SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1996
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-14352
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BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3344227
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
--------------
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
----- -----
<PAGE>
BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
BALANCE SHEETS
June 30, 1996 and December 31, 1995
(UNAUDITED)
ASSETS
1996 1995
------------- -------------
Cash and cash equivalents $ 1,899,164 $ 5,475,539
Escrow deposits 827,511 909,293
Prepaid expenses 231,733 35,463
Accounts and accrued interest receivable 216,183 157,490
Deferred expenses, net of accumulated
amortization of $70,149 in 1996 and
$23,383 in 1995 584,577 631,343
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3,759,168 7,209,128
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Investment in real estate, at cost:
Land 10,567,930 10,567,930
Buildings and improvements 58,506,072 58,506,072
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69,074,002 69,074,002
Less accumulated depreciation 24,515,381 23,640,594
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Investment in real estate, net of
accumulated depreciation 44,558,621 45,433,408
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$ 48,317,789 $ 52,642,536
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 85,210 $ 61,352
Due to affiliates 44,716 23,216
Accrued real estate taxes 137,227 23,314
Security deposits 262,040 257,824
Mortgage notes payable 33,669,195 33,824,504
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Total liabilities 34,198,388 34,190,210
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Limited Partners' capital (57,074
Interests issued and outstanding) 14,363,424 18,695,717
General Partner's deficit (244,023) (243,391)
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Total partners' capital 14,119,401 18,452,326
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$ 48,317,789 $ 52,642,536
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1996 and 1995
(UNAUDITED)
1996 1995
------------- -------------
Income:
Rental and service $ 4,806,153 $ 4,934,898
Interest on short-term investments 70,562 95,370
------------- -------------
Total income 4,876,715 5,030,268
------------- -------------
Expenses:
Interest on mortgage notes payable 1,271,074 1,497,277
Depreciation 874,787 874,787
Amortization of deferred expenses 46,766 89,165
Property operating 1,884,801 1,829,304
Real estate taxes 405,335 390,709
Property management fees 236,525 249,462
Administrative 220,646 191,026
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Total expenses 4,939,934 5,121,730
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Net loss $ (63,219) $ (91,462)
============= =============
Net loss allocated to General Partner $ (632) $ (915)
============= =============
Net loss allocated to Limited Partners $ (62,587) $ (90,547)
============= =============
Net loss per Limited Partnership Interest
(57,074 issued and outstanding) $ (1.10) $ (1.59)
============= =============
Distributions to Limited Partners $ 4,269,706 None
============= =============
Distributions per Limited Partnership
Interest (57,074 issued and outstanding) $ 74.81 None
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1996 and 1995
(UNAUDITED)
1996 1995
------------- -------------
Income:
Rental and service $ 2,432,500 $ 2,475,879
Interest on short-term investments 24,035 41,034
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Total income 2,456,535 2,516,913
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Expenses:
Interest on mortgage notes payable 634,808 750,755
Depreciation 437,393 437,393
Amortization of deferred expenses 23,383 44,583
Property operating 954,993 990,070
Real estate taxes 172,854 195,418
Property management fees 116,498 123,587
Administrative 134,459 106,834
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Total expenses 2,474,388 2,648,640
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Net loss $ (17,853) $ (131,727)
============= =============
Net loss allocated to General Partner $ (179) $ (1,317)
============= =============
Net loss allocated to Limited Partners $ (17,674) $ (130,410)
============= =============
Net loss per Limited Partnership Interest
(57,074 issued and outstanding) $ (0.31) $ (2.29)
============= =============
Distribution to Limited Partners $ 1,569,535 None
============= =============
Distribution per Limited Partnership
Interest (57,074 issued and outstanding) $ 27.50 None
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1996 and 1995
(UNAUDITED)
1996 1995
------------- -------------
Operating activities:
Net loss $ (63,219) $ (91,462)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation of properties 874,787 874,787
Amortization of deferred expenses 46,766 89,165
Net change in:
Escrow deposits 81,782
Accounts receivable (58,693) (330,025)
Prepaid expenses (196,270) (145,598)
Accounts payable 23,858 (25,397)
Due to affiliates 21,500 (63,105)
Accrued liabilities 113,913 113,728
Security deposits 4,216 (7,512)
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Net cash provided by operating activities 848,640 414,581
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Financing activities:
Principal payments on mortgage notes
payable (155,309) (322,012)
Distributions to Limited Partners (4,269,706)
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Net cash used in financing activities (4,425,015) (322,012)
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Net change in cash and cash equivalents (3,576,375) 92,569
Cash and cash equivalents at beginning
of period 5,475,539 2,872,521
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Cash and cash equivalents at end of period $ 1,899,164 $ 2,965,090
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the six months and quarter
ended June 30, 1996, and all such adjustments are of a normal and recurring
nature.
