.
Acting on behalf of Griffin Companies' clients, Mr. Fransen has
negotiated the acquisition and disposition of more than one billion dollars in
investment real estate properties nationwide.
He is a member of numerous professional organizations, including the
Greater Minneapolis Area Board of Realtors, the Minnesota Association of
Realtors, the National Association of Realtors (NAR), Minnesota Multi Housing
Association (MHA), National Multi-Housing Council (NMHC), the National Apartment
Association (NAA), Commercial and Investment Institute, National Association of
Real Estate Investment Trusts (NAREIT), and the Pension Real Estate Association
(PREA).
Mr. Fransen holds the CCIM (Certified Commercial Investment Member)
designation of the Commercial Investment Institute, as well as the SRS
(Specialist in Real Estate Securities) designation. For 13 years, he was an
instructor for the Commercial Investment Institute and served as the group's
national president in 1983. He has been awarded the Omega Tau Rho Medal of
Service for his years of service to the National Association of Realtors.
Robert S. Dunbar (58) is Chief Executive Officer of Griffin Companies. Following
several years with Control Data Corporation where he held various administrative
and management positions, he was named Executive Vice President of the U.S.
Jaycees in 1970, with responsibility for planning, budgeting and administration
of the national organization. In 1972, he joined Ed. Phillips & Sons Company in
Minneapolis, Minnesota as a sales manager. In 1975 he was elected President of
Westland Capital Corporation, a Minneapolis venture capital firm, where he was
responsible for analyzing various companies for potential investment
opportunities. He joined Griffin Companies in 1977.
Mr. Dunbar is a member of the Institute of Real Estate Management (IREM)
and the Minnesota Multi Housing Association (MHA). He holds the Certified
Apartment Manager (CAM) designation of the National Apartment Association and is
a Certified Property Manager (CPM) as designated by the National Association of
Realtors. Mr. Dunbar also holds a Minnesota Real Estate Broker's License and has
completed the necessary course work for their prestigious Certified Commercial
Investment Member (CCIM) designation conferred by the Commercial Investment
Institute. He is a member of the national Multi-Housing Council and The
Executive Committee (T.E.C.). He also serves on the Board of Trustees of
Northwestern College.
Messrs. Fransen and Dunbar together own 100% of the issued and
outstanding shares of common stock of Griffin Companies. The principals of the
General Partners represent and warrant that they have a collective personal net
worth on an unaudited cost basis and on an unaudited estimated current value
basis (measured as total assets at estimated current value less all liabilities)
in excess of $1,500,000. The assets of the principals of the General Partners
are largely invested in interests in real property and in Griffin Companies.
Therefore, it may be difficult to precisely value such assets or to liquidate
such assets expeditiously or on terms favorable to the seller.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
Item 11. Management Remuneration and Transactions
Principals of the General Partner receive no current or proposed direct
remuneration in such capacity. The Partnership is required to pay a management
fee to Griffin Companies and the General Partner is entitled to receive a share
of cash distributions, when and as cash distributions are made to the Limited
Partners, and a share of profits or losses as described below:
* Profits, losses, other than from refinancing or from the sale of
Partnership properties, are allocated 99% to the limited partners
and 1% to the General Partner.
* Cash flow distributions, other than from refinancing or from the
sale of Partnership properties, are allocated 95% to the limited
partners and 5% to the General Partner.
* Net proceeds from refinancing or from the sale of property other
than upon liquidation, less any necessary liability reserves or debt
payments, will be distributed in the following order subject to the
General Partners receiving at least 1% of the distributions:
** First, to the limited partners to the extent that prior
distributions are less than the original capital contribution plus
6% per annum (as defined in the Partnership Agreement);
** Second, any unpaid real estate commissions due to the General
Partner on the resale of the Partnership properties;
** Third, any remaining balance, 85% to the limited partners and 15% to
the General Partner.
The Partnership is entitled to engage in various transactions involving
affiliates of the General Partner of the Partnership.
Griffin Companies ("Griffin"), an affiliate of the General Partner, may
be reimbursed for direct expenses relating to the administration of the
Partnership and operation of the Partnership real property investments. Griffin
received approximately $16,021, $13,868 and $18,504 in 1997, 1996 and 1995
respectively, for these expenses.
Reference is made to Note 5 of Notes to Financial Statements filed with
this annual report for a description of related party transactions.
