SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1997
--------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -----
EXCHANGE ACT OF 1934.
For the transition period from to
------------ ------------
Commission file number 0-14350
-------
BALCOR REALTY INVESTORS 85-SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3333344
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
--------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
BALANCE SHEETS
June 30, 1997 and December 31, 1996
(Unaudited)
ASSETS
1997 1996
------------- -------------
Cash and cash equivalents $ 5,188,986 $ 5,888,040
Escrow deposits 564,857 696,354
Accounts and accrued interest receivable 35,319 93,191
Prepaid expenses 59,888
Deferred expenses, net of accumulated
amortization of $210,654 in 1997
and $250,656 in 1996 631,963 781,323
Investment in joint venture with an affiliate 1,046,660
------------- -------------
6,421,125 8,565,456
------------- -------------
Investment in real estate:
Land 2,404,824 3,161,992
Buildings and improvements 20,434,160 27,767,583
------------- -------------
22,838,984 30,929,575
Less accumulated depreciation 8,929,130 11,739,654
------------- -------------
Investment in real estate, net of
accumulated depreciation 13,909,854 19,189,921
------------- -------------
$ 20,330,979 $ 27,755,377
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 124,359 $ 39,006
Due to affiliates 90,017 85,504
Accrued real estate taxes 153,702
Security deposits 120,165 159,650
Mortgage notes payable 17,776,676 24,324,028
------------- -------------
Total liabilities 18,264,919 24,608,188
Affiliates' participation in joint ventures (542,548) (499,671)
------------- -------------
17,722,371 24,108,517
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
BALANCE SHEETS
June 30, 1997 and December 31, 1996
(Unaudited)
(Continued)
Commitments and contingencies
Limited Partners' captial (59,092 Interests
issued and outstanding) 2,914,980 3,995,822
General Partner's deficit (306,372) (348,962)
------------- -------------
Total partners' capital 2,608,608 3,646,860
------------- -------------
$ 20,330,979 $ 27,755,377
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
------------- -------------
Income:
Rental and service $ 2,359,598 $ 5,827,968
Interest on short-term investments 95,349 102,060
Participation in income of joint
venture with an affiliate 25,267
------------- -------------
Total income 2,454,947 5,955,295
------------- -------------
Expenses:
Interest on mortgage notes payable 884,242 2,046,311
Depreciation 398,991 851,550
Amortization of deferred expenses 53,538 70,661
Property operating 793,312 1,834,696
Real estate taxes 212,311 587,059
Property management fees 116,640 288,788
Administrative 215,826 234,848
------------- -------------
Total expenses 2,674,860 5,913,913
------------- -------------
(Loss) income before gain on sales of properties,
affiliates' participation in joint ventures
and extraordinary item (219,913) 41,382
Gain on sales of properties 4,846,446 9,073,561
Affiliates' participation in loss (income) from
joint ventures before extraordinary item 11,792 (4,770)
------------- -------------
Income before extraordinary item 4,638,325 9,110,173
Extraordinary item:
Debt extinguishment expense (379,280) (125,000)
------------- -------------
Net income $ 4,259,045 $ 8,985,173
============= =============
Income before extraordinary item
allocated to General Partner $ 46,383 $ 91,102
============= =============
Income before extraordinary item
allocated to Limited Partners $ 4,591,942 $ 9,019,071
============= =============
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF INCOME AND EXPENSES
for the six months ended June 30, 1997 and 1996
(Unaudited)
(Continued)
Income before extraordinary item per
Limited Partnership Interest (59,092 issued
and outstanding) $ 77.71 $ 152.63
============= =============
Extraordinary item allocated to
General Partner $ (3,793) $ (1,250)
============= =============
Extraordinary item allocated to
Limited Partners $ (375,487) $ (123,750)
============= =============
Extraordinary item per Limited Partnership
Interest (59,092 issued and outstanding) $ (6.36) $ (2.10)
============= =============
Net income allocated to General Partner $ 42,590 $ 89,852
============= =============
Net income allocated to Limited Partners $ 4,216,455 $ 8,895,321
============= =============
Net income per Limited Partnership
Interest (59,092 issued and outstanding) $ 71.35 $ 150.53
============= =============
Distributions to Limited Partners $ 5,083,094 $ 886,380
============= =============
Distributions per Limited Partnership
Interest (59,092 issued and outstanding) $ 86.02 $ 15.00
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1997 and 1996
(Unaudited)
1997 1996
------------- -------------
Income:
Rental and service $ 1,035,313 $ 2,827,394
Interest on short-term investments 58,651 68,809
Participation in income of joint
venture with an affiliate 21,526
------------- -------------
Total income 1,093,964 2,917,729
------------- -------------
Expenses:
Interest on mortgage notes payable 420,955 987,123
Depreciation 182,988 414,703
Amortization of deferred expenses 25,628 35,330
Property operating 410,499 884,431
Real estate taxes 95,976 318,909
Property management fees 52,154 140,541
Administrative 129,788 139,886
------------- -------------
Total expenses 1,317,988 2,920,923
------------- -------------
(Loss) before gain on sales of properties,
affiliates' participation in joint ventures
and extraordinary item (224,024) (3,194)
Gain on sales of properties 4,846,446 9,073,561
Affiliates' participation in loss (income) from
joint ventures before extraordinary item 11,265 (12,953)
------------- -------------
Income before extraordinary item 4,633,687 9,057,414
Extraordinary item:
Debt extinguishment expense (379,280) (125,000)
------------- -------------
Net income $ 4,254,407 $ 8,932,414
============= =============
Income before extraordinary item
allocated to General Partner $ 46,337 $ 90,574
============= =============
Income before extraordinary item
allocated to Limited Partners $ 4,587,350 $ 8,966,840
============= =============
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended June 30, 1997 and 1996
(Unaudited)
(Continued)
Income before extraordinary item per
Limited Partnership Interest (59,092 issued
and outstanding) $ 77.63 $ 151.75
============= =============
Extraordinary item allocated to
General Partner $ (3,793) $ (1,250)
============= =============
Extraordinary item allocated to
Limited Partners $ (375,487) $ (123,750)
============= =============
Extraordinary item per Limited Partnership
Interest (59,092 issued and outstanding) $ (6.36) $ (2.10)
============= =============
Net income allocated to General Partner $ 42,544 $ 89,324
============= =============
Net income allocated to Limited Partners $ 4,211,863 $ 8,843,090
============= =============
Net income per Limited Partnership
Interest (59,092 issued and outstanding) $ 71.27 $ 149.65
============= =============
Distribution to Limited Partners $ 680,740 $ 443,190
============= =============
Distribution per Limited Partnership
Interests (59,092 issued and outstanding) $ 11.52 $ 7.50
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
------------- -------------
Operating activities:
Net income $ 4,259,045 $ 8,985,173
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on sales of properties (4,846,446) (9,073,561)
Debt extinguishment expense 95,822
Affiliates' participation in (loss)
income from joint ventures (11,792) 4,770
Participation in income of joint
venture with an affiliate (25,267)
Depreciation of properties 398,991 851,550
Amortization of deferred expenses 53,538 70,661
Net change in:
Escrow deposits 131,497 (161,970)
Accounts and accrued interest receivable 57,872 (92,035)
Prepaid expenses 59,888 (64)
Accounts payable 85,353 (13,882)