2. Interest Expense:
During the six months ended June 30, 1996 and 1995, the Partnership incurred
and paid interest expense on mortgage notes payable of $1,271,074 and
$1,497,277, respectively.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
six months and quarter ended June 30, 1996 are:
Paid
-----------------------
Six Months Quarter Payable
------------ --------- ----------
Reimbursement of expenses to
the General Partner, at cost $64,271 $46,352 $44,716
4. Subsequent Event:
In July 1996, the Partnership made a distribution of $285,370 ($5.00 per
Interest) to the holders of Limited Partnership Interests representing a
quarterly distribution of Net Cash Receipts of $3.00 per Interest for the
second quarter of 1996, and a special distribution of Net Cash Proceeds of
$2.00 per Interest from proceeds remaining from the 1995 mortgage loan
refinancings.
<PAGE>
BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Current Income Fund-85 A Real Estate Limited Partnership (the
"Partnership") is a limited partnership formed in 1985 to invest in and operate
income-producing real property. The Partnership raised $57,074,000 through the
sale of Limited Partnership Interests and utilized these proceeds to acquire
five real property investments. The Partnership continues to operate these five
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 1995 for a more complete understanding of
the Partnership's financial position.
Operations
- ----------
Summary of Operations
- ---------------------
Lower interest expense resulting from the 1995 mortgage loan refinancings,
which was partially offset by declining operations at American Way Mall,
resulted in the Partnership recognizing decreased net loss for the six months
and quarter ended June 30, 1996 as compared to the same periods in 1995.
Further discussion of the Partnership's operations is summarized below.
1996 Compared to 1995
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1996 and 1995 refer
to both the six months and quarters ended June 30, 1996 and 1995.
Rental and service income decreased during 1996 as compared to 1995 primarily
as a result of a decrease in occupancy at American Way Mall. However, the
decrease was partially offset by increases in rental and service income at the
El Dorado Hills and Providence Square Apartments due to increased rental rates
and Willow Lawn self-storage facility due to increased occupancy.
The January and April 1996 special distributions to Limited Partners caused a
decrease in cash available for short-term investments and resulted in a
decrease in interest income on short-term investments during 1996 as compared
to 1995.
In September 1995, the Partnership refinanced the mortgage loan secured by the
El Dorado Hills Apartments and the mortgage loan secured by the Providence
Square Apartments, Storage USA of Norcross and Willow Lawn self-storage
facilities. The Partnership obtained two new mortgage loans secured by El
Dorado Hills and Providence Square Apartments, respectively, which carry lower
interest rates than the prior financing. In addition, fees associated with the
new mortgage loans are being amortized over a longer term than the prior
mortgage loans. As a result, interest expense on mortgage notes payable and
amortization of deferred expenses decreased for 1996 as compared to 1995.
<PAGE>
Real estate tax expense decreased for the quarter ended June 30, 1996 as
compared to 1995 due to a reduction in the assessed value of American Way Mall
received from the taxing authority in the second quarter of 1996. This decrease
was partially offset by increased tax rates at Providence Square Apartments.