Item 12. Limited Partnership Ownership of Certain Beneficial Owners and
Management
No person or any "group" is known by the Partnership to own beneficially
more than 5% of the outstanding units of the Partnership.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
The individual principals of the General Partner as a group have the following
interest in the Partnership:
Amount and Nature Percent of Class
of Beneficial Outstanding at
Title of Class Ownership December 31,1997
-------------- --------- ----------------
Limited Partnership Units 100 units purchased at .3%
$500 per unit
No principal of the General Partner possesses a right to acquire
beneficial ownership of interest of the Partnership.
There exists no arrangement, known to the Partnership, the operation of
which may at subsequent date result in a change in control of the Partnership.
Item 13. Certain Relationships and Related Transactions
The partners of Griffin Equity Partners, and the shareholder of Guardian
Investment Corporation, the General Partner of the Partnership, are also owners
and employees of Griffin Companies, a Minnesota Corporation. Accounts payable -
affiliates consists of unpaid management fees to and advances from Griffin
Companies The following is a summary of approximate fees incurred for the years
ended December 31:
1997 1996 1995
---- ---- ----
Property management fees $ 209,951 $ 221,068 $ 222,740
Major improvement
supervisory fees 57,649 83,307 78,018
On April 26, 1985, Griffin Real Estate Fund-V entered into a joint
venture with Griffin Real Estate Fund-IV for the purpose of purchasing Ravenwood
Apartments, with Griffin Real Estate Fund-V designated as the managing partner.
Griffin Real Estate Fund-IV contributed $330,000 (30%) and Griffin Real Estate
Fund-V contributed $770,000 (70%) to the venture. All allocations of cash flow,
tax consequences, expenses, and contributions were in the ratio of 30% to 70%.
There are no remunerations between Griffin Real Estate Fund-IV and Griffin Real
Estate Fund-V in relation to the Ravenwood Joint Venture. After the sale of
Ravenwood Apartments on June 16, 1997, the joint venture terminated as of
December 31, 1997.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
The following documents are filed as part of this report:
Exhibit 13: Financial Statements and Schedules.
Exhibit 27: Financial Data Schedule
An 8-K was filed on July 1, 1997 in regards to the sale of Ravenwood
Apartments on June 16, 1997. Proforma Financial Information was included with
this filing. No annual report or proxy material for the fiscal year 1997 has
been sent to the Partners of the Partnership. An annual report will be sent to
the Partners subsequent to this filing substantially similar to this form 10K.
<PAGE>
GRIFFIN REAL ESTATE FUND-V, A LIMITED PARTNERSHIP
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: March 30, 1998 Griffin Real Estate Fund-V,
A Limited Partnership
By: Larry Fransen \s\
-----------------
Larry Fransen
for the General Partner
Griffin Equity Partners
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
Report has been signed below by the following person on behalf of the Registrant
and in the capacity and on the date indicated.
Dated: March 30, 1998 By: Larry Fransen \s\
-----------------
Larry Fransen
Managing General Partner
of the General Partner
Griffin Equity Partners
EXHIBIT 13
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
INCLUDED IN ANNUAL REPORT (FORM 10-K)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
TABLE OF CONTENTS
Page
Independent Auditor's Report............................................. 1
Balance Sheets, December 31, 1997 and 1996............................... 2
Statements of Operations for the Years Ended
December 31, 1997, 1996 and 1995......................................... 3
Statements of Cash Flows for the Years
Ended December 31, 1997, 1996 and 1995................................... 4
Statements of Changes in Partners' Equity
for the Years Ended December 31, 1997, 1996 and 1995..................... 5
Notes to Financial Statements............................................ 6-11
Financial Statement Schedules............................................ 12
III Real Estate and Accumulated Depreciation,
December 31, 1997.............................................. 12
All schedules other than those indicated in the Table of Contents have been
omitted as the required information is inapplicable or the information is
presented in the financial statements or related notes.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Griffin Real Estate Fund-V,
A Limited Partnership
Minneapolis, Minnesota