Due to affiliates 4,513 18,092
Accrued real estate taxes 153,702 231,993
Security deposits (39,485) (16,582)
------------- -------------
Net cash provided by operating activities 402,498 778,878
------------- -------------
Investing activities:
Proceeds from sales of properties 10,000,000 15,950,000
Payment of selling costs (272,478) (134,625)
Distributions from joint venture with
an affiliate 1,046,660 151,982
------------- -------------
Net cash provided by investing activities 10,774,182 15,967,357
------------- -------------
Financing activities:
Distributions to Limited Partners (5,083,094) (886,380)
Deemed distribution to Limited Partners (214,203)
Principal payments on mortgage
notes payable (103,407) (247,146)
Repayment of mortgage notes payable (6,443,945) (8,770,310)
Distributions to joint venture
partners - affiliates (31,085) (31,443)
Contributions from joint venture
partners - affiliates 54,711
------------- -------------
Net cash used in financing activities (11,875,734) (9,880,568)
------------- -------------
<PAGE>
BALCOR REALTY INVESTORS 85 - SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
for the six months ended June 30, 1997 and 1996
(Unaudited)
(Continued)
Net change in cash and cash equivalents (699,054) 6,865,667
Cash and cash equivalents at beginning
of period 5,888,040 2,310,596
------------- -------------
Cash and cash equivalents at end of period $ 5,188,986 $ 9,176,263
============= =============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR REALTY INVESTORS 85-SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the six months and quarter
ended June 30, 1997, and all such adjustments are of a normal and recurring
nature.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. During 1996, the Partnership sold the Country Ridge, Park Place -
Phase II and Shadowridge apartment complexes. The Lakeville Resort Apartments,
in which the Partnership owned a minority joint venture interest, was also sold
during 1996. In addition, the Partnership sold the Howell Station Apartments in
May 1997. Currently, the joint venture, which consists of the Partnership and
an affiliate, has entered into a contract to sell the North Hill Apartments,
the Partnership's remaining property. The timing of the termination of the
Partnership and final distribution of cash will depend upon the nature and
extent of liabilities and contingencies which exist or may arise. Such
contingencies may include legal and other fees stemming from litigation
involving the Partnership including, but not limited to, the lawsuits discussed
in Note 8 of Notes to Financial Statements. In the absence of any such
contingency, the reserves will be paid within twelve months of the last
property being sold. In the event a contingency exists or arises, reserves may
be held by the Partnership for a longer period of time.
3. Interest Expense:
During the six months ended June 30, 1997 and 1996, the Partnership incurred
and paid interest expense on mortgage notes payable of $884,242 and $2,046,311,
respectively.
4. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
six months and quarter ended June 30, 1997 are:
Paid
----------------------
Six Months Quarter Payable
------------ --------- ----------
Reimbursement of expenses to
the General Partner, at cost $ 88,196 $ 68,463 $ 90,017
<PAGE>
5. Property sale:
In May 1997, the Partnership sold the Howell Station Apartments in an all cash
sale for $10,000,000. From the proceeds of the sale, the Partnership paid
$6,443,945 to the third party mortgage holder in full satisfaction of the first
mortgage loan, $283,458 of prepayment penalties and $272,478 in selling costs.
In addition, the Partnership paid a state withholding tax of $214,203 on behalf
of the Limited Partners relating to the gain on sale of the property which has
been recorded as a deemed distribution for financial statement purposes. The
basis of the property was $4,881,076 which is net of accumulated depreciation
of $3,209,515. For financial purposes, the Partnership recognized a gain of
$4,846,446 from the sale of this property.
6. Investment in Joint Venture with an Affiliate:
The Lakeville Resort Apartments was owned by a joint venture consisting of the
Partnership and an affiliate. During October 1996, the joint venture sold the
property. Pursuant to the sale agreement, $500,000 of the sale proceeds were
retained by the joint venture until February 1997 at which time the funds were
released in full. The Partnership's share of the holdback was $201,250. The
Partnership also received a distribution from the joint venture of $845,410,
principally consisting of it's share of repair escrows released during 1997.
7. Extraordinary item:
During the quarter ended June 30, 1997, the Partnership paid a prepayment
penalty of $283,458 and wrote off the remaining unamortized deferred financing
fees of $95,822 in connection with the sale of the Howell Station Apartments.
These amounts were recognized as an extraordinary item and classified as debt
extinguishment expense for financial statement purposes.
8. Contingencies:
The Partnership is currently involved in two lawsuits whereby the Partnership
and certain affiliates have been named as defendants alleging substantially
similar claims involving certain federal securities law violations with regard
to the adequacy and accuracy of disclosures of information concerning, as well
as marketing efforts related to, the offering of the Limited Partnership
Interests of the Partnership. The defendants continue to vigorously contest
these actions. A plaintiff class has not been certified in either action and,
no determinations of the merits have been made. It is not determinable at this
time whether or not an unfavorable decision in either action would have a
material adverse impact on the financial position, operations and liquidity of
the Partnership. The Partnership believes it has meritorious defenses to
contest the claims.
9. Subsequent Event:
In July 1997, the Partnership made a special distribution of $2,954,600 ($50.00
per Interest) to the holders of Limited Partnership Interests primarily from
Net Cash Proceeds received in connection with the sale of the Howell Station
Apartments during May 1997.
<PAGE>
BALCOR REALTY INVESTORS 85-SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Realty Investors 85-Series III A Real Estate Limited Partnership (the
"Partnership") was formed in 1984 to invest in and operate income-producing
real property. The Partnership raised $59,092,000 from the sale of Limited
Partnership Interests and utilized these proceeds to acquire eight real
properties and a minority joint venture interest in one additional real
property. The Partnership has since disposed of seven of these properties,
including the Howell Station Apartments which was sold in May 1997, and the
property in which the Partnership held a minority joint venture interest.
Currently, the joint venture, which consists of the Partnership and an
affiliate, has entered into a contract for the sale of the North Hill
Apartments, the Partnership's remaining property.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1996 for a more complete understanding of
the Partnership's financial position.
Summary of Operations
- ---------------------
The Partnership sold the Howell Station Apartments in May 1997 and the Country
Ridge Apartments in June 1996. The gain recognized in connection with the 1996
sale was higher than the gain recognized in connection with the 1997 sale. This
was the primary reason for the decrease in net income for the six months and
quarter ended June 30, 1997 as compared to the same periods in 1996. Further
discussion of the Partnership's operations is summarized below.
1997 Compared to 1996
- ---------------------
Unless otherwise noted, discussions of fluctuations between 1997 and 1996 refer
to both the six months and quarters ended June 30, 1996 and 1995.
