FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
September 30, 1996 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 Number)
2350 North Forest Road
Suite 12 A
Getzville, New York 14068
(Address of Principal Executive Office)
Registrant's Telephone Number: (716) 636-0280
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-Q or any
amendment to this Form 10-Q. (X)
As of September 30, 1996 the issuer had 23,365.9 units of limited partnership
interest outstanding.
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
--------------------------------------------------
INDEX
-----
PAGE NO.
--------
PART I: FINANCIAL INFORMATION
- ------- ---------------------
Balance Sheets -
September 30, 1996 and December 31, 1995 3
Statements of Operations -
Three Months Ended September 30, 1996 and 1995 4
Statements of Operations -
Nine Months Ended September 30, 1996 and 1995 5
Statements of Cash Flows -
Nine Months Ended September 30, 1996 and 1995 6
Statements of Partners' (Deficit) -
Nine Months Ended September 30, 1996 and 1995 7
Notes to Financial Statements 8 - 17
PART II: MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION & RESULTS OF OPERATIONS 18 - 19
-------------------------------------------
-2-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
Property, at cost:
Land $ 1,773,922 $ 1,773,922
Buildings and improvements 27,909,615 27,641,015
Furniture, fixtures and equipment 2,711,794 2,711,794
------------ ------------
32,395,331 32,126,731
Less accumulated depreciation 13,955,385 13,104,388
------------ ------------
Property, net 18,439,946 19,022,343
Interest and other receivables 53,534 65,026
Note receivable 154,875 154,875
Mortgage costs, net of accumulated amortization
of $467,108 and $634,587 280,856 172,966
Other assets 862,457 567,583
------------ ------------
Total Assets $ 19,791,668 $ 19,982,793
============ ============
LIABILITIES AND PARTNERS' (DEFICIT)
Liabilities:
Cash overdraft $ 84,115 $ 252,805
Mortgages and notes payable 19,854,943 19,414,288
Accounts payable and accrued expenses 1,243,581 991,181
Accounts payable - affiliates 2,878,647 2,220,847
Accrued interest 62,145 156,525
Security deposits and prepaid rents 399,537 414,471
------------ ------------
Total Liabilities 24,522,969 23,450,117
------------ ------------
Minority interest in joint venture (795) 54,583
------------ ------------
Partners' (Deficit):
General partners (714,894) (678,636)
Limited partners (4,015,612) (2,843,271)
------------ ------------
Total Partners' (Deficit) (4,730,506) (3,521,907)
------------ ------------
Total Liabilities and Partners' (Deficit) $ 19,791,668 $ 19,982,793
============ ============
</TABLE>
See notes to financial statements
-3-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
STATEMENTS OF OPERATIONS
Three Months Ended September 30, 1996 and 1995
(Unaudited)
Three Months Three Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 1,235,723 $ 1,435,656
Interest and other income 80,831 44,624
----------- -----------
Total income 1,316,554 1,480,280
----------- -----------
Expenses:
Property operations 846,200 877,977
Interest:
Paid to affiliates 100,261 44,630
Other 378,765 297,311
Depreciation and amortization 434,097 302,237
Administrative:
Paid to affiliates 193,965 204,669
Other 153,535 98,330
----------- -----------
Total expenses 2,106,824 1,825,154
----------- -----------
Loss before allocated loss from joint venture (790,270) (344,874)
Loss allocated to minority interest 35,568 15,675
----------- -----------
Net loss $ (754,701) $ (329,199)
=========== ===========
Loss per limited partnership unit $ (31.33) $ (13.67)
=========== ===========
Distributions per limited partnership unit $ -- $ --
=========== ===========
Weighted average number of
limited partnership units
outstanding 23,366 23,366
=========== ===========
See notes to financial statements
-4-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
STATEMENTS OF OPERATIONS
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Income:
Rental $ 3,820,605 $ 4,213,998
Interest and other income 269,222 202,374
----------- -----------
Total income 4,089,827 4,416,372
----------- -----------
Expenses:
Property operations 2,182,076 2,478,515
Interest:
Paid to affiliates 225,701 125,667
Other 1,176,821 1,141,558
Depreciation and amortization 948,388 906,715
Administrative:
Paid to affiliates 381,784 529,821
Other 439,035 349,594
----------- -----------
Total expenses 5,353,806 5,531,870
----------- -----------
Loss before allocated loss from joint venture (1,263,979) (1,115,498)
Loss allocated to minority interest 55,380 35,492
----------- -----------
Net loss $(1,208,599) $(1,080,006)
=========== ===========
Loss per limited partnership unit $ (50.17) $ (44.83)
=========== ===========
Distributions per limited partnership unit $ -- $ --
=========== ===========
Weighted average number of
limited partnership units
outstanding 23,366 23,366
=========== ===========
See notes to financial statements