We have audited the accompanying balance sheets of Griffin Real Estate Fund-V, A
Limited Partnership, as of December 31, 1997 and 1996, and the related
statements of operations, changes in partners' equity (deficit), and cash flows
for each of the years in the three-year period ended December 31, 1997. Our
audits also included the financial statement schedules listed in the table of
contents at Exhibit 13. These financial statements and financial statement
schedules are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
resonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statments. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Griffin Real Estate Fund-V, A
Limited Partnership, as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1997 in conformity with generally accepted accounting
principles. Also, in our opinion, the financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
LARSON, ALLEN, WEISHAIR & CO., LLP
Minneapolis, Minnesota
March 10, 1998
-1-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
1997 1996
------------ ------------
ASSETS
Cash and cash equivalents $ 575,355 $ 450,906
Escrow deposits 34,853 200,490
Receivables and other assets 33,813 41,527
------------ ------------
Total 644,021 692,923
------------ ------------
PROPERTY AND EQUIPMENT:
Land 2,724,000 3,046,000
Buildings and improvements 15,460,116 17,646,870
Furniture and equipment 1,313,087 1,592,170
------------ ------------
Total 19,497,203 22,285,040
Less accumulated depreciation 7,528,717 8,325,543
------------ ------------
Property and equipment - net 11,968,486 13,959,497
------------ ------------
Deferred expenses (net of accumulated
amortization - 1997, $218,073;
1996, $212,916) 122,008 219,172
------------ ------------
TOTAL ASSETS $ 12,734,515 $ 14,871,592
============ ============
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Accounts payable:
Affiliate $ 1,422 $ 4,129
Other 58,016 64,217
Security deposits 110,468 125,235
Accrued expenses:
Real estate taxes 49,519 156,023
Interest 60,165 78,245
Mortgage notes payable 10,761,037 13,025,497
------------ ------------
TOTAL LIABILITIES 11,040,627 13,453,346
------------ ------------
PARTNERS' EQUITY:
General Partner 2,560 (210,793)
Limited Partners 1,691,328 1,629,039
------------ ------------
Total Partners' Equity 1,693,888 1,418,246
------------ ------------
TOTAL LIABILITIES AND PARTNERS'
EQUITY $ 12,734,515 $ 14,871,592
============ ============
See Notes to Financial Statements
-2-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES:
Rent (less vacancies:
1997, $362,886; 1996, $303,971;
1995, $183,893) $ 3,767,882 $ 4,095,552 $ 4,042,288
Interest 25,144 21,615 32,823
Recognition of deferred revenue -- -- 246,635
Gain on sale of property
and equipment 673,909 -- --
Other 70,978 80,921 90,263
----------- ----------- -----------
Total Revenues 4,537,913 4,198,088 4,412,009
----------- ----------- -----------
EXPENSES:
Interest 1,025,494 1,136,293 1,307,610
Depreciation and amortization 775,133 774,243 747,572
Real estate taxes 226,621 292,829 265,812
Repairs and maintenance 606,816 659,340 670,600
Utilities 425,709 409,344 374,635
Salaries and employee benefits 535,187 604,706 606,840
Management fees:
Related parties 209,951 221,068 222,740
Administrative 134,295 153,064 181,500
Insurance 97,269 107,848 94,854
Bad debts 31,589 27,900 64,025
Other 1,045 1,702 3,440
----------- ----------- -----------
Total expenses 4,069,109 4,388,337 4,539,628
----------- ----------- -----------
NET INCOME (LOSS) $ 468,804 $ (190,249) $ (127,619)
=========== =========== ===========
NET INCOME (LOSS) ALLOCATED
TO GENERAL PARTNERS $ 215,285 $ (1,902) $ (1,276)
=========== =========== ===========
NET INCOME (LOSS) ALLOCATED
TO LIMITED PARTNERS $ 253,519 $ (188,347) $ (126,343)
=========== =========== ===========
PER UNIT:
NET INCOME (LOSS) $ 6.63 $ (4.92) $ (3.30)
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
-3-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 468,804 $ (190,249) $ (127,619)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Gain on sale of property
and equipment (673,909) -- --
Recognition of deferred revenue -- -- (246,635)
Depreciation and amortization 775,133 774,243 747,572
Note receivable amortization -- -- (1,473)
Write-off of notes receivable -- -- 30,000
Decrease (increase) in:
Escrow deposits 165,637 66,333 70,728
Receivables and other assets 7,714 1,564 (1,063)
Increase (decrease) in:
Accounts payable (8,908) (43,921) (19,091)
Security deposits (14,767) 7,548 5,175
Accrued expenses (124,584) 56,815 19,944
----------- ----------- -----------
Net cash provided by
operating activities 595,120 672,333 477,538