The Partnership sold the Country Ridge, Shadowridge and Park Place - Phase II
apartment complexes during 1996 and the Howell Station Apartments in 1997. As a
result, rental and service income, interest expense on mortgage notes payable,
depreciation, amortization, property operating expense, real estate taxes and
property management fees decreased during 1997 as compared to 1996.
Interest income on short-term investments decreased for the quarter ended June
30, 1997 as compared to the same period in 1996 due to higher net proceeds
received in connection with the 1996 property sale as compared to the 1997
property sale, which was invested in short-term investments prior to being
distributed to Limited Partners.
<PAGE>
The Partnership owned a minority joint venture interest in the Lakeville Resort
Apartments. As a result of the 1996 sale of the property, participation in
income of joint venture with an affiliate ceased during 1996.
The Partnership sold the Howell Station Apartments during 1997 and the Country
Ridge Apartments during 1996. The Partnership recognized gains of $4,846,446
and $9,073,561 during 1997 and 1996, respectively, in connection with these
sales.
North Hill Apartments is owned by a joint venture consisting of the Partnership
and an affiliate. Lower rental and service income due to decreased occupancy
resulted in affiliates' participation in loss during 1997 as compared to
affiliates' participation in income during 1996.
In connection with the sales of the Howell Station Apartments in 1997 and the
Country Ridge Apartments in 1996, the Partnership wrote-off the remaining
unamortized deferred financing fees in the amounts of $95,822 and $125,000,
respectively, and in connection with the sale of the Howell Station Apartments
in 1997, paid prepayment penalties of $283,458. These amounts were recognized
as an extraordinary item and classified as debt extinguishment expense for
financial statement purposes.
Liquidity and Capital Resources
- -------------------------------
The cash position of the Partnership decreased by approximately $699,000 as of
June 30, 1997 when compared to December 31, 1996, primarily due to the
distributions to Limited Partners during January and April 1997 from proceeds
received from the 1996 property sales which was partially offset by the net
proceeds from the sale of the Howell Station Apartments. Cash flow of
approximately $402,000 was provided by operating activities consisting of cash
flow from the operations of the Partnership's remaining properties and interest
income on short-term investments, which was partially offset by the payment of
administrative expenses. Cash provided by investing activities consisted
primarily of net proceeds of approximately $9,728,000 received from the sale of
Howell Station Apartments and a distribution from joint venture with an
affiliate of approximately $1,047,000. The Partnership used cash to fund its
financing activities which consisted primarily of the payment of distributions
totaling approximately $5,083,000 to the Limited Partners and the repayment of
a mortgage note payable of approximately $6,444,000 with proceeds from the
property sale.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. The
Partnership defines cash flow generated from its properties as an amount equal
to the property's revenue receipts less property related expenditures, which
include debt service payments. The Howell Station Apartments generated positive
cash flow in 1996 and prior to its sale in 1997. During 1997 and 1996, the
<PAGE>
Partnership's remaining property, the North Hill Apartments, generated positive
cash flow. The Country Ridge, Shadowridge and Park Place - Phase II apartment
complexes generated positive cash flow prior to their sales in 1996. In
addition, Lakeville Resort Apartments, in which the Partnership held a minority
joint venture interest, generated positive cash flow in 1996 prior to its sale.
As of June 30, 1997, the occupancy rate at the North Hill Apartments was 90%.
During 1996, the Partnership sold three properties, and the property in which
the Partnership held a minority joint venture interest. The Partnership sold
the Howell Station Apartments during May 1997. Currently, the joint venture,
which consists of the Partnership and an affiliate, has entered into a contract
to sell the North Hill Apartments, the Partnership's remaining property for
$21,000,000. The timing of the termination of the Partnership and final
distribution of cash will depend upon the nature and extent of liabilities and
contingencies which exist or may arise. Such contingencies may include legal
and other fees stemming from litigation involving the Partnership including,
but not limited to, the lawsuits discussed in Note 8 of Notes to Financial
Statements. In the absence of any such contingency, the reserves will be paid
within twelve months of the last property being sold. In the event a
contingency exists or arises, reserves may be held by the Partnership for a
longer period of time.
The Lakeville Apartments was owned by a joint venture consisting of the
Partnership and an affiliate. Pursuant to the sale agreement for the Lakeville
Resort Apartments, $500,000 of the sale proceeds was retained by the joint
venture and was unavailable for distribution until February 1997, at which time
the funds were released in full to the joint venture. The Partnership's share
of the funds was $201,250. The Partnership also received a distribution from
the joint venture of $845,410, principally consisting of it's share of repair
escrows released during 1997.
In May 1997, the Partnership sold the Howell Station Apartments in an all cash
sale for $10,000,000. From the proceeds of the sale, the Partnership paid
$6,443,945 to the third party mortgage holder in full satisfaction of the first
mortgage loan, $238,458 of prepayment penalties and $272,478 in selling costs.
In addition, the Partnership paid a state withholding tax of $214,203 relating
to the gain on the sale of the property. Pursuant to the terms of the sale, the
Partnership will retain $100,000 of the proceeds until August 1997. The
remainder of the available proceeds were distributed to Limited Partners in
July 1997.
The Partnership's remaining property, the North Hill Apartments, is owned
through the use of third-party mortgage loan financing and, therefore, the
Partnership is subject to the financial obligations required by the loan which
matures in 2024. Currently, the Partnership has entered into a contract to sell
the property.
In July 1997, the Partnership made a special distribution of $2,954,600 ($50.00
per Interest) to the holders of Limited Partnership Interests primarily from
Net Cash Proceeds received in connection with the sale of the Howell Station
Apartments during May 1997. Including the July 1997 distribution, Limited
<PAGE>
Partners have received cumulative distributions of Net Cash Receipts of $52.50
per $1,000 Interest, and Net Cash Proceeds of $321.02 per $1,000 Interest
totaling $373.52 per $1,000 Interest. Since all of the Partnership's properties
except the North Hill Apartments have been sold, no additional regular
quarterly distributions from Net Cash Receipts will be made. However, a
distribution may be made from available proceeds from the sale of the North
Hill Apartments, as to which there can be no assurances. Investors will not
recover all of their original investment.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
<PAGE>
BALCOR REALTY INVESTORS 85-SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 5. Other Information
- --------------------------
North Hill Apartments
- ---------------------
As previously reported, on May 22, 1997, the joint venture consisting of the
Partnership and an affiliate which owns the North Hill Apartments, DeKalb
County, Georgia, contracted to sell the property to ERP Operating Limited
Partnership, an Illinois limited partnership, for a sale price of $22,500,000.
The joint venture and the purchaser subsequently agreed to reduce the sale
price to $21,000,000. In addition, the closing has been extended to August 20,
1997.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 1
to the Partnership's Registration Statement on Form S-11 dated August 2, 1985
(Registration No. 2-97249), and Form of Confirmation regarding Interests in the
Partnership set forth as Exhibit 4.2 to the Partnership's Report on Form 10-Q
for the quarter ended September 30, 1992 (Commission File No. 0-14350) are
incorporated herein by reference.