The Partnership incurred consulting fees and postage and printing costs in
connection with its response to a tender offer during 1996. In addition, the
Partnership incurred legal and professional fees in connection with marketing
American Way Mall for sale. As a result, administrative expenses increased
during 1996 as compared to 1995.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased by approximately $3,576,000 as
of June 30, 1996 as compared to December 31, 1995 due primarily to special
distributions to Limited Partners in January and April 1996. The Partnership
generated cash flow of approximately $849,000 from its operating activities
which includes the cash flow from operations of the Partnership's properties
and interest income received on short-term investments, which was partially
offset by administrative costs. The Partnership's financing activities
consisted primarily of the payment of distributions of approximately $4,270,000
to Limited Partners.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit or a significant deficit, each after
consideration of debt service payments, unless otherwise indicated. A deficit
is considered significant if it exceeds $250,000 annually or 20% of the
property's rental and service income. The Partnership defines cash flow
generated from its properties as an amount equal to the property's revenue
receipts less property related expenditures, which include debt service
payments where applicable. El Dorado Hills and Providence Square Apartments are
the only properties that have underlying debt. During the six months ended June
30, 1996 and 1995, the Providence Square and El Dorado Hills apartment
complexes and the Storage USA of Norcross and Willow Lawn self-storage
facilities all generated positive cash flow after applicable debt service
payments. The American Way Mall, which does not have underlying debt, generated
a significant cash flow deficit during the six months ended June 30, 1996 as
compared to positive cash flow during the same period in 1995 due to lower
rental and service income resulting from lower occupancy. As of June 30, 1996,
the occupancy rates of the Partnership's apartment complexes and storage
facilities ranged from 86% to 98%. The American Way Mall had an occupancy rate
of 32% at June 30, 1996. The Partnership evaluated alternative strategies to
sell or redevelop this property and has currently entered into a contract to
sell this property.
While the cash flow of certain of the Partnership's properties has improved,
the General Partner continues to pursue a number of actions aimed at improving
the cash flow of the Partnership's properties including improving property
operating performance and seeking rent increases where market conditions allow.
The General Partner believes that the market for multifamily housing properties
is favorable to sellers of these properties. Currently, the Partnership has
entered into a contract to sell the El Dorado Hills Apartments for $29,350,000.
The Partnership is also actively marketing its other residential property and
its two storage facilities. Additionally, the Partnership has entered into a
contract to sell the American Way Mall for $5,200,000. If current market
<PAGE>
conditions remain favorable and the General Partner can obtain appropriate
sales prices, the Partnership's liquidation strategy will be accelerated.
Two of the Partnership's properties are owned through the use of third-party
mortgage loan financing and, therefore, the Partnership is subject to the
financial obligations required by such loans. As a result of the General
Partner's efforts to obtain loan refinancings, the Partnership has no
third-party financing which matures before 2002.
In July 1996, the Partnership made a distribution of $285,370 ($5.00 per
Interest) to the holders of Limited Partnership Interests representing a
regular quarterly distribution of Net Cash Receipts of $3.00 per Interest for
the second quarter of 1996 and a special distribution of Net Cash Proceeds of
$2.00 per Interest from the remaining proceeds of the 1995 mortgage loan
refinancings. The level of the second quarter 1996 Net Cash Receipts
distribution increased from the prior quarter's level due to improved
operations at El Dorado Hills Apartments and the two storage facilities.
Including the July 1996 distribution, Limited Partners have received
distributions of Net Cash Receipts of $165.12 and Net Cash Proceeds of $77.00,
totaling $242.12 per $1,000 Interest. The General Partner expects to continue
quarterly distributions to Limited Partners. However, the level of future
distributions will depend on cash flow from the Partnership's properties and
proceeds from property sales, as to all of which there can be no assurances. In
light of results to date and current conditions, the General Partner does not
anticipate that investors will recover all of their original investment.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- --------------------------
El Dorado Hills Apartments
- --------------------------
As previously reported, on June 12, 1996, the Partnership contracted to sell El
Dorado Hills Apartments, San Diego, California, for a sale price of $29,600,000
to an unaffiliated party, Security Capital Pacific Trust, a Maryland real
estate investment trust. The purchaser and the Partnership have agreed to
reduce the sale price to $29,350,000. The closing of the sale has been extended
to August 30, 1996.
