FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934. (NO FEE REQUIRED)
Commission File Number 0-14386
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - IV
----------------------------------------------------
(Exact Name of Registrant as specified in its Charter)
Delaware 16-1245153
- - - --------------------------- -----------------------------------
(State of Formation) (IRS Employer Identification No.)
2350 North Forest Road
Suite 12-A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-9090
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership Interest
Indicate by a 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 a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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.(X)
DOCUMENTS INCORPORATED BY REFERENCE
See page 13 for a list of all documents incorporated by reference
1
<PAGE>
PART I
ITEM 1: BUSINESS
- - - ------- --------
The Registrant, Realmark Property Investors Limited Partnership IV (the
"Partnership"), is a Delaware limited partnership organized in February 1985,
pursuant to an Agreement and Certificate of Limited Partnership (the
"Partnership Agreement"), under the Revised Delaware Uniform Limited Partnership
Act. The Partnership's general partners are Realmark Properties, Inc. (the
"Corporate General Partner"), a Delaware corporation, and Joseph M. Jayson (the
"Individual General Partner"). During 1988, Realmark Properties IV Associates
("Associates") and RPI Investors-IV, Inc. (formerly the "Corporate General
Partner") were merged with Realmark Properties, Inc. (the "Corporate General
Partner").
The Registrant commenced the public offering of its limited partnership
units, registered with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on April 22, 1985, and concluded the
offering on June 22, 1986, having raised a total of $23,365,900 before deducting
sales commissions and expenses of the offering.
The Partnership's primary business and its only industry segment is to own
and operate income-producing real property for the benefit of its limited
partners. The Partnership owns five (5) apartment complexes totaling 871 units,
an office complex containing 130,898 square feet and is an 83.78% joint venture
owner of a 168 unit apartment complex. Each Partnership property is located in a
relatively stable community with a solid base from which to draw residents.
There remains however, strong competition from other complexes in the respective
areas. See also item 7. Each of the apartment complexes are managed for the
Partnership by Realmark Corporation, an affiliate of the General Partners.
The business of the Partnership is not seasonal. As of December 31, 1996,
the Partnership did not directly employ any persons in a full-time position. All
persons who regularly rendered services on behalf of the Partnership through
December 31, 1996 were employees of the Corporate General Partner or its
affiliates.
The Registrant's objectives are to acquire, operate and hold existing
income-producing properties to (1) provide long-term capital appreciation, (2)
provide cash distributions from operations, (3) provide investors with a
diversified real estate portfolio, and (4) preserve and protect Partnership
capital.
Occupancy for each complex as of December 31, 1996, 1995 and 1994 was as
follows:
1996 1995 1994
---- ---- ----
Lakeview Apartments (Joint Venture) 82% 91% 93%
Sutton Park Apartments 85% 92% 91%
Creekside Apartments 90% 95% 87%
Willow Creek Apartments 92% 96% 94%
Evergreen Terrace Apartments 92% 95% 97%
Chapelwood Estates 75% 87% 84%
Airlane Office Warehouse 97% 92% 86%
2
<PAGE>
ITEM 1: BUSINESS (Con't.)
- - - ------- -----------------
The percentage of total Partnership revenue generated from each complex as
of December 31, 1996, 1995 and 1994 was as follows:
1996 1995 1994
---- ---- ----
Lakeview Apartments (Joint Venture) 13% 14% 15%
Sutton Park Apartments 24% 24% 23%
Creekside Apartments 21% 22% 23%
Willow Creek Apartments 18% 18% 18%
Evergreen Terrace Apartments 6% 6% 6%
Chapelwood Estates 4% 4% 5%
Airlane Office Warehouse 14% 12% 9%
<TABLE>
<CAPTION>
ITEM 2: PROPERTIES
- - - ------------------
Name and Location General Character of Property Purchase Date
- - - ----------------- ----------------------------- -------------
<S> <C> <C>
Lakeview Village Apts. Apartment complex; 7 buildings on November 1985
Joint Venture 13 acres; 168 units. An 8.25%
Milwaukee, WI mortgage with a balance of $2,508,128
at December 31, 1996, which provides
for annual principal and interest payments
of $232,920 in equal monthly installments.
The term of the mortgage is ten (10) years
with the remaining balance due and payable
February 1, 2006.
Sutton Park Apts. Apartment complex; 12 buildings on 23 December 1985
(formerly Bristol acres; 288 units. An 8% mortgage with a
Square Apts.) balance of $3,370,652 at December 31,
Lansing, MI 1996, which provides for annual principal
and interest payments of $306,168 in equal
monthly installments. The term of the
mortgage is ten (10) years with the
remaining balance due and payable on
February 1, 2006. In addition, there is a
promissory note, with a balance of $29,170
at December 31, 1996, which provides for
monthly principal payments of $2,083 plus
interest accruing at the lenders reference
rate plus 2% annually (10.25% at December
31, 1996). The note is due and payable
February 1, 1998.
3
<PAGE>
ITEM 2: PROPERTIES (Con't.)
- - - ---------------------------
Name and Location General Character of Property Purchase Date
- - - ----------------- ----------------------------- -------------
<S> <C> <C>
Airlane I & III Office/Warehouse; two buildings of August 1986
Nashville, TN 62,598 square feet (Airlane I) and
68,300 square feet (Airlane III). The
property is financed with a 7.625% mortgage
with a balance of $3,525,932 at December 31,
1996. The mortgage provides for annual
principal and interest payments of $369,783
payable in equal monthly installments, with
the remaining balance due January 1, 1999.
Evergreen Terrace Apts. Apartment complex; 3 buildings on December 1986
(formerly Sunset Hills 2.56 acres; 72 units financed by a
Apts.) mortgage of $1,021,096 at December 31,
Lansing, MI 1996. The interest rate is adjustable
annually to a maximum rate of 15% during the
first five years of the loan term and 17%
for the remaining life of the loan; the
interest rate shall never be less than 9%
over the life of the loan (9.0% at December
31, 1996). The mortgage is payable monthly
in amounts which vary with the interest
rate. Monthly payments at December 31, 1996
based on a 9.0% interest rate were $8,962.
The balance of the mortgage is due and
payable June 1, 1998.
Willow Creek Apts. Apartment complex; 18 buildings on 12.4 December 1986
Greenville, SC acres; 215 units financed by a 9.25%
mortgage which provides for monthly
principal and interest payments of $32,752
with the remaining balance originally due
September 1, 1996; the maturity has been
extended to March 1, 1997. The balance as of
December 31, 1996 was $3,919,467.
4
<PAGE>
ITEM 2: PROPERTIES (Con't.)
- - - ---------------------------
Name and Location General Character of Property Purchase Date
- - - ----------------- ----------------------------- -------------
<S> <C> <C>
Creekside Apts. Apartment complex; 11 buildings on December 1986
(formerly Bretton Park 20.14 acres; 240 units financed by an
Phase I and II) adjustable rate mortgage with the interest
Flat Rock, MI adjustable quarterly to a maximum rate of
13.5% and a minimum rate of 7%, (7.09% at
December 31, 1996). The mortgage is payable
monthly in amounts which vary with the
interest rate. Monthly payments at December
31, 1996 based on a 7.09% interest rate were
$27,827. The outstanding principal balance
of the mortgage at December 31, 1996 is
$3,670,328. The balance of the mortgage is
due and payable March 31, 1998.
Chapelwood Estates Apartment complex; 5 buildings on 3.4 May 1987
(formerly Cedar Court acres; 56 units, financed by a 9.25%
Apts. and Cliffside mortgage with a balance of $894,551 at
Apts.) December 31, 1996, which provides for
Monroeville, PA monthly principal and interest payments of
$7,466 with the remaining balance due
September 1, 1996. The mortgage is now
in default and is payable on demand.
</TABLE>
ITEM 3: LEGAL PROCEEDINGS
- - - ------- -----------------
The Partnership is not a party to, nor is any of the Partnership's property
the subject of, any material pending legal proceedings.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY
- - - ------- -------------------------------------------
HOLDERS.
--------
None.
PART II
ITEM 5: MARKET FOR REGISTRANT'S UNITS OF LIMITED
- - - ------- ----------------------------------------
PARTNERSHIP INTEREST.