(10) Material Contracts:
(a)(i) Agreement of Sale and attachment thereto relating to the sale of Country
Ridge Apartments previously filed as Exhibit (2)(a) to the Partnership's
Current Report on Form 8-K dated April 23, 1996, is incorporated herein by
reference.
(ii) Master Amendment and Agreement dated May 22, 1996 relating to the sale of
Country Ridge Apartments previously filed as Exhibit (99)(a) to the
Partnership's Current Report on Form 8-K dated July 5, 1996, is incorporated
herein by reference.
(iii) Master Amendment and Agreement #2 dated May 22, 1996 relating to the sale
of Country Ridge Apartments previously filed as Exhibit (99)(b) to the
Partnership's Current Report on Form 8-K dated July 5, 1996, is incorporated
herein by reference.
(b)(i) Agreement of Sale and attachment thereto relating to the sale of
Lakeville Resort Apartments previously filed as Exhibit (2)(b) to the
Partnership's Current Report on Form 8-K dated April 23, 1996, is incorporated
herein by reference.
<PAGE>
(ii) Letter Agreements dated May 22, 1996 and July 8, 1996 relating to the sale
of Lakeville Resort Apartments previously filed as Exhibit (99)(c) to the
Partnership's Current Report on Form 8-K dated July 5, 1996, is incorporated
herein by reference.
(iii) Letter Agreement dated August 20, 1996 relating to the sale of Lakeville
Resort Apartments previously filed as Exhibit (99)(a) to the Partnership's
Current Report on Form 8-K dated August 20, 1996 is incorporated herein by
reference.
(iv) Letter Agreement dated September 19, 1996 relating to the sale of
Lakeville Resort Apartments previously filed as Exhibit (10)(b)(iv) to the
Partnership's Report on Form 10-Q for the quarter ended September 30, 1996 is
incorporated herein by reference.
(v) Letter Agreement dated September 30, 1996 relating to the sale of Lakeville
Resort Apartments previously filed as Exhibit (10)(b)(v) to the Partnership's
Report on Form 10-Q for the quarter ended September 30, 1996 is incorporated
herein by reference.
(c)(i) Agreement of Sale and attachment thereto relating to the sale of Park
Place Apartments - Phase II previously filed as Exhibit (2)(c) to the
Partnership's Current Report on Form 8-K dated April 23, 1996, is incorporated
herein by reference.
(ii) Letter Agreements dated May 22, 1996 and July 8, 1996 relating to the sale
of Park Place Apartments - Phase II previously filed as Exhibit (99)(d) to the
Partnership's Current Report on Form 8-K dated July 5, 1996, is incorporated
herein by reference.
(iii) First Amendment to Agreement of Sale relating to the sale of Park Place
Apartments - Phase II previously filed as Exhibit (10)(c)(iii) to the
Partnership's Report on Form 10-Q for the quarter ended September 30, 1996 is
incorporated herein by reference.
(d)(i) Agreement of Sale and attachment thereto relating to the sale of
Shadowridge Apartments previously filed as Exhibit (2)(a) to the Partnership's
Current Report on Form 8-K dated July 5, 1996, is incorporated herein by
reference.
(ii) First Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of Shadowridge Apartments previously filed as Exhibit (99) to the
Partnership's Form 10-Q dated June 30, 1996 is incorporated herein by
reference.
(e)(i) Agreement of Sale relating to the sale of North Hill Apartments
previously filed as Exhibit (2) to the Partnership's Current Report on Form 8-K
dated May 22, 1997, is incorporated herein by reference.
(ii) First Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of North Hill Apartments, Georgia, is attached hereto.
(iii) Second Amendment to Agreement of Sale and Escrow Agreement relating to
the sale of North Hill Apartments, Georgia, is attached hereto.
<PAGE>
(iv) Third Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of North Hill Apartments, Georgia, is attached hereto.
(v) Fourth Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of North Hill Apartments, Georgia, is attached hereto.
(vi) Fifth Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of North Hill Apartments, Georgia, is attached hereto.
(vii) Sixth Amendment to Agreement of Sale and Escrow Agreement relating to the
sale of North Hill Apartments, Georgia, is attached hereto.
(viii) Letter Agreement dated June 30, 1997 relating to the sale of North Hill
Apartments, Georgia, is attached hereto.
(ix) Seventh Amendment to Agreement of Sale and Escrow Agreement relating to
the sale of North Hill Apartments, Georgia, is attached hereto.
(f)(i) Agreement of Sale relating to the sale of Howell Station Apartments
previously filed as Exhibit (2)(b)(ii) to the Partnership's Current Report on
Form 8-K dated February 21, 1997 is incorporated herein by reference.
(ii) Amendment No.1 relating to the sale of Howell Station Apartments
previously filed as Exhibit (2)(b)(ii) to the Partnership's Current Report on
Form 8-K dated February 21, 1997 is incorporated herein by reference.
(iii) Agreement relating to the sale of Howell Station Apartments previously
filed as Exhibit (2)(b)(iii) to the Partnership's Current Report on Form 8-K
dated February 21, 1997 is incorporated herein by reference.
(iv) Amendment No. 2 to Agreement of Sale relating to the sale of Howell
Station Apartments previously filed as Exhibit (2)(b)(iv) to the Partnership's
Current Report on Form 8-K dated February 21, 1997 is incorporated herein by
reference.
(v) Amendment No. 3 to Agreement of Sale relating to Howell Station Apartments,
previously filed as Exhibit (10)(f)(v) to the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1996 is incorporated herein by
reference.
(vi) Amendment No. 4 to Agreement of Sale relating to Howell Station
Apartments, previously filed as Exhibit (10)(f)(vi) to the Partnership's Report
on Form 10-Q for the quarter ended March 31, 1997 is incorporated herein by
reference.
(vii) Amendment No. 5 to Agreement of Sale relating to Howell Station
Apartments, previously filed as Exhibit (10)(f)(vii) to the Partnership's
Report on Form 10-Q for the quarter ended March 31, 1997 is incorporated herein
by reference.
(27) Financial Data schedule of the Partnership for the six months ended June
30, 1997 is attached hereto.
(b) Reports on Form 8-K:
A Current Report of Form 8-K dated June 2, 1997 was filed reporting the
contract to sell the North Hill Apartments, Georgia.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BALCOR REALTY INVESTORS 85-SERIES III
A REAL ESTATE LIMITED PARTNERSHIP
By: /s/ Thomas E. Meador
---------------------------------
Thomas E. Meador
President and Chief Executive Officer (Principal
Executive Officer) of Balcor Partners-XVIII, the
General Partner
By: /s/ Jayne A. Kosik
---------------------------------
Jayne A. Kosik
Managing Director and Chief Financial Officer
(Principal Accounting Officer) of Balcor
Partners-XVIII, the General Partner
Date: August 14, 1997
---------------------
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
This FIRST AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is entered into as of this 30th day of May, 1997 by and between
ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Purchaser"), N.H. ASSOCIATES, an Illinois limited partnership ("Seller") and
NEAR NORTH NATIONAL TITLE CORPORATION ("Escrow Agent").
