FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 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 0-16805
ASSOCIATED PLANNERS REALTY FUND
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4036980
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5933 W. CENTURY BLVD., SUITE 900
LOS ANGELES, CALIFORNIA 90045
(Address of principal executive offices)
(Zip Code)
(310) 670-0800
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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
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ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 1. FINANCIAL STATEMENTS
In the opinion of the General Partner of Associated Planners Realty Fund
(the "Partnership"), all adjustments necessary for a fair presentation of the
Partnership's results for the three and nine months ended September 30, 1997 and
1996, have been made in the following financial statements which are normal and
recurring in nature. However, such financial statements are unaudited and are
subject to any year-end adjustments that may be necessary.
BALANCE SHEETS
SEPTEMBER 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996
<CAPTION>
SEPTEMBER 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
Rental real estate, less accumulated
depreciation (Note 2) $5,806,345 $5,909,116
Cash and cash equivalents 189,829 206,413
Other assets 49,212 31,086
TOTAL ASSETS $6,045,386 $6,146,615
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable:
Trade $16,624 $4,989
Related party (Note 3) 8,257 6,894
Notes payable (Note 4) 1,477,048 1,497,782
Security deposits and prepaid rent 28,143 31,424
TOTAL LIABILITIES 1,530,072 1,541,089
Minority interest 207,277 213,418
PARTNERS' EQUITY (NOTES 6 AND 7)
Limited partners:
$1,000 stated value per unit - authorized
7,500 units; issued and outstanding 7,499 4,263,356 4,350,158
General partner 44,681 41,950
TOTAL PARTNERS' EQUITY 4,308,037 4,392,108
TOTAL LIABILITIES AND PARTNERS' EQUITY $6,045,386 $6,146,615
</TABLE>
[FN]
See accompanying notes to financial statements.
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ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<CAPTION>
LIMITED PARTNERS GENERAL
TOTAL UNITS AMOUNT PARTNER
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1996 $4,392,108 7,499 $4,350,158 $41,950
Net income 154,231 -- 127,670 26,561
Distributions to limited partners (214,472) -- (214,472) --
Distributions to general partner (23,830) -- -- (23,830)
BALANCE AT SEPTEMBER 30, 1997 $4,308,037 7,499 $4,263,356 $44,681
NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
LIMITED PARTNERS GENERAL
TOTAL UNITS AMOUNT PARTNER
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1995 $4,478,268 7,499 $4,133,882 $344,386
Net income 120,498 -- 99,851 20,647
Reallocation of balances prior to
January 1, 1996 (Note 6) -- -- 305,548 (305,548)
Distributions to limited partners (175,777) -- (175,777) --
Distributions to general partner (19,531) -- -- (19,531)
BALANCE AT SEPTEMBER 30, 1996 $4,403,458 7,499 $4,363,504 $39,954
</TABLE>
[FN]
See accompanying notes to financial statements
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ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE THREE NINE NINE
MONTHS MONTHS MONTHS MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
30, 1997 30, 1996 30, 1997 30, 1996
REVENUES:
<S> <C> <C> <C> <C>
Rental $187,440 $183,995 $585,633 $536,092
Interest 2,491 3,028 7,100 6,730
189,931 187,023 592,733 542,822
COST AND EXPENSES:
Operating 39,462 48,609 109,088 140,115
Property taxes 9,410 7,965 28,466 23,561
Property management fees- Note 3(c) 9,413 9,226 29,218 26,536
General and administrative 16,481 15,338 52,082 42,013
Depreciation 41,250 31,842 123,752 95,526
Interest expense 33,710 36,962 101,603 78,139
149,726 149,942 444,209 405,890
LESS MINORITY INTEREST IN NET (1,597) (1,619) (5,707) 16,434
(INCOME) LOSS OF JOINT VENTURE
NET INCOME $41,802 $38,700 $154,231 $120,498
NET INCOME PER
LIMITED PARTNERSHIP UNIT $4.52 $4.26 $17.03 $13.32
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
NINE MONTHS NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
<S> <C> <C>