---------------------
There is currently no established trading market for the units of Limited
Partnership Interest of the Partnership and it is not anticipated that any will
develop in the future.
The Partnership did not make any distributions for the years ended December
31, 1996, 1995 or 1994. See also Item 7.
As of December 31, 1996, there were 2,545 record holders of units of
Limited Partnership Interest.
5
<PAGE>
ITEM 6: SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Realmark Properties Investors Limited Partnership-IV
Year Ended Year Ended Year Ended Year Ended Year Ended
Dec. 31, 1996 Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Total assets $ 20,488,126 $ 19,982,793 $ 21,439,199 $ 22,292,013 $ 23,404,115
============ ============ ============ ============ ============
Notes payable and
long-term obligations $ 18,939,324 $ 19,414,288 $ 19,881,483 $ 20,148,300 $ 20,302,337
============ ============ ============ ============ ============
______________________________________________________________________________________________________________
Income $ 5,536,412 $ 5,753,559 $ 5,062,606 $ 5,190,122 $ 5,118,464
Expenses 6,759,234 7,225,672 7,020,306 6,319,029 6,859,431
------------ ------------ ------------ ------------ ------------
Loss before loss allocated
to minority interest, loss of
disposition of property, and
extraordinary items (1,222,822) (1,472,113) (1,957,700) (1,128,907) (1,740,967)
Loss allocated to
minority interest 36,106 42,625 51,247 24,974 1,984
Loss on disposition
of property -- -- -- -- (1,328,352)
Extraordinary items 1,501,158 -- -- -- --
------------ ------------ ------------ ------------ ------------
Net income (loss) $ 314,442 ($ 1,429,488) ($ 1,906,453) ($ 1,103,933) ($ 3,067,335)
============ ============ ============ ============ ============
______________________________________________________________________________________________________________
Net cash (used in) provided
by operating activities ($ 984,095) ($ 875,686) ($ 460,660) ($ 394,753) $ 173,668
Principal payments on
long-term debt (5,658,964) (467,195) (266,817) (154,037) (195,485)
------------ ------------ ------------ ------------ ------------
Net cash (used in)
operating activities
after principal payments
on long-term debt ($ 6,643,059) ($ 1,342,881) ($ 727,477) ($ 548,790) ($ 21,817)
============ ============ ============ ============ ============
______________________________________________________________________________________________________________
Loss per limited
partnership unit before
extraordinary gains ($ 49.26) ($ 59.34) ($ 79.14) ($ 45.83) ($ 127.33)
Extraordinary gains per
limited partnership unit 62.32 -- -- -- --
------------ ------------ ------------ ------------ ------------
Income (loss) per limited
partnership unit $ 13.06 ($ 59.34) ($ 79.14) ($ 45.83) ($ 127.33)
============ ============ ============ ============ ============
Weighted average number
of limited partnership
units outstanding 23,366 23,366 23,366 23,366 23,366
============ ============ ============ ============ ============
</TABLE>
6
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- - - ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Liquidity and Capital Resources:
- - - --------------------------------
The Partnership once again suffered from a year burdened by poor cash flow
generated from operations, low occupancies and high delinquencies. Lakeview
Apartments, Sutton Park (formerly Bristol Square) Apartments, Creekside
Apartments, Willow Creek Apartments, Evergreen Terrace Apartments and Chapelwood
Estates (formerly Cedar Court) all experienced occupancies in the mid 70%'s
through much of 1996. As has been the case for several years, the Corporate
General Partner advances covered the shortfalls in cash flow for the
Partnership. The General Partners are under no obligation to fund the
shortfalls, and at this date, there is no assurance that such advances will
continue. At December 31, 1996, advances from the Corporate General Partner and
its affiliates totaled $3,167,754, an increase of almost $947,000 over the
balance at December 31, 1995. The advances are payable on demand and are
accruing interest at the rate of 11% per annum. Unless there is a significant
increase in income and a considerable reduction in expenses, the General Partner
believe that the Partnership could be in default with regards to their
mortgages. Due to the persistent cash flow shortages, no distributions were made
in the years ended December 31, 1996, 1995 and 1994. Until the Partnership is
able to pay its operating obligations out of cash flow and also repay the
Corporate General Partner advances, it is not likely that the Limited Partners
will receive any distributions in the coming year.
On July 16, 1996 the Corporate General Partner entered into contracts on
behalf of the Partnership to sell Creekside Apartments, Evergreen Terrace
Apartments, Lakeview Village Apartments, Sutton Park Apartments (formerly
Bristol Square) and Willow Creek Apartments at sales prices of $5,900,000,
$1,200,000, $4,090,000, $5,800,000 and $5,425,000, respectively. The contracts
are subject to a number of contingencies as were described in Form 8-K filed on
July 31, 1996. No firm closing date on the sales have been established to date.
The General Partners continue to aggressively seek other buyers for these
properties since the sales contracts previously mentioned are cancelable by the
purchaser. All contracts have been negotiated in the best interests of the
Limited Partners.
Management has once again implemented corrective action plans in response
to the going concern consideration discussed in Note 15 to the financial
statements. These plans include tighter cash management through the closer
monitoring of expenses such as payroll, advertising and maintenance, which have
typically been the expenses that have increased from year to year. Additionally,
tighter credit policies have been put into place as a means of avoiding the
collection problems which the property incurred during the past several years.
The General Partners are seeking new financing for several of the properties
within the Partnership; with new mortgages at lower interest rates, it is
believed that enough cash flow could be produced to do the capital improvements
necessary to increase occupancy at the properties, as well as to make the
properties more appealing for sale purposes.
During the fourth quarter of 1996, there was a fire at Sutton Park which
resulted in almost a total loss of one of the buildings. The loss was covered by
insurance; the proceeds are being used to re-build the building which is
expected to be completed by mid-1997. Since the insurance proceeds exceeded the
book value of the destroyed property, an extraordinary gain equal to the excess
of the proceeds over the book value has been reported; such gain totaled
$706,158.
7
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- - - ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Con't.)
------------------------------------------------------
Liquidity and Capital Resources (Con't.):
- - - -----------------------------------------
Early in 1996, refinancing was obtained for both Lakeview Village
Apartments and Sutton Park Apartments. As a result of the refinancing, a portion
of the original second mortgage on Sutton Park was forgiven by the lender; a
total forgiveness of $795,000 was received and reported as an extraordinary gain
for financial statement purposes for the year ended December 31, 1996. The
refinancing not only reduced debt service in both complexes, but also will
decrease the mortgage payments approximately $2,460 per month at Sutton Park and
approximately $450 per month at Lakeview Village. The extremely high cost of
refinancing these properties did, however, contribute to the large increase in
the payable to the General Partner.
The notes receivable from the sale of Gold Key II matured in the fourth
quarter of 1995. The mortgagees did not pay the note at that date. During 1996,
the General Partners successfully settled with the mortgagee on the note(s) and
accrued interest for a total of $175,000. This settlement was pursued in the
best interests of the Limited Partners and was reached prior to any formal legal
actions.
Results of Operations:
- - - ----------------------
For the year ended December 31, 1996, the Partnership generated net income
of $314,442 or $13.06 per limited partnership unit. This income was principally
due to the extraordinary gains which resulted from the fire loss and the
forgiveness of debt both for Sutton Park Apartments. Before such gains, the loss
incurred by the Partnership was $1,186,716 or $49.26 per limited partnership
unit. For the years ended December 31, 1995 and 1994 losses incurred totaled
$1,429,488 or $59.34 per limited partnership unit and $1,906,453 or $79.14 per
limited partnership unit, respectively.
Partnership revenues for the year ended December 31, 1996 totaled
$5,536,412, consisting of rental income of $5,163,212 and other income, which
includes interest, laundry income, and other miscellaneous sources of income of
$373,200. The decrease in rental revenue from that of the previous year is
evidence of low occupancy levels at most of the residential properties
throughout much of 1996. In order to increase occupancies, management offered
incentive programs throughout the year; additionally, aggressive marketing plans
were put into place, which as of December 31, 1996 appear to have had some
success since there was a noticeable increase in new tenants at year end. Rental
revenues in the year ended December 31, 1995 amounted to $5,456,107 and in the
year ended December 31, 1994 totaled $4,777,840. There was also an increase of
approximately $75,000 in other income, which is attributed to increased laundry
revenue at the residential complexes. Increasing occupancy, as well as
decreasing delinquencies, remains the major focus of management. Tighter credit
policies and extended and attractive incentive programs continue to be
management's means of reaching the income levels needed to improve the cash flow
in the Partnership.