-5-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
STATEMENTS OF PARTNERS' (DEFICIT)
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
General Limited Partners
Partners
Amount Units Amount
------ ----- ------
Balance, January 1, 1995 $ (635,751) 23,366 $(1,456,668)
Net loss (32,400) -- (1,047,606)
----------- ----------- -----------
Balance, September 30, 1996 $ (668,151) 23,366 $(2,504,274)
=========== =========== ===========
Balance, January 1, 1996 $ (678,636) 23,366 $(2,843,271)
Net loss (36,258) -- (1,172,341)
----------- ----------- -----------
Balance, September 30, 1996 $ (714,894) 23,366 $(4,015,612)
=========== =========== ===========
See notes to financial statements
-6-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
---- ----
Cash flow from operating activities:
Net loss $(1,208,599) $(1,080,006)
Adjustments to reconcile net loss to net cash
(used in) operating activities:
Depreciation and amortization 948,388 906,715
Loss allocated to minority interest (55,380) (35,492)
Changes in operating assets and liabilities:
Interest and other receivables 11,492 30,047
Other assets (294,874) (253,995)
Accounts payable and accrued expenses 252,400 352,902
Accrued interest (94,380) 21,178
Security deposits and prepaid rent (14,934) (65,538)
----------- -----------
Net cash (used in) operating activities (455,886) (124,189)
----------- -----------
Cash flow from investing activities:
Capital expenditures (268,818) --
Increase in note(s) receivable -- --
----------- -----------
Net cash (used in) investing activities (268,818) --
----------- -----------
Cash flows from financing activities:
Mortgage costs (205,060) (48,663)
Cash overdraft (168,690) --
Accounts payable - affiliates 657,800 351,803
Principal payments on mortgages and notes (340,682) (166,586)
Proceeds from mortgage 781,337 --
----------- -----------
Net cash provided by financing activities 724,705 136,554
----------- -----------
Increase (decrease) in cash -- 12,365
Cash - beginning of period -- --
----------- -----------
Cash - end of period $ -- $ 12,365
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 1,271,202 $ 1,141,558
=========== ===========
See notes to financial statements
-7-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
NOTES TO FINANCIAL STATEMENTS
Nine Months Ended September 30, 1996 and 1995
(Unaudited)
1. GENERAL PARTNERS' DISCLOSURE
----------------------------
In the opinion of the General Partners of Realmark Property Investors Limited
Partnership IV, all adjustments necessary for a fair presentation of the
Partnership's financial position, results of operations and changes in cash
flows for the nine month periods ended September 30, 1996 and 1995, have been
made in the financial statements. Such financial statements are unaudited and
subject to any year-end adjustments which may be necessary.
2. 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 23,362.9 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.
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 after the general
partners receive a disposition fee, 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.
-8-
<PAGE>
FORMATION AND OPERATION OF PARTNERSHIP (CONTINUED)
-------------------------------------- -----------
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.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Cash
----
For purposes of reporting cash flows, cash includes the following items: cash
on hand; cash in checking; and money market savings.
Property and Depreciation
-------------------------
Depreciation is provided using the straight-line method over the estimated
useful lives of the respective assets. Expenditures for maintenance and
repairs are expensed as incurred, and major renewals and betterments are
capitalized. The Accelerated Cost Recovery System and Modified Accelerated
Cost Recovery System are used to determine depreciation expense for tax
purposes.
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.
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.
4. ACQUISITION AND DISPOSITION OF RENTAL PROPERTY
----------------------------------------------
In November 1985, the Partnership acquired a 168 unit apartment complex
(Lakeview Village) located in Milwaukee, Wisconsin, for a purchase price of
$4,411,659, which included $320,779 in acquisition fees.
In December 1985, the Partnership acquired a 288 unit apartment complex
(Sutton Park, formerly Bristol Square) located in Lansing, Michigan for a
purchase price of $7,252,858, which included $588,716 in acquisition fees.
-9-
<PAGE>
ACQUISITION AND DISPOSITION OF RENTAL PROPERTY (CONTINUED)
---------------------------------------------- -----------
In August 1986, the Partnership acquired two office/warehouse buildings
consisting of 62,598 square feet (Airlane 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 Apartments, 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) 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
$1,1711,093, which included $314,379 in acquisition fees.
