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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
AMENDMENT TO GENERAL FORM FOR REGISTRATION OF SECURITIES
Filed pursuant to Section 12(g)
THE SECURITIES EXCHANGE ACT OF 1934
ASSOCIATED PLANNERS REALTY FUND
(Exact name of registrant as specified in its charter)
AMENDMENT NO. 2
File No. 0-16805
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its General Form for Registration
of Securities on Form 10-K as set forth in the pages attached hereto:
Item 7 - Management Discussion and Analysis
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
Associated Planners Realty Fund.
(Registrant)
Date:
By: West Coast Realty Advisors, Inc. (Advisor)
By: Michael G. Clark, Vice President/Treasurer
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership began offering for sale limited partnership units on
March 28, 1986. On July 16, 1986, the Partnership reached its minimum
offering level of $1,200,000, and funds were released from an escrow account
to the Partnership. The Partnership sold units throughout the remainder of
the year, and raised $3,397,000 in gross proceeds or $3,025,961 net of
syndication costs and sales commissions as of December 31, 1986. During
1986, the Partnership purchased two properties for $1,525,254 cash. During
1987, the Partnership purchased two additional properties for $3,829,207
cash. The Partnership filed Post-Effective Amendment No. 1 to the Form S-18
used to register the Partnership. This filing was done to extend the period
that units could be offered for sale by registrant to March 28, 1988. On
December 30, 1987, the sale of units ended with $7,499,000 raised or
$6,725,211 net of syndication costs and sales commissions. During 1988, the
Partnership acquired its last and final property for $1,603,144 cash. As of
December 31, 1988, the Partnership completed its property acquisition phase.
During the year ended December 31, 1994, the Partnership made
distributions to the limited partners totaling $348,703 of which $103,851
constituted a return of capital. On February 3, 1995, the Partnership made a
distribution to limited partners totaling $74,990. Distributions are
determined by management based on cash flow and the liquidity position of the
Partnership. It is the intention of management to make quarterly
distributions of cash, subject to the maintenance of reasonable reserves.
In January 1995, the Partnership closed escrow on a parcel of land
adjacent to the Shaw Villa Shopping Center. The purchase price of the land
was $206,749, including a $13,102 acquisition fee paid to the Advisor. The
purchase was paid for using $23,602 in cash, and the remainder financed by a
one year construction loan provided by Valliwide Bank of Fresno. The
loan carries an interest rate of 2% over the bank's prime rate, with the
total loan commitment equaling $1,365,000. The loan is interest only with
payments being made via additional draws against the loan. There was no
outstanding loan balance at December 31, 1994.
During the year ended December 31, 1994, $307,180 in cash was provided
by operating activities. This resulted primarily from net cash basis income
of $359,385 from operations (net income plus depreciation expense) less the
$55,030 increase in other assets (primarily resulting from deposits paid in
connection with the construction at Shaw Villa Shopping Center), less a
$38,002 decrease in related party accounts payable (from the repayment of an
advance from an affiliate) less a $19,528 decrease in security deposits and
prepaid rents (due to a tenant prepaying January 1994 but not January 1995
rent). These deductions were offset by $71,892 in cash generated from the
sale of government securities. Cash used in investing activities
amounted to $60,762 in connection with the construction in progress at the
Shaw Villa Shopping Center. Cash used in financing activities amounted to
$349,703 due primarily to the distribution to the limited partners during the
year.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
Management uses cash as its primary measure of a partnership's
liquidity. The amount of cash that represents adequate liquidity for a real
estate limited partnership, in the short-term and long-term, depends on
several factors. Among them are:
1. Relative risk of the partnership;
2. Condition of the partnership's properties;
3. Stage in the partnership's life cycle (e.g., money-raising,
acquisition, operating or disposition phase); and
4. Distributions to partners.
The Partnership believes it has the ability to generate sufficient cash
to meet both short-term and long-term liquidity needs, based upon the above
four points. The first point refers to the risk of Partnership investments.
The Partnership's investments in properties were paid for in cash and
precludes the risk of debt service. Although a major tenant representing
12% of 1993 rental revenues vacated Santa Fe Business Park's Building 3 in
December 1993, the Partnership believes that its cash reserves are sufficient
to meet liquidity needs and to pay the relatively nominal operating costs of
owning this building. The second point relates to the condition of the
Partnership's properties. All Partnership properties are in good condition.
There is no foreseeable need to increase reserves to fund deferred or unusual
maintenance and repair expenditures. The third point relates to life cycle.
The Partnership completed its funding and acquisition of property in previous
years. Thus, the Partnership is in the property operating stage. As part
of these operating activities, the partnership was involved in purchasing and
developing the aforementioned parcel in Clovis in 1994. This activity is
expected to enhance rental revenues and increase the value of the Shaw Villa
Shopping Center. The Partnership believes that cash flows provided by
operating activities will continue. The fourth point relates to partner
distributions. The Partnership makes quarterly distributions from
operations. Such distributions are subject to payment of Partnership
expenses and reasonable reserves for expenses, maintenance, and replacements.
Adding to the liquidity is that at least one quarter's cash profits are
reflected on the Partnership's balance sheet at each quarter end, since the
Partnership makes distributions to the partners one month after quarter end.
Absence of any unforeseeable catastrophic event, the General Partner believes
that the Partnership will have the ability to meet its cash requirements in
the short-term and long-term.