8
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- - - ------- ---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Con't.)
------------------------------------------------------
Results of Operations (Con't.):
- - - -------------------------------
Partnership expenses for the year ended December 31, 1996 totaled
$6,759,234, a substantial decrease over the expenses of the years ended December
31, 1995 and 1994 which were $7,225,672 and $7,020,306, respectively. The
majority of the decrease may be attributed to a decrease in property operations
costs. Through regular monitoring and measuring of expenses related to payroll,
repairs and maintenance and contracted services, the Partnership has achieved a
decrease of in excess of $300,000 or approximately 10% in operations expenses as
compared to the previous year, and over $220,000 as compared to 1994. Interest
paid to affiliates increased by over $87,000 as compared to 1995 due to the
higher carrying value of the loan from affiliates between the two years. Total
administrative expenses of $1,250,449 increased substantially as compared to the
years ended December 31, 1995 and 1994 when they totaled $1,149,808 and
$1,110,968, respectively. The decrease in administrative expenses paid to
affiliates is the result of decreased management fees due to the decreased net
rental revenues resulting from lower occupancies and higher delinquencies, while
the offsetting increase in other administrative expenses is due to increased
legal fees and more costly advertising campaigns, undertaken to increase
occupancies.
The Partnership expects to incur higher than "normal" property operations
expenses in the near future as a considerable amount of capital improvement work
is necessary to make the properties more attractive to new tenants. The work
planned includes interior and exterior painting and woodwork, replacing of
carpeting and appliances at several of the complexes, and structural work such
as repairs to roofs and decks/patios. Although this work is necessary in order
to increase rental revenue(s) generated in the Partnership, management continues
to keep in mind that expenditures must be closely monitored so as not to worsen
the cash flow situation of the Partnership. One means of controlling such
expenses has been management's success at obtaining large price discounts on
paint, carpeting and appliances through negotiations with large national
companies, such as Whirlpool.
For the year ended December 31, 1996, the tax basis loss was $522,104 or
$21.67 per limited partnership unit compared to a tax loss of $1,155,597 or
$47.97 per unit for the year ended December 31, 1995 and a tax loss of
$1,902,697 or $78.99 per limited partnership unit for the year ended December
31, 1994. The Partnership agreement provides for the taxable income or losses to
be allocated 97% to the Limited Partners and 3% to the General Partners, and in
accordance with this and the Internal Revenue Code, the loss for the year ended
December 31, 1996 was allocated in this fashion.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
- - - ------- --------------------------------------------
Listed under Item 14 of the report.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
- - - ------- ---------------------------------------------
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
---------------------------------------
None.
9
<PAGE>
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE
- - - -------- ---------------------------------------
REGISTRANT.
-----------
The Partnership, as an entity, does not have any directors or officers. The
Individual General Partner of the Partnership is Joseph M. Jayson. The directors
and executive officers of Realmark Properties, Inc., the Partnership's Corporate
General Partner, as of March 1, 1996, are listed below. Each director is subject
to election on an annual basis.
Title of All Positions Year First
Name Held With the Company Elected Director
- - - ---- --------------------- ----------------
Joseph M. Jayson President and Director 1979
Judith P. Jayson Vice President and Director 1979
Michael J. Colmerauer Secretary
Joseph M. Jayson, President and Director of Realmark Properties, Inc. and
Judith P. Jayson, Vice President and Director of Realmark Properties, Inc., are
married to each other.
The Director and Executive Officers of the Corporate General Partner and
their principal occupations and affiliations during the last five years or more
are as follows:
Joseph M. Jayson, age 58, is Chairman and Director and sole stockholder of
J.M. Jayson & Company, Inc. and certain of its affiliated companies:
Westmoreland Capital Corporation, Oilmark Corporation and U.S. Energy
Development Corporation. In addition, Mr. Jayson is President and Director of
Realmark Corporation and Realmark Properties, Inc., wholly owned subsidiaries of
J.M. Jayson & Company, Inc. and co-general partner of Realmark Property
Investors Limited Partnership, Realmark Property Investors Limited
Partnership-II, Realmark Property Investors Limited Partnership-III, Realmark
Property Investors Limited Partnership-IV, Realmark Property Investors Limited
Partnership-V, Realmark Property Investors Limited Partnership-VI A and Realmark
Property Investors Limited Partnership-VI B. Mr. Jayson is a member of the
Investment Advisory Board of the Corporate General Partner. Mr. Jayson has been
engaged in the real estate business for the last 34 years and is a Certified
Property manager as designated by the Institute of Real Estate Management
("I.R.E.M."). Mr. Jayson received a B.S. Degree in Education in 1961 from
Indiana University, a Masters Degree from the University of Buffalo in 1963, and
has served on the Educational Faculty of the Institute of Real Estate
Management. Mr. Jayson has for the last 34 years been engaged in various aspects
of real estate brokerage and investment. He brokered residential properties from
1962 to 1964, commercial and investment properties from 1964 to 1967, and in
1967, left commercial real estate to form his own investment firm. Since that
time, Mr. Jayson and J.M. Jayson & Company, Inc. have formed, or participated in
various ways, in forming over 30 real estate related limited partnerships. For
the past sixteen years, Mr. Jayson and J.M. Jayson & Company, Inc. and an
affiliate have also engaged in developmental drilling for gas and oil.
10
<PAGE>
Judith P. Jayson, age 57, is currently Vice-President and Director of
Realmark Properties, Inc. She is also a Director of the property management
affiliate, Realmark Corporation. Mrs. Jayson has been involved in property
management for the last 35 years and has extensive experience in the hiring and
training of property management personnel and in directing, developing and
implementing property management systems and programs. Mrs. Jayson, prior to
joining the firm in 1973, taught business in the Buffalo, New York high school
system. Mrs. Jayson graduated from St. Mary of the Woods College in Terre Haute,
Indiana, with a degree in Business Administration. Mrs. Jayson is the wife of
Joseph M. Jayson, the Individual General Partner.
Michael J. Colmerauer, 39, is Secretary and in-house legal counsel for J.M.
Jayson & Company, Inc., Realmark Corporation, Realmark Properties, Inc. and
other companies affiliated with the General Partners. He received a Bachelor's
Degree (BA) from Canisius College in 1980 and a Juris Doctors (J.D.) from the
University of Tulsa in 1983. Mr. Colmerauer is a member of the American and Erie
County Bar Association and has been employed by the Jayson group of companies
for the last 13 years.
ITEM 11: EXECUTIVE COMPENSATION.
- - - -------- -----------------------
No direct remuneration was paid or payable by the Partnership to directors
and officers (since it has no directors or officers) for its fiscal years ended
December 31, 1996, 1995 or 1994; nor was any direct remuneration paid or payable
by the Partnership to directors or officers of Realmark Properties, Inc., the
Corporate General Partner and sponsor for the years ended December 31, 1996,
1995 or 1994.
The following table sets forth for the years ended December 31, 1996, 1995
and 1994 the compensation paid by the Partnership, directly or indirectly, to
affiliates of the General Partners:
<TABLE>
<CAPTION>
Entity Receiving Type of
Compensation Compensation 1996 1995 1994
------------ ------------ ---- ---- ----
<S> <C> <C> <C> <C>
Realmark Properties, Inc.