Cash Flow from operating activities:
Net income $154,231 $120,498
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 123,752 95,526
Minority interest in net income (loss) 5,707 (16,434)
Increase (decrease) from changes in:
Other assets (18,126) 35,450
Accounts payable 12,998 (25,356)
Security deposits and prepaid rents (3,282) 4,878
Net cash provided by operating activities 275,280 214,562
Cash flows used in investing activities:
Tenant improvement additions (20,980) ---
Net cash (used in) investing activities (20,980) ---
Cash flows used in financing activities:
Repayment of notes payable (20,734) (7,158)
Distributions to minority interest (11,848) ---
Distributions to general partners (23,830) (19,531)
Distributions to limited partners (214,472) (175,777)
Net cash (used in) financing activities (270,884) (202,466)
Net (decrease) increase in cash and cash
equivalents (16,584) 12,096
Cash and cash equivalents at beginning of period 206,413 103,300
CASH AND CASH EQUIVALENTS AT END OF PERIOD $189,829 $115,396
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
BUSINESS
Associated Planners Realty Fund (the "Partnership"), a California limited
partnership, was formed on November 19, 1985 under the Revised Limited
Partnership Act of the State of California. The Partnership was formed to
acquire income-producing real property throughout the United States with
emphasis on properties located in California. The Partnership purchased such
properties on an all cash basis or operated them on a moderately leveraged
basis, and originally intended to own and operate such properties for
investment over an anticipated holding period of approximately five to ten
years.
BASIS OF PRESENTATION
The consolidated financial statements do not give effect to any assets that
the partners may have outside of their interest in the partnership, nor to
any personal obligations, including income taxes, of the partners.
The consolidated financial statements include the accounts of Associated
Planners Realty Fund and all joint ventures in which it has a majority
interest.
RENTAL REAL ESTATE AND DEPRECIATION
Assets are stated at cost. Depreciation is computed using the straight-line
method over estimated useful lives ranging from five to 35 years.
In the event that facts and circumstances indicate that the cost of an asset
may be impaired, an evaluation of recoverability would be performed. If
an evaluation is required, the estimated future undiscounted cash flows
associated with the asset would be compared to the carrying amount to
determine if a write-down to market value is required.
RENTAL INCOME
Rental revenue is recognized on a straight-line basis to the extent that
rental revenue is deemed collectible.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
STATEMENTS OF CASH FLOWS
For the purpose of the statements of cash flows, the Partnership considers
cash in the bank and all highly liquid investments purchased with original
maturities of three months or less, to be cash and cash equivalents.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS
No. 125) issued by the Financial Accounting Standards Board (FASB) is
effective for transfers and servicing of financial assets and extinguishments
of liabilities occurring after December 31, 1996, and is to be applied
prospectively. Earlier or retroactive application is not permitted.
The new standard provides accounting and reporting standards for transfers
and servicing of financial assets and extinguishments of liabilities. The
Partnership does not expect adoption to have a material effect on its
financial position or results of operations.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1996
NOTE 1- NATURE OF PARTNERSHIP
The Partnership began accepting subscriptions in March 1986 and completed
its funding in December 1987.
Under the terms of the partnership agreement, the General Partner, West Coast
Realty Advisors, is entitled to cash distributions ranging from 10% to 15%.
The General Partner is also entitled to net income or loss allocations
varying from 1% to 15% and 1% depreciation and amortization allocations in
accordance with the partnership agreement.