RECITALS
A. Purchaser and Seller have entered into an Agreement of Sale dated as
of May 16, 1997 (the "Purchase Agreement") wherein Seller agreed to sell and
Purchaser agreed to purchase that certain parcel of real property commonly
known as North Hill Apartments, Atlanta, Georgia and legally described on
Exhibit A attached to the Purchase Agreement (the "Property").
B. Purchaser, Seller and Escrow Agent have entered into that certain
Escrow Agreement dated May 16, 1997 (the "Escrow Agreement"), which Escrow
Agreement governs the holding and disposition of the earnest money under the
Purchase Agreement.
C. Purchaser and Seller desire to modify and amend the Purchase
Agreement as hereinafter set forth and Purchaser, Seller and Escrow Agent
desire to modify and amend the Escrow Agreement as hereinafter set forth.
NOW, THEREFORE, for the sum of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Purchaser and Seller hereby desire to amend the Purchase
Agreement as follows:
1. Defined Terms. All capitalized terms which are used herein but which
are not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
2. Modifications to Purchase Agreement. The Purchase Agreement is
hereby modified as follows:
Approval Period. The Approval Period is hereby extended from June 4,
1997 to June 9, 1997. Accordingly, the date "June 4, 1997" contained in
Section 17 is hereby deleted, and the date "June 9, 1997" is hereby substituted
therefor.
3. Modifications to Escrow Agreement. The date "June 4, 1997" in
Section 2 of the Escrow Agreement is hereby deleted and the date "June 9, 1997"
is hereby substituted therefor.
4. Miscellaneous.
A. Full Force and Effect. Except as modified herein, the Purchase
Agreement and Escrow Agreement shall remain unmodified and in full force and
effect.
B. Counterparts. This Amendment may be executed in multiple
counterparts.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
this 30th day of May, 1997.
PURCHASER:
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment trust
By: /s/ Christopher B. Beda
-------------------------------------
Name: Christopher B. Beda
-------------------------------------
Title: A.V.P.
-------------------------------------
SELLER:
N.H. ASSOCIATES, an Illinois limited partnership
By: North Hill Partners, an Illinois joint venture,
its general partner
By: Thornhill Limited Partnership, an Illinois
limited partnership, a joint venture partner
By: Balcor Partners-XVI, an Illinois general
partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ Terri Thompson
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
ESCROW AGENT:
NEAR NORTH NATIONAL TITLE CORPORATION
By: /s/
--------------------------------
Its Authorized Agent
<PAGE>
SECOND AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
This SECOND AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is entered into as of this 9th day of June, 1997 by and between
ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Purchaser"), N.H. ASSOCIATES, an Illinois limited partnership ("Seller") and
NEAR NORTH NATIONAL TITLE CORPORATION ("Escrow Agent").
RECITALS
A. Purchaser and Seller have entered into an Agreement of Sale dated as
of May 16, 1997 (the "Original Purchase Agreement") wherein Seller agreed to
sell and Purchaser agreed to purchase that certain parcel of real property
commonly known as North Hill Apartments, Atlanta, Georgia and legally described
on Exhibit A attached to the Purchase Agreement (the "Property").
B. Purchaser, Seller and Escrow Agent have entered into that certain
Escrow Agreement dated May 16, 1997 (the "Original Escrow Agreement"), which
Escrow Agreement governs the holding and disposition of the earnest money under
the Purchase Agreement.
C. Purchaser, Seller and Escrow Agent have entered into that certain
First Amendment to Agreement of Sale and Escrow Agreement dated May 30, 1997
(the "First Amendment"), which First Amendment extended the expiration of the
due diligence period until June 9, 1997. The Original Purchase Agreement as
amended by the Amendment is hereinafter referred to as the "Purchase
Agreement". The Original Escrow Agreement as amended by the Amendment is
hereinafter referred to as the "Escrow Agreement".
D. Purchaser and Seller desire to further modify and amend the Purchase
Agreement as hereinafter set forth and Purchaser, Seller and Escrow Agent
desire to further modify and amend the Escrow Agreement as hereinafter set
forth.
NOW, THEREFORE, for the sum of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Purchaser and Seller hereby desire to amend the Purchase
Agreement as follows:
1. Defined Terms. All capitalized terms which are used herein but which
are not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
2. Modifications to Purchase Agreement. The Purchase Agreement is
hereby modified as follows:
Approval Period. The Approval Period is hereby extended from
June 9, 1997 to June 13, 1997. Accordingly, the date "June 9,
1997" contained in Section 17 is hereby deleted, and the date
"June 13, 1997" is hereby substituted therefor.
<PAGE>
3. Modifications to Escrow Agreement. The date "June 9, 1997" in
Section 2 of the Escrow Agreement is hereby deleted and the date "June 13,
1997" is hereby substituted therefor.
4. Miscellaneous.
A. Full Force and Effect. Except as modified herein, the Purchase
Agreement and Escrow Agreement shall remain unmodified and in full force and
effect.
B. Counterparts. This Amendment may be executed in multiple
counterparts.
[this space intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
this 9th day of June, 1997.
PURCHASER:
ERP OPERATING LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Equity Residential Properties Trust, a Maryland
real estate investment trust
By: /s/ Shelley Dunck
-----------------------------------
Name: Shelley Dunck
-----------------------------------
Title: VP
-----------------------------------
SELLER:
N.H. ASSOCIATES, an Illinois limited partnership
By: North Hill Partners, an Illinois joint venture,
its general partner
By: Thornhill Limited Partnership, an Illinois
limited partnership, a joint venture partner
By: Balcor Partners-XVI, an Illinois general
partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ Michael J. Becker
-----------------------------
Name: Michael J. Becker
-----------------------------
Title: Managing Director
-----------------------------
ESCROW AGENT:
NEAR NORTH NATIONAL TITLE CORPORATION
By:
------------------------------
Its Authorized Agent
<PAGE>
THIRD AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
This THIRD AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is entered into as of this 13th day of June, 1997 by and between
ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Purchaser"), N.H. ASSOCIATES, an Illinois limited partnership ("Seller") and
NEAR NORTH NATIONAL TITLE CORPORATION ("Escrow Agent").
RECITALS
A. Purchaser and Seller have entered into an Agreement of Sale dated as
of May 16, 1997 (the "Original Purchase Agreement") wherein Seller agreed to
sell and Purchaser agreed to purchase that certain parcel of real property
commonly known as North Hill Apartments, Atlanta, Georgia and legally described
on Exhibit A attached to the Purchase Agreement (the "Property").
B. Purchaser, Seller and Escrow Agent have entered into that certain
Escrow Agreement dated May 16, 1997 (the "Original Escrow Agreement"), which
Escrow Agreement governs the holding and disposition of the earnest money under
the Purchase Agreement.