(The Corporate General
Partner) Interest charged on
accounts payable -
affiliates $281,944 $194,407 $103,681
----------- ----------- -----------
Reimbursement for
allocated partnership
administration expenses:
Investor Services Fees 14,275 11,372 26,601
Brokerage 24,200 15,578 30,249
Portfolio Management
& Accounting Fees 193,548 275,932 205,253
Realmark Corporation Property Management Fees 280,167 247,223 220,993
Computer Service Fees 20,394 20,394 20,200
----------- ----------- -----------
532,584 570,499 503,296
----------- ----------- -----------
Total $814,528 $764,906 $606,977
</TABLE>
11
<PAGE>
The Corporate General Partner is entitled to a continuing Partnership
Management Fee equal to 7% of net cash flow (as defined in the Partnership
Agreement), of which 2% is subordinated to the receipt by the Limited Partners
of a non-cumulative annual cash return equal to 7% of the average of their
adjusted Capital Contributions (as defined in the Partnership Agreement). The
Corporate General Partner is paid its 5% Partnership Management Fee annually as
cash flow allows. The 2% subordinated fee will not be paid or accrued until such
time as the Limited Partners have received their 7% return and payment of the
fee becomes probable. The General Partners are also entitled to 3% of
Distributable Cash (as defined in the Partnership Agreement) and to certain
expense reimbursements with respect to Partnership operations.
Net income or loss and proceeds arising from a sale or refinancing shall be
distributed first to the limited partners in amounts equivalent to a 7% return
on the average of their adjusted capital contributions, then an amount equal to
their capital contributions, then an amount equal to an additional 5% of the
average of their adjusted capital contributions, then to all partners in an
amount equal to their respective positive capital balances and, finally, in the
ratio of 87% to the limited partners and 13% to the general partners.
The General Partners are also allowed to collect a property disposition fee
upon sale of acquired properties. This fee is not to exceed the lesser of 50% of
amounts customarily charged in arm's-length transactions by others rendering
similar services for comparable properties or 3% of the sales price. The
property disposition fee is subordinate to payments to the limited partners of a
cumulative annual return (not compounded) equal to 7% of their average adjusted
capital balances and to repayment to the limited partners of an amount equal to
their original capital contributions. Since these conditions have not been met
no fees have been recorded or paid on the sale of the Gold Key II apartment
complex.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- - - -------- -----------------------------------------------
AND MANAGEMENT.
---------------
No person owns of record or beneficially more than five percent (5%) of the
units of Limited Partnership Interests of the Partnership. Except for the
General Partner's Interest in the Partnership ($3,000 initial capital
contribution), the General Partners, as of December 31, 1996, owned no units of
Limited Partnership Interest.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
- - - -------- -----------------------------------------------
(a) Transactions with Management and Others.
---------------------------------------
No transactions have occurred between the Partnership and those in the
management of Realmark Properties, Inc. All transactions between the Partnership
and Realmark Properties, Inc. (the Corporate General Partner) and any other
affiliated organization are described in Item 11 of this report and in Note 7 to
the Financial Statements.
12
<PAGE>
ITEM 14: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND
- - - -------- ---------------------------------------------
REPORTS ON FORM 8-K.
--------------------
(a) Financial Statements and Schedules.
-----------------------------------
FINANCIAL STATEMENTS PAGE
-------------------- ----
(I) Independent Auditors' Report 15
(ii) Balance Sheets at December 31, 1996 and 1995 16
(iii) Statements of Operations for the years ended
December 31, 1996, 1995 and 1994 17
(iv) Statements of Partners' Capital (Deficit) for the
years ended December 31, 1996, 1995 and 1994 18
(v) Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994 19
(vi) Notes to Financial Statements 20 - 31
FINANCIAL STATEMENT SCHEDULES
-----------------------------
(i) Schedule I - Mortgage Loans on Real Estate 32
(ii) Schedule III - Real Estate and Accumulated
Depreciation 33 - 34
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or the notes thereto.
(b) Reports on Form 8-K.
--------------------
None
(c) Exhibits
--------
4. Instruments defining the rights of security holders, including
indentures
(a) Certificate of Limited Partners filed with the Registration
Statement of the Registrant Form S-11, filed February 14, 1985,
and subsequently amended incorporated herein by reference.
(b) Partnership Agreement included with the Registration Statement of
the Registrant as filed and amended to date incorporated herein
by reference.
13
<PAGE>
ITEM 14: EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND
- - - -------- ---------------------------------------------
REPORTS ON FORM 8-K (Con't.).
-----------------------------
10. Material contracts
(a) Property Management Agreement with Realmark Corporation included
with the Registration Statement of the Registrant as filed and
amended to date incorporated herein by reference.
(b) Joint Venture Agreement with Realmark Property Investors Limited
Partnership VI B as filed and amended to date incorporated herein
by reference.
(c) Property sales agreements with unrelated third-party included
with the third quarter Form 10Q incorporated herein by reference.
14
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Realmark Property Investors Limited Partnership-IV:
We have audited the accompanying balance sheets of Realmark Property Investors
Limited Partnership-IV as of December 31, 1996 and 1995, and the related
statements of operations, partners' capital (deficit), and cash flows for each
of the three years in the period ended December 31, 1996. Our audits also
included the financial statement schedules listed in the index at Item 14. These
financial statements and financial statement schedules are the responsibility of
the General Partners. Our responsibility is to express an opinion on the
financial statements and the financial statement schedules 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
reasonable 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 statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
General Partners, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Realmark Property Investors Limited
Partnership-IV at December 31, 1996 and 1995 and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1996 in conformity with generally accepted accounting principles. Also, in our
opinion, such 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.
The accompanying financial statements and financial statement schedules have
been prepared assuming that the Partnership will continue as a going concern. As
discussed in Note 15 to the financial statements, the Partnership's recurring
losses, continuing cash flow deficiencies, partners' deficit, delinquent
mortgage, and one mortgage due in 1997 raise substantial doubt about its ability
to continue as a going concern. Management's plans concerning these matters are
also described in Note 15. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
DELOITTE & TOUCHE, LLP
Buffalo, New York
March 25, 1997
15
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
Assets 1996 1995
------------ ------------
<S> <C> <C>
Property, at cost (including assets held for sale, see Note 3):
Land $ 1,773,922 $ 1,773,922
Buildings and improvements 27,898,057 27,641,015
Furniture, fixtures and equipment 2,711,794 2,711,794
------------ ------------
32,383,773 32,126,731
Less accumulated depreciation 13,753,437 13,104,388
------------ ------------
Property, Net 18,630,336 19,022,343
Escrow deposits 764,566 338,660
Interest and other receivables 591,255 65,026
Note receivable -- 154,875
Prepaid expenses 231,561 224,468
Mortgage costs, net of accumulated amortization
of $493,159 in 1996 and $634,587 in 1995 265,953 172,966
Other assets 4,455 4,455
------------ ------------
Total Assets $ 20,488,126 $ 19,982,793
============ ============
Liabilities and Partners' Deficit
Liabilities:
Mortgages and note payable $ 18,939,324 $ 19,414,288
Cash overdraft 138,032 252,805
Accounts payable and accrued expenses 864,429 991,181
Accounts payable - affiliates 3,167,754 2,220,847
Interest payable 172,452 156,525
Security deposits and prepaid rents 395,123 414,471
------------ ------------
Total liabilities 23,677,114 23,450,117
------------ ------------
Minority interest in joint venture 18,477 54,583
------------ ------------
Partners' deficit:
General partners (669,203) (678,636)
Limited partners (2,538,262) (2,843,271)
------------ ------------
Total Partners' deficit (3,207,465) (3,521,907)
------------ ------------
Total Liabilities and Partners' Deficit $ 20,488,126 $ 19,982,793
============ ============
</TABLE>
See notes to financial statements
16
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Income:
Rental $ 5,163,212 $ 5,456,107 $ 4,777,840
Interest and other 373,200 297,452 284,766
----------- ----------- -----------
Total income 5,536,412 5,753,559 5,062,606
----------- ----------- -----------