During the year ended December 31, 1994, the General Partner earned
partnership management fees of $38,745, representing 10% of the total
distribution (including management fees) of $387,448 to the General Partner
and Limited Partners. Subsequent to year-end, the General Partner received
a partnership management fee of $8,332, representing 10% of a total
distribution of $83,322. Partnership management fees were paid and
calculated in accordance with the partnership agreement.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
As of December 31, 1993, the property located at 179 Calle Magdalena was
vacated by its sole tenant. The property is not impaired and initially
management was attempting to lease the property to single floor tenants,
although this attempt was not successful. After management discussed the
leasing opportunities for the property, the General Partner decided to switch
brokerage firms and lease the property to multi-tenant users. This new plan
to lease the property is successful and as of September 30, 1995, the
property is 50% leased. The lost rental revenue per year is approximately
$50,000 net of operating expenses of $33,000.
The Tax Reform Acts of 1986 and 1987 and the Revenue Reconciliation
Acts of 1990 and 1993 did not have a material impact on the Partnership's
operations.
The slowdown in the economy, inflation and changing prices have had a
nominal effect on the Partnership's revenues and income from continuing
operations. During the eight years of the Partnership's existence,
inflationary pressures in the U.S. economy have been minimal, and
this has been consistent with the experience of the Partnership in operating
rental real estate in California. The Partnership has several lease clauses
with its properties' tenants that will help alleviate much of the negative
impact of inflation. Among these are:
A. Several month-to-month leases at the Santa Fe Business Park that
would allow the Partnership to raise rents on a monthly basis.
B. Triple net leases at the Shaw Villa Shopping Center and Pacific
Bell Building which give the Partnership an ability to pass on higher
operating costs to its tenants.
RESULTS OF OPERATIONS - 1994 VS. 1993
Operations for the years ended December 31, 1994 and 1993 reflect full
years of rental activities for the Partnership's properties. Net Income
decreased 28% ($84,795) as a result of a 12% ($105,798) decrease in rental
revenues. This decrease in rental revenue was primarily the result of lower
occupancy at the 187 Calle Magdalena Office Suite Building resulting in
approximately $3,521 less rental revenue and zero occupancy at the 179 Calle
Magdalena Building resulting in approximately $101,500 less rental revenue
from the year ended December 31, 1993.
The Partnership's net income was reduced as the result of a $2,757
unrealized net loss on a $58,311 (cost basis) investment in short-term
government securities.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
The Partnership generated $362,142 in income from operations before
depreciation expense of $141,493 and unrealized loss on government securities
of $2,757, compared to $454,331 in income from operation for 1993 before
depreciation expense of $144,075. Distributions to limited partners were
only slightly impacted--dropping from $356,202 in 1993 to $348,703 in 1994.
Distributions did not decrease more due to the payout of prior years'
undistributed income that had been held in reserves. Operating expenses
increased $5,013 (1.7%) and general and administrative expenses decreased
$8,005 (6.9%) from 1993 to 1994, which are both considered immaterial for
comparison purposes.
The statement of cash flows reflects proceeds from the sales (purchases)
of government securities for 1994 and 1993. These amounts pertain to gross
sales and (purchases) of government securities and are not being reflected as
net sales (purchases) for the periods being reported.
The General Partner believes that the Partnership will continue to
incur operating and general and administrative expenses consistent with the
prior years since occupancy has not fluctuated significantly from 1993 to
1994. Additionally, the properties are in good condition and significant
repairs and maintenance or other capital improvements are not necessary at
this time.
Net income per limited partner unit decreased from $34.60 in 1993 to
$24.45 in 1994, due primarily to the $101,500 decrease in rental revenue in
the 179 Calle Magdalena Building .
RESULTS OF OPERATIONS - 1993 VS. 1992
Operations for years ended December 31, 1993 and 1992 reflect full years
of rental activities for the Partnership's properties. Net income increased
15.1% ($39,601) as a result of an 11.1% ($36,232) decrease in operating
expenses in particular and a 4.6% decrease in total expenses. Cash from
operations increased $80,474 as a result of higher overall revenues and
lower overall expenses. The average occupancy for the Santa Fe and Clovis
properties decreased from 84% in 1992 to 60% in 1993. However, during 1993
rental income increased $10,458 (1.2%) due increased occupancy in other
Partnership properties and due to a tenant who vacated the Santa Fe property
during December 1992 was obligated to make rent payment through the end of
the lease, which expired in December 1993.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
The Partnership generated $454,331 in income from operations before
depreciation expense of $144,075 in 1993 compared to $417,416 in income from
operations for 1992 before depreciation expense of $147,023. This 1993
income resulted from $5,616 interest income on money market investments,
$564,745 in rental income, net of operating expenses of $290,877
and $116,030 in general and administrative expenses. Operating expenses
decreased $36,232 (from $327,109 in 1992 to $290,877 in 1993) primarily as a
result of $38,443 lower overall repairs and maintenance expenses, while
general and administrative expenses increased $12,468 (from $103,562 in 1992
to $116,030 in 1993) primarily as a result of a $6,249 increase in
General Partner management fees, and a $3,950 increase in accounting fees
and general business insurance.
The net income per limited partner unit was $34.60 in 1993 vs. $29.81 in
1992, due to increase rental revenue collected in connection with common area
maintenance reimbursements from tenants and lower overall expenses as
discussed above.
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S I G N A T U R E S
Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
ASSOCIATED PLANNERS REALTY FUND
A California Limited Partnership
(Registrant)
By: WEST COAST REALTY ADVISORS, INC.
(General Partner)
W. THOMAS MAUDLIN JR.
(Director and President)
WILLIAM T. HAAS
(Director and Executive Vice President / Secretary)
MICHAEL G. CLARK
(Vice President / Treasurer)
February 26, 1996