NOTE 2- RENTAL REAL ESTATE
The Partnership currently has interests in the following four rental real
estate properties. Two are wholly-owned and two are jointly owned by the
Partnership (81.2%) and an affiliate (18.8%):
Location (Property Name) Date Purchased Cost
Encinitas, California
(179 Calle Magdalena) December 31, 1986 $ 705,918
Encinitas, California
(187 Calle Magdalena) December 31, 1986 853,560
Clovis, California January 23, 1987 2,854,221
Simi Valley, California November 12, 1987 2,616,523
The major categories of property are:
September 30, 1997 December 31, 1996
Land $2,361,894 $2,361,894
Building and Improvements 4,621,668 4,600,688
Furniture and Fixtures 46,660 46,660
7,030,222 7,009,242
Less accumulated depreciation 1,223,877 1,100,126
Net rental real estate $5,806,345 $5,909,116
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1996
NOTE 2- RENTAL REAL ESTATE (CONTINUED)
A significant portion of the Partnership's rental revenue was earned from a
tenant whose individual rent represented more than 10% of total rental revenue.
Specifically:
Two tenants accounted for 29% and 20% in 1997;
Two tenants accounted for 34% and 18% in 1996;
NOTE 3 - RELATED PARTY TRANSACTIONS
(a) For Partnership management services rendered to the Partnership, the
General Partner is entitled to receive 10% of all distributions of cash from
operations. These amounts totaled $8,499 for the quarter ended September 30,
1997 and $6,791 for the quarter ended September 30, 1996, and $23,830 for the
nine months ended September 30, 1997 and $19,531 for the six months ended
September 30, 1996.
(b) For administrative services provided to the Partnership, the General
Partner is entitled to reimbursement for the cost of certain personnel and
relevant expenses. These amounts totaled $3,000 for the quarter ended
September 30, 1997 and September 30, 1996, and $9,000 for the nine months
ended September 30, 1997 and 1996.
(c) Property management fees incurred, in accordance with the Partnership
Agreement, to West Coast Realty Management, Inc., an affiliate of the
corporate General Partner, totaled $9,413 for the quarter ended September 30,
1997, and $9,226 for the quarter ended September 30, 1996, and $29,218 for the
nine months ended September 30, 1997 and $26,536 for the nine months ended
September 30, 1996.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1996 (Continued)
NOTE 4- NOTES PAYABLE
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
financed using $23,602 in cash, and the remainder by a one year construction
loan from Valliwide Bank of Fresno. The total construction loan commitment was
for $1,365,000 that matured on October 5, 1996. The construction was completed
during 1995 and total construction costs of $1,372,900 was allocated to land,
building and improvements. Included in construction costs is $87,838 in
construction loan interest that was capitalized.
In October 1996, the Partnership obtained permanent financing from a major
insurance company to replace the construction loan with a twenty year loan. The
terms of the loan are as follows: Principal - $1,500,000; Interest Rate of
9.1% fixed for five years, then may be adjusted to the weekly average of the
five - year Treasury Note yield for the seventh week prior to the Adjustment
Date (5th anniversary date) plus 250 basis points, but in no event less than the
existing rate, nor to exceed the maximum rate allowed by law; Amortized over
twenty years; due November 1, 2006; and current monthly payments of principal
and interest of $14,919. The note payable balance is $1,477,048 at September
30, 1997.
The carrying amount is a reasonable estimate of fair value of the construction
loan payable because the interest rates approximate the borrowing rates
currently available for mortgage loans with similar terms and average
maturities.
The aggregate annual future maturities at September 30, 1997 are as follows:
1997 .................................. $4,996
1998 .................................. 30,619
1999 .................................. 33,524
2000 .................................. 36,706
2001 .................................. 40,189
Thereafter .......................... 1,331,014
Total $1,477,048
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1996 (Continued)
NOTE 5- NET INCOME AND CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP LIST
The Net Income per Limited Partnership Unit was computed in accordance with the
partnership agreement using the weighted average number of outstanding limited
partnership units of 7,499 for 1997 and 1996.
The Limited Partner cash distributions, computed in accordance with the
Partnership Agreement, were as follows:
Outstanding Amount Total
Record Date Units Per Unit Distribution
June 30, 1997 7,499 $10.20 76,490
March 31, 1997 7,499 9.20 68,991
December 31, 1996 7,499 9.20 68,991
Total $214,472
June 30, 1996 7,499 $8.15 61,117
March 31, 1996 7,499 8.15 61,117
December 31, 1995 7,499 7.14 53,543
Total $114,660
Distributions were paid in the fiscal quarter following the record date.