Expenses:
Property operations 2,737,139 3,051,398 2,959,626
Interest:
Paid to Affiliates 281,944 194,407 103,681
Other 1,587,480 1,614,910 1,641,865
Depreciation and amortization 902,222 1,215,149 1,204,166
Administrative:
Paid to affiliates 532,584 570,499 503,296
Other 717,865 579,309 607,672
----------- ----------- -----------
Total expenses 6,759,234 7,225,672 7,020,306
----------- ----------- -----------
Loss before loss allocated to minority interest (1,222,822) (1,472,113) (1,957,700)
and extraordinary items
Loss allocated to minority interest 36,106 42,625 51,247
Extraordinary items:
Gain on extinguishment of debt 795,000 -- --
Gain from insurance proceeds on fire loss 706,158 -- --
----------- ----------- -----------
Net income (loss) $ 314,442 ($1,429,488) ($1,906,453)
=========== =========== ===========
Loss per limited partnership unit before
extraordinary gains ($ 49.26) ($ 59.34) ($ 79.14)
Extraordinary gains per limited partnership unit 62.32 -- --
----------- ----------- -----------
Income (loss) per limited partnership unit $ 13.06 ($ 59.34) ($ 79.14)
=========== =========== ===========
Weighted average number of limited partnership
units outstanding 23,366 23,366 23,366
=========== =========== ===========
</TABLE>
See notes to financial statements
17
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
General Limited Partners
Partners ----------------
Amount Units Amount
------ ----- ------
Balance, January 1, 1994 ($ 578,557) 23,366 $ 392,591
Net loss (57,194) -- (1,849,259)
----------- ----------- -----------
Balance, December 31, 1994 (635,751) 23,366 (1,456,668)
Net loss (42,885) -- (1,386,603)
----------- ----------- -----------
Balance, December 31, 1995 (678,636) 23,366 (2,843,271)
Net income 9,433 -- 305,009
----------- ----------- -----------
Balance, December 31, 1996 ($ 669,203) 23,366 ($2,538,262)
=========== =========== ===========
See notes to financial statements
18
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Cash Flows from operating activities:
Net income (loss) $ 314,442 ($1,429,488) ($1,906,453)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 902,222 1,215,149 1,204,166
Loss allocated to minority interest (36,106) (42,625) (51,247)
Extraordinary gains (1,501,158) -- --
Changes in operating assets and liabilities:
Interest and other receivables (526,229) (21,454) (2,388)
Prepaid expenses (7,093) (133,077) (11,210)
Accounts payable and accrued expenses (126,752) (502,227) 224,294
Interest payable 15,927 23,893 (6,685)
Security deposits and prepaid rent (19,348) 14,143 88,863
----------- ----------- -----------
Net cash (used in) operating activities: (984,095) (875,686) (460,660)
----------- ----------- -----------
Cash flows from investing activities:
Escrow deposits (425,906) 678,440 (280,994)
Collection of principal on notes receivable 154,875 15,000 15,000
Property acquisitions and additions (548,871) (153,469) (75,230)
Insurance proceeds on fire loss 876,393 -- --
----------- ----------- -----------
Net cash provided by (used in) investing activities 56,491 539,971 (341,224)
----------- ----------- -----------
Cash flows from financing activities:
(Decrease) increase in cash overdraft (114,773) 242,519 10,286
Principal payments on mortgages (5,658,964) (467,195) (266,817)
Proceeds from refinancings 5,979,000 -- --
Mortgage costs (224,566) (144,183) (31,500)
Increase in accounts payable - due to affiliates 946,907 704,574 1,054,945
----------- ----------- -----------
Net cash provided by financing activities 927,604 335,715 766,914
----------- ----------- -----------
Decrease in cash -- -- (34,970)
Cash - beginning of year -- -- 34,970
----------- ----------- -----------
Cash - end of year $ -- $ -- $ --
=========== =========== ===========
As discussed in Footnote 8, the Partnership has estimated total insurance proceeds to be $876,393 as
the result of a fire at Sutton Park Apartments. As of December 31, 1996, $300,000 had been received
and $576,393 was receivable.
</TABLE>
See notes to financial statements
19
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1. FORMATION AND OPERATION OF PARTNERSHIP:
---------------------------------------
Realmark Property Investors Limited Partnership-IV (the "Partnership"), a
Delaware Limited Partnership, was formed on February 12, 1985, to invest in a
diversified portfolio of income-producing real estate investments.
In April 1985, the Partnership commenced the public offering of units of
limited partnership interest. Other than matters relating to organization, it
had no business activities and, accordingly, had not incurred any expenses or
earned any income until the first interim closing (minimum closing) of the
offering, which occurred on September 20, 1985. On June 22, 1986 the offering
was concluded, at which time 23,363 units of limited partnership interest were
outstanding, excluding 3 units held by an affiliate of the General Partners. The
General Partners are Realmark Properties, Inc., a wholly-owned subsidiary of
J.M. Jayson & Company, Inc. and Joseph M. Jayson, the Individual General
Partner. Joseph M. Jayson is the sole shareholder of J.M. Jayson & Company, Inc.
Under the partnership agreement, the general partners and their affiliates
can receive compensation for services rendered and reimbursement for expenses
incurred on behalf of the Partnership (See Note 7).
The partnership agreement also provides that distribution of funds,
revenues, costs and expenses arising from partnership activities, exclusive of
any sale or refinancing activities, are to be allocated 97% to the limited
partners and 3% to the general partners.
Net income or loss and proceeds arising from a sale or refinancing shall be
distributed first to the limited partners in amounts equivalent to a 7% return
on the average of their adjusted capital contributions, then an amount equal to
their capital contributions, then an amount equal to an additional 5% of the
average of their adjusted capital contributions, then to all partners in an
amount equal to their respective positive capital balances and, finally, in the
ratio of 87% to the limited partners and 13% to the general partners.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
(a) 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 and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
20
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con't.):
----------------------------------------------------
(b) Property and Depreciation
-------------------------
Expenditures for maintenance and repairs are expensed as incurred, and
major renewals and betterments are capitalized. Depreciation is provided using
the straight-line method over the estimated useful lives of the respective
assets and totaled $770,643, $1,111,013 and $1,096,657 for the years ended
December 31, 1996, 1995 and 1994, respectively. Generally, buildings and
improvements are depreciated over 25 years, and furniture, fixtures, and
equipment are depreciated over 5 years. The Accelerated Cost Recovery System and
Modified Accelerated Cost Recovery System are used to determine depreciation
expense for tax purposes. For further discussion, see Footnote 3.
(c) Rental Income
-------------
Leases for residential properties have terms of one year or less.
Commercial leases have terms of from one to five years. Rental income is
recognized on the straight line method over the term of the lease.
(d) Mortgage Costs
--------------
Mortgage costs incurred in obtaining property mortgage financing have been
deferred and are being amortized over the terms of the respective mortgages.
(e) Minority Interest in Consolidated Joint Venture
-----------------------------------------------
The minority interest in a consolidated joint venture is stated at the
amount of capital contributed by the minority investors adjusted for their share
of joint venture losses.
(f) Rents Receivable
----------------
Due to the nature of these accounts, residential rent receivables are fully
reserved for at December 31, 1996 and 1995.
3. ACQUISITION AND DISPOSITIONS OF RENTAL PROPERTY:
------------------------------------------------
In November 1985, the Partnership acquired a 168 unit apartment complex
(Lakeview Village Apartments) located in Milwaukee, Wisconsin, for a purchase
price of $4,411,659, which included $320,779 in acquisition fees.
21
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
3. ACQUISITION AND DISPOSITIONS OF RENTAL PROPERTY (Con't.):
---------------------------------------------------------
In December 1985, the Partnership acquired a 288 unit apartment complex
(Sutton Park Apartments, formerly Bristol Square Apartments) located in Lansing,
Michigan for a purchase price of $7,252,858, which included $588,716 in
acquisition fees.
In August 1986, the Partnership acquired two office/warehouse buildings of
62,598 square feet (Airlanes I) and 68,300 square feet (Airlane III), consisting
of approximately 25% office space and 75% warehouse space located in Nashville,
Tennessee, for a purchase price of $6,180,920, which included $383,169 in
acquisition fees.
In October 1986, the Partnership acquired an 86 unit apartment complex
(Gold Key Village II) located in Englewood, Ohio for a purchase price of
$2,354,615, which included $152,744 in acquisition fees.
In December 1986, the Partnership acquired two apartment complexes
consisting of 96 and 144 units (Creekside Apts., formerly Bretton Park I and II)
located in Flat Rock, Michigan, for a purchase price of $5,462,176, which
included $445,964 in acquisition fees.