American Way Mall
- -----------------
As previously reported, on June 7, 1996, the Partnership contracted to sell
American Way Mall, Fairfield, New Jersey, for a sale price of $5,200,000 to an
unaffiliated party, Robert Heidenberg. The purchaser and the Partnership have
agreed to extend the closing of the sale to September 25, 1996. In addition,
the agreement of sale requires that, in the event the purchaser or any
affiliate thereof transfers any portion of the property prior to August 22,
1996 to a third party specified in the agreement of sale, the Partnership is
entitled to a specified portion of the proceeds of such transfer. The purchaser
and the Partnership have agreed to extend this date to October 25, 1996.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Amended and Restated Form of Subscription Agreement set forth as
Exhibit 4.1 to Amendment No. 5 to the Registrant's Registration Statement on
Form S-11 dated August 16, 1985 (Registration No. 2-95910), and Form of
Confirmation regarding Interests in the Partnership set forth as Exhibit 4.2 to
the Registrant's Report on Form 10-Q for the quarter ended June 30, 1992
(Commission File No. 0-14352) are incorporated herein by reference.
(10)(a)(i) Agreement of Sale and attachment thereto relating to the sale of the
El Dorado Hills Apartments previously filed as Exhibit 2(a) to the Registrant's
Current Report on From 8-K dated June 7, 1996 is incorporated herein by
reference.
(ii) First Amendment to Agreement of Sale relating to the sale of El Dorado
Hills Apartments is attached hereto.
(iii) Second Amendment to Agreement of Sale and Escrow Agreement relating to
the sale of El Dorado Hills Apartments is attached hereto.
<PAGE>
(b)(i) Agreement of Sale and attachment thereto relating to the sale of the
American Way Mall previously filed as Exhibit 2(b) to the Registrant's Current
Report on Form 8-K dated June 7, 1996 is incorporated herein by reference.
(ii) First Amendment to Agreement of Sale relating to the sale of the American
Way Mall is attached hereto.
(27) Financial Data Schedule of the Registrant for the six month period ending
June 30, 1996 is attached hereto.
(b) Reports on form 8-K: A Current Report on Form 8-K dated June 7, 1996 was
filed reporting the execution of contracts for the sale of El Dorado Hills
Apartments, San Diego, California, and American Way Mall, Fairfield, New
Jersey.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR CURRENT INCOME FUND-85
A REAL ESTATE LIMITED PARTNERSHIP
By: /s/ Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Current Income Partners-85, the General
Partner
By: /s/ Brian D. Parker
------------------------------
Brian D. Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Current Income
Partners-85, the General Partner
Date: August 14, 1996
-----------------------------
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF SALE
(El Dorado)
This FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this _Amendment_)
is entered into as of June 24, 1996, by and between ELDORITO LIMITED
PARTNERSHIP, an Illinois limited partnership ("Seller"), and SECURITY CAPITAL
PACIFIC TRUST, a Maryland real estate investment trust ("Buyer"), with
reference to that certain Agreement of Sale (the "Purchase Agreement") dated as
of June 12, 1996, between Seller and Buyer, concerning the property located in
El Dorado Hills, San Diego, California, and described in the Purchase
Agreement. All initially capitalized terms used herein shall have the meanings
ascribed thereto in the Purchase Agreement unless otherwise defined herein.
Seller and Buyer hereby agree to amend the Purchase Agreement as follows:
1. The last day of the Inspection Period is hereby extended from June 24,
1996, to July 1, 1996.
2. Except as otherwise set forth herein, the Purchase Agreement shall
remain unmodified and in full force and effect. This Amendment may be executed
in two (2) or more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument, with the
same effect as if all parties had signed the same signature page. To
facilitate execution of this Amendment, the parties may execute and exchange by
telephone facsimile counterparts of the signature pages in which case the
Amendment shall be deemed delivered upon transmission of such facsimiles.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the day and year first above written.