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property (341,542) (562,583) (396,852)
Proceeds from sale of property
and equipment 2,328,493 -- --
Proceeds from Note Receivable -- -- 310,466
----------- ----------- -----------
Net cash provided (used) by
investing activities 1,986,951 (562,583) (86,386)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of finance fees -- -- (124,014)
Distributions to partners (193,162) -- --
Principal payments on mortgage
notes payable (2,264,460) (146,277) (72,722)
Redemption of Partnership Units -- (13,873) --
----------- ----------- -----------
Net cash used by
financing activities (2,457,622) (160,150) (196,736)
----------- ----------- -----------
INCREASE (DECREASE) IN CASH 124,449 (50,400) 194,416
CASH AND CASH EQUIVALENTS
- BEGINNING OF YEAR 450,906 501,306 306,890
----------- ----------- -----------
CASH AND CASH EQUIVALENTS
- END OF YEAR $ 575,355 $ 450,906 $ 501,306
=========== =========== ===========
CASH PAID FOR INTEREST $ 1,043,574 $ 1,137,764 $ 1,283,734
=========== =========== ===========
SUMMARY OF NON-CASH TRANSACTIONS:
Proceeds from refinancing of
mortgage note $ -- $ -- $ 3,245,000
Payoff of mortgage note -- -- (3,056,000)
Loan proceeds paid to
fund escrows -- -- (189,000)
----------- ----------- -----------
$ -- $ -- $ --
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
-4-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNERS' PARTNERS'
EQUITY EQUITY
(DEFICIT) (DEFICIT) TOTAL
----------- ----------- -----------
<S> <C> <C> <C>
PARTNERS' EQUITY (DEFICIT)
DECEMBER 31, 1994 $ (207,615) $ 1,957,602 $ 1,749,987
NET LOSS (1,276) (126,343) (127,619)
----------- ----------- -----------
PARTNERS' EQUITY (DEFICIT)
DECEMBER 31, 1995 (208,891) 1,831,259 1,622,368
NET LOSS (1,902) (188,347) (190,249)
REDEMPTION OF THIRTY
PARTNERSHIP UNITS -- (13,873) (13,873)
----------- ----------- -----------
PARTNERS' EQUITY (DEFICIT)
DECEMBER 31, 1996 (210,793) 1,629,039 1,418,246
NET INCOME 215,285 253,519 468,804
DISTRIBUTIONS (1,932) (191,230) (193,162)
----------- ----------- -----------
PARTNERS' EQUITY
DECEMBER 31, 1997 $ 2,560 $ 1,691,328 $ 1,693,888
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
-5-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Partnership - Griffin Real Estate Fund-V, A Limited
Partnership (the Partnership), was organized 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 at a cost of
$500 per unit. At December 31, 1997 there are 38,346 limited
partnership units authorized and 38,246 limited partnership units
outstanding.
Sale of Property - Griffin Ravenwood Joint Venture sold Ravenwood
Apartments on June 16, 1997 for $3,450,000. The Partnership's share of
this sales price was $2,415,000. Closing costs of $123,579 were
associated with this sale, of which the Partnership's obligation was
$86,505.
Statements of Cash Flows - For the purpose of the statements of cash
flows, the Partnership considers all highly liquid debt instruments
with an original maturity of three months or less to be cash
equivalents. Cash and cash equivalents of $575,355 and $450,906 at
December 31, 1997 and 1996 respectively, consist of bank deposits and
government money market portfolios with banks and are recorded at cost
which approximates market value. The Partnership places its temporary
cash investments with high credit quality financial institutions. At
times such investments may be in excess of the FDIC insurance limit.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. Estimates also
affect the reported amounts of revenue and expense during the reported
period. Actual results could differ from those estimates.
Financial Instruments - The carrying amounts for all financial instruments
approximates fair value. The carrying amounts for cash, receivables,
accounts payable and accrued liabilities, and loans payable approximate
fair value because of the short maturity of these instruments. The fair
value of long-term debt approximates the current rates at which the
Partnership could borrow funds with similar remaining maturities.
Properties and Depreciation - Properties are stated at cost including
capitalized acquisition fees and are depreciated using a straight-line
method over the estimated useful lives of the related assets
(buildings, 25 years; land improvements, 10-15 years; furnishings and
equipment, 5 years). For income tax purposes, the Partnership
depreciates the buildings over 15 to 19 years using the Accelerated
Cost Recovery System. Building improvements made subsequent to January
1, 1987 are depreciated over 27.5 years using the Modified Cost
Recovery System for tax purposes.