In December 1986, the Partnership acquired a 215 unit apartment complex
(Willow Creek Apartments) located in Greenville, South Carolina, for a purchase
price of $5,040,560, which included $477,987 in acquisition fees.
In December 1986, the Partnership acquired a 72 unit apartment complex
(Evergreen Terrace) located in Lansing, Michigan for a purchase price of
$1,711,093, which included $314,379 in acquisition fees.
In May 1987, the Partnership acquired a 56 unit apartment complex
(Chapelwood Estates, formerly Cedar Court Apartments) located in Monroeville,
Pennsylvania, for a purchase price of $1,439,832, which included $370,728 in
acquisition fees.
In 1988, the Partnership acquired, upon its dissolution, the net assets and
liabilities of the Willow Lake Joint Venture, which amounted to $1,635,474. The
net assets acquired were equivalent to the carrying value of the Partnership's
investment in the joint venture at the time of the dissolution. Since the date
of the acquisition, the Partnership had capitalized additional construction
costs of $5,059,296, which includes capitalized interest of $151,993.
Construction on this project was substantially complete in early 1991. During
September 1992, Willow Lake's lender foreclosed and took possession of the
property because the Partnership had difficulty in obtaining tenant leases and
financing to complete tenant build-out costs. The loss on disposal generated a
$1,328,352 loss for financial statement purposes.
In October, 1990 the Partnership sold the Gold Key II apartment complex for
$2,881,136 which generated a gain of $911,177 for financial statement purposes.
22
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
3. ACQUISITION AND DISPOSITIONS OF RENTAL PROPERTY (Con't.):
---------------------------------------------------------
In July 1996, the Partnership entered into a plan to dispose of the
property, plant and equipment of the following:
Carrying Amount Net Income (Loss)
of Property at for the Year Ended
Property December 31, 1996 December 31, 1996
Lakeview Village $2,507,241 ($222,600)
Sutton Park 4,248,201 1,296,059
Creekside 3,093,751 (34,451)
Willow Creek 2,854,886 (87,320)
Evergreen Terrace 966,352 (93,133)
Management has determined that the sale of the properties is in the best
interests of the limited partners. As of December 31, 1996, an agreement,
cancelable by the buyer, has been signed with anticipated sales prices of:
Property Sales Price
Lakeview Village $4,090,000
Sutton Park 5,800,000
Creekside 5,900,000
Willow Creek 5,425,000
Evergreen Terrace 1,200,000
The actual date of closing on the sale of any property will depend on
financing availability, tax credit availability and other factors.
Financial Accounting Standards Statement No. 121, Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of (the
"Statement") requires that assets to be disposed of be recorded at the lower of
carrying value or fair value less costs to sell. The Statement also requires
that such assets not be depreciated during the disposal period, as the assets
will be recovered through sale rather than through operations. In accordance
with this Statement, the long-lived assets of the Partnership are recorded at
the carrying amount which is the lower of carrying value or fair value less
costs to sell, and have not been depreciated during the disposal period.
Depreciation expense, not recorded during the disposal period, for the year
ended December 31, 1996 totaled approximately $346,000.
23
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
4. NOTE RECEIVABLE
---------------
In connection with the sale of the Gold Key II apartment complex, the
Partnership took back a second mortgage as security for two notes receivable.
The first note for $155,000 carried an interest rate of 10% with interest
payable monthly and the remaining balance payable at maturity on October 11,
1995. The second note for $75,000 carried an interest rate of 10% with principal
payments payable in five annual installments of $15,000 and any remaining
interest payable at maturity on October 11, 1995. Neither of the notes were paid
in full by the maturity date and, in accordance with the agreements, both notes
accrue interest at 15% annually on the unpaid balances. The Partnership received
a settlement in the amount of $175,000 during 1996. The remainder of the
balances were written off.
5. MORTGAGES AND NOTE PAYABLE:
---------------------------
The Partnership has the following mortgages and note payable:
Lakeview Village Apartments
- - - ---------------------------
A 10.875% mortgage with a balance of $2,311,688 at December 31, 1995, which
provided for annual principal and interest payments of $305,496 in equal monthly
installments. The balance was originally due May 1, 1993, but the Partnership
had been granted an extension to January 1996. The property was refinanced
January 11, 1996 with an 8.25% mortgage for $2,529,000. The new mortgage, with a
balance of $2,508,128 at December 31, 1996, provides for annual principal and
interest payments of $232,920 in equal monthly installments. The term of the
mortgage is ten (10) years with the remaining balance due and payable on
February 1, 2006.
Sutton Park Apartments (formerly Bristol Square Apartments)
- - - -----------------------------------------------------------
A first mortgage with a balance of $2,849,412 at December 31, 1995, which
provided for principal and interest payments at 9% payable in equal monthly
installments of $26,700, due December 31, 1995. In addition, a second,
non-interest bearing mortgage with a balance of $1,000,000 at December 31, 1995.
Under the terms of the agreement, 80% of the second mortgage was to be forgiven
if the remaining balance of the first mortgage was paid by December 31, 1995.
Both mortgages were refinanced January 11, 1996 with an 8% mortgage for
$3,400,000, and an unsecured $50,000 promissory note. The new mortgage, with a
balance of $3,370,652 at December 31, 1996, provides for annual principal and
interest payments of $306,168 in equal monthly installments. The term of the
mortgage is ten (10) years with the remaining balance due and payable on
February 1, 2006. The promissory note, with a balance of $29,170 at December 31,
1996, provides for monthly principal payments of $2,083 plus interest accruing
at the lenders reference rate plus 2% annually (10.25% at December 31, 1996).
The note is due and payable February 1, 1998.
As a result of the refinancing, a portion of the second mortgage, described
above, was forgiven and an extraordinary gain in the amount of $795,000 was
recognized in 1996.
24
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
5. MORTGAGES AND NOTE PAYABLE (Con't.):
------------------------------------
Airlanes I & III
- - - ----------------
A 7.625% mortgage with a balance of $3,525,932 and $3,622,816 at December
31, 1996 and 1995, respectively, which provides for annual principal and
interest payments of $369,783 payable in equal monthly installments, with the
remaining balance due January 1, 1999.
Creekside
- - - ---------
An adjustable rate mortgage with an outstanding principal balance of
$3,670,328 and $3,745,882 at December 31, 1996 and 1995, respectively. The
interest rate is adjustable quarterly to a maximum rate of 13.5% and a minimum
rate of 7% (7.09% at December 31, 1996). The mortgage is payable monthly in
amounts which vary with the interest rate. Monthly payments at December 31, 1996
based on a 7.09% interest rate were $27,827. The balance of the mortgage is due
and payable March 31, 1998.
Willow Creek
- - - ------------
A 9.25% mortgage which provides for annual principal and interest payments
of $393,024 payable in equal monthly installments with the remaining balance
originally due on September 1, 1996; the maturity has been extended to March 1,
1997. The balance as of December 31, 1996 and 1995 was $3,919,467 and
$3,948,467, respectively.
Evergreen Terrace
- - - -----------------
An adjustable rate mortgage with a balance at December 31, 1996 and 1995 of
$1,021,096 and $1,036,006, respectively. The interest rate is adjustable
annually to a maximum rate of 15% during the first five years of the loan term
and 17% for the remaining life of the loan; the interest rate shall never be
less than 9% over the life of the loan (9.0% at December 31, 1996). The mortgage
is payable monthly in amounts which vary with the interest rate. Monthly
payments at December 31, 1996 based on a 9.0% interest rate were $8,962. The
balance of the mortgage is due and payable June 1, 1998.
Chapelwood Estates (formerly Cedar Court)
- - - -----------------------------------------
A 9.25% mortgage with a balance of $894,551 and $900,017 at December 31,
1996 and 1995, respectively, which provides for annual principal and interest
payments of $89,592 payable in equal monthly installments with the remaining
balance due September 1, 1996. The mortgage is now in default and payable on
demand.
The mortgages described above are secured by the Partnership properties to
which they relate.
