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, 1998
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 PARTNERSHIIP
INDEX
PART I. Financial Information
Condensed Balance Sheets
September 30, 1998 and December 31, 1997.................1
Condensed Statements of Operations
for the three months and nine months ended
September 30, 1998 and 1997..............................2
Condensed Statements of Cash Flows
for the nine months ended
September 30, 1998 and 1997..............................3
Condensed Statements of Changes
in Partners' Equity for the
nine months ended September 30, 1998.....................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,
1998 1997
------------ ------------
ASSETS
Cash and Cash Equivalents $ 324,989 $ 575,355
Receivables and Other Assets 151,513 190,674
------------ ------------
Total 476,502 766,029
------------ ------------
PROPERTY:
Land 260,000 2,724,000
Buildings and Improvements 4,502,679 15,460,116
Furniture and Equipment 368,102 1,313,087
------------ ------------
Total 5,130,781 19,497,203
Less Accumulated Depreciation 2,442,142 7,528,717
------------ ------------
Property - Net 2,688,639 11,968,486
------------ ------------
TOTAL ASSETS $ 3,165,141 $ 12,734,515
============ ============
LIABILITIES AND PARTNERSHIP EQUITY
LIABILITIES:
Accounts Payable and Accrued Liabilities $ 39,527 $ 169,122
Security Deposits 22,617 110,468
Mortgage loans 3,114,034 10,761,037
------------ ------------
Total Liabilities 3,176,178 11,040,627
------------ ------------
PARTNERS' EQUITY:
General Partner (110) 2,560
Limited Partner (10,927) 1,691,328
------------ ------------
Total Partnership Equity (11,037) 1,693,888
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 3,165,141 $ 12,734,515
============ ============
See notes to condensed financial statements.
1
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
1998 1997 1998 1997
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
REVENUES
Rental Income $ 514,569 $ 833,375 $ 2,266,231 $ 2,865,391
Interest Income 16,494 6,522 30,224 22,235
Other Income 12,526 17,442 50,681 54,873
Gain (Loss) on Sale of Property 2,670,288 (5,295) 5,247,738 673,908
----------- ----------- ----------- -----------
Total Revenues 3,213,877 852,544 7,594,874 3,616,407
----------- ----------- ----------- -----------
OPERATING EXPENSES
Operating Expenses 387,836 549,073 1,419,431 1,710,825
Interest Expense 121,446 230,942 625,756 794,903
Depreciation and
amortization 97,967 164,047 419,459 604,256
----------- ----------- ----------- -----------
Total Operating Expenses 607,249 944,062 2,464,646 3,109,984
----------- ----------- ----------- -----------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM 2,606,628 (91,518) 5,130,228 506,423
EXTRAORDINARY ITEM -
LOSS ON EXTINGUISHMENT
OF DEBT (2,301) -- (296,530) --
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 2,604,327 $ (91,518) $ 4,833,698 $ 506,423
=========== =========== =========== ===========
NET INCOME (LOSS) ALLOCATED
TO GENERAL PARTNER $ 26,044 $ (915) $ 72,379 $ 5,064
=========== =========== =========== ===========
NET INCOME (LOSS) ALLOCATED
TO LIMITED PARTNERS $ 2,578,283 $ (90,603) $ 4,761,319 $ 501,359
=========== =========== =========== ===========
PER UNIT:
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM $ 67.54 $ (2.37) $ 132.24 $ 13.11
EXTRAORDINARY ITEM (.13) -- (7.75) --
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 67.41 $ (2.37) $ 124.49 $ 13.11
=========== =========== =========== ===========
</TABLE>
See notes to condensed financial statements.
2
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 4,833,698 $ 506,423
Adjustments to reconcile Net Income
to Net Cash Provided by Operating Activities:
Gain on Sale of Property (5,247,738) (673,908)
Extraordinary Item - Loss
on Extinguishment of Debt 296,530 --
Depreciation and Amortization 419,459 604,256
Decrease (Increase) in other assets - net (2,505) 116,174
Decrease in Accounts Payable
and Accrued Liabilities (129,595) (67,516)
Decrease in Security Deposits (87,851) (16,111)
------------ ------------
Net Cash Provided by Operating Activities 81,998 469,318
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sale of Property and Equipment 14,140,479 2,328,493
Purchase of Property (12,179) (321,985)
------------ ------------
Net Cash Provided by Investing Activities 14,128,300 2,006,508
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distribution to Partners (6,538,623) (193,162)
Reduction in Mortgage Payable (7,647,003) (2,228,045)
Prepayment Penalty on Mortgage (275,038) --
------------ ------------
Net Cash Used by Financing Activities (14,460,664) (2,421,207)
------------ ------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (250,366) 54,619
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 575,355 450,906
------------ ------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 324,989 $ 505,525
============ ============
CASH PAID DURING THE PERIOD FOR INTEREST $ 665,327 $ 812,810
============ ============
</TABLE>
See notes to condensed financial statements.
3
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARNTERSHIP
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(unaudited)
General Limited Total
Partner Partners Partnership
----------- ----------- -----------
Partner's Equity
January 1, 1998 $ 2,560 $ 1,691,328 $ 1,693,888
Net Income 72,379 4,761,319 4,833,698
Distributions (75,049) (6,463,574) (6,538,623)
----------- ----------- -----------
Partners' Equity
September 30, 1998 $ (110) $ (10,927) $ (11,037)
=========== =========== ===========
See notes to condensed financial statements.