C. Purchaser, Seller and Escrow Agent have entered into that certain
First Amendment to Agreement of Sale and Escrow Agreement dated May 30, 1997
(the "First Amendment") and that certain Second Amendment to Agreement of Sale
and Escrow Agreement dated June 9, 1997 (the "Second Amendment"), which
extended the expiration of the due diligence period until June 13, 1997. The
Original Purchase Agreement as amended by the First Amendment and the Second
Amendment is hereinafter referred to as the "Purchase Agreement". The Original
Escrow Agreement as amended by the First Amendment and the Second Amendment is
hereinafter referred to as the "Escrow Agreement".
D. Purchaser and Seller desire to further modify and amend the Purchase
Agreement as hereinafter set forth and Purchaser, Seller and Escrow Agent
desire to further modify and amend the Escrow Agreement as hereinafter set
forth.
NOW, THEREFORE, for the sum of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Purchaser and Seller hereby desire to amend the Purchase
Agreement as follows:
1. Defined Terms. All capitalized terms which are used herein but which
are not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
2. Modifications to Purchase Agreement. The Purchase Agreement is
hereby modified as follows:
Approval Period. The Approval Period is hereby extended from June
13, 1997 to June 18, 1997. Accordingly, the date "June 13, 1997" contained in
Section 17 is hereby deleted, and the date "June 18, 1997" is hereby
substituted therefor.
<PAGE>
3. Modifications to Escrow Agreement. The date "June 13, 1997" in
Section 2 of the Escrow Agreement is hereby deleted and the date "June 18,
1997" is hereby substituted therefor.
4. Miscellaneous.
A. Full Force and Effect. Except as modified herein, the Purchase
Agreement and Escrow Agreement shall remain unmodified and in full force and
effect.
B. Counterparts. This Amendment may be executed in multiple
counterparts.
[this space intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
this 13th day of June, 1997.
PURCHASER:
ERP OPERATING LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Equity Residential Properties Trust, a Maryland
real estate investment trust
By: /s/ Christopher B. Beda
-----------------------------------
Name: Christopher B. Beda
-----------------------------------
Title: A.V.P.
-----------------------------------
SELLER:
N.H. ASSOCIATES, an Illinois limited partnership
By: North Hill Partners, an Illinois joint venture,
its general partner
By: Thornhill Limited Partnership, an Illinois
limited partnership, a joint venture partner
By: Balcor Partners-XVI, an Illinois general
partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ Michael J. Becker
-----------------------------
Name: Michael J. Becker
-----------------------------
Title: Managing Director
-----------------------------
ESCROW AGENT:
NEAR NORTH NATIONAL TITLE CORPORATION
By:
------------------------------
Its Authorized Agent
<PAGE>
FOURTH AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
This FOURTH AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is entered into as of this 18th day of June, 1997 by and between
ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Purchaser"), N.H. ASSOCIATES, an Illinois limited partnership ("Seller") and
NEAR NORTH NATIONAL TITLE CORPORATION ("Escrow Agent").
RECITALS
A. Purchaser and Seller have entered into an Agreement of Sale dated as
of May 16, 1997 (the "Original Purchase Agreement") wherein Seller agreed to
sell and Purchaser agreed to purchase that certain parcel of real property
commonly known as North Hill Apartments, Atlanta, Georgia and legally described
on Exhibit A attached to the Purchase Agreement (the "Property").
B. Purchaser, Seller and Escrow Agent have entered into that certain
Escrow Agreement dated May 16, 1997 (the "Original Escrow Agreement"), which
Escrow Agreement governs the holding and disposition of the earnest money under
the Purchase Agreement.
C. Purchaser, Seller and Escrow Agent have entered into that certain
First Amendment to Agreement of Sale and Escrow Agreement dated May 30, 1997
(the "First Amendment"), that certain Second Amendment to Agreement of Sale and
Escrow Agreement dated June 9, 1997 (the "Second Amendment") and that certain
Third Amendment to Agreement of Sale and Escrow Agreement dated June 13, 1997
(the "Third Amendment"). The Original Purchase Agreement as amended by the
First Amendment, the Second Amendment and the Third Amendment is hereinafter
referred to as the "Purchase Agreement". The Original Escrow Agreement as
amended by the First Amendment, the Second Amendment and the Third Amendment is
hereinafter referred to as the "Escrow Agreement".
D. Purchaser and Seller desire to further modify and amend the Purchase
Agreement as hereinafter set forth and Purchaser, Seller and Escrow Agent
desire to further modify and amend the Escrow Agreement as hereinafter set
forth.
NOW, THEREFORE, for the sum of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Purchaser and Seller hereby desire to amend the Purchase
Agreement as follows:
1. Defined Terms. All capitalized terms which are used herein but which
are not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
2. Modifications to Purchase Agreement. The Purchase Agreement is
hereby modified as follows:
A. Purchase Price. The Purchase Price is hereby reduced to
$21,000,000. Accordingly:
<PAGE>
1. the phrase "Twenty-Two Million Five Hundred Thousand and
No/100 Dollars ($22,500,000.00)" in the second and third lines of Section 1 of
the Agreement is hereby deleted and the phrase "Twenty-One Million and No/100
Dollars ($21,000,000.00)" is hereby substituted therefor; and
2. the number "$22,500,000" in the second line of Section 2C
of the Agreement is hereby deleted and the number "$21,000,000" is hereby
substituted therefor.
B. Approval Period. The Approval Period is hereby extended from
June 18, 1997 to June 23, 1997. Accordingly, the date "June 18, 1997"
contained in Section 17 is hereby deleted, and the date "June 23, 1997" is
hereby substituted therefor.
3. Modifications to Escrow Agreement. The date "June 18, 1997" in
Section 2 of the Escrow Agreement is hereby deleted and the date "June 23,
1997" is hereby substituted therefor.
4. Miscellaneous.
A. Full Force and Effect. Except as modified herein, the Purchase
Agreement and Escrow Agreement shall remain unmodified and in full force and
effect.
B. Counterparts. This Amendment may be executed in multiple
counterparts.
[this space intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
this 13th day of June, 1997.
PURCHASER:
ERP OPERATING LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Equity Residential Properties Trust, a Maryland
real estate investment trust
By: /s/ Christopher B. Beda
-------------------------------------
Name: Christopher B. Beda
-------------------------------------
Title: A.V.P.
-------------------------------------
SELLER:
N.H. ASSOCIATES, an Illinois limited partnership
By: North Hill Partners, an Illinois joint venture,
its general partner
By: Thornhill Limited Partnership, an Illinois
limited partnership, a joint venture partner
By: Balcor Partners-XVI, an Illinois general
partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ Michael J. Becker
-----------------------------
Name: Michael J. Becker
-----------------------------
Title: Managing Director
-----------------------------
ESCROW AGENT:
NEAR NORTH NATIONAL TITLE CORPORATION
By:
-------------------------------
Its Authorized Agent
<PAGE>
FIFTH AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
This FIFTH AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is entered into as of this 23rd day of June, 1997 by and between
ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Purchaser"), N.H. ASSOCIATES, an Illinois limited partnership ("Seller") and
NEAR NORTH NATIONAL TITLE CORPORATION ("Escrow Agent").