25
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
5. MORTGAGES AND NOTE PAYABLE (Con't.):
The aggregate maturities of mortgages and notes payable are as follows:
Year Amount
1997 $5,104,085
1998 4,783,112
1999 3,384,889
2000 82,696
2001 89,653
Thereafter 5,494,889
-----------------
TOTAL $18,939,324
=================
6. MINORITY INTEREST OF RELATED PARTY IN LAKEVIEW JOINT VENTURE
On September 1, 1992, the Partnership entered into an agreement to form a
joint venture with Realmark Property Investors Limited Partnership-VI B
(RPILP-VI B). The joint venture was formed for the purpose of operating the
Lakeview Apartment complex owned by the Partnership. Under the terms of the
agreement, RPILP VI-B contributed $175,413, with the Partnership contributing
the property net of the first mortgage. The interests of the Partnerships in the
property were determined based on the fair value of the property as estimated by
the General Partners.
The joint venture agreement provides that any income, loss, gain, cash
flow, or sale proceeds be allocated 83.78% to the Partnership and 16.22% to
RPILP-VI B. The net loss from the date of inception has been allocated to the
minority interest in accordance with the agreement and has been recorded as a
reduction of the capital contribution.
A reconciliation of the minority interest share in the Lakeview Joint
Venture is as follows:
1996 1995
Balance, Beginning of Year $54,583 $97,208
Allocated Loss (36,106) (42,625)
---------- -----------
Balance, End of Year $18,477 $54,583
========== ===========
26
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
7. PROPERTY MANAGEMENT FEES AND RELATED PARTY TRANSACTIONS:
--------------------------------------------------------
Management fees for the management of certain of the Partnership's
properties are paid to an affiliate of the General Partners. The management
agreement provides for 5% of gross monthly receipts of the complexes to be paid
as fees for administering the operations of the properties. These fees totaled
$280,167, $247,223 and $220,993 for the years ended December 31, 1996, 1995 and
1994, respectively.
The Partnership entered into a management agreement with an unrelated third
party for the management of Airlane I and III on August 15, 1986. The agreement
provides for the payment of a management fee equal to 4% of monthly gross rental
income. The results of operations include $30,245, $27,170 and $21,476 of such
fees in 1996, 1995 and 1994, respectively.
According to the terms of the Partnership Agreement, the Corporate General
Partner is also entitled to receive a partnership management fee equal to 7% of
net cash flow (as defined in the Partnership Agreement), 2% of which is
subordinated to the limited partners having received an annual cash return equal
to 7% of their average adjusted capital contributions. No such fee was paid or
accrued by the partnership for the years ended December 31, 1996, 1995 and 1994.
Accounts payable to affiliates amounted to $3,167,754 and $2,220,847 at
December 31, 1996 and 1995, respectively. The payables represent fees due and
advances from the Corporate General Partner or an affiliate of the General
partners. Interest on accounts payable - affiliates, charged at a rate of 11% on
the average outstanding balance, totaled $281,944, $194,407 and $103,681 for the
years ended December 31, 1996, 1995, and 1994, respectively. All amounts payable
to affiliates are due upon demand.
The General Partners are also allowed to collect a property disposition fee
upon sale of acquired properties. This fee is not to exceed the lesser of 50% of
amounts customarily charged in arm's-length transactions by others rendering
similar services for comparable properties or 3% of the sales price. The
property disposition fee is subordinate to payments to the limited partners of a
cumulative annual return (not compounded) equal to 7% of their average adjusted
capital balances and to repayment to the limited partners of an amount equal to
their original capital contributions. Since these conditions have not been met
no fees have been recorded or paid on the sale of the Gold Key II apartment
complex.
Computer service charges for the partnership are paid or accrued to an
affiliate of the General Partner. The fee is based upon the number of apartment
units and totaled $20,394, $20,394 and $20,200 for the years ended December 31,
1996, 1995 and 1994, respectively.
27
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
7. PROPERTY MANAGEMENT FEES AND RELATED PARTY TRANSACTIONS (Con't.):
-----------------------------------------------------------------
Pursuant to the terms of the Partnership Agreement, the Corporate General
partner charged the Partnership for reimbursement of certain costs and expenses
incurred by the Corporate General Partner and its affiliates in connection with
the administration of the Partnership. These charges were for the Partnership's
allocated share of such costs and expenses which include payroll, legal, rent,
depreciation, printing, mailing, travel and communication costs related to
Partnership accounting, partner communication and relations and property
marketing and are included in property operations. Additionally, Partnership
accounting and portfolio management fees, investor services fees and brokerage
fees are allocated based on total assets, number of partners and number of
units, respectively. These charges totaled $232,023, $302,882 and $262,103 in
1996, 1995 and 1994, respectively.
8. EXTRAORDINARY GAIN FROM INSURANCE PROCEEDS:
-------------------------------------------
On July 16, 1996 the Sutton Park Apartments experienced a fire in one of
its buildings resulting in property destruction estimated at a net book value of
$170,235. It has been estimated that the Partnership will receive insurance
proceeds totaling $876,393, resulting in an extraordinary gain for financial
statement purposes of $706,158.
As of December 31, 1996, $576,393 in insurance proceeds was not received
and is included in Interest and Other Receivables on the balance sheet.
9. INCOME TAXES:
-------------
No provision has been made for income taxes since the income or loss of the
partnership is to be included in the tax returns of the individual Partners.
The tax returns of the Partnership are subject to examination by the
Federal and state taxing authorities. Under federal and state income tax laws,
regulations and rulings, certain types of transactions may be accorded varying
interpretations and, accordingly, reported partnership amounts could be changed
as a result of any such examination.
28
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
9. INCOME TAXES (Con't.):
The reconciliation of net loss for the years ended December 31, 1996, 1995
and 1994, as reported in the statement of operations, and as would be reported
for tax return purposes is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Net income (loss) -
Statement of operations $ 314,442 ($1,429,488) ($1,906,453)
Add to (deduct from):
Difference in depreciation (320,560) (59,198) (133,448)
Gain on sale of property 4,402 4,402 4,402
Gain from fire loss (706,158) -- --
Other, primarily increase in
allowance for doubtful accounts 185,770 328,687 132,802
----------- ----------- -----------
Net loss - tax return purposes ($ 522,104) ($1,155,597) ($1,902,697)
=========== =========== ===========
The reconciliation of Partners' (Deficit) as of December 31, 1996, 1995 and
1994, as reported in the balance sheet and as reported for tax return purposes,
is as follows:
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Partners' Deficit - Balance Sheet ($3,207,465) ($3,521,907) ($2,092,419)
Add to (deduct from):
Accumulated difference in depreciation (5,548,135) (5,227,575) (5,168,377)
Accumulated amortization of
discounts on mortgages payable 382,695 382,695 382,695
Syndication fees 2,734,297 2,734,297 2,734,297
Difference in book and tax basis in
Partnership investments (635,737) (635,737) (635,737)
Gain from fire loss (706,158) -- --
Other, primarily allowance for
doubtful accounts 1,332,809 1,147,039 813,950
----------- ----------- -----------
Partners' Deficit - tax return purposes ($5,647,694) ($5,121,188) ($3,965,591)
=========== =========== ===========
</TABLE>
29
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
10. LEASES:
In connection with the operation of its commercial property, the
Partnership has entered into leases with terms of one to five years. Minimum
future rentals to be received for each of the next five years under
noncancelable operating leases are as follows:
Year Amount
1997 $568,424
1998 443,807
1999 297,877
2000 206,349
2001 109,311
--------------
TOTAL $1,625,768
==============
11. FAIR VALUE OF FINANCIAL INSTRUMENTS:
------------------------------------
Statement of Financial Accounting Standards No. 107 requires disclosure
about fair value of certain financial instruments. The fair value of accounts
receivable, accounts payable, accounts payable affiliates, accrued expenses and
deposit liabilities approximate the carrying value due to the short-term nature
of these instruments.
Management has estimated that the fair values of the mortgages payable on
Lakeview and Sutton Park approximate their carrying values of $2,508,128 and
$3,370,652, respectively, as both mortgages payable were refinanced in January
1996.
Management has estimated that the fair values of the mortgages payable on
Willow Creek and Chapelwood Estates approximate their carrying values of
$3,919,467 and $894,551, respectively, due to their short-term nature. The
mortgage on Willow Creek is due March 1, 1997 and Chapelwood Estates was due
September 1, 1996.