In May 1987, the Partnership acquired a 56 unit apartment complex (Cedar
Court) 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.
Since the date of the acquisition, the Partnership had capitalized additional
construction costs of $5,059,296 which included 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
disposal generated a $1,328,352 loss for financial statement purposes.
In October, 1989 the Partnership sold the Gold Key II apartment complex for
$2,881,136 which generated a gain of $911,177 for financial statement
purposes.
-10-
<PAGE>
5. 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. Applicable interest and
penalties have been accrued through September 30, 1996. The General Partner
is pursuing legal action to collect on these notes. During 1994, the
Partnership assigned the rights to receive the proceeds of the above notes as
additional collateral for the mortgage on Evergreen Terrace Apartments.
6. MORTGAGES AND NOTES PAYABLE
---------------------------
The Partnership has the following mortgages and notes payable:
Lakeview
--------
In January 1996, the Partnership refinanced the mortgage. The refinanced
mortgage, with a balance of $2,514,540 at September 30, 1996, provides for
annual principal and interest payments at 8.25% payable in equal monthly
installments of $232,924.
Sutton Park (formerly Bristol Square)
-------------------------------------
The property was refinanced January 11, 1996 with an 8% mortgage for
$3,400,000, and an unsecured $50,000 promissory note. The new mortgage
provides for annual principal and interest payments of $306,174 in equal
monthly installments. The balance outstanding at September 30, 1996 was
$3,377,579. The term of the mortgage is 10 years with the remaining balance
due and payable on February 1, 2006. The promissory note provides for monthly
principal payments of $2,083 plus interest accruing at the lenders reference
rate plus 2% (total of 10.25% at September 30, 1996). At September 30, 1996
the outstanding balance was $39,585. The note is due and payable February 1,
1998.
-11-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
Airlanes I & III
----------------
A 7.625% mortgage with a balance of $3,574,383 at September 30, 1996, 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
$3,694,277 and $3,757,669 at September 30, 1996 and 1995, respectively. The
interest rate is adjustable quarterly to a maximum rate of 13.5% and a
minimum rate of 7% (7.07% at September 30, 1996). The mortgage is payable
monthly in amounts which vary with the interest rate. Monthly payments at
September 30, 1996 based on 7.07% interest rate were $27,804.37. The balance
of the mortgage is due and payable March 31, 1998.
Willow Creek
------------
A 9.25% mortgage with an original balance of $4,080,000 which provides for
annual principal and interest payments of $393,023 payable in equal monthly
installments with the remaining balance of $3,929,432 due on September 1,
1996. The balance as of September 30, 1996 and 1995 was $3,926,969 and
$3,955,359, respectively. Management continues to look for new financing for
this property; the mortgagor has granted a temporary extension until March
1997.
Evergreen Terrace
-----------------
An adjustable rate mortgage with a balance at September 30, 1996 and 1995 of
$1,024,978 and $1,039,562, 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 with a minimum rate of 9% (9%
at September 30, 1996). The mortgage is payable monthly in amounts which vary
with the interest rate. Monthly payments at September 30, 1996 based on a 9%
interest rate were $8,962. The balance of the mortgage is due and payable May
24, 1998.
-12-
<PAGE>
MORTGAGES AND NOTES PAYABLE (CONTINUED)
---------------------------------------
Chapelwood Estates (formerly Cedar Court)
-----------------------------------------
A 9.25% mortgage with a balance of $895,117 and $901,600 at September 30,
1996 and 1995, respectively, which provides for annual principal and interest
payments of $89,586 payable in equal monthly installments with remaining
balance of $895,117 due September 1, 1996. A temporary extension has been
granted to November 1, 1996; management is currently looking for new
financing for this property.
The mortgages described above are secured by the Partnership properties to
which they relate.
The aggregate maturities of mortgages and notes payable for each of the next
five years and thereafter are as follows:
Year Amount
---- ------
1996 $ 5,088,225
1997 262,895
1998 4,778,938
1999 3,384,889
2000 82,696
Thereafter 5,584,544
-------------
TOTAL $ 19,182,187
7. INVESTMENT IN 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 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.