Escrow Deposits - The escrow deposits consist of funds held for future
payment of real estate taxes, insurance premiums and replacement
reserves for major expenditures.
Leases - Apartment leases are generally renewable on a six month to one
year basis.
Deferred Expenses - These are primarily financing costs and are amortized
over the term of the related debt on a straight-line basis.
-6-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
Offering Costs - Expenses incurred in connection with the registration and
offering of the partnership units syndication costs, including selling
commissions and advertising, are recorded as a reduction of Partners'
Equity. Such costs are not deductible for income tax purposes by the
Partnership nor its partners.
Income Taxes - The financial statements of the Partnership do not include
a provision for income taxes as the income and losses of the
Partnership are allocated to the individual partners for inclusion in
their income tax returns.
Net Income (Loss) Per Limited Partnership Unit - The net income (loss) per
limited partnership unit is computed by dividing the net income (loss)
allocated to limited partners by the weighted average number of limited
partnership units outstanding during the year.
2. ORGANIZATION
The Partnership was formed by the General Partner, Griffin Equity
Partners, a Minnesota Partnership, and Guardian Investment Corporation,
a Minnesota Corporation, to acquire existing, income-producing real
properties for rental purposes. The General Partner is not required to
make any capital contributions to the Partnership.
The Limited Partnership Agreement and Certificate of Limited Partnership
(Partnership Agreement) contains certain provisions, among others,
described as follows:
* The management and general responsibility of operating the Partnership
business shall be vested exclusively in the General Partner.
* Profits and losses, other than from refinancing or from the sale of
Partnership properties, are allocated 99% to the limited partners
and 1% to the General Partner.
* Cash flow distributions, other than from refinancing or from the sale
of Partnership properties, are allocated 95% to the limited partners
and 5% to the General Partner.
* Net proceeds from refinancing or from the sale of property other than
upon liquidation, less any necessary liability reserves or debt
payments, will be distributed in the following order subject to the
General Partner receiving at least 1% of the distributions:
** First, to the limited partners to the extent that prior distributions
are less than the original capital contribution plus 6% per annum
(as defined in the Partnership Agreement);
** Second, any unpaid real estate commissions due to the General Partner
on the resale of the Partnership properties;
-7-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 1997, 1996 AND 1995
** Third, any remaining balance, 85% to the limited partners and 15% to
the General Partner.
* The Partnership will terminate on December 31, 2025 or earlier upon the
sale of substantially all of the properties or the occurrence of
certain other events as stated in the Partnership Agreement.
3. MORTGAGE NOTES PAYABLE
Mortgage notes payable consist of the following at December 31:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Mortgage note (Country Club Apartments)
monthly installments of principal and
interest (7.936% at December 31, 1997)
due November 1, 2005 $3,151,606 $ 3,198,357
Mortgage note (Savannah Oaks Apartments)
monthly installments of principal and
interest (9.25% at December 31, 1997)
due February 15, 2000 4,242,440 4,295,712
Mortgage note (Desert Pines Apartments),
varying monthly installments of principal
and interest (8.35% at December 31, 1997)
due October 1998 3,366,991 3,407,907
Mortgage Note (Ravenwood Apartments)
monthly installments of principal and interest
(9.225% at June 16, 1997).
The Partnership's share of the debt
was 70% (See note 9) - 2,123,521
----------- -----------
Total mortgage notes payable $10,761,037 $13,025,497
=========== ===========
</TABLE>
All property is pledged as collateral to the mortgage notes payable.
Future principal maturities are as follows:
1998 $ 3,476,004
1999 118,816
2000 4,179,246
2001 64,150
2002 69,430
Later 2,853,391
-----------
Total $10,761,037
===========
On October 24, 1995, the Partnership refinanced Country Club Apartments.
The refinanced loan of $3,245,000 requires monthly installments of
principal and interest ($24,908 beginning December 1, 1995) with
payments based on a fixed interest rate of 7.936% until it matures on
November 1, 2005. This loan is subject to a yield maintenance
prepayment penalty with a minimum 1% prepayment penalty until the final
90 days of the loan, at which time there is no penalty.