RECITALS
A. Purchaser and Seller have entered into an Agreement of Sale dated as
of May 16, 1997 (the "Original Purchase Agreement") wherein Seller agreed to
sell and Purchaser agreed to purchase that certain parcel of real property
commonly known as North Hill Apartments, Atlanta, Georgia and legally described
on Exhibit A attached to the Purchase Agreement (the "Property").
B. Purchaser, Seller and Escrow Agent have entered into that certain
Escrow Agreement dated May 16, 1997 (the "Original Escrow Agreement"), which
Escrow Agreement governs the holding and disposition of the earnest money under
the Purchase Agreement.
C. Purchaser, Seller and Escrow Agent have entered into that certain
First Amendment to Agreement of Sale and Escrow Agreement dated May 30, 1997
(the "First Amendment"), that certain Second Amendment to Agreement of Sale and
Escrow Agreement dated June 9, 1997 (the "Second Amendment"), that certain
Third Amendment to Agreement of Sale and Escrow Agreement dated June 13, 1997
(the "Third Amendment") and that certain Fourth Amendment to Agreement of Sale
and Escrow Agreement dated June 18, 1997 (the "Fourth Amendment"). The
Original Purchase Agreement as amended by the First Amendment, the Second
Amendment, the Third Amendment and Fourth Amendment is hereinafter referred to
as the "Purchase Agreement". The Original Escrow Agreement as amended by the
First Amendment, the Second Amendment the Third Amendment and the Fourth
Amendment is hereinafter referred to as the "Escrow Agreement".
D. Purchaser and Seller desire to further modify and amend the Purchase
Agreement as hereinafter set forth and Purchaser, Seller and Escrow Agent
desire to further modify and amend the Escrow Agreement as hereinafter set
forth.
NOW, THEREFORE, for the sum of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Purchaser and Seller hereby desire to amend the Purchase
Agreement as follows:
1. Defined Terms. All capitalized terms which are used herein but which
are not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
2. Modifications to Purchase Agreement. The Purchase Agreement is
hereby modified as follows:
<PAGE>
A. Approval Period. The Approval Period is hereby extended from
June 23, 1997 to June 24, 1997. Accordingly, the date June 23, 1997" contained
in Section 17 is hereby deleted, and the date "June 24, 1997" is hereby
substituted therefor.
3. Modifications to Escrow Agreement. The date "June 23, 1997" in
Section 2 of the Escrow Agreement is hereby deleted and the date "June 24,
1997" is hereby substituted therefor.
4. Miscellaneous.
A. Full Force and Effect. Except as modified herein, the Purchase
Agreement and Escrow Agreement shall remain unmodified and in full force and
effect.
B. Counterparts. This Amendment may be executed in multiple
counterparts.
[this space intentionally left blank]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
this 23rd day of June, 1997.
PURCHASER:
ERP OPERATING LIMITED PARTNERSHIP, an Illinois
limited partnership
By: Equity Residential Properties Trust, a Maryland
real estate investment trust
By: /s/ Christopher B. Beda
-------------------------------------
Name: Christopher B. Beda
-------------------------------------
Title: A.V.P.
-------------------------------------
SELLER:
N.H. ASSOCIATES, an Illinois limited partnership
By: North Hill Partners, an Illinois joint venture,
its general partner
By: Thornhill Limited Partnership, an Illinois
limited partnership, a joint venture partner
By: Balcor Partners-XVI, an Illinois general
partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ Jerry M. Ogle
-----------------------------
Name: Jerry M. Ogle
-----------------------------
Title: Managing Director and
Secretary
-----------------------------
ESCROW AGENT:
NEAR NORTH NATIONAL TITLE CORPORATION
By:
--------------------------------
Its Authorized Agent
<PAGE>
SIXTH AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
This SIXTH AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is entered into as of the 25th day of June, 1997, by and between
ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Purchaser"), N.H. ASSOCIATES, an Illinois limited partnership ("Seller"), and
NEAR NORTH NATIONAL TITLE CORPORATION ("Escrow Agent").
RECITALS
A. Purchaser and Seller are parties to an Agreement of Sale dated as of
May 16, 1997 (the "Original Purchase Agreement") wherein Seller agreed to sell
and Purchaser agreed to purchase that certain parcel of real property commonly
known as North Hill Apartments, Atlanta, Georgia and legally described on
Exhibit A attached to the Purchase Agreement (the "Property").
B. Purchaser, Seller and Escrow Agent have entered into that certain
Escrow Agreement dated May 16, 1997 (the "Original Escrow Agreement"), which
Escrow Agreement governs the holding and disposition of the earnest money under
the Purchase Agreement.
C. Purchaser, Seller and Escrow Agent have entered into that certain
First Amendment to Agreement of Sale and Escrow Agreement dated May 30, 1997
(the "First Amendment"), that certain Second Amendment to Agreement of Sale and
Escrow Agreement dated June 9, 1997 (the "Second Amendment"), that certain
Third Amendment to Agreement of Sale and Escrow Agreement dated June 13, 1997
(the "Third Amendment"), that certain Fourth Amendment to Agreement of Sale and
Escrow Agreement dated June 18, 1997 (the "Fourth Amendment"), that certain
Fifth Amendment to Agreement of Sale and Escrow Agreement dated June 23, 1997
(the "Fifth Amendment") and that certain letter dated June 24, 1997 (the
"Letter Amendment"). The Original Purchase Agreement as amended by the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the
Fifth Amendment and the Letter Amendment is hereinafter referred to as the
"Purchase Agreement". The Original Escrow Agreement as amended by the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and
the Fifth Amendment is hereinafter referred to as the "Escrow Agreement".
D. Purchaser and Seller desire to further modify and amend the Purchase
Agreement as hereinafter set forth and Purchaser, Seller and Escrow Agent
desire to further modify and amend the Escrow Agreement as hereinafter set
forth.
NOW, THEREFORE, for the sum of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Purchaser and Seller hereby desire to amend the Purchase
Agreement as follows:
1. Defined Terms. All capitalized terms which are used herein but which
are not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Agreement.
<PAGE>
2. Modifications to Purchase Agreement. The Purchase Agreement is hereby
modified as follows:
A. Payment of Closing Costs, Section 5 of the Purchase Agreement is
hereby deleted in its entirety and the following is hereby substituted
therefore:
Purchaser and Seller shall evenly divide the costs of the documentary stamps
(if any) to be paid with reference to the Deed and all other stamps,
intangible, documentary, recording, sales tax and surtax imposed by law with
reference to any other documents delivered in connection with this Agreement,
all costs of the Title Commitment, Title Policy, modifications to the Survey,
escrow charges and all other charges of the Title Insurer in connection with
this transaction. Seller agrees to pay for any transfer or assumption fees
required by the "Lender Entities" (as said terms is hereinafter defined).
Purchaser and Seller agree to evenly divide and pay for any other fees and
charges required by any other applicable third party in connection with the
assumption of the Bonds and the Loan Documents including, without limitation,
non-refundable application fees, the costs of any necessary opinion of bond
counsel retained by Purchaser in connection with the assumption of the Bonds
and the Loan Documents and recording and title insurance costs and expenses.