-13-
<PAGE>
INVESTMENT IN JOINT VENTURE (CONTINUED)
---------------------------------------
A reconciliation of the minority interest share in the Lakeview Joint Venture
is as follows:
1996 1995
---- ----
Balance, January 1 $ 54,583 $ 97,207
Allocated Loss ( 55,380) (35,492)
----------- ---------
Balance, September 30 $ ( 797) $ 61,715
8. 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
$195,859 and $210,158 for the nine months ended September 30, 1996 and 1995,
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. An affiliate of the General Partners also receives a
management fee of 2% of monthly gross rental income.
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 nine months ended September 30,
1996 and 1995.
Accounts payable to affiliates amounted to $2,878,647 and $1,868,076 at
September 30, 1996 and 1995, respectively. The payable represents fees due
and advances from the Corporate General Partner or an affiliate of the
General Partners. Interest charged on accounts payable to affiliates totaled
$225,701 and $125,667 for the nine months ended September 30, 1996 and 1995.
-14-
<PAGE>
RELATED PARTY TRANSACTIONS (CONTINUED)
--------------------------------------
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 partnerships are paid or accrued to an
affiliate of the General Partner. The fee is based upon the number of
apartment units and totaled $9,900 for both the nine months ended September
30, 1996 and 1995.
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. Accounting, communication and marketing
expenses are allocated based on total assets, number of partners, and the
market value of properties respectively.
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.
-15-
<PAGE>
INCOME TAXES (CONTINUED)
------------------------
The reconciliation of net loss for the nine months ended September 30, 1996
and 1995 as reported in the statements of operations, and as would be
reported for tax purposes, is as follows:
September 30, September 30,
1996 1995
---- ----
Net loss - statement of operations $(1,208,598) $(1,080,006)
Add to (deduct from):
Difference in depreciation (44,400) (100,088)
Gain on sale of property 3,303 --
Allowance for doubtful accounts 246,000 212,777
----------- -----------
Net loss - tax return purposes $(1,003,695) $ (967,317)
The reconciliation of Partners' (Deficit) as of September 30, 1996 and
December 31, 1995 as reported in the balance sheet, and as reported for tax
purposes, is as follows:
September 30, December 31,
1996 1995
---- ----
Partners' (Deficit) - balance sheet $(4,730,505) $(3,521,907)
Add to (deduct from):
Accumulated difference in
depreciation (5,271,975) (5,227,575)
Accumulated amortization 382,695 382,695
Syndication fees 2,734,297 2,734,297
Difference in book and tax
basis in partnership investments (635,737) (635,737)
Other 1,396,342 1,147,039
----------- -----------
Partners' (Deficit) - tax return purposes $(6,124,883) $(5,121,188)
-16-
<PAGE>
10. PENDING SALES
-------------
On July 16, 1996 the Corporate General Partner entered into a contract on
behalf of the Partnership to sell Creekside Apartments, Evergreen Terrace
Apartments, Lakeview 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 contract
is subject to a number of contingencies as were described in Form 8-K filed
on July 31, 1996. No firm closing date on the sale has been established to
date.
-17-
<PAGE>
PART II MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
----------------------------------------------
The Partnership continues to struggle with cash shortfalls being funded by the
General Partner, although under no obligation to do so. At this point in time,
there is no assurance that the General Partner will continue to advance funds to
assist with the Partnership's cash flow difficulties. The Partnership suffered
from another disappointing quarter further adding to the pains incurred during
the year thus far. Total revenue decreased dramatically (i.e. by approximately
$326,000) from the same nine month period in the previous year, while total
expenses only decreased by $178,000 for the same period. Management is
optimistic that the decrease in expenses will continue as more control is being
exercised over expenditures; with more control over spending now in place,
management is focusing on ways to increase operating revenue. Occupancies at
several of the residential properties in the Partnership remain in the upper
70's, which has resulted in the large decrease in rental income this year. Great
emphasis is now being placed on increasing occupancies by focusing on more
effective advertising, improving maintenance at the properties, painting and
other improvements to add to the properties' curb appeal, etc. Management has
also made changes in personnel in an attempt to hire more experienced staff,
thus creating a "fresh" attitude and approach.
The Partnership continues to review the possibility of refinancing mortgages in
order to reduce interest rates and increase cash flow. Additionally, there are
signed contracts for the sale of five properties within the Partnership. The
sale of any one of these properties is expected to bring in the additional cash
which the Partnership needs to do the capital improvements that are necessary as
the properties continue to age. The General Partner continues to work towards
closing the pending sales, although there is still no firm closing date. At this
time it is highly unlikely that the Limited Partners will receive any proceeds
from the sale.