NOTE 6 - REALLOCATION OF PARTNER BALANCES
Per the provisions of Section 11.1 (V)(ii) of the Partnership Agreement, the
General Partner determined that action was necessary to "cure the ambiguities"
caused by the Agreement itself. The ambiguity involved the treatment of the
partnership management fee, being paid to the General Partner, as an expense of
the Partnership, when in fact, it should have been treated as a general partner
withdrawal of capital. In order to properly reflect this inception to date
correction, a transfer of $305,548 was made from the General Partner's capital
account to the Limited Partners capital account during the quarter ended March
31, 1996.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
Associated Planners Realty Fund (the "Partnership") was organized in November
1985, under the California Revised Limited Partnership Act. The Partnership
began offering units for sale on March 28, 1986. As of December 27, 1987, the
Partnership had raised $7,499,000 in gross capital contributions. The
Partnership netted approximately $6,720,000 after sales commissions and
syndication costs.
The Partnership was organized for the purpose of investing in, holding, and
managing improved, leveraged income-producing property, such as residential
property, office buildings, commercial buildings, industrial properties, and
shopping centers. The Partnership originally intended to own and operate such
properties for investment over an anticipated holding period of approximately
five to ten years.
The Partnership's principal investment objectives are to invest in rental real
estate properties which will:
(1) Preserve and protect the Partnership's invested capital;
(2) Provide for cash distributions from operations;
(3) Provide gains through potential appreciation; and
(4) Generate Federal income tax deductions so that during the early years
of property operations, a portion of cash distributions may be treated as a
return of capital for tax purposes and, therefore, may not represent
taxable income to the limited partners.
The ownership and operation of any income-producing real estate is subject to
those risks inherent in all real estate investments, including national and
local economic conditions, the supply and demand for similar types of
properties, competitive marketing conditions, zoning changes, possible casualty
losses, increases in real estate taxes, assessments, and operating expenses, as
well as others.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
The Partnership is operated by the General Partner subject to the terms of the
Amended and Restated Agreement of Limited Partnership. The Partnership has no
employees, and all administrative services are provided by West Coast Realty
Advisors, Inc., the General Partner.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended September 30, 1997 the Partnership made
distributions to the general and limited partners totaling $238,302, of which
$83,246 constituted a return of capital. The $238,302 in distributions compared
favorably to the $278,808 in cash generated from property operations (net income
plus depreciation expense). On February 3, 1997, May 9, 1997 and August 5, 1997
the Partnership made distributions of $9.20, $9.20 and $10.20 to units holders
of record as of December 31, 1996, March 31, 1997 and June 30, 1997
respectively. Distributions are determined by management based on cash flow and
the liquidity position of the Partnership and anticipated occupancy of the
properties.
As of September 30, 1997 management has decided to make semi-annual
distributions of cash, (instead of quarterly distributions) subject to
maintenance of reasonable reserves. The semi-annual distributions will begin
with the record date of December 31, 1997, and will be paid in early February
1998. The primary reason for this change is to reduce operating costs of the
Partnership.
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 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. Distribution to partners
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Partnership has adequate liquidity based upon the above four points. The
first point refers to the approximately 1% property reserve requirement of
capital funds raised that the Partnership currently has; this relatively low
reserve level is appropriate since all Partnership properties are acquired with
the use of no debt financing or moderate financing. This is a minimum guideline
that is disclosed in the Partnership's prospectus; the Partnership had more than
enough funds to meet this requirement as of September 30, 1997. Related to the
property reserve requirement is the second point - the condition of the
Partnership's properties. Since the properties are in good condition, no
unusual maintenance and repair expenditures are anticipated. The third point is
relevant to the Partnership because after the November 1987 purchase of the Simi
Valley property, the Partnership had effectively completed its acquisition
phase, and entered the operating phase. The fourth point relates to partner
distributions. The Partnership makes distributions from operations semi-annually
beginning on the record date of December 31, 1997. Such distributions are
subject to payment of Partnership expenses and reasonable reserves for expenses,
maintenance, and replacements.