SELLER:
ELDORITO LIMITED PARTNERSHIP,
an Illinois limited partnership
By: BALCOR CURRENT INCOME PARTNERS-85, INC.,
an Illinois corporation, its general
partner
By: /s/ Phillip Schechter
--------------------------------
Its: Authorized Agent
BUYER:
SECURITY CAPITAL PACIFIC TRUST,
a Maryland real estate investment trust
By: /s/ Anthony R. Arnest
--------------------------------
Name: Anthony R. Arnest
Title: Vice President
<PAGE>
SECOND AMENDMENT TO
AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS SECOND AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is made and entered into as of this 1st day of July, 1996, by and
between ELDORITO LIMITED PARTNERSHIP, an Illinois limited partnership
("Seller"), SECURITY CAPITAL PACIFIC TRUST, a Maryland real estate investment
trust ("Purchaser"), and CHICAGO TITLE INSURANCE COMPANY ("Escrow Agent").
RECITALS:
A. Seller and Purchaser are parties to that certain Agreement of Sale,
dated June 12, 1996 (the "Original Agreement"), as amended by that certain
First Amendment to Agreement of Sale by and between Seller and Purchaser, dated
June 24, 1996 (the "First Amendment," together with the Original Agreement, the
"Agreement"), pursuant to which Purchaser has agreed to purchase and Seller has
agreed to sell certain Property (as defined in the Agreement) legally described
and depicted on Exhibit A attached to the Agreement.
B. Seller, Purchaser and Escrow Agent are parties to that certain Escrow
Agreement, dated June 12, 1996 (the "Escrow Agreement"), pursuant to which
Purchaser has deposited funds in escrow to be held by Escrow Agent in
accordance with the terms of the Escrow Agreement.
C. Seller and Purchaser desire to amend the Agreement and the Escrow
Agreement in accordance with the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. All terms not otherwise defined herein shall have the meanings ascribed to
each in the Agreement.
2. Paragraph 1 of the Agreement is deleted in its entirety and replaced with
the following:
"1. PURCHASE AND SALE. Purchaser agrees to purchase and Seller agrees to
sell at the price of Twenty-Nine Million Three Hundred Fifty Thousand And
No/100 Dollars ($29,350,000.00) (the "Purchase Price"), that certain property
commonly known as El Dorado Hills, San Diego, California, a 448 unit apartment
complex legally described on Exhibit A attached hereto, together with all
improvements thereon and appurtenances thereto belonging (the "Property").
Included in the Purchase Price is all of the personal property set forth on
Exhibit B attached hereto (the "Personal Property")."
3. The dollar amount reflected in Paragraph 2.3 of the Agreement shall be,
and hereby is, reduced from $29,600,000.00 to $29,350,000.00.
<PAGE>
4. The first grammatical sentence of Paragraph 8.1 of the Agreement is
deleted in its entirety and replaced with the following:
"The closing of this transaction (the "Closing") shall be on August 8,
1996 (the "Closing Date"), at the office of Title Insurer, San Diego,
California, at which time Seller shall deliver possession of the Property to
Purchaser; provided, however, that if Purchaser has submitted to Lender a final
and executed application to assume the Loan, together with all required
financial statements and the $3000.00 processing fee, with a copy of the
transmittal letter to Seller, on or before July 9, 1996, the Closing Date shall
be August 30, 1996."
5. Paragraph 18.3 of the Agreement is deleted in its entirety and replaced
with the following:
" 18.3. In the event any of the Conditions Precedent are not
satisfied on or before five (5) business days prior to the Closing Date, then
this Agreement shall be terminated, and the Earnest Money shall be immediately
paid to Purchaser, together with any interest earned thereon, and neither
Seller nor Purchaser shall have any right, obligation or liability under this
Agreement, except for the indemnities set forth in Paragraphs 7 and 15 of this
Agreement."
6. On or before the Closing Date, Purchaser and Seller hereby agree to
execute the City of San Diego Transfer of Responsibility to Retrofit
Certificate, whereby pursuant to San Diego Municipal Code Section 93.0208 (the
"Water Code"), Purchaser accepts the responsibility of retrofitting the
Property as required under the Water Code upon any transfer of the Property.