There were no distributions for the nine month periods ended September 30, 1996
and 1995. The Partnership does not expect to resume distributions until it is
able to generate sufficient excess cash flow and repay the General Partner
advances and the other obligations of the Partnership. The General Partner
believes that unless there is a significant increase in income and a major
reduction in expenses, some of the properties in this Partnership could be in
default with regard to their mortgages.
-18-
<PAGE>
Results of Operations:
- ----------------------
Net loss for the three month period ended September 30, 1996 amounted to
$754,701 or $31.33 per limited partnership unit versus a net loss for the three
month period ended September 30, 1995 of $329,199 or $13.67 per limited
partnership. For the nine month period ended September 30, 1996, the net loss
amounted to $1,208,598 or $50.17 per limited partnership unit versus a net loss
of $1,080,006 or $44.83 per limited partnership unit for the nine month period
ended September 30, 1995.
On a tax basis, the Partnership generated a loss for the nine month period ended
September 30, 1996 of $1,272,514 or $52.83 per unit versus a tax loss $967,317
or $40.16 per unit for the nine month period ended September 30, 1995
Partnership revenue for the quarter ended September 30, 1996, totaled
$1,316,554, decreasing $163,726 from the same quarter of 1995 period. Rental for
the three month period decreased rather substantially as compared to that of the
same quarter in the previous year. This is due to the low occupancy levels and
collection problems at Creekside Apartments, Willow Creek Apartments and
Chapelwood Estates (formerly Cedar Court). For the nine month period ended
September 30, 1996, rental revenue totaled $3,820,605. The total rental income
decreased by $393,393 over the same time period in 1995.
For the three month period ended September 30, 1996, the Partnership's expenses
totaled $2,106,824, an increase of $281,670 over the quarter ended September 30,
1995. For the nine months ended September 30, 1996, the Partnership expenses
totaled $5,353,806, decreasing over $178,064 from the nine months ended
September 30, 1995. The largest decrease can be seen in property operations
expenses. Management continues to monitor very closely payroll, repairs and
maintenance, and contracted service costs. These have traditionally been areas
where expenses/costs have been high, so effort has been put forward to control
these by, for example, handling more maintenance work in-house as opposed to
bringing in outside contractors. Interest expense to affiliates continues to
increase as General Partner advances increase.
For the nine month period ended September 30, 1996, the Lakeview Joint Venture
generated net loss of $341,433, with $55,380 of the loss allocated to the
minority venturer. For the nine months ended September 30, 1995, the joint
venture has a net loss of $122,177, with $19,817 of the loss allocated to the
minority venturer. This property saw a large increase in operating expenses for
the first nine months of 1996 as compared to those incurred during the same
period in 1995. Management continues to put forth great efforts to control
payroll and associated costs, as well as maintenance expenses, for this
property; these are felt to be the areas where control is needed in order to
turn this property around.
-19-
<PAGE>
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP IV
--------------------------------------------------
PART II
-------
OTHER INFORMATION
-----------------
Item 1 - Legal Proceedings
- --------------------------
The Partnership is not party to, nor is it the subject of, any material pending
legal proceedings other than ordinary routine litigation incidental to the
Partnership's business.
Item 2, 3, 4 and 5
- ------------------
Not applicable.
Item 6 - Exhibits and reports on Form 8-K
- -----------------------------------------
None.
-20-
<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.
REALMARK PROPERTY INVESTORS
LIMITED PARTNERSHIP IV
By: /s/Joseph M. Jayson March 14, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
Individual General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By: REALMARK PROPERTIES, INC.
Corporate General Partner
/s/Joseph M. Jayson March 14, 1997
------------------------------ ------------------------
Joseph M. Jayson, Date
President and Director
/s/Michael J. Colmerauer March 14, 1997
------------------------------ ------------------------
Michael J. Colmerauer Date
Secretary
<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
NINE MONTHS ENDED SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 208,409
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,351,722
<PP&E> 32,395,331
<DEPRECIATION> 13,955,385
<TOTAL-ASSETS> 19,791,668
<CURRENT-LIABILITIES> 4,668,026
<BONDS> 19,854,943
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 19,791,668
<SALES> 0
<TOTAL-REVENUES> 4,089,827
<CGS> 0
<TOTAL-COSTS> 5,353,806
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,402,522
<INCOME-PRETAX> (1,208,598)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,208,598)
<EPS-PRIMARY> (50.17)
<EPS-DILUTED> 0
</TABLE>