During the nine months ended September 30, 1997 the Partnership paid the General
Partner a partnership management fee of $23,830 and distributed $214,472 to the
limited partners of which $84,071 constituted a return of capital. The
partnership management fee distribution to the general partner was calculated
and paid in accordance with the Partnership Agreement.
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 effects of the slowdown in the economy, inflation and changing prices have
not had a material impact on the Partnership's revenues and income from
operations. During the 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 clauses in the leases with its
properties' tenants that would help alleviate much of the negative impact of
inflation.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
CASH FLOWS - NINE MONTHS ENDED SEPTEMBER 30, 1997 VS. NINE MONTHS ENDED
SEPTEMBER 30, 1996
Cash resources decreased $16,584 during the nine months ended September 30, 1997
compared to a $12,096 increase in cash resources for the nine months ended
September 30, 1996. During the nine months ended September 30, 1997, $275,280
in cash was provided by operating activities. This resulted primarily from net
cash basis income of $277,983 from operations (net income plus depreciation
expense) plus a $12,998 increase in accounts payable, offset by a $18,126
increase in other assets (primarily due to an increase in a property tax impound
account) and a $3,282 decrease in security deposits and prepaid rents (due to a
decrease in tenants prepaying subsequent months rent). In contrast, during the
nine months ended September 30, 1996, $214,562 in cash was provided by operating
activities. This resulted primarily from net cash basis income of $216,024. The
sole use of cash in investing activities for the nine months ended September 30,
1997 was $20,980 expended for tenant improvements to an existing tenant at the
Shaw Villa Shopping Center. In contrast, the nine months ended September 30,
1996 did not have any investing activities. For the nine months ended September
30, 1997, financing activities used $270,884 via distributions to limited,
general and minority interest partners totaling $250,150 and repayments on notes
payable of $20,734. In contrast, the nine months ended September 30, 1996,
financing activities used an additional $202,466 via distributions to these same
parties totaling $195,308 and repayments on notes payable of $7,158.
PENDING TRANSACTIONS
The two office buildings located in Encinitas, California (179 and 187 Calle
Magdalena), and the Shaw Villa Shopping Center located in Clovis, California
will attempted to be sold, and the net proceeds from such sales will be
distributed to the limited partners and General Partner in accordance with the
terms of the Partnership Agreement. The cost basis of these properties are:
179 Calle Magdalena $ 705,918
187 Calle Magdalena 853,560
Shaw Villa Shopping Center 2,854,221
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
The amounts for the Calle Magdalena property represent the 81.2% interest that
the Partnership owns as part of a joint venture with an affiliate (the affiliate
will be selling its interest as well). There is no debt on the Encinitas
properties, and the Shaw Villa is encumbered by an assumable loan that will have
a balance of $1,477,048 as of September 30, 1997.
At this time, the General Partner feels that the sale of these properties will
be consummated sometime between January and September 1998. Although the
General Partner intends upon aggressively marketing the properties for sale,
there is no guarantee that a sale will actually take place, within the time
frame mentioned above, and at a sales price acceptable to the Partnership.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS No.
125) issued by the Financial Accounting Standards Board (FASB) is effective for
transfers and servicing of financial assets and extinguishments of liabilities
occurring after December 31, 1996, and is to be applied prospectively. Earlier
or retroactive application is not permitted. The new standard provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities. The Company does not expect adoption
to have a material effect on its financial position or results of operations.