Purchaser and Seller shall be responsible for the costs of their respective
attorneys (except to the extent that Purchaser's bond counsel prepares any
necessary legal opinion in connection wit the assumption of the Bonds, in which
case, as provided above, the cost of preparing such opinion shall be evenly
divided between Purchaser and Seller).
B. Prorations. The sentence beginning "Real Property taxes shall be
prorated" in the 9th line on page 15 of the Purchase Agreement is hereby
deleted in its entirety, and the following is hereby substituted therefore:
"Real property taxes shall be prorated based on 115% of the most recently
available tax bill".
3. Miscellaneous.
A. Full Force and Effect. Except as modified herein, the Purchase
Agreement and Escrow Agreement shall remain unmodified and in full force and
effect.
B. Counterparts. This Amendment may be executed in multiple
counterparts.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Amendment as of this 25th day of June, 1997.
PURCHASER:
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
a Maryland real estate investment trust
By: /s/ Alan W. George
-------------------------------------
Name: Alan W. George
-------------------------------------
Its: EVP
-------------------------------------
SELLER:
N.H. ASSOCIATES, an Illinois limited partnership
By: North Hill Partners, an Illinois joint venture,
its general partner
By: Thornhill Limited Partnership, an Illinois
limited partnership, a joint venture partner
By: Balcor Partners-XVI, an Illinois general
partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ Michael J. Becker
------------------------------------
Name: Michael J. Becker
------------------------------------
Its: Managing Director
------------------------------------
<PAGE>
June 30, 1997
VIA FACSIMILE & UPS
The Balcor Company Katten Muchin & Zavis
2355 Waukegan Road, Suite A200 525 West Monroe Street, Suite 2100
Bannockburn, Illinois 60015 Chicago, Illinois 60661-3693
Attention: Ilona Adams, John Powell Attention: Daniel J. Perlman, Esq.
and Al Lieberman and Andrew D. Small, Esq.
Facsimile: 708/317-4461 Facsimile: 312/902-1061
Re: Agreement of Sale dated as of May 16, 1997 (as amended from time to
time, the "Agreement"), by and between ERP Operating Limited
Partnership ("Purchaser") and N.H. Associates
Ladies and Gentlemen:
On behalf of the above referenced Purchaser, and pursuant to Section 8(C)
of the above referenced Agreement, this letter constitutes an Extension Notice
from Purchaser that the date for satisfaction of the Conditions Precedent is
hereby extended to July 28, 1997, and the Closing Date to August 4, 1997 (or
five business days after satisfaction of the Conditions Precedent, whichever
occurs first). Defined terms used, but not defined, in this letter shall have
the same respective meanings ascribed to such terms in the Agreement.
Please acknowledge this Extension Notice, and forward a copy to the Title
Insurer, as provided in Section 8(C) of the Agreement. Should you have any
questions, please call me. Thank you for your assistance with this matter.
Very truly yours,
/s/ John P. Starkweather
--------------------------------
John P. Starkweather
cc: Christopher Beda (via facsimile: 312/454-9678)
Alan George (via facsimile: 312/454-9678)
Kelly Stonebraker
Roberta Vacker
/s/ John K. Powell
--------------------------------
John K. Powell
Authorized Agent
Acknowledged on behalf of Seller
<PAGE>
SEVENTH AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT
THIS SEVENTH AMENDMENT TO AGREEMENT OF SALE AND ESCROW AGREEMENT (this
"Amendment") is made as of the 28th day of July, 1997, by and between N.H.
ASSOCIATES, an Illinois limited partnership ("Seller"), and ERP OPERATING
LIMITED PARTNERSHIP, an Illinois limited partnership ("Purchaser").
RECITALS
Purchaser and Seller are parties to an Agreement of Sale dated as of May
16, 1997 (as the same has been amended from time to time, the "Purchase
Agreement") and an Escrow Agreement dated as of May 16, 1997 (as the same has
been amended from time to time, the "Escrow Agreement"). All capitalized terms
which are used but not defined in this Amendment shall have the same respective
meanings ascribed to such terms in the Purchase Agreement. Purchaser and
Seller desire to amend the Purchase Agreement and Escrow Agreement as more
particularly set forth below.
NOW, THEREFORE, in consideration of the Purchase Agreement, the mutual
covenants and agreements therein and hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, Purchaser and Seller agree as follows:
1. Condition Precedent. The date for satisfaction of the Condition
Precedent as described in Section 8 of the Purchase Agreement is hereby
extended to August 15, 1997, and to the extent necessary, the Purchase
Agreement and the Escrow Agreement are hereby amended to reflect such
extension.
2. Closing Date. The Closing Date is hereby extended to August 20, 1997.
3. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which shall be deemed to be an original, and all of such counterparts shall
constitute one agreement. To facilitate execution of this Amendment, the
parties may execute and exchange by telephone facsimile counterparts of the
signature pages.
4. Effect of Amendment. Except as expressly amended hereby, the Purchase
Agreement and Escrow Agreement shall remain in full force and effect and
otherwise unmodified.
<PAGE>
SIGNATURE PAGE TO SEVENTH AMENDMENT TO
AGREEMENT OF SALE AND ESCROW AGREEMENT
[North Hill Apartments, Atlanta, Georgia]
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this
Amendment as of the date first above written.
SELLER:
N.H. ASSOCIATES, an Illinois limited partnership
By: North Hill Partners, an Illinois joint venture,
its general partner
By: Thornhill Limited Partnership, an Illinois
limited partnership, a joint venture partner
By: Balcor Partners-XVI, an Illinois general
partnership, its general partner
By: RGF-Balcor Associates-II, an Illinois
general partnership, a partner
By: The Balcor Company, a Delaware
corporation, a general partner
By: /s/ Michael J. Becker
-----------------------------
Name: Michael J. Becker
-----------------------------
Its: Managing Director
-----------------------------
PURCHASER:
ERP OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: Equity Residential Properties Trust,
its general partner
By: /s/ Alan W. George
----------------------------------
Name: Alan W. George
----------------------------------
Its: EVP
----------------------------------
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 5189
<SECURITIES> 0
<RECEIVABLES> 35
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5789
<PP&E> 22839
<DEPRECIATION> 8929
<TOTAL-ASSETS> 20331
<CURRENT-LIABILITIES> 488
<BONDS> 17777
0
0
<COMMON> 0
<OTHER-SE> 2609
<TOTAL-LIABILITY-AND-EQUITY> 20331
<SALES> 0
<TOTAL-REVENUES> 7301
<CGS> 0
<TOTAL-COSTS> 1111
<OTHER-EXPENSES> 668
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 884
<INCOME-PRETAX> 4638
<INCOME-TAX> 0
<INCOME-CONTINUING> 4638
<DISCONTINUED> 0
<EXTRAORDINARY> (379)
<CHANGES> 0
<NET-INCOME> 4259
<EPS-PRIMARY> 71.35
<EPS-DILUTED> 71.35
</TABLE>