-8-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
On June 16, 1995 the Savannah Oaks Mortgage note was modified for the
third time to allow interest only payments of $40,951 at 11.2625%
through July 15, 1995 at which time the interest rate was changed to
9.25%. On August 15, 1995, a new monthly payment of principal and
interest of $37,367 began and continues to the new maturity date of
February 15, 2000. All cash flow after payment of normal operating
expenses and debt service were placed in an escrow account for future
capital improvements as a result of Savannah Oaks second mortgage note
modification during January 1993.
The Ravenwood loan of $3,105,500 required monthly installments of
principal and interest of $20,870 beginning February 1, 1994 with
possible interest rate adjustments every six months limited to 1% per
adjustment date. This mortgage note was paid off upon the sale of
Ravenwood Apartments on June 16, 1997. (The Partnership share of the
debt is 70% -see note 9).
All of the above debt is non-recourse to the individual partners.
4. FORECLOSURE
In September 1991, a foreclosure action in relation to Lantern Square
Apartments was commenced against the Partnership by the second mortgage
holder. An agreement was reached whereby the Partnership transferred
title to the property and was relieved of all liabilities related to
the property. In addition, the Partnership received a note receivable
from the second mortgage holder for $354,000 secured by a mortgage on
the property. The note called for interest to accrue at 2% from October
1, 1991 through October 1, 1993, with such interest to be added to the
principal balance. Thereafter, the Partnership was to receive monthly
interest only payments at varying rates until the note matured on June
20, 1995. This note was discounted at December 31, 1994 and 1993 to
$246,635 and $295,000, respectively, to reflect prevailing market
interest rates. Amortization of $1,473 and $11,698 was included in
interest income at December 31, 1995 and 1994 respectively. The
foreclosure resulted in $295,000 of deferred revenue and an
extraordinary loss of $72,488.
During January, 1995, the Partnership received payment on this note
receivable. Due to the note repayment prior to the maturity date, a
discount of $48,365 was given. The note receivable balance and the
related deferred revenue at December 31, 1994 reflected this discount.
Deferred revenue in the amount of $246,635 has been recognized in 1995.
-9-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
5. RELATED PARTY TRANSACTIONS
The partners of Griffin Equity Partners and the shareholder of Guardian
Investment Corporation, the general partners of the Partnership, are
also owners and employees of Griffin Companies, a Minnesota
corporation. Accounts payable - affiliates consists of unpaid
management fees to and advances from Griffin Companies. The following
is a summary of approximate fees incurred for the years ended December
31:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Property management fees $ 209,951 $ 221,068 $ 222,740
Major improvement
supervisory fees 57,649 83,307 78,018
</TABLE>
6. PARTNERS' EQUITY (DEFICIT) RECONCILIATION
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Equity per financial statements $ 1,693,888 $ 1,418,246 $ 1,622,368
Cumulative excess of tax
depreciation over financial
statement depreciation (1,700,645) (2,355,413) (2,338,483)
Accrued real estate taxes not
deducted for tax purposes - 80,693 25,531
Prepaid rent recognized as
income for tax purposes 6,804 12,233 12,038
----------- ---------- -----------
Equity (deficit) per tax return $ 47 $ (844,241) $ (678,546)
=========== =========== ===========
</TABLE>
7. TAXABLE INCOME (LOSS)
The net income (loss) shown on the financial statements is reconciled to
the taxable loss as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Net income (loss) per
financial statements $ 468,804 $ (190,249) $ (127,619)
Tax depreciation in excess of
financial statement depreciation (18,134) (16,930) (24,586)
Gain on sale of property and
equipment for tax purposes in
excess of financial statement gain 672,903 - -
Accrued real estate taxes not
deducted for tax purposes - 80,693 25,531
Tax deduction for real estate
taxes in excess of financial
statement expense (80,693) (25,531) (23,086)
Additional interest income on
note receivable for tax purposes - - 48,198
Other
(5,430) 195 1,064
----------- ----------- -----------
Taxable Income (loss) $ 1,037,450 $ (151,822) $ (100,498)
=========== =========== ===========
</TABLE>
-10-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
8. JOINT VENTURE
On April 26, 1985, Griffin Real Estate Fund-V entered into a joint venture
with Griffin Real Estate Fund-IV for the purpose of purchasing
Ravenwood Apartments, with Griffin Real Estate Fund-V designated as the
managing partner. Griffin Real Estate Fund-IV contributed $330,000
(30%) and Griffin Real Estate Fund-V contributed $770,000 (70%) to the
venture. All allocations of cash flow, tax consequences, expenses, and
contributions are in the ratio of 30% to 70%. After the sale of
Ravenwood Apartments on June 16, 1997, the joint venture terminated as
of December 31, 1997.