Management has estimated that the fair values of the mortgages payable on
Creekside and Evergreen Terrace approximate their carrying values of $3,670,328
and $1,021,096, respectively, due to the fact that both mortgages payable are
adjustable rate mortgages and their rates are adjusted periodically based on
indexes specified in the mortgage.
Management has estimated that the fair value of the mortgage payable on
Airlanes I and II approximate its carrying value of $3,525,932, based on
currently available rates for debt of similar terms.
See footnote 5 for a description of the terms of the mortgages payable.
30
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
12. SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
-----------------------------------------------
1996 1995 1994
---------- ---------- ----------
Cash paid for interest $1,571,553 $1,591,017 $1,648,550
========== ========== ==========
13. CONTINGENCIES:
--------------
Included in accounts payable and accrued expenses on the balance sheet are
delinquent taxes and interest on Evergreen Terrace Apartments for the years 1993
through 1995 totaling approximately $116,000 and $193,000 at December 31, 1996
and 1995, respectively. As of December 31, 1996, the property is in tax sale.
The result of such tax sale could be substantial penalties or the potential loss
of property.
14. RECLASSIFICATIONS:
------------------
Certain reclassifications have been made to the 1994 balances to conform
with the classifications used in 1995.
15. GOING CONCERN CONSIDERATIONS:
-----------------------------
The Partnership continued to experience operating losses and cash flow
difficulties in 1996. In addition, as discussed in Note 13, Evergreen Terrace
Apartments is liable for delinquent real estate taxes in the amount of
approximately $116,000. The Chapelwood Estates mortgage is currently delinquent
and payable on demand, and final payments are due in March 1997 for the Willow
Creek mortgage. Management is currently seeking a work out agreement related to
the back taxes and is seeking refinancing for the mortgages due and all other
mortgages in the Partnership to improve cash flow. These factors combined with
significant partners' deficits have raised substantial doubt about the
Partnership's ability to continue as a going concern.
Management is continuing its efforts to reduce expenses and increase rents
and also to refinance existing properties. In addition, management is currently
negotiating the sales of several properties in the Partnership as discussed in
Footnote 3.
31
<PAGE>
SCHEDULE I
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Principal Amount of
Final Carrying Loan Subject to
Interest Maturity Face Amount Amount of Delinquent Principal
Description Rate Date Periodic Payment Term Prior Liens of Mortgage Mortgage or Interest
----------- ---- ---- --------------------- ----------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gold Key Village II 10% 10/11/95 Interest payable monthly, $2,290,000 $230,000 $ - $ -
Second Mortgage, 86 principal payments of $15,000 First mortgage
Unit Apartment were due annually until
Complex in 10/11/95 when the remaining
Englewood, Ohio principal of $154,875 was due.
1996 1995 1994
<S> <C> <C> <C>
Balance at beginning of period $154,875 $169,875 $184,875
Deductions during period:
Collections of principal 154,875 15,000 15,000
--------- --------- ---------
Balance at close of period $0 $154,875 $169,875
========= ========= =========
</TABLE>
See note 4 to the financial statements
32
<PAGE>
SCHEDULE III
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP-IV
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Initial Cost to Cost Gross amounts at which
Partnership Capitalized Carried at Close of Period
----------------------- -----------------------------------
Property Subsequent to (1)(2)
Description Encumbrances Land Buildings Acquisition Land Buildings Total
<S> <C> <C> <C> <C> <C> <C> <C>
Lakeview Village Apts.
Milwaukee, WI $2,508,128 $200,000 $3,785,880 $163,790 $200,000 $3,949,670 $4,149,670
Sutton Park Apts.
Lansing, MI 3,399,822 400,000 6,139,297 241,702 400,000 6,380,999 6,780,999
Airlanes Office Whse.
Nashville, TN 3,525,932 576,500 5,604,420 331,173 576,500 5,935,593 6,512,093
Creekside Apts.
Flat Rock, MI 3,670,328 250,500 4,491,688 123,498 250,500 4,615,186 4,865,686
Willow Creek Apts.
Greenville, SC 3,919,467 226,300 4,276,760 5,900 226,300 4,282,660 4,508,960
Evergreen Terrace
Lansing, MI 1,021,096 69,372 1,462,471 0 69,372 1,462,471 1,531,843
Chapelwood Estates
Monroeville, PA 894,551 51,250 1,238,528 32,950 51,250 1,271,478 1,322,728
------------ ---------- ----------- ----------- ---------- ----------- -----------
$18,939,324 $1,773,922 $26,999,044 $899,013 $1,773,922 $27,898,057 $29,671,979
=========== ========== =========== ======== ========== =========== ===========
___________________________________________________________________________________________________________
Life on Which
Depreciation
In Latest
(3) Statement
Property Accumulated Date of Of Operations
Description Depreciation Construction Is Computed
<S> <C> <C> <C>
Lakeview Village Apts.
Milwaukee, WI $1,642,430 Nov-85 25 Years
Sutton Park Apts.
Lansing, MI 2,532,798 Dec-85 25 Years
Airlanes Office Whse.
Nashville, TN 2,388,294 Aug-86 25 Years
Creekside Apts.
Flat Rock, MI 1,779,334 Dec-86 25 Years
Willow Creek Apts.
Greenville, SC 1,654,074 Dec-86 25 Years
Evergreen Terrace
Lansing, MI 565,490 Dec-86 25 Years
Chapelwood Estates
Monroeville, PA 486,622 May-87 25 Years
----------
$11,049,042
===========
</TABLE>
33
<PAGE>
SCHEDULE III
(Continued)
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(1) Cost for Federal income tax purposes is $29,671,979.
(2) A reconciliation of the carrying amount of land and buildings as of
December 31, 1996, 1995 and 1994 follows:
1996 1995 1994
---- ---- ----
Balance at beginning of period $ 29,414,937 $ 29,269,324 $ 29,194,094
Additions 548,871 145,613 75,230
Dispositions (291,829) -- --
------------ ------------ ------------
Balance at end of period $ 29,671,979 $ 29,414,937 $ 29,269,324
============ ============ ============
(3) A reconciliation of accumulated depreciation for the years ended December
31, 1996, 1995 and 1994 follows:
1996 1995 1994
---- ---- ----
Balance at beginning of period $ 10,400,447 $ 9,289,434 $ 8,192,777
Additions charged to cost and
expenses during the period 770,187 1,111,013 1,096,657
Dispositions (121,592) -- --
------------ ------------ ------------
Balance at end of period (a) $ 11,049,042 $ 10,400,447 $ 9,289,434
============ ============ ============
(a) Balance applies entirely to buildings.
34
<PAGE>
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.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP - IV
By: /s/ Joseph M. Jayson 3/28/97
------------------------------------------- ---------------
JOSEPH M. JAYSON, Date
Individual General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
By: /s/ Joseph M. Jayson 3/28/97
-------------------------------------------- ---------------
JOSEPH M. JAYSON, President Date
Principal Executive Officer and Director
/s/ Michael J. Colmerauer 3/28/97
-------------------------------------------- ---------------
MICHAEL J. COLMERAUER, Date
Secretary
35
<PAGE>
Supplemental Information to be Furnished with Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act.
The form 10-K is sent to security holders. No other annual report is
distributed. No proxy statement, form of proxy or other proxy soliciting
material was sent to any of the registrant's security holders with respect to
any annual or other meeting of security holders.
36
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV FOR
TWELVE MONTHS ENDED DECEMBER 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 591,255
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,000,562
<PP&E> 32,383,773
<DEPRECIATION> 13,753,437
<TOTAL-ASSETS> 20,488,126
<CURRENT-LIABILITIES> 4,737,790
<BONDS> 18,939,324
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 20,488,126
<SALES> 0
<TOTAL-REVENUES> 5,536,412
<CGS> 0
<TOTAL-COSTS> 6,723,126
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,869,424
<INCOME-PRETAX> (1,186,716)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 1,501,158
<CHANGES> 0
<NET-INCOME> 314,442
<EPS-PRIMARY> 13.06
<EPS-DILUTED> 0
</TABLE>