RESULTS OF OPERATIONS
Operations for the nine months ended September 30, 1997, reflect an entire
period of operations for the Partnership's properties. Rental revenue for the
three and nine months ended September 30, 1997 increased from that for the three
and nine months ended September 30, 1996 by $3,445 and $49,541, respectively,
due to increased occupancy at the Shaw Villa Shopping Center, which pertains to
the completion of the construction-in-progress in 1995 and subsequent leasing of
the additional 8,000 square feet of rentable space, and additionally improved
occupancy at the multi-tenant Santa Fe Business Park Building. Interest income
increased $370 (5%) during the nine months ended September 30, 1997 when
compared to the nine months ended September 30, 1996. This increase is due to
larger amounts of cash held in interest bearing accounts during the nine months
ended September 30, 1997 as opposed to September 30, 1996.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS (CONT.)
The Partnership generated $277,983 in income from operations before depreciation
of $123,752 for the nine months ended September 30, 1997 compared to $216,024 in
income from operations before depreciation of $95,526 for the nine months ended
September 30, 1996 Depreciation expense increased $28,226 for the nine months
ended September 30, 1997 as compared to September 30, 1996 due to the completion
of construction-in-progress of the Clovis property. The completion was
completed during 1995 and total construction costs of $1,372,000 was allocated
to land, building and improvements. Interest expense increased $23,464 for the
nine months ended September 30, 1997 compared to the nine months ended September
30, 1996 due primarily to interest expense incurred after the construction was
completed at the Shaw Villa Shopping Center and the permanent financing which
was obtained in November 1996.
Operating expenses decreased $31,027 (22%) as a result of lower repairs and
maintenance costs for the nine months ended September 30, 1997 compared to the
nine months ended September 30, 1996. General and administrative expenses
increased $10,069 (24%) due primarily to an increase in legal and accounting
expenses and an adjustment to the 1995 minority interest account balance which
was adjusted in January 1996.
During the nine months ended September 30, 1997, the Partnership distributed
$214,472 to the limited partners and $23,830 to the general partner, as opposed
to the nine months ended September 30, 1996 when the Partnership distributed
$175,777 to the limited partners and $19,531 to the general partners. Cash
basis income for the nine months ended September 30, 1997 was $277,983. This
was derived by adding depreciation and amortization to net income. Thus cash
distributions during the nine months ended September 30, 1997 were ($39,681)
less than cash basis income. In contrast, distributions during the nine months
ended September 30, 1996 were ($20,716) less than cash basis income.
Net income per limited partner unit increased from $13.32 for the nine months
ended September 30, 1996 to $17.03 for the nine months ended September 30, 1997,
primarily due to the increase in rental income as a result of the expansion of
the Shaw Villa Shopping Center.
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
PART II
O T H E R I N F O R M A T I O N
ITEM 1.LEGAL PROCEEDINGS
None
ITEM 2.CHANGES IN SECURITIES
None
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5.OTHER INFORMATION
None
ITEM 6.EXHIBIT AND REPORTS ON FORM 8-K
(a) Information required under this section has been included in the
financial statements.
(b) Reports on Form 8-K
Dated September 10, 1997 - Item 2 Acquisition or Disposition of Assets
<PAGE>
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
S I G N A T U R E S
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.
ASSOCIATED PLANNERS REALTY FUND
A California Limited Partnership
(Registrant)
November 11, 1997 By: WEST COAST REALTY ADVISORS, INC.
A California Corporation,
General Partner
Neal E. Nakagiri
Vice President/Secretary
November 11, 1997
Michael G. Clark
Vice President/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000785791
<NAME> ASSOCIATED PLANNERS REALTY FUND L.P.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 189,829
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 222,849
<PP&E> 7,030,222
<DEPRECIATION> (1,223,877)
<TOTAL-ASSETS> 6,045,386
<CURRENT-LIABILITIES> 260,301
<BONDS> 1,477,048
0
0
<COMMON> 0
<OTHER-SE> 4,308,037
<TOTAL-LIABILITY-AND-EQUITY> 6,045,386
<SALES> 585,633
<TOTAL-REVENUES> 592,733
<CGS> 336,899
<TOTAL-COSTS> 336,899
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 101,603
<INCOME-PRETAX> 154,231
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 154,231
<EPS-PRIMARY> 17.03
<EPS-DILUTED> 17.03
</TABLE>