Summarized financial information for the Ravenwood Joint Venture for the
years ended December 31,:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Balance Sheet-
Property and equipment - net $ -- $ 2,432,944 $ 2,587,018
Other Assets -- 253,408 259,306
----------- ----------- -----------
Total Assets $ -- $ 2,686,352 $ 2,846,324
=========== =========== ===========
Mortgage notes payable $ -- $ 3,033,601 $ 3,057,287
Other liabilities -- 146,975 142,275
Partners' deficit -- (494,224) (353,238)
----------- ----------- -----------
Total Liabilities and
Partners' Deficit $ -- $ 2,686,352 $ 2,846,324
=========== =========== ===========
Statements of Operations
Operating revenues $ 1,361,033 $ 885,376 $ 908,746
Operating expenses 567,307 1,056,362 1,077,734
----------- ----------- -----------
Net Income (Loss) $ 793,726 $ (170,986) $ (168,988)
=========== =========== ===========
</TABLE>
The Partnership accounted for its 70% interest in the joint venture by including
its 70% share of the joint venture assets, liabilities and operations in the
Partnership financial statements. Such pro rata accounting was appropriate since
the controlling majority of each of the general partners of the joint venture
owners consisted of the same individuals.
-11-
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Costs
Capitalized
Subsequent
Initial Cost to to Gross Amount at Which Carried
Partnership (a) Acquisition at Close of Period (b) (c)
----------------------------------- ----------------------------------- Date
Bldgs/ Land/Bldg Buildings Accumulated of Date
Description Encumbrances Land Improve Improve Land & Improve Total Deprec. (d) Const Acquired
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MARIETTA, GA
Savannah Oaks
Apartments $ 4,242,440 $ 1,239,000 $ 5,009,028 $ 850,037 $ 1,239,000 $ 5,859,065 $ 7,098,065 $ 2,697,283 1973 09/30/86
TUCSON, AZ
Desert Pines
Apartments 3,366,991 1,225,000 4,290,612 1,752,744 1,225,000 6,043,356 7,268,356 2,525,009 1973 02/02/87
ANDERSON, SC
Country Club
Apartments 3,151,606 260,000 4,195,025 675,757 260,000 4,870,782 5,130,782 2,306,425 1973 05/14/86
----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------
Total $10,761,037 $ 2,724,000 $13,494,665 $ 3,278,538 $ 2,724,000 $16,773,203 $19,497,203 $ 7,528,717
=========== =========== =========== =========== =========== =========== =========== ============
</TABLE>
(a) The cost to the Partnership represents the original purchase price of the
properties.
(b) The aggregate cost of real estate owned at December 31, 1997 is the same for
financial statement purposes as it is for tax purposes, with the aggregate
total being $19,497,203.
(c) Reconciliation of property:
<TABLE>
<CAPTION>
1995 1996 1997
----------- ----------- -------------
<S> <C> <C> <C>
Balance at beginning of period $21,325,605 $21,722,457 $ 22,285,040
Additions during period
Improvements 396,852 562,583 341,542
Dispositions - - (3,129,379)
----------- ----------- -------------
Balance at end of period $21,722,457 $22,285,040 $ 19,497,203
=========== =========== ============
(d) Reconciliation of accumulated depreciation:
Balance at beginning of period $ 6,880,418 $ 7,594,027 $ 8,325,543
Depreciation expense for period 713,609 731,516 677,969
Dispositions - - (1,474,795)
----------- ----------- -----------
Balance at end of period $ 7,594,027 $ 8,325,543 $ 7,528,717
=========== =========== ===========
</TABLE>
Depreciation calculated on 5-27.5 year lives using the straight-line method
on real property and accelerated for personal property.
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 575,355
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<RECEIVABLES> 33,813
<ALLOWANCES> 0
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<PP&E> 19,497,203
<DEPRECIATION> 7,528,717
<TOTAL-ASSETS> 12,734,515
<CURRENT-LIABILITIES> 279,590
<BONDS> 10,761,037
0
0
<COMMON> 0
<OTHER-SE> 1,693,888<F1>
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<SALES> 0
<TOTAL-REVENUES> 4,512,769
<CGS> 0
<TOTAL-COSTS> 0
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<INCOME-PRETAX> 468,804
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<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>