As compensation for Purchaser accepting this additional responsibility, the
Purchase Price shall be further reduced by an amount equal to the cost, as
mutually agreed upon by Seller and Purchaser in their reasonable discretion, to
install the plumbing fixtures required under the Water Code, less the rebate to
be received from the City of San Diego for each ultra-low-flushing-toilet to be
installed by Purchaser pursuant to the Water Code. If, despite good faith
efforts, Purchaser and Seller are unable to mutually agree upon the reduction
to the Purchase Price to be received by Purchaser at Closing, a third-party
experienced in the installation of plumbing fixtures shall be employed (with
Purchaser and Seller sharing such expense) to determine the appropriate
reduction to the Purchase Price.
7. Except as amended hereby, the Agreement shall be and remain unchanged and
in full force and effect in accordance with its terms.
8. This Amendment may be executed in counterparts each of which shall be
deemed an original, but all of which, when taken together shall constitute one
and the same instrument. To facilitate the execution of this Amendment, Seller
and Purchaser may execute and exchange by telephone facsimile counterparts of
the signature pages, with each facsimile being deemed an "original" for all
purposes.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PURCHASER:
SECURITY CAPITAL PACIFIC TRUST, a Maryland
real estate investment trust
By: /s/ Anthony R. Arnest
-------------------------------------
Name: Anthony R. Arnest
-------------------------------------
Its: Vice President
-------------------------------------
SELLER:
ELDORITO LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Balcor Current Income Partners-85,
an Illinois corporation, its general partner
By: /s/ Phillip Schechter
--------------------------------
Name: Phillip Schechter
--------------------------------
Its: Authorized Agent
--------------------------------
ESCROW AGENT:
CHICAGO TITLE INSURANCE COMPANY
By:
Name:
Its:
<PAGE>
FIRST AMENDMENT
TO AGREEMENT OF SALE
The First Amendment (the "Amendment") is entered into as of June 26, 1996
between ROBERT HEIDENBERG ("Purchaser") and AMERICAN WAY PARTNERS, an Illinois
limited partnership ("Seller").
RECITALS
Purchaser and Seller entered into a certain Agreement of Sale dated as of
June 6, 1996 (the "Agreement") with respect to certain property commonly know
as American Way Mall located in Fairfield, New Jersey (the "Property").
Purchaser has completed its review of the Documents and inspection of the
Property during the Approval Period.
Purchaser and Seller have agreed to modify the Agreement in certain
respects as set forth herein, and in consideration hereof, Purchaser has agreed
not to deliver a Notice of Disapproval.
NOW THEREFORE, in consideration of the above recitals and the covenants
contained herein, the parties hereby amend the Agreement, effective as of the
date hereof as follows:
1. Incorporation. The above recitals are incorporated into the agreement as
though fully set forth herein.
2. Definitions. All capitalized terms not otherwise defined herein or
modified hereby shall have the same meanings as ascribed to them in the
Agreement.
3. Approval Period. Purchaser acknowledges that the Approval Period has
expired and that Purchaser has accepted the condition of the Property and
completed its review of the Documents to its satisfaction.
4. Closing Date. Paragraph 9 of the Agreement is amended by substituting
"September 25, 1996" for "July 22, 1996" and all references to as the
Closing Date shall hereafter mean September 25, 1996.
5. Target Transfer. Paragraph 25 of the Agreement is amended by substituting
the date "October 25, 1996" in each place that "August 22, 1996" appears.
6. Escrow Agreement. Purchaser and Seller agree to enter into an amendment
to the Escrow Agreement to reflect the extension of the Closing Date, in
substantially the form of Exhibit X attached hereto.
7. Continuation. Except as expressly set forth herein, the Agreement remains
in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
PURCHASER: SELLER:
AMERICAN WAY PARTNERS, an
Illinois limited partnership
/s/ Robert Heidenberg
- ------------------------ By: /s/ Alan G. Lieberman
Robert Heidenberg ------------------------------
Its: Senior Vice President
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