4
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
September 30, 1998
(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, 1998 and December 31, 1997 and the results of its operations
for the three months and nine months ended September 30, 1998 and 1997 and
its cash flows for the nine months ended September 30, 1998 and 1997.
The accounting policies followed by the Partnership are set forth in Note
1 to the Partnership financial statements in the 1997 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 partner of the Partnership, are also
owners, and/or employees of the Griffin Companies, a Minnesota
corporation. The following is a summary of fees incurred for the nine
months ended September 30, 1998 and 1997 relating to the Griffin Companies
and its affiliates:
1998 1997
--------- ---------
Management fees $ 163,955 $ 161,872
Supervisory fees $ 16,122 $ 45,590
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,
1998 1997
----------- -----------
Net income per statement of operations $ 4,833,698 $ 506,423
Excess of tax depreciation over
book depreciation (9,561) (15,456)
----------- -----------
Taxable income $ 4,824,137 $ 490,967
=========== ===========
5
<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, 1998, the Partnership had cash and cash equivalents of $324,989
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 1998.
Distributions of $3 per Limited Partnership unit were made following the first
quarter of 1998. Following the second quarter of 1998 distributions of $64 per
Limited Partnership unit were made for unit holders of record on June 30, 1998.
Of this $64 per unit, $3 resulted from positive operating cash flow and $61
represented proceeds from the sale of Savannah Oaks Apartments on June 22, 1998.
Distributions of $102 per unit were also made on September 30, 1998 which
represented proceeds from the sale of Desert Pines Apartments on September 18,
1998. Lastly, following the third quarter of 1998 distributions of $3 per unit
were made to unit holders of record on September 30, 1998.
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.
On June 16, 1997 the Partnership sold its interest in the Ravenwood Apartments.
Also on June 22, 1998 the Partnership sold the Savannah Oaks Apartments and on
September 18, 1998 it sold the Desert Pines Apartments. Therefore, comparison of
results from one year to the next is not possible for the Partnership taken as a
whole. The following operations discussion is therefore limited to the one
remaining property that was still held at the end of the third quarter of 1998.
Country Club Apartments:
Comparing the first nine months of 1998 to the first nine months of 1997 rental
rates increased over 2.5% but a drop in physical occupancy from 1997 negated
that. Occupancy at the end of the first quarter of 1997 was 97%. Since then it
has stayed between 90% and 94%. Total revenues in fact declined slightly by
$2,076 from $720,671 in 1997 to $718,595 in 1998. In an effort to reverse the
lower occupancy, advertising and leasing expenses rose $4,293 from $6,373 in the
first nine months of 1997 to $10,666 in 1998. Lower occupancy also impacted the
Repairs & Maintenance expense as vacant units were maintained and being made
rent ready. This category accounted for an increase of $2,578 from $28,656 in
the first nine months of 1997 to $31,234 in 1998. Overall, operating expenses
were up about 7%.
On July 14, 1998, a formal sales contract was executed for the sale of Country
Club Apartments. Although there can be no assurance a closing will ultimately
occur, a closing of the sale is expected during the month of November. A
Securities and Exchange Commission Form 8-K will be filed following the closing
which will detail the transaction.
6
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 a 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.
OCCUPANCY TABLE
Approximate occupancy levels of the Partnership's investment property by
quarter.
1997 1998
at at
------------------------- -------------------------
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
1. Ravenwood Apts.
Cincinnati, OH 85% * * * * * *
2. Country Club
Apartments
Anderson, SC 97% 92% 94% 90% 92% 93% 92%
3. Savannah Oaks
Apartments
Marietta, GA 97% 97% 93% 93% 97% * *
4. Desert Pines
Apartments
Tucson, AZ 90% 88% 91% 91% 93% 89% *
* Indicates Partnership did not own this property at the end of the quarter.
7
<PAGE>
GRIFFIN REAL ESTATE FUND-V,
A LIMITED PARTNERSHIP
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
To the best of our knowledge no legal proceedings exist against the Partnership.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibits 27 Financial Data Schedule
(b) Form 8-K was filed on July 2, 1998 to report the sale of
Savannah Oaks Apartments on June 22, 1998. Form 8-K was also
filed on October 2, 1998 to report the sale of Desert Pines
Apartments on September 18, 1998.
8
<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
Dated: November 13, 1998 By: /s/ Larry D. Fransen
---------------------
Larry D. Fransen, of the
General Partner, Griffin
Equity Partners
Dated: November 13, 1998 By: /s/ Larry D. Fransen
---------------------
Larry D. Fransen,
Managing General Partner of the
General Partner, Griffin
Equity Partners
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 324,989
<SECURITIES> 0
<RECEIVABLES> 151,513
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 476,502
<PP&E> 5,130,781
<DEPRECIATION> 2,442,142
<TOTAL-ASSETS> 3,165,141
<CURRENT-LIABILITIES> 62,144
<BONDS> 3,114,034
0
0
<COMMON> 0
<OTHER-SE> (11,037)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 3,165,141
<SALES> 0
<TOTAL-REVENUES> 7,564,650
<CGS> 0
<TOTAL-COSTS> 1,838,890
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 595,532
<INCOME-PRETAX> 5,130,228
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,130,228
<DISCONTINUED> 0
<EXTRAORDINARY> (296,530)
<CHANGES> 0
<NET-INCOME> 4,833,698
<EPS-PRIMARY> 124.49<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>